Statement of Wenonah Hauter, Director of Public Citizen?s

Nov. 4, 1998

Statement of Wenonah Hauter, Director of Public Citizen?s
Critical Mass Energy Project, on the Defeat of California?s Proposition 9

Even though Proposition 9 was defeated, consumers have sent a powerful message to states pondering electric utility deregulation: Bailouts are not the answer and do not foster competition. California utilities shelled out nearly $50 million, out-spending the opposition by more than 100 to 1, and used scare tactics to beat back the challenge of consumers and advocates for fair rates and competition.

This is just the first battle in an ongoing war over deregulation. It is the first spark of a grassroots uprising against the kind of unfair bailouts being sought by utilities that used poor judgment in building these nuclear behemoths that are now obsolete. With 15 states poised to begin deregulation and 30 more states discussing it, this issue will be controversial for several years to come. Now that consumers? eyes are wide open to the kind of back-room deals cut by California lawmakers, state legislatures are likely to be more cautious about handing out another egregious bailout.