Actor Arnold Schwarzenegger hasn’t even taken office yet and already he and his Republican handlers are moving quickly to make California “business friendly.” They are scheming more deregulation of the electricity market, certain to hit Californians with huge rate increases and fill the coffers of energy traders.

Democratic lawmakers in Sacramento with a majority in both the House and Senate vow to block Schwarzenegger’s moves to further deregulate electricity. “Not only is the Legislature in no mood for it, the public is in no mood for it,” said state Sen. Joseph Dunn, a Democrat from conservative Orange County.

Dunn is planning an initiative for the November 2004 ballot to re-impose regulation on the electricity market. “The polling shows that 75 percent of Californians want to re-regulate the electricity system,” Dunn said.

Jason Leopold, who covered California’s energy crisis two years ago for the Dow Jones News Wire writes in Common Dreams, Oct. 10, “Forget about the Terminator. Arnold Schwarzenegger is taking on a new role as Governor-elect of California: The Deregulator.” He warns that among Schwarzenegger’s highest priorities is terminating measures enforced by Gov. Gray Davis to curb skyrocketing electricity rates brought on by the deregulation policies of his predecessor, Republican Gov. Pete Wilson. Schwarzenegger named to his transition team Jessie Knight, architect of Wilson’s 1996 deregulation plan, which opened the door for Enron, Reliant, El Paso Natural Gas, and other energy traders to “game” California’s energy market. The conspiracy was exposed in Enron internal memos with codenames like “Death Star,” “Get Shorty,” and “Fat Boy.”

The conspirators generated fraudulent electricity shortages with rolling brownouts that were used to force California to sign ruinous contracts that have cost ratepayers $50 billion in overcharges. But with their crony ties to George W. Bush and Dick Cheney, none of the ringleaders of this colossal extortion has been prosecuted. At the height of the crisis, Schwarzenegger, L.A. Mayor Richard Riordan and other Republican bigwigs met secretly with Enron CEO Ken Lay at the Peninsula Hotel in Beverly Hills on May 11, 2001, to hear his demand for even more energy deregulation. Asked about that session during the recall election, Schwarzenegger claimed he “can’t remember details of the meeting.”

Schwarzenegger has already announced that he will fire dozens of energy regulators appointed by Davis and appoint Republicans who favor “free market” energy policies. The Electricity Oversight Board, Schwarzenegger aides say, “may soon be out of business.” The Public Utility Commission, also a defender of regulated markets, faces a Schwarzenegger shake-up when two of its most vocal members, Loretta Lynch and Carl Wood, end their terms at the end of next year.

Also slated for termination may be the California Consumer Power and Conservation Financing Authority (CCP&CFA) created in August 2001 to finance publicly-owned power plants. The rapid construction of 26 public power plants, all by union labor, during Davis’ tenure, is credited with “keeping the lights on” in California when other regions suffered a plague of blackouts.

But on his official website Schwarzenegger declares, “to build and operate publicly-owned power plants is in direct competition with private industry and serves only to divert private investment in electricity generation and transmission away from the state.” Davis forced the energy companies to pay back about $3.3 billion in refunds and vowed to fight for at least $9 billion, even if the state had to go to court to recover more of the stolen money.

Schwarzenegger aides say they are ready to drop these lawsuits. “It’s time to settle and move on,” a senior Schwarzenegger aide told Leopold. “We don’t want to inherit litigation.”

With Schwarzenegger’s “business-friendly” policies, consumer advocates expect the worst.

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