The New Energy Governor

Which still leaves enormous questions about the marketplace itself unanswered. Schwarzenegger says he wants more of a free market on energy, continuing the move away from the old regulated-monopoly-utility model to encourage investment, which has stalled, and to reduce energy costs for businesses, which cite California’s higher rates as one of their most serious problems. But without some form of regulation, that could bring California right back to the crisis of 2001. The old regulated-utility model brought consistency and some of the highest prices in the country. The first stab at deregulation prompted chaos, market manipulation and even higher prices.

One thing that is certain is a Schwarzenegger attempt to do “the big reorg,” as officials call it. State Finance Director Donna Arduin notes, “There is tremendous overlap with the energy agencies. We need to reorganize all this and make it much more efficient.” Indeed, California has something of an alphabet soup on energy, with a Public Utilities Commission, an Energy Commission, a Power Authority and a Department of Water Resources, all of which have had major sway over energy policy in recent years. Davis had wanted to conduct his own reorganization, but nothing was really decided after the electric-power crisis of 2001 as the state simply lurched into the next crisis.

 

But as yet there is no point person in the Governor’s Office on energy. In the early go-rounds on energy policy, Clarey and Reiss have sometimes been at odds. Clarey, a deputy campaign manager in Schwarzenegger’s effort last year, was an important administrator but not part of the campaign’s top strategy group. A former health-maintenance-organization executive who worked as deputy chief of staff to Governor Pete Wilson under Wilson chief of staff (and later Schwarzenegger campaign manager) Bob White, Clarey is a fairly conventional Republican whose bid for the chief-of-staff spot was probably aided by Schwarzenegger’s groping controversy. She was reportedly against Schwarzenegger’s appointment of highly regarded environmentalist Terry Tamminen, the ex–Mr. Universe’s personal choice as his chief environmental adviser in the campaign, as secretary of environmental protection.

Reiss, in contrast, pushed hard for Tamminen, whom environmentalists laud for, among other things, keeping on highly regarded Air Resources Board chief Alan Lloyd, whom others wanted to get rid of. Reiss is a Democrat, a longtime friend and key campaign confidante of Schwarzenegger and Maria Shriver, a former top executive with his afterschool program and a top environmentalist in the entertainment industry. She told the Weeklyon election night that she would not be going into the government. That changed when Schwarzenegger made it clear he needed at least a few people around him in the Governor’s Office who actually knew him.

While the identity of Schwarzenegger’s full-time staffer

on energy policy will be important, in the end the chief action officer on the issues he deems most important is Arnold Schwarzenegger, as legislators dealing with workers’

compensation and other hot-button issues have learned.

His enthusiasm for at least the renewable-energy piece of the puzzle was palpable last week when he stepped away from

negotiations on workers’-comp reform for a moment to join Tamminen in unveiling a new hybrid delivery truck that the new administration helped develop.

“Arnold can be the best environmental governor California has ever had,” declared his former rival Gray Davis to the

environmentalists lauding his own record as governor. “I know that he wants to be. Push him like you did me to make sure

that he is.”