California CapitolWeek 9/1/00
Just ahead . . . lawmakers wrap up the year’s business in marathon sessions. Does it include a break from high electric bills? Several potential fixes are on the table, but is there one answer to preventing what happened in San Diego from happening elsewhere? Plus. . . a healthcare crisis facing Critically ill children Is more state funding the answer? And Ralph Nader. . speaks out . . on money and politics . . deregulation. . and the two front-running candidates.
Hello I’m Melissa Crowley. And I’m Jack Kavanagh. Those stories, next.
((Melissa )) Thank you for joining us. This is it . . lawmakers go their separate ways this week, their last chance to pass legislation for the year. We’ll look at the most controversial issue . . . fixing the state’s electricity mess. But first . . . a little publicized healthcare issue that needs attention. As HMOs, doctors, and patients go head to head over affordability and quality of care, a small segment of California’s population battles another crisis. More than 150,000 critically ill kids receive financial benefits from "California Children's Services." But there are many more who are losing out on care because of a shortage of specialists . . . Jennifer Fischer has this story.
Jennifer Fischer: Today’s a pretty good day for Alexandra Stoffel. She likes to have fun like any other seven year old, but unlike some kids her age… …she’s suffering from a rare form of cancer. It’s aggressive and deadly.
Lori Stoeffel, Alexandra’s Mother: It has caused paralysis, ewring scacoma went suddenly from being able to walk to not walking at all.
It’s been just three months since doctors discovered the tumor. In that short time, Alexandra has gone through a major emotional and physical change.
Lori Stoeffel, Alexandra’s Mother: And she had gotten down to the point of starvation level scurvy in her gums. She couldn’t keep food down, couldn’t keep medicines down that she needed.
The only comfort in this terrible ordeal is that Alexandra is at the top of the list to receive financial help from California Children’s Services… …also know as CCS. The state agency foots the bill for gravely ill kids.
Lori Stoeffel, Alexandra’s Mother: I don’t know how insurance would have worked, because CCS has picked up great, let’s go, services that she needed.
But many other children who are also very sick aren’t receiving the same benefits as Alexandra. That’s because according to specialists, CCS pays the doctors so little, many are leaving the state, causing a shortage… …Doctor Robert Dimand, Associate Professor of Pediatrics at UC Davis Medical Center says some kids wait six months before seeing a specialist…
Dr. Robert Dimand, Associate Professor of Pediatrics, UC Davis Medical Center:
Our clinic is full and booked. We can’t serve what we already have, let alone take on any more.
Dimand says the reimbursements are low—specialists receive thirty cents on the dollar—and because of this, many hospitals throughout the state are shutting their doors to new patients. They just can’t take them on without the staff. In fact, here at UC Davis, eight pediatric specialists positions have been vacant for years.
Dr. Robert Dimand, Associate Professor of Pediatrics, UC Davis Medical Center:
No one wants to come to California right now. Reimbursements are so low, they’re saying well… …we’re seeing little incremental bumps, but we’re way behind other states.
And it’s the sickest children that are paying the cost…Dr. Robert Dimand, Associate Professor of Pediatrics, UC Davis Medical Center:
We’re dealing with the most vulnerable population, kids, but kids don’t vote, and their parents tend to be very young and not influential in the political system, so it’s been really challenging.
For those suffering through it right now, like Alexandra, all that matters is that the care continues. Lori Stoeffel, Alexandra’s Mother: She’s got pretty good spirits, great friends really have stayed close to her, so overall, it’s pretty good.
I’m Jennifer Fischer for California Capitolweek.
END CCS STORY
(( Melissa )) California children’s services received a 39 percent increase in this year’s state budget But the agency says that is only half of what they need to meet all the needs of critically ill children . . . Jack??
(( Jack )) As we mentioned, hundreds of bills hang in the balance this week. The most public, and perhaps most politically sensitive ones involve how the state will step in to relieve southern california residents from soaring electricity rates. Democrats and republicans are working on separate plans to use state funds to help San Diego ratepayers. The question is . . . how much? Another measure would speed up the construction of new power plants. And the governor is pushing immediate relief by capping rates to cut electricity bills in half. But Republicans say that plan is short-sighted.
(“I think the… rate payers today”)
San Diego residents have seen their electricity bills triple in the summer months. They are the first in the nation to pay market prices for power, other california cities will follow in 2 years. Will sharp spikes in electricity rates be the norm in California’s de-regulated market?
POWER DEREGULATION DISCUSSION
The
Energy Commission says the demand for power in California is growing faster
than the population, while in-state generating capacity remains relatively flat.
Joining
me now to discuss more on the issue. . . Republican assembly leader Scott Baugh
of Huntington Beach. And
Lenny Goldberg lobbyist for TURN, the utility reform network.
Jack: Scott, I guess the biggest question out there is we deregulate and look what happened. You voted for it. Can we re-regulate and fix the problem?
Scott Baugh: Well, sure you could, but the question is: do you want to? And the deregulation that we passed in ’96 had a good model to it. It did not foresee this tremendous surge we have in electricity today. For example, four years ago computers were using four percent of the electricity in California, now they’re using fourteen percent. We’ve had tremendous population growth, and we have a booming economy, and all of those factors converge together to create a huge supply while the demand did not keep up.
Jack: Yeah, but under deregulation, weren’t the utilities urged to sell off their generating capacity?
Scott Baugh: That’s what deregulation was all about.
Jack: So they wouldn’t be able to buy that back, would they?
Scott Baugh: Well, they could. You can try to put the toothpaste back in the tube, and you’ve got a mess on your hands, but you could re-regulate the entire system if you wanted to, but I don’t think you’d have a better system.
Jack: Why not re-regulate, Lenny?
Lenny Goldberg: Well, there are a lot of things we’re going to have to change with deregulation, and I don’t know if you call it re-regulation, but clearly, for example—
Jack: Well, I guess the question is can we go back to where we were?
Lenny Goldberg: We can’t go back to where we were.
Jack: Why?
Lenny Goldberg: Because, well, the reason that we got to where we were were federal actions taken in the early 1990’s which opened up the markets, and once you get down that road, you’re going to continue down that road, and a lotta’ places in the country are facing the same electricity market, but their customers are not facing the same kind of problems that have occurred in San Diego—
Jack: Okay, so the message for South Orange County and for San Diego is “no, we can’t go back, so let’s try to fix it as we go further?”
Lenny Goldberg: Well, there are fixes. For example, what the legislature did in their bill to put a break on prices in San Diego is in fact a form of re-regulation. We are taking on rate regulation. We are saying we have a price cap. We’re not going to go over that. We are going to try to then work it out in the context of protecting customers from these incredible spikes in prices, and in a market that is not working, and if the market isn’t working out, we got to figure out some fixes.
Jack: I don’t know the details of the bill, but the suspicion is that it is retroactive through the summer, and it caps rates in San Diego and South Orange County to a certain amount, but who picks up the slack?
Scott Baugh: Well, that’s what’s deceptive about it. The rate payer ultimately has to pay that. What you essentially do is—
Jack: So, we’re not capping rates, we’re postponing them?
Scott Baugh: Yeah, you’re artificially lowering the rate now, and the balance goes into what’s called a balancing account, and then in 2003, January of 2003, the ratepayers have to pay all that back.
Lenny Webster: That may or may not be the case—
Jack: Wow! That’s a balloon payment.
Lenny Webster: No, it’s left to the public utilities commission. We believe that San Diego Gas and Electric acted terribly imprudently, and if the commission finds that, as I expect they will, they’re going to have to eat some of those costs. There’s also the effort now to go to the Federal Energy Regulatory Commission, and that is part of the legislation and part of the program to see if the generators have been unfairly gouging and manipulating the system, and if there’s some recovery there, that won’t be paid by ratepayers, so what the legislation does is say, you know, we’re leaving open who pays the ultimate cost here. Somebody’s got to pay the piper, but it may be the shareholders.
Jack: Okay, so you’ve got this big payment out there that somebody’s going to have to pay, but we won’t designate who that—
Scott Baugh: Well, under state law, the ratepayer has to pay. There is the opportunity to do some investigation, but if you look at the cost of energy, a lot of this surge has come from the wholesale market. The increase and the spikes in prices, that’s not an SD&G function. They pass that on to the consumers, so under the state constitution, the utility makes a reasonable profit, and they have to recover all their cost, so the bottom line is there could be a 600 million dollar pot of money, or a negative balance if you will—
Jack: A bill that has to be paid.
Scott Baugh: A bill that will come due, and that’s the balloon payment that the ratepayers will be stuck with.
Jack: Nobody wants a power plant in their backyard. We haven’t built a lot of power plants in California. Is that part of the problem?
Scott Baugh: Well, that’s the fundamental problem. It’s a supply problem. We need to bring more supply in. Part of our effort—even yesterday and today we’re going to go vote on this—is streamlining the bureaucracy so that we can go build more plants.
Jack: You mentioned gaining. Are people fiddling around with that market?
Lenny Goldberg: Absolutely, clearly the wholesale market—and I agree with Scott; a lot of this comes out of the wholesale market—is not working. In many parts of this summer, we have had demand that is very much the same as last summer—
Jack: And the price spiked up.
Lenny Goldberg: The price has been three, four, five times what it was. You know, at three ‘o clock in the morning the other day, the price was a hundred dollars a megawatt hour which translates into about five times. We should be paying about twenty dollars a megawatt hour.
Jack: Does that mean—
Lenny Goldberg: Translates to about five times what we should be paying—
Jack: Okay, so how do we fix that? Is that caused by the way the wholesale bidding system takes place?
Lenny Goldberg: There are a number of fixes. There are fixes that have to be done in the independent system operations in the power exchange, and there are fixes that are at the federal level where the federal regulatory energy commission has to have much stronger powers to police those markets.
Jack: If I were Federal Express or American Airlines, and I saw the price of oil going up and my planes needed that oil, I’d buy long-term contracts down the road at a lower price to hedge against this incremental—why can’t the power companies do the same thing?
Scott Baugh: They can, but it SD&G’s case, they were limited to ten percent of their volume, so you could only hedge—
Jack: By whom?
Scott Baugh: By the PUC.
Jack: The PUC said you can only hedge on ten percent.
Scott Baugh: That’s right.
Jack: We’ve regulated our—
Lenny Goldberg: Well, there’s a block forward market. They could have bought a lot more than they did, however, we haven’t regulated ourselves in the hold. It’s our feeling that SDG&E took no responsible action, that they don’t care about their ratepayers at this point given the way that the new deregulation system went, and they were just buying and passing it on—
Scott Baugh: Well, I think that’s a silly notion. SDG&E has to care about their customers. Otherwise, they’re going to lose them, and that’s what deregulation does. It brings in competition. You have companies like NRON coming and competing for the same business. SDG&E has taken a colossal hot on this fiasco. They don’t want to be here again. They do care about their customers, but there’s a problem—
Jack: In the last minute that we have, is this going to spread statewide?
Lenny Goldberg: We are going to have to work really hard in the next few years to fix it before other ratepayers are exposed to it, but—
Jack: Yes, it is going to happen statewide. Last word, Scott.
Scott Baugh: It’ll be a tsunami throughout the whole state if we don’t get more power on the grid. We need to streamline the bureaucracy and build more power plants in California.
(( Jack )) Scott Baugh and Lenny Goldberg thank you for joining us. We would like your thoughts? What is the best way to prevent soaring electricity rates . . cap rates, build power plants, something else? Send us an email to capitolweek dot org or drop us a letter to the address on your screen.
On now for a quick look at some other last-minute matters at the capitol.
A gun licensing bill was pulled Wednesday night after the Gov. indicated he would not sign it. Lawmakers narrowly passed the legislation requiring licenses for pistols or revolvers. Handgun buyers would have to pass a safety test. Earlier this year the governor warned lawmakers against creating new gun controls, until reforms enacted last year are given time to work.
And in the flurry of legislative activity, assembly members approve an end to a 115 year old ban on blackjack. When some lawmakers realized what they had done, they tried to pull the bill back. Card clubs say the bill would Help them compete with Indian casinos.
Legislation that has received national attention is headed to the governor’s desk. It’s an attempt to stop new mothers from abandoning their babies by giving them another option. The bill would allow parents to drop off unwanted newborns at a hospital, or safe place, without threat of prosecution. There is a small cemetary in Southern California where abandoned babies are laid to rest. To date, a handful of cities and states have implemented similar programs. One in Texas has reportedly rescued dozens of infants. The governor has until the end of September to sign or veto all legislation. Finally . . big news from outside the capitol.
An emergency order issued this week by the U.S. Supreme Court . . it bars Medical Marijuana Patients in California from legally buying the drug. Nearly four years ago, California voters approved proposition 215. That initiative legalized marijuana if used for medicinal purposes, and if accompanied by a doctor’s prescription. Legal experts say the emergency order sends a message . . . that the high court may invalidate California’s marijuana law as well as similar laws in seven other states.
((MELISSA)) Jack, we’ll get to our interview with Green Party presidential candidate and consumer activist Ralph Nader in just a moment. First. . . presidential candidates were talking health care and prescription drug coverage this week. Governor Bush says he supports coverage. He plans to unveil details next week. Vice President Al Gore supports prescription drug coverage and would add that benefit to Medicare. Reform candidate Pat Buchanan plans to study the matter further. And Green Party candidate Ralph Nader supports universal access to healthcare and prescription drugs. That is just one of the things we talked to Nader about last week. The consumer activist told us he is pro-choice and against vouchers . . . among other things Here’s what else he had to say when we caught up with him in Sacramento.
NADER STORY
Woman introducing Nader: It is my great privilege and pleasure to introduce Mr. Ralph Nader.
Green Party Presidential candidate Ralph Nader didn’t waste time getting to the issues on his mind…
Ralph Nader, Green Party Pres. Candidate: I hate to say I told you so…
On deregulation…
Ralph Nader, Green Party Pres. Candidate: Old monopolies are still monopolies, only this time they’re unregulated.
Nader recommends declaring a state of emergency and rollback to July 99 rates……He’s also pushing healthcare reform.
Ralph Nader, Green Party Pres. Candidate: In a time of record, massive prosperity, this is the time, if ever, to have universal healthcare coverage.
Details for achieving that goal are less clear…But Nader’s criticism of fellow running mates is straight to the point…
Ralph Nader, Green Party Pres. Candidate: Whis in this country can believe Al Gore and his populist rhetoric? He and the DNC continue to take millions of dollars from the very people they criticize in his speeches. George W. Bush is a giant corporation running disguised as a human being.
Nader is hoping to win at least five percent of the voter support to receive matching federal funds...…Democratic strategists say his campaign to attract independents and swing voters is siphoning votes from Al Gore.
Some Guy: Every vote for Nader is a for for George Junior.
Melissa Crowley, Capitolweek: How do you respond to people saying you are a campaign spoiler?
Ralph Nader, Green Party Pres. Candidate: Well, everyone is pretty disgruntled with politics as usual, with the corruption of money, and don’t they want a change? Don’t they want a new start?
Melissa Crowley, Capitolweek: So do you worry about what role that you may play in the Democratic election? That a vote for you may be a vote for Bush?
Ralph Nader, Green Party Pres. Candidate: Well, I think a vote for me is a vote for public financing of public campaigns and for labor laws that allow workers to organize and improve their standard of living and for environmental health and for consumer protection and for a wide use of our tax dollars instead of funneling them in through corporate welfare boondoggles. It’s not up to me to worry about George W. Bush or Al Gore. It’s up to them to move into these areas and let the American people know if they really care about these reforms.
Nader’s platform is heavy on campaign finance reform.
Ralph Nader, Green Party Pres. Candidate: We are practicing what we preach. We are taking no political action committee money. We’re taking no soft money. We are using and raising only money given to us by individuals who write us, call in, or log onto our website, votenader.com, up to two thousand dollars, the maximum permitted.
Melissa Crowley, Capitolweek: Realistically, if the presidency is not won, what do you hope to do?
Ralph Nader, Green Party Pres. Candidate: What I hope to gain is that every vote for my candidacy in November is a vote for disciplining the two parties and straightening them out, and if they don’t, it’s a vote for an ever growing Green party towards majority status. The Green magnet and the Green hammer after November on these two parties is either going to tell them they better shape up or they’re going to shrink down, and the Green party will take over.
END NADER(( Melissa )) Nader says he also plans to clean up bacteria problems on California beaches. By the way, he’s been criticized for not releasing his tax return and told us he filed all his required campaign disclosures, but believes income tax returns should remain private. Nader is one of many political candidates using the internet to extend their campaign reach.
Our partners at Wired news say the internet has become a savvy political tool. . . . as well as a source of debate.
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(( Melissa )) For more information on technology subjects or other online issues, log onto our partners website at wired dot com.
((Jack)) Time now for some viewer mail. We received a lot of feedback on last week’s discussion about proposition 38 and school vouchers. Lawrence supports prop 38. He writes: “The proposed voucher system will go a long way in providing quality education to the children of our state.” And Beth agrees. “Maybe if we give public education some competition for their money, they will get better.”
((Melissa)) But Claudia opposes prop 38. “It is better to put money into our public schools in the form of books and computers and to fix the schools that are broken.” And Mary has similar ideas. She writes: “The best idea, besides smaller classes, is to find teachers who are successful and use them to develop training to help other teachers.”
(( Jack )) Thanks to those who also participated in our online poll at capitolweek dot org. 70 percent of you who chimed in said you are against prop 38. 30 percent said they support it.
((Melissa)) Finally this week, With session over, a celebration to honor state history begins. Break out the party hats… California’s official 150th Birthday Celebration is almost here. To jump start the event, Characters in costume cruised onto the capitol lawn, kicking off capitol plans to celebrate the sesquicentennial. Just a preview of what the 3-day the “Celebrating California Festival” will include beginning September 8th thru the 10th. Beginning next Friday you can check out the music, storytelling, and food on the state capitol grounds.
((Jack )) Next week . . .difficult decisions regarding end of life care.