Blaming nearly all of California's energy problems on Governor Gray Davis and his policies, including energy crises in 2000 and 2001, Schwarzenegger promises an energy policy that supports the Federal Energy Regulatory Commission's Standard Market Design (SMD), strongly supported by the wind industry. The comprehensive power market policy, now replaced at the federal level by what critics call SMD-light (Windpower Monthly, June 2003), was opposed by Davis and the state's Public Utilities Commission and Energy Commission.
Among SMD's proposals are scheduling mechanisms that accommodate electricity from intermittent resources and transmission pricing that allows remote wind facilities competitive access to the grid.
Schwarzenegger's policy says the "regulatory uncertainty" in California caused by the lack of a coherent state energy policy, heightens the "risk for investors and threatens further delays" in new power investment. "A rational and consistent power policy will ultimately result in lower costs and greater reliability." He promises to "immediately lay the groundwork to expand the state's power supplies, with special emphasis on clean, renewable sources."
The new governor says he will dissolve the California Power Authority, an agency with the job of ensuring new generation is built to bolster lagging capacity margins, and to work with other governors to improve the reliability of the western grid system. Schwarzenegger appointed a transition team which includes William Reilly, a one-time administrator of the US Environmental Protection Agency under the 1989-93 Bush administration.