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January 25, 2001

FOR IMMEDIATE RELEASE

Utilities, Producers Take the Heat in OC and SD
New Poll Finds Limited Local Concern about Blackouts and Many Willing to Let Utilities Go Bankrupt

IRVINE, CA - Residents in Orange County and San Diego hold highly negative views of the electric utilities and energy producers, but remain calm about potential blackouts, according to a new independent poll released Thursday.

The survey, which was conducted between January 14th and 23rd, finds more than 4 in 10 in Orange County holding an unfavorable view of Southern California Edison and more than 6 in 10 San Diegans holding an unfavorable view of their primary utility, San Diego Gas and Electric. Among South Orange County residents, some of whom are SDG&E customers, 48 percent have unfavorable view of SDG&E versus just 33 percent who hold a favorable view.

When asked who was to blame for the energy crisis, a plurality of San Diegans said energy producers (25 percent) followed by the utilities (21 percent). In Orange County, producers ranked second behind the utilities (23 percent). In both counties, the State Legislature and the State Public Utilities Commission - which was viewed unfavorably by nearly half of those surveyed - were listed third and fourth, respectively, as potential culprits for the crisis. Only small percentages assign blame to Governor Gray Davis or to local residents.

Blackouts Drawing Few Worries - For Now

While the public reveals anger at the utilities and producers, the survey finds relatively low concern about the energy shortage. When
asked whether they were personally worried about a potential blackout in their area, just 1 in 4 in Orange County say they are "very" or "extremely" worried, with approximately two-thirds saying they are only "somewhat", "not too" or "not at all" worried. In San Diego County, concern is slightly higher - 35 percent say they are "extremely" or "somewhat" worried about potential outages.

"In spite of the daily warnings, neither Orange County nor San Diego sees a potential blackout as something tantamount to a disaster," said Dr. Christian Collet, senior partner of Pacific Opinions, the research group that directed the poll. "For now, the public is taking the situation in stride."

The survey indicates that Latinos in Orange County are nearly twice as likely to say they are "extremely worried" about blackouts in their area (18% versus 9% for the county as a whole).

Public Takes Utility Debt Problem Seriously, But 1 in 3 Willing to Let Them Go Bankrupt

Most polled say the debt problems facing the utilities are indeed a serious problem, but a surprising number say they are willing to let them go bankrupt rather than issuing state bonds to keep them solvent. Sixty percent in Orange County and 55 percent in San Diego County say the utilities' financial situation is an "extremely" or "very" serious problem. Roughly one in five in both counties say the problem is "somewhat" serious.

But when given a choice between selling state bonds to pay off the debt and letting the utilities go bankrupt, the public was more divided. While pluralities in San Diego (49 percent) and Orange County (44 percent) say they would prefer to see the state sell bonds to help the utilities pay off their debt, 1 in 3 in both counties say they would be willing to let the utilities go bankrupt. Opinion remains unsettled on this issue, as 25 percent in Orange County and 16 percent in San Diego say they would choose neither option.

Compared to Latinos and other ethnic groups, most of whom support a bond bailout, Anglos are more likely to let the utilities go bankrupt. In Orange County, 43 percent of Anglos say they would support bailing out the utilities' debt with bonds, compared to 36 percent willing to let them go bankrupt. In San Diego, the percentage of Anglos willing to let the utilities expire rises to 39 percent, only 4 percentage points fewer than those willing to bail the utilities out (43 percent). This is within the statistical margin of error for the San Diego sample of 511 respondents.

Further analysis of the data shows that those who are most willing to let the utilities go bankrupt are least concerned about the utilities financial situation.

"Though the public, on the whole, says they are taking the utilities' debt seriously, many are skeptical," Collet said. "What the numbers tell us is that the utilities have yet to fully convince ratepayers - and taxpayers - that the problem is so severe as to require their contribution. For some in the area, the attitude toward the utilities and the state is this: 'If this is really a problem, it's yours not mine.'"

State Built Power Plants, Alternative Energy Seen as Most Effective
Solutions

The poll also asked Orange County and San Diego County for their views on six possible solutions for the energy crisis - and which ones they felt would make the biggest impact on solving the crisis. Among the most popular in both counties are the sale of state bonds to buy new power plants (69% in OC say it would make a "big" or "some" difference, 78% in SD) and the development of alternative energy sources (66% in OC, 73% in SD).

The ideas that the public believes will have less impact are: raising utility rates for consumers (53% in OC, 51% in SD) and having the state assume full control over the utilities. In Orange County, 62 percent say a complete state takeover the utilities would make a "big" or "some" difference in solving the crisis. In San Diego County, 54 percent say a state takeover would make a "big" or "some" difference.

Collet said, "Rather than clamoring for re-regulation or a quick-fix, what the public is telling us is that it wants a serious consideration of long-term solutions and alternatives."

Davis Remains Popular, Peace Draws Fire in San Diego

In spite of recent speculation about his handling of the crisis, Governor Davis remains popular in Orange County and San Diego. In both counties, he holds a nearly 2 to 1 favorable-to-unfavorable rating. Fewer than 1 in 10 say he is the person most responsible for the energy problems.

In San Diego County, however, State Senator Steve Peace - the so-called architect of utility deregulation - is drawing severe criticism. Of the 51 percent in the survey who were able to identify the Senator, 45 percent held an unfavorable view of him. Just 33 percent hold a favorable view of him while more than 1 in 5 say they have no opinion.

Not Just a Pocketbook Issue

Though the study finds nearly half of San Diego residents paying more than $100 per month for their electricity (compared to 1 in 4 in Orange County), further analysis finds little relationship between the amount of electricity bills and resident attitudes toward the utilities - or the energy crisis.

"This is an indication that the issue is something more than simple pocketbook anger over utility bills," Collet said. "The public sees it as an issue of fairness and responsibility."

About the Poll and Pacific Opinions

The poll, based on a randomly selected sample of 1,050 registered voters in Orange and San Diego Counties, was conducted by telephone between January 14th and 23rd, 2001. Interviews were administered in English and Spanish. A special over-sample of 503 Latinos was included in the poll. The margin of sampling error is approximately +/-3 percentage points for the entire sample; for county and ethnic subgroups, the error is approximately +/- 4 percentage points. It is important to recognize that sampling error is only one source of potential error in opinion surveys, and that other factors, such as question wording and order, may affect the results.

Pacific Opinions is an independent research group based in Irvine, California. The Pacific Poll is a public-interest opinion survey conducted regularly on social and political issues in the Orange County and San Diego area.