Viridian Note 00219: California Crisis Part 2

Key concepts

California energy crisis, policy aspects, boredom as policy

Attention Conservation Notice: So intensely boring that even California's politicians lost track. Part Two of Three.

Source

Christian Berthelsen, San Francisco Chronicle Sunday, December 31, 2000

"Genesis Of State's Energy Fiasco

"String of bad decisions on deregulation could end up costing consumers $40 billion

"Next month, about 10 million Californians may begin paying as much as 30 percent more for electricity, in a maddening coda to one of the most costly public policy mistakes ever made.

"When the state's leaders started moving the energy system toward deregulation six years ago, they envisioned a brand new day in which utility companies' long-standing monopoly would be broken and rates would decline by as much as 25 percent.

"Instead, when it is over, it may cost customers of the state's investor-owned utilities $40 billion, perhaps more. In the coming year, it could harm the world's sixth- largest economy and send a ripple effect throughout the globe for those dependent on California's continued prosperity. (((Nice move with the emotional blackmail there, fella. What about California's dependence on everybody else's prosperity? Who's going to bail you out of this mess? Iowa, Wisconsin.... If there's a federal bailout, California will be dependent on everybody

else's generosity.)))

"This is the story of what went wrong with deregulation,
and how planning lapses, serious policy blunders == and
warnings that came too late == set California's two main
utilities, Pacific Gas & Electric Co. and Southern
California Edison, toward a train wreck.

"Power plant construction lagged while demand expanded. Leaders misjudged how much competition there would be to supply California with juice. And flawed deregulation laws left utilities and their customers at the mercy of power companies, extracting the highest price for electricity. (...)

"In the early 1990s, businesses were fleeing the state amid the worst economic times since the Great Depression. Energy rates were 50 percent higher than they were on average across the nation, because of commitments to more expensive, environmentally friendly power and cost overruns for nuclear power plant construction. (((Electrical utilities are dirty and lack sexiness, but they don't go away just because they're boring.)))

(((Here is the crux of the political problem with deregulation. It was so boring that the California legislature couldn't stand it. So they forfeited the control of their destiny to the one guy among them who was willing to do the grunt work. His name was Steve Peace, and he wasn't as bright as he thought he was. Unfortunately, since State Senator Peace couldn't get his colleagues to concentrate, he had to railroad the bill through with oleaginous assurances that everything would turn out just fine if they just crossed their fingers and held their breath. "Leap, and the Net will appear!" Every single one of them voted yes.)))

"Months passed while the discussion meandered and faltered, and at one point it even appeared that no law would be passed.

"That's when state Sen. Steve Peace took the reins and tried to make something happen.

"The San Diego legislator already had won the respect of his colleagues for his work on another complex piece of legislation, reform of the workers' compensation system.

"During a hurried two-week conference in August == dubbed
the 'Steve Peace death march' for his propensity to keep
negotiators at the table late into the night == the fine
points of the energy law were hashed out.

"Legislators entrusted their judgment to Peace and the few colleagues who worked on the bill. There was an abiding sense by a number of participants that few members of either house knew what was in the bill or even understood it. (((The dotcom approach to governance.))) It was passed by both houses of the Legislature unanimously and signed into law the following month.

'People were grateful to Peace and (former Sen. Diane) Martinez for taking it on,' said Debra Bowen, D-Los Angeles, the current chair of the Senate energy committee. 'Historically, utilities were a pretty boring topic, and I think term limits factored into it.'

(((This is really funny, isn't it? It's chucklesome thing, very human. The authorities ceded any real understanding of their genuine predicament, tried to handwave their way out it, and death-marched the

population straight off a cliff in a haze of inattention.
But it's not entirely funny == because that's exactly what
we're doing to ourselves with the Greenhouse Effect.)))