The California Energy Crunch of 2000 Let this be a lesson to the rest of us.
In the summer of 2000, the state of California experienced a shortage of electric power
due to a rapidly expanding population and their failure to construct new
power plants, largely due to the environmental restrictions for which California is
famous. People who have been to California — I haven't — say there are
more windmills and solar panels there than in any other state, yet they still don't have
enough electricity for normal household consumption at reasonable prices.
[Comments from Deweese (no longer) On Line]: "The not so-well-known subtext to the current energy
problems in California is the abandonment of nuclear power as a source of electrical generating
capacity. Since the 1970s, the needlessly difficult process and endless legal challenges from
anti-energy environmental groups have made it uneconomical to build new plants."
This is an important lesson for the other 49 states about the consequences of letting
environmental activists influence the state legislature. And it is yet another
example of a story that demonstrates the bias of the national news media.
The latest... California Restarts Daily Electricity
Auction. Nine years after its state-sanctioned energy auction went bust in the western energy
crisis, California is preparing to launch another daily electricity auction on Tuesday [3/31/2009] that it hopes will be
more successful. The new "day ahead" energy market will line up electricity resources for delivery the
next day.
California's Potemkin
Environmentalism: [Governor] Schwarzenegger's reputation as an environmental trailblazer is in
keeping with California's recent history and self-perception. … In truth, however, the Golden State's
energy leadership is a mirage. California's environmental policies have made it heavily dependent on
other states for power; generated some of the highest, business-crippling energy costs in the country; and
left it vulnerable to periodic electricity shortages. Its economic growth has occurred not because of,
but despite, those policies, which would be disastrous if extended to the rest of the country.
Fatal Conceit at the
California Public Utilities Commission. After a year of heading in the right direction,
the California Public Utilities Commission veered off course last week when Commissioner Dian Grueneich
initiated a dangerous move towards old command-and-control regulation.
The Real Cause of
Blackouts — It's not deregulation. Just who is in charge of getting electricity
to residents? Public utilities, which usually means "state-run" and "state-managed"
enterprises, perhaps with a veneer of private trappings. This centralization and
cartelization began nearly a century ago, as Robert Bradley points out in Energy: The
Master Resource, when industry leaders agreed to price controls based on a cost-plus formula in exchange
for franchise protection from market competition — a formula that survives to this day.
California power upgrade:
Although officials are expressing concern that the energy crisis may return this summer, Gov. Arnold Schwarzenegger
and the Bush administration will stage a ceremony today [12/13/2004] to mark the easing of a north-south state
transmission bottleneck that sparked blackouts three years ago.
There Is No Electricity Tooth
Fairy. The North American Electric Reliability Council projects that the nation needs about 10,000
megawatts of new generating capacity each year through 2008 to keep up with an annual rise in demand of 1.8 percent.
California's Electrical Mess: The Deregulation That
Wasn't. In 1994 California enacted legislation intended to deregulate the electric power business
in the state and establish a competitive market. By January 2001, flaws in the California approach had
become evident with the state's utilities driven to the brink of bankruptcy and Californians suffering
electricity shortages and blackouts.
Power to the People: An
Economic Analysis of California's Electricity Crisis and Its Lessons for Legislators. During 2000—2001,
Californians faced electricity blackouts in winter, the season of lowest demand. Massive summer shortages loomed,
along with huge costs, for years to come. To keep the lights on, state officials were forced to deplete a healthy
budget surplus in order to purchase wholesale power. These conditions should not only be recalled with clarity
but understood within a larger context. [PDF]
Lights Out: California's
Electricity Debacle. California's 1996 restructuring law deregulated wholesale prices for
electricity, the price utilities paid to purchase electricity. Because the state effectively prevented
the private utilities from entering into long-term purchase contracts, needed power purchases were conducted
on the daily spot market. The Achilles heel of the law was its cap on the retail price that utilities
could charge consumers. When wholesale prices soared, the government-controlled retail price plunged the
utilities into a black hole of debt. [PDF]
California Energy Facts: Pennsylvania, Texas and
Florida each produce more electricity than California. Texas produces twice as much electricity as California.
Frequently Asked Questions About California's
Electricity Crisis: Did California really deregulate its electricity market? Has deregulation
worked in other places? Do we need stronger price caps? What should California's leaders do now?
What caused the current crisis?
The chickens are in the
roost. It is incredible that the Clinton administration has just now noticed — after
seven-plus years in office — that we have an electricity shortage. … We know they understand
electricity demand has been growing. So why is it that on President Clinton's watch nothing has been done
on the supply side insofar as electricity is concerned? The answer is simple: Al Gore.
Editor's note:
The following item comes from CBS News and is presented in the interest of "balance", since it paints a completely different
picture of the California situation.
California Energy Crisis a
Sham: CBS News obtained records showing federal regulators have power plant control room audio
tapes that prove traders from Williams Energy called plant operators and told them to turn off the
juice. The government sealed the tapes in a secret settlement and still refuses to release them.
The tyranny of visions:
part II. California has long had more than its fair share of busybodies with a vision of the
world in which it is necessary for them to force other people to do Good Things. One of the latest
examples is a recent ruling by one of the many busybody commissions in California that people who build houses,
or just remodel their homes, will in the future have to have more fluorescent lights and even install motion
sensors to control lights – all in the name of saving energy.
Davis Continues Blaming Energy
Providers: California Gov. Gray Davis told Fox News Wednesday he will sue the power companies if
they do not cough up the $9 billion in rebates he believes are due in return for "gouging" his state's
energy customers.
The Cause of the California Power Blackouts: The
childish quest for a free lunch is what has led to blackouts all over the state of California. People
trapped in elevators that stopped between floors when the electricity was cut off should understand that this is
part of the price paid for years of moral posturing by the environmentalists and the "consumer advocates."
Davis Denies Selling Power During
California Blackouts: A California Assemblyman isn't sure if it was "corruption or incompetence,"
but he claims the administration of Democrat Gov. Gray Davis sold more than a half-million megawatt hours
of electricity earlier this year at a huge loss - at a time when Californians were being told to conserve
energy amid rolling blackouts.
California's Dim Bulbs: California is in the midst of an enormous stupidity crisis. Californians have been
sitting in the dark because ... they didn't turn the lights on.
'Price
Gouging' Doesn't Cut It As Reason for Rising Energy Prices: Maximizing
profits is what every business tries to do. This is not some kind of evil,
anti-social practice but, in fact, the mechanism that provides us with the
necessities and the joys of life.
Power Price Caps Have Created Shortages, State
Officials Say: Officials in California and Nevada have admitted that controls on wholesale
electricity prices throughout the western states imposed by the Federal Energy Regulatory Commission have
worsened power shortages.
Time-Of-Day Electricity Pricing: Most
consumers don't know it, but the overnight price for electricity at wholesale can be practically zero.
Utilities and other power producers are sometimes actually forced to pay industrial consumers to use
electricity in the early-morning hours -- because it's too expensive to shut down power plants at night.
With time-of-day pricing, consumers would be encouraged to alter their habits -- running the dishwasher at
night, for example -- and pounce on such bargains, while evening out demand.
Why Wholesale Price Caps on Electricity
Won't Solve California's Energy Woes: In 1996, California passed a badly flawed utility
deregulation scheme. The botched implementation of this plan, coupled with regulations that discourage
the construction of new power plants, produced rolling blackouts and higher prices.
California energy crisis: This is a case
study in how not to deregulate an industry. Furthermore, it underscores the danger that the extreme
environmental movement presents to our largest state and to our Nation. Through regulations, lawsuits
and political intimidation, the "greens" have prevented the construction of the electrical, natural gas and
hydro infrastructure necessary to meet the needs of a modern industrial society.
Energy in the Executive:
Bush must stand up against environmentalism and for the American way of life.
Gray Davis Lets the Dogs
Out: With the energy crisis raging in California and his approval rating falling rapidly,
Governor Gray Davis is frantically trying to spin his way out of the mess. Desperate to save
his political image and his now damaged Presidential prospects, Davis has enlisted two seasoned political
attack dogs to shift the blame for California's energy problems away from himself and on to President
Bush, who took office nearly a year after the crisis began.
Paying thru the nose:
When California ran out of power, the out-of-state energy producers jacked up the prices fast. Of
course the Clinton administration did nothing to stop it because that would have meant the Department of
Energy and Janet Reno might actually have to do something.
Editor's note:
Barbra Streisand is sometimes called a "limousine liberal." She wants you to conserve electricity by hanging your
clothes on a clothesline so that there will be enough electricity available to run her electric dryer. This is typical
liberal hypocrisy. And the California Power Crunch is of interest to many people because California is the first of many
states which will experience the same thing if environmentalism is allowed to displace common sense as the population grows and
energy demands increase.
Streisand Tells Californians To
Hang Their Clothes Out To Dry. Singer and liberal activist Barbra Streisand called on Californians Monday to use
their clotheslines and not use electric dryers in order to help the "Golden State" conserve energy.
Greens Say "Turn Off Your
Lights". The Greens, who brought about that State's energy crisis, wants to worsen it by reducing the dam's
hydroelectric generation in order to protect salmon while millions of Californians wait for the next rolling blackout. If
this isn't insanity, I don't know what is.
California's Next Crisis? The Golden State
may soon run out of water, too. The problem: California is currently home to more than
34 million people, each and every one of whom gets thirsty from time to time. It will have closer
to 50 million in 20 years. The state also hosts such multi-billion dollar industries as
agriculture, tourism, and computer production, all of which require a steady flow of agua to stay
afloat. Rounding out the cast of characters is a hardcore environmental lobby that earnestly defends
every inch of undeveloped land as indispensable for the state's ubiquitous endangered species. They all
want water, but there isn't enough to go around.
Report:
State grid operator behind plant's output swings: The operator of the state's power grid has
acknowledged that it was responsible for swings in production at a power plant that Gov. Gray Davis
held as an example of price gouging by out-of-state energy companies.
The Link between Regulation and Power
Blackouts: Nuclear power is a controversial issue in some parts of the United States.
But that is not necessarily the case around the country. For example, the Calloway nuclear power plant is
owned and operated in Missouri by the Union Electric unit of Ameren-UE. Most Americans have never heard
of Calloway. That is because it is a reliable and trouble-free provider of electricity. No
government official tried to prevent it from going into operation.
Former Clinton Aides Reveal Ties
to Cal. Power Company: Former Clinton White House officials Chris Lehane and Mark Fabiani officially
disclosed their relationship Thursday [6/21/2001] with Southern California Edison, a power company that recently
struck a high-dollar deal with the state of California.
California's Philosophical Blackout: The
roots of the California power crisis lie in the repudiation of objective language and logic, and the outlawing
of human values. And the sum of this "game" really is zero.
The Art of the
Impossible. As a noted economist has pointed out, nothing "could prevent the California
electorate from simultaneously demanding low electricity prices and no new generating plants while using ever
increasing amounts of electricity." You want the impossible? You got it. Politicians
don't get elected by saying "No" to voters. Of course Californians also got electricity blackouts and,
in order to deal with the blackouts, a multi-billion dollar surplus in the state's treasury was turned into a
multi-billion dollar deficit, followed by cutbacks in various other government programs, followed by calls for
higher taxes.
Environmentalists
Square Off in Squirrel Squabble: When a Pacific Northwest utility company announced in January
[2001] it would build the world's largest wind power plant, it came at a moment when the West was feeling the
pinch of energy-starved California. But there's a problem: The Washington ground squirrels, which
are protected under the Oregon Endangered Species Act.
