Re: Bill Richardson and California Electricity Problems.

[Jim Muckerheide <jmuckerheide@delphi.com>]

Michelle Malkin

December 13, 2000

Blame enviros for electric mess

Windmills and candles and warm woolen mittens. Staticky sparks from the fur
of small kittens. Campfires and solar panels and thermal paddings. These are
a few of the favorite things that radical environmentalists would rather
rely on for warmth, light, and electricity than the modern power plant. To
the delight of eco-Luddites, energy shortages in California and the Pacific
Northwest are forcing residents to live like 17th-century peasants. The
Seattle Times urged readers this week to turn down their thermostats to 50
degrees at night. "Wear a sweater and throw another blanket on the bed," the
paper flippantly editorialized. Others pine for subsidized sunshine sources.
"If there were sufficient state or federal incentives for using solar
power," one San Francisco Chronicle reader bemoaned, "there wouldn't be an
energy crisis." 

Good luck convincing the denizens of Silicon Valley -- and everywhere else,
for that matter -- to unplug their computers and wrap their roofs in tin
foil. As author and Manhattan Institute fellow Peter Huber writes: "Wind,
solar and other 'alternative' energies sound great in theory, but they
rarely make much economic or environmental sense in practice. They require a
lot of expensive, unreliable hardware. And they generally use more land to
deliver less energy."

Huber and fellow energy consultant Mark P. Mills estimate that the use of
home and office computers, phone lines, printers, fax machines, and other
peripheral devices accounted for 13 percent of America's energy use last
year. Internet-related energy usage will likely rise to 35 percent or more
by the end of the next decade, they project. In the midst of this
high-tech-driven power crisis, Calif. Gov. Gray Davis took the laughable
step of turning off the Christmas tree lights at the Sacramento capitol and
urging homeowners to do the same.

Every hapless home improvement wannabe knows it takes more energy to put up
those darned lights in one afternoon than they consume over the entire
course of the holidays.

On a serious note, Davis and the state's left-wing consumer groups attack
electricity deregulation for the West Coast's energy woes. But the real
Grinches are naysaying activists and bureaucrats who continue to stand in
the way of a truly free market in electricity. Although much ado has been
made since the Golden State passed electricity "deregulation" measures in
1996, high prices and red tape remain. It's government failure, not market
failure, that short-circuited success.

While demand for electricity has skyrocketed, government officials continued
to clamp down on supply. Overzealous air-quality laws, environmental permit
applications, and siting paperwork have slowed the construction process to a
near-halt. No new major generating plants have been built in over a decade.
Only in the past year did the state Legislature pass fast-track measures to
lower the regulatory barriers to building new plants.

The 1996 law also forced power companies to obtain regulator approval before
doing major repairs or refits. In addition, new competitors from
out-of-state were frozen out of the market. The state required utilities to
buy power through two pools run by quasi-governmental agencies and kept
tight rate caps in place, distorting price signals.

Adrian Moore, director of economic policy at Reason Public Policy Institute,
puts it plainly: "The fact is, California embarked not on deregulation of
the electricity market at all, but 'restructuring.' While the generation of
electricity was partly deregulated, additional regulation and controls were
placed on the rest of the system. The result is not a market, but a hash of
semi-markets run by a government body ... so complex that no one fully
understands what is happening."

In fact, Moore notes, "California's electricity 'deregulation' law violated
most basic principles of deregulation -- it discouraged entry into the
market, it restricts expansion of capacity, and it sustains the old systems
and rules that defy competition."

Panicked politicians and environmental activists are calling for a return to
the good old days of the electric monopoly. But centralized control is the
reason for this year's outages, not the solution --- and it would do nothing
to alleviate the supply problem caused by continued opposition to new plant
construction. The green NIMBYs' power trip is enough to give you the
shivers.
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