My Take on the Power Crisis or How the Anchovies Were Fed to the Sharks


October, 2001 presentation to the League of Women Voters Energy Forum, Bakersfield, California

It’s quite a privilege to be on the same program as Richard Bilas. Dick is the kind of public servant whose door is always open, who always takes his calls–even from those whom he may not agree. Maybe it’s from his years in academia engaging in the free exchange of ideas with his colleagues. Maybe it’s from his outlook on life. I don’t know which it is, but in this time of crisis, it’s an American value we should not forget, nor slight. Dick and I don’t always agree, but I know I can always talk to him. (I also know he alway’s good for a quote.) I wish there were more public servants like him.

Unfortunately, there are politicians who have forgotten the meaning of democracy, who have forgotten that they serve all their constituents, not just those that bankroll their campaigns. Politicians who publicly brag that have not met, nor will they meet with constituents who they don’t agree with. Politicians such as these–of either party–are as dangerous a threat to our democracy, to the true meaning of our democracy, as external terrorists. In the end terrorists may kill us. They may destroy our buildings. Yet they only dent our ideals, our values. But a politician without regard for their sacred trust to protect democracy, erodes our institutions slowly from within.

And this brings us to energy policy, for it is in the deregulation fiasco that such attitudes, such disregard for the wellspring of political power–the people–found full flower.

A cynic once said there are two things you should never watch being made: sausage, and legislation. For me the scene in California was so disheartening, that in the mid-1990s I began traveling across the county and through Northern Europe warning audiences not to catch “deregulation fever,” what I called the American Mad Cow Disease. If it’s any consolation to Californians, the Europeans have become infected too. But maybe, just maybe, our experience in the past year will shake some sense into them before it becomes too late. Certainly here in North America a number of states are re-examining their hell-bent rush towards de-regulation. We didn’t and we’re paying the price, figuratively and literally.

So, how did we get into this mess? The answer you get depends on who you talk to and the spin they want to put on it. My Take on California’s Power Crisis can be found on one of my web sites. I won’t go through it here. Unlike other commentators, though, I tell you up front where I am coming from.

So, what’s my spin? You’ve probably guessed by now. I was opposed to deregulation. I still am. Anyone with any historical perspective whatsoever should recall with a shudder why electric utilities were regulated in the first place. Millions of Americans lost their life savings to the Power Trusts of the 1920s. While the old system was fraught with problems from an environmental perspective, it basically worked. At least it kept the lights on.

Suffice it to say the story is complex and the details overwhelming. To understand it, always ask yourself, who had the most to gain.

The story is not very pretty either. Historians may one day ascribe the entire episode to “dollar-democracy” at its worst, a not so euphemistic term for the corrupting influence of the campaign contributions that poured into the legislature on this issue. PG&E alone had 30 hired-guns patrolling Capitol lobbies.

So, once again, why wasn’t there enough power when we needed it? Was it because of those pesky enviros? No. Enviros participated in the grueling, seemingly never-ending and ultimately unsuccessful planning process that should have resulted in 1,500 MW of new power plants in the state sometime in the early 1990s.

Well then, who did stop these plants? It was the electric utilities themselves with the connivance of the Federal Energy Regulatory Commission. Yep, the very ones whining about bankruptcy. Let’s just say that they got it wrong, very wrong.

So, who wanted deregulation in the first place? Who would gain–or at least who thought they would gain? The answer is what is known in the trade as the Big Dogs: SCE, PG&E, SDG&E, the large industrial consumers, and their ideological allies. The utilities wanted released from their regulatory shackles as they called them so they could increase their profits by launching new businesses and venturing into other states. The industrial customers wanted cheap electricity at any cost–to other ratepayers of course. Greed, in a word, is what drove deregulation.

Californians have been snookered. We are all victims of a myth. A belief so all pervasive that few question it, even fewer still realize it is a belief, a veritable secular religion.

Deregulation was a craze, but not one like the harmless hula-hoop craze of the 50s. This craze hurts people, by feeding the anchovies, the public, to the sharks, the power generators. Deregulation was more like the tulip mania that engulfed the Dutch in the 17th century and bankrupted the country.

Deregulation’s chief tenet is that all things good come from the so-called free market. I say so-called free-market, because such a market, certainly for energy, doesn’t exist.

Unfortunately, an unregulated free market is a fool’s paradise where the things most important to us–love, family, clean air & water–are either undervalued or not valued at all, and where only price–and that only the apparent price–is raised onto an altar and we are asked to pay homage.

Californians and our politicians were not immune to the siren song of deregulation and we have crashed the ship of state on its shoals.

Deregulation has failed. Yet its failure offers us an unparalleled, if unfortunate, opportunity to rethink how we produce, consume, and value electricity in the Golden State. We need a vision of what we want for California and for Californians.

Electricity is a means to an end–a tool for meeting the needs of people–and not an end in itself. We need an electricity system that is sustainable, a system that meets the needs of people today as well those of tomorrow, and a system that is built upon sufficiency for all, equitably distributed. We need an eletricity system that enhances the quality of life for all Californians, rich and poor alike. Such a system is built upon services rendered, needs met, and not upon a constant and never-ending growth of supply. We must envision an electricity system for people, or, as the Danish theologian N.F.S. Grundtvig would say, an energy system for life.

It’s time for us to construct an electricity supply system that emphasizes using energy wisely and with respect for our neighbors and the environment.

There are no panaceas, no quick fixes.

One achievable near-term objective fitting the vision I laid out is reaching residential per capita consumption of electricity equivalent to that of Europeans.

Per capita, Europeans consume about half the electricity of Californians while enjoying the same standard of living. By several measures, Europeans enjoy a higher standard of living than Californians, yet use less electricity, less oil, less energy in general.

A young Bakersfield woman wisely said, “what we waste today, we steal from our children.” She meant it literally as a future mother, but she could easily have meant it metaphorically, as what we squander today, we steal from future generations.

We can do as well as the Europeans. Saving energy does require effort, and an investment in time and money, but anything in life of value requires some degree of effort.

Don’t let anyone tell you it can’t be done. It can. In March my wife, Nancy Nies, and I started paying attention to our electricity consumption. As a result we’ve cut our bill by nearly 50% and we’re on track to bring our annual consumption in line with that of a typical Northern European. And yes, we have A/C.

What would happen if everyone did this? Well, we certainly wouldn’t have had a power crisis and we certainly wouldn’t have given the Confederate Cartel a stranglehold over the state’s economy.

Of course we still need new sources of supply, especially to replace the old dirty power plants operating in the state. And one way to do that is to offer the people of California the same deal that Germany and Spain offer their citizens by instituting an Electricity Feed Law. Such a law simply states that you can connect your solar or wind power system to the grid, and, more importantly, spells out how much you will be paid for it.

German utilities pay 50 cents per kWh for electricity from customer-owned solar panels, 10 cents per kWh from windmills. This simple law is why Germany is today’s world leader in wind and solar energy. It’s because of this law that the windmills being built in Tehachapi are German-designed not American.

What you can do? Write your Assemblyperson, State Senator, Governor Gray Davis, and your local newspaper to demand that these simple measures be incorporated into any legislation now before the Assembly.

The Governor and the legislature are desperate for a quick fix that will absolve them of further responsibility for California’s deregulation mess. Let’s give them something that will better serve the needs of Californians and the environment.

In a place of such abundant sunshine as Bakersfield–sometime much too much sunshine–there should be a solar power plant in everyone’s backyard

Let’s bring back the luster to the Golden State. Let’s build a bright solar future for California and for California’s children.