Related Articles

CA ENERGY CRISIS UPDATE
Contributed by LU 1245, Walnut Creek, CA

May 9, 2001 

REPUBLICAN BREAKS RANKS ON WHOLESALE RATE CAP

California Rep. Elton Gallegly (R) in a break with the Bush administration, has called on the federal government to impose an immediate cap on wholesale power rates. "With anything less than these measures, the state of California cannot meet the short-term energy needs of its citizens," Gallegly said in a letter to Vice President Dick Cheney. Gallegly is the fourth House Republican to support a price cap.

TOP LEGISLATORS ANNOUNCE PLAN TO SUE FERC

California Senate President Pro Tem John Burton (D) and Assembly Speaker Robert Hertzberg (D) plan to sue federal energy regulators for allowing electricity rates to spiral out of control. "The Federal Power Act requires (the commission) to make sure that energy prices are just and reasonable," Burton told the San Francisco Chronicle. "Clearly, rates are anything but just and reasonable.

It's the second major suit regarding wholesale power supplies in a week. Last week Lt. Gov. Cruz Bustamante (D) filed a suit against wholesale energy producers on behalf of California taxpayers, accusing the producers of engaging in a price-fixing conspiracy and using unlawful trading practices to manipulate the state's electricity market.

UNLIKE CHENEY, SCIENTISTS SEE BIG POTENTIAL IN CONSERVATION

Five national laboratories say that a government-led efficiency program emphasizing research and incentives to adopt new technologies could reduce the growth in electricity demand by 20% to 47%. That would be the equivalent of between 265 and 610 megawatt power plants, each with a 300-megawatt capacity. The scientists findings are in sharp contrast to opinions expressed last week by Vice President Dick Cheney, who virtually dismissed the role of conservation in solving California's power crisis.

NO, REALLY, DEREGULATION IS GREAT!

Former Gov. Pete Wilson just can't stop taking credit for California's current power crisis. "I take credit for being the driving force behind deregulation," he told the Los Angeles Times in an interview this week."

Notes the Times: "Of course, that mid-'90s deregulation scheme ... has been calamitous for California so far: obscenely high wholesale electricity prices that have bankrupted one private utility and left another pleading for a public rescue, a gigantic shift of wealth from California to out-of-state profiteers, and the draining of billions from the state treasury to buy electricity for utilities. Plus rolling blackouts."

POOR ENERGY COMPANIES

Unregulated wholesale generators complain about not being paid for power supplied to PG&E last winter. But they haven't done too badly. The top 10 companies supplying power to California posted a 100% gain in their combined 2000 net income.

EXECS DO OK, TOO

Executives at the largest energy companies selling power into California saw their compensation rise an average of 253% last year, with one top exec collecting more than $100 million. ENRON Chairman and Bush advisor Kenneth Lay collected a cool $141.6 million, a 184% increase over 1999. A California Independent System Operator study recently found that "market power" exercised by Enron and other suppliers resulted in unfair profits that contributed $6.87 billion to the cost of wholesale power last year.

CONSUMERS GAIN SEAT IN BANKRUPTCY

A federal trustee last week named a ratepayers' committee for the PG&E bankruptcy case and empowered the committee to question PG&E's finances and the need for rate increases. The committee includes five business representatives, two members from government agencies, and two consumer organizations.

FLORIDA SAYS NO THANKS

Florida lawmakers were ready to adjourn last week without amending a state law that prohibits merchant power plants from operating in the state. Do you think they might have heard about what was going on in California?

Hundreds of community organizations have been notified that the roughly $7 million they have counted on annually from PG&E is suspended indefinitely. Another casualty of PG&E bankruptcy.

ECONOMY THREATENED

Elevated energy costs present a significant drag on the economy and can be expected to reduce growth and economic output and employment, according to a study by the Bay Area Economic Forum. The study said 42% of Bay Area businesses report that power problems have already hurt their profit margins and their competitiveness relative to competitors outside the region.