The California energy crisis is a product of government ineptitude, myopia and arrogance. Incompetence, featherbedding and politics contribute to the growing calamity that has taken on an urgency everyone except the state officials who need to solve the problem recognize.
Notwithstanding the sarcasm of many, like the Wall Street Journal's Kimberly Strassel ("Well, boo hoo hoo. That's the most sympathy I can muster for all those Californians currently tripping over their espresso makers in the dark. For once we have some justice. Very bad decisions mean very cold hot tubs"), California's self-inflicted wounds could ripple across the country jeopardizing the national power grid.
Ms. Strassel is certainly right about one thing: "California enacted some of the strictest environmental rules in the world and refused to build any new dam or plant. Now, with supply low and prices high, the state is flailing. And so the armchair crowd must decide: Will they support radical environmentalism or pragmatic conservation?" It is beyond time to lead, follow or get the hell out of the way.
Sadly, California's Democratic controlled Assembly, Senate, and governor's office seem incapable of anything other than tilting at windmills and trying to cover their political bottoms in a chronic demonstration of blame-shifting and plausible deniability.
Still, there are consequences to actions.
Strassel notes, "California is an amusing lesson of cause and effect. It takes all those worst-case scenarios that responsible conservationists have been warning about for years and makes them reality. It shows, step by step, what happens when pie-in-the-sky environmental policies -- initiated by environmental groups, paid for by armchair environmentalists and pushed through by ambitious politicians -- win out over a reasoned balance between humans and nature."
Any bright 6th grader can tell you that if demand continues to grow and capacity doesn't maintain pace, eventually the law of diminishing return will kick in. OK, a sixth grader won't call it diminishing return but if classroom size were to increase 25 percent and chairs were only increased 6 percent somebody will end up sitting on the floor. California's energy demand has increased 25 percent but capacity has only increased 6 percent, thanks to the enviro-wackos.
California Gov. Gray Davis admittedly is in a tough spot. He has reached out to the feds and asked President Bush to bail out California. "Help! Puleeeeez!"
The new president, while providing some short-term bridging assistance has basically said, "Hey, you guys created the problem...you guys have to fix it."
And he is right!
However, the potential very real negative consequences of California's probable inability to fix the problem could have ramifications of national scope. Remember all that talk about the interconnectivity of the national power grid during the Y2K scare? That reality still looms as a potential. When (note I don't say "if") the California rolling blackouts are insufficient to mitigate the hemorrhaging, the symbiotic national power grid infrastructure could be impacted.
Eventually, the diffident President Bush may not be able to treat California like that, in the parlance of Ross Perot, crazy aunt you keep in the basement.
The Dilbert-like California legislature's solution is to embrace fascism and have the Big Brother state government buy and sell power. As one reader asked, "Does that mean with the state running things energy management will now run as smoothly as the DMV?"
Davis et al. presume they can buy energy cheaper on long-term contracts because, in the wake of a budget surplus (which was a result of taking more money from taxpayers than they expected and therefore hadn't figured out how to spend yet), California has a better credit rating than the bankruptcy-prone utilities. By the way, those utilities were put in financial jeopardy because of the legislative brain flatulence that compelled them to sell at a fixed price with no mechanism for passing along increased cost from power vendors. Remember, the utilities have to reach out to other states because California "greenism" cancer imposes draconian environmental restrictions that inhibit the ability to build more power generation facilities.
So, what happens when the state (and it is almost axiomatic) soils the sheets and -- even with advantages they refused the utilities -- cannot perform? What happens when the state's credit rating drops?
California (or more accurately, the governor and legislature) could be responsible for a national energy crisis that would result in the federal government doing to California what California has done to its utility-company victims.
I have a very cynical view of politicians. The parable of the scorpion and the frog comes to mind when discussing pols and their ubiquitous tendency to do what they do because of what they are.
California has created a $10-billion salvation fund. Its creation is as dubious as the myriad failings that created the need for salvation. Allegedly, $10 billion will fix everything. I don't think so! A typical Democrat solution: throw more money, more of other people's (the people's) money and everything will be cool.
Yeah, cool in the winter and hot in the summer.
On Nov. 21, 2000, Calpine said that it was committed to investing $4 billion in the California market. This from a company that went from $95 million in revenue in 1994 to $848 million after Gov. Davis took office. When Davis was granted the $10 billion to take care of the electrical problem, what did he do with the money? Well he turned around on Feb. 7, 2001, and handed $4.6 billion to Calpine to spend!
That's an interesting coincidence. When I suggested the curiousness of the coincidence with some California lobbyists, they laughed. "Coincidence doesn't exist around here," they all said.
However, the fascinating part of this story that I haven't heard acknowledged yet is that Calpine, by its own admission, is not going to be able to do anything about the power problem this summer. It is going to get ugly. In fact, according to Calpine, it will only have 200 megawatts Oct. 2001 and 1,000 megawatts committed in 2004.
What does that mean in English? Well, it means what Calpine is proposing will only add one-fiftieth of the amount of power needed by the state of California by 2004!
So, Gov. Davis has given one company -- that has only started to grow since he came into office -- nearly half of the taxpayer's $10 billion, and it doesn't even begin to address the problem when the power plant comes on line. Hmmm.
It doesn't take a rocket scientist to solve the problem; however, the solution will not be short term and will not prevent the nightmare that will occur this summer (thanks to the politicians engaged in mental masturbation). You have to build more energy production facilities as fast as humanly possible and accept environmental impacts that will offend the greenies. Or, impose population restrictions and control the border to slow growth.
If California does not do what is obvious and necessary the unintended consequence will be a mass migration out of California, which could result in a state demographically composed of the very rich and the very poor.
at that point, the very rich -- who tend (in California) for some strange
reason to be very liberal -- will find themselves subsidizing the necessities
of the very poor. Which will probably lead Ms. Strassel at the Wall Street
Journal to smile and probably observe, "Payback's a bitch!"