California, The Designated Bad Guy. Energy, Politics or Both?

So the way I read the whole California energy crisis, is that the Bush team has designated them as the opposing team.

I see two motivations for this.

[1] Politics

Bush knows that he came very close to winning many small states, and got blown out in some of the big ones. I see the Bush team as writing off California as unwinnable, and using them to beat up on in order to try and gain a winning margain in other states when the 2004 election rolls around.

I’m looking for the Bush team to take every opportunity to blame California’s situation (from energy to anything else imaginable) on the democrats and liberal policies in general. I’m almost expecting his 2004 campaign slogan to be: “Elect me or end up like California”
[1] Energy Policy
I see the same trend here.

Follow my energy policy, or end up like California.

I expect to hear California’s name invoked when anything from drilling in Alaska comes up, to negotiating with Opec, to building nuclear power plants on the east coast, to expanding the powers of emminent domain.

What’s the reason?

[sub]everyone repeat after me…[/sub]

California!!!

While I happen to agree with many of Bush’s proposals, is it right to let California suffer?

I’m going both ways on this issue. Half of me wonders why the other 49 states have managed to avoid blackouts, while the other half of me wonders if we are dragging the entire country down by letting the lights go out whenever demand gets too high.

So I guess the debate is, does California deserve what it’s getting?

Yes, California should suffer, just on general principles. :smiley:

Factual qualification: other states have blackouts:
From Stateline | The Pew Charitable Trusts “Although other states, such as Illinois, Arkansas, New York and Delaware, experienced blackout problems of their own in 1999 and 2000, none have been as hard hit as California…”

Wisconsin has also had blackouts, as shown in this article.

Overall though, I think that W loses very little by sticking it to California. Price caps on electricity sales (a good idea, IM-not-so-HO) suffer from guilt-by-association with price caps on gasoline (a bad idea, IMNSHO). So even Californians don’t really blame W or the Federal Energy Regulatory Commission for their troubles. Which is a shame.

Qualification: California comprises about an eighth of the total economy, so there are limits to how hard W can squeeze. Still, even if the supply shock tips us into a recession, it will almost certainly be over by Nov. 2002. There is plenty of plant construction occuring; it will just take some time to get them built.

I should also say that the crisis really highlights the problems with Grey Davis’ play-it-safe-don’t-ruffle-any-feathers strategy. I suspect that he has been effectively eliminated as a serious Presidential contender.

Yes. California made the following mistakes:

  1. Built no power plants for many years. (I lived there during the battles over a new nuclear plant; it was brutal politics.)

  2. Didn’t build refineries.

  3. As a result of #1 and #2, they are forced to buy a large share of their energy from out of state.

  4. Their “deregulation plan” deregulated the prices paid by distributors, but kept state control of the prices paid by customers. When the price of power increased sharply, the state played politics by keeping the rate paid by the customers too low. As a result, the distributors are nearly bankrupt.

  5. In a vain attempt to avert reality, the state wasted a lot of their budget surplus buying power on behalf of the people. Meanwhile they blamed out of state power suppliers.

  6. Somewhere along the line, the state had prevented the distributors from signing long-term contracts with their suppliers. This policy boomeranged when the market price of energy sky-rocketed.

  7. Gov. Davis’s current solution has been to hire two political hatchet men, Mark Fabiani, Al Gore’s deputy campaign manager, and Chris Lehane, who have the job of attacking President Bush. See http://www.opinionjournal.com/diary/?id=95000505

These publicly funded political attacks won’t generate any energy for the people, but Davis hopes that blaming someone else will save his sorry political ass.

In short, at every stage the State of California failed to deal sensibly with their energy needs. Instead they have attacked whatever scapegoats they could find.

december has things generally right, with minor specifics that aren’t worth nitpicking.

As a Californian, I see this as a huge clusterfuck of mistakes piling on mistakes, all made by the people and government of this state. Therefore, it is up to the people of this state to fix it.

First, I think we need to get straight information. The state government is trying to give as much muddied information as possible, then the media puts it’s own twist to it, and the general public gets a very skewed and innaccuarate representation of the problem (unless they research it). I think this can be done by getting rid of Gray Davis. His plans are nothing but a stopgap measure and will not solve any problems.

Second, I do not think the central government should solve the problem for us, but I do feel they should provide some sort of temporary assistance (The US doesn’t want Californian tech companies to move to Canada). What this assistance should be, I don’t know, but it should only be some sort of monetary loan that must be repayed.

Third, I think the people of California should allow the construction of new power plants, and I think the state needs to enact real, full deregulation.

So, in short: California deserves what it’s getting. (And I’m damn glad I live in LA, even with the pollution, traffic, and stupid laws and higher city taxes. At least I have power).

Deregulation is the problem, plain and simple. As we’ve covered in earlier threads, some of the suppliers have chosen to simply idle their plants (using various excuses) in order to lower the supply, which in turn increases prices. Under the old system, that sort of game wouldn’t have been allowed. What California should do is go back to price caps and some regulation. What they will do is try to get people to conserve, by power from out of state for now, eventually build some more plants, and muddle through.

There are other states in the Northeast that have tried deregulation, and, as mentioned before they have suffered blackouts. Also, the promised drops in prices have yet to materialize. The LA Times had a map showing prices around the country a few weeks ago. The Northeast was mostly in the range of 10-15 cents / kWh. The lowest price, 5.3 cents / kWh, happened to be in my home state of Kentucky (:)), which is still regulated, just like it always has been. Of course, these are all average prices, your individual results may vary.

Oops, my post was missing a correction in the following sentence in my chaos of copy and pasting…

“Third, I think the people of California should allow the construction of new power plants, and I think the state needs to enact real, full deregulation.”

It should read, “Third, I think the people of California should allow and accept construction of new power plants, and I think the state needs to either enact real, full deregulation or revert to the previous controlled system (It worked!).”

december has most things wrong, with a few things right that aren’t worth nitpicking. Just kidding.

It’s true that it’s been difficult to build power plants in California, mostly due to NIMBYism, rather than environmentalists. Still, a lot of plant investment was postponed for a while until the rules of deregulation were made clear.

Refineries: Dealt with that here. That’s your thread, btw. New refineries haven’t been built anywhere in the US because up to a few of years ago, we didn’t need them.

4&5 are basically correct. 6 is sorta true: my understanding is that the utilities could have signed a long term contract anyway on their own account but chose not to. But the PUC did cock things up.

Untrue. Let me quote the erudite flowbark, from your thread cited above:

California consumers have had their rates raised twice, and pay among the highest in the nation. (Excepting Montana, which deregulated in a fashion similar to CA, but allowed the prices to be passed on to the consumer. Electricity prices skyrocketed. Businesses closed. Source: NYT Sunday Bus Section)

In short, most steps to resolve the crisis have (finally) been taken with one glaring exception: power producers still have an incentive to withhold output, thereby jacking up prices. And that problem can only be addressed in Washington.

Finally, let me quote my colleague beatle:

There are 2 power plants set to open in California by summer, with still more in construction.
Couldn’t G. Dubya really help his re-election by helping California? I know Gov. Davis didn’t cause the problem, but his handling of the problem will have me voting for whoever runs against him next time. If the Prez was to step in and save Californians on their bills and at the pumps, I know I’d be voting Republican for the 1st time.

I think that is exactly the opposite of what is going on.

I don’t think there is anyway that Bush can carry California in 2004, and I think he knows that.

I see Bush as trying to help his re-election by California bashing. He’s hoping that enough people in the swing states will dread ending up like Cali, that they will vote for him next time.

Ok, from what I can tell, the consensus is that California created their own problems (largely) by passing a law deregulating the wholesale side of the electricity supply. Wholesale prices went up, production was cut, and now we have blackouts and bankrupt utilities. Obviously, there are other problems, like lack of in-state power plants, but this law seemed to trigger the current crisis.

Here’s the question, why can’t CA re-regulate the wholesale side on their own, instead of expecting the Feds to do it?

I feel like something must have WHOOOOSHED right over my head.

Why is Gray Davis having to take the heat for this? He didn’t cause this problem. How can he be handling it any better than what he’s doing? What do you want? Want him to rub a ballon on his head to create a little electricity? He’s doing what he needs to do. Denouncing the Energy Industry’s Favorite Whore for leaving most of CA high and dry! I’m not from CA but I can see what the Bush admistration is doing by playing this problem hands off.

  1. Punishing CA for not voting for his second rate ass!

  2. Laughing behind his hand while greedy power companies
    withhold energy from CA and rob them blind. Thereby putting more money into the pockets of his friends. Remember the energy industry made a huge profit last year.

  3. Feeling bloated with his own sense of self worth because he can squeeze the largest and most influential state in the union.

  4. Sell the rest of the country a lie that we are in some kind of energy crisis. The only real crisis being that we’ve gone and allowed the energy, oil, insurance, tobacco, pharma, mining, blah, blah, blah industries to take over our government.

SDMB Californians, you are railing at the wrong guy. If you don’t like Gray Davis for any other reason then fine. From what I understand the state has filed suit against the suppliers that are gouging them, but I wouldn’t hold my breath about getting any justice for at least the next 4 years. I do understand the guy is no firebrand, but this guy is stuck between the bark and the tree. Blame who you need to blame, Mr. We Don’t Give Aid to States That Don’t Vote For Us. (And besides we need an excuse to drill, pollute with impunity, and push our barbaric tax break. Thanks for helping our sick, greedy adgenda.)

Needs2know

I hadn’t thought of that.

I was thinking more along the lines of harnessing the wind power he is generating.:slight_smile:

Needs2know, you aren’t very accurate with your position (and providing no valuable input, just Bush bashing), and I’ll respond to your post and others as soon as I get home from school.

Excuse me Monster but I am as accurate as where I get my information. Just because I choose to get it from another source than the right wing propaganda machine. I don’t have time right now to look up the cites but I will as soon as I can. The energy companies that have been providing CA with power have gone up as much as 300%. They have enjoyed huge profits. I’ve also read the news that LA and a couple of other counties do not have these problems because they control their own power generators. That’s good, perhaps the rest of the state can model future programs from them. Any way you slice it, deregulation has led to a serious problem in CA. The most serious being that out of state companies have used it as a means to gouge the state with over inflated prices. Perhaps it was feasible for them to raise prices, but not to the degree they have. One thing I believe the public needs to face, there are some public services that simply do not lend themselves to “free market” concepts. Why you ask, because companies are not interested in the public good, only profit. They have no conscience, and certainly many of them have no sense of civic duty at all.

Of course CA will have to find a way to become more independent or at least gain more leverage in it’s bid for power.

I will also not apologize for bashing Bush on this issue. (Or any other for that matter.) I can’t imagine that a president would turn his back on an entire state just to use their problem to further his own adgenda. I don’t like him, and I don’t like his supporters. I don’t like their “every man for himself” attitude. He’s leaving CA high and dry. He threatened to leave other states wet this year when it looked as though they would flood again. He leaves 3000 communities drinking polluted water. The “it’s your own fault” line doesn’t cut it with me. The people of California do not deserve to be played as pawns in some obscene political game. They are part of the Union and our government owes them it’s support.

Needs2know

Here are a few sites explaining the situation in CA.
http://www.sacbee.com/news/special/power/050601california.html

http://www.sacbee.com/news/special/power/042601hickox.html

http://www.sfgate.com/energy

There are others of course…California did make this problem but only in the sense that they were blind to the fact companies will always use every chink, loophole, and oversight to increase their profits. They were sold a bill of goods that competition always creates an enviornment where innovation and excellence prevail. And that may be true for some industries, not in this case. Companies have seized the opportunity to make obscene profits with almost criminal disregard for the consequences to the public. Anyone who does more than listen to Tony Snow or read the Wall Street Journal’s editorial page can figure it out on their own.

Needs2know

Maybe it’s just tough love?

Needs2know, it is good to know some one knows what’s going on in CA. You did a very nice job of taking an amazingly complex situation and explaining it in clear and convincing terms. There is just one question left, then we can solve this whole mess. That question is, “Did Bush cause the drought in the Northwest before or after he set the fire in San Iniofre?”

Yes, Needs2know, the problem was entirely caused by a secret conspiracy of evil power companies. But, Governor Davis could have saved the day if he had only kept his tin-foil hat on.

Oooh, I love how GD has become the place to attack other posters instead of pointing out the fallacy of their arguments. The current system encourages generators to cut supply to encourage higher prices, colusion need not apply. This has been recognized by California PUC, FERC and an economists higher by FERC.

stuffinb, that’s exactly the argument I am trying to counter. There are at least 2 incidence where the problems are very real power-plant problems. These two outages (hydroelectric and nuclear) contribute significantly to the lower supply of power. Anyone who attributes the crisis entirely to conspiracy, and refuses to admit that, hey, big mechanical things break down sometimes, is adding more heat than light, and perhaps should be ignored.

That said, I am willing to accept the idea that the outage of some of the plants was a little too convenient for the power companies. Got any real proof? The fact that they could have, unfortunately, does not mean that they should.