So this is Arnold's bold plan

NotMrKnowItAll · October 9, 2003, 2:21pm

To recap, the govenor-elect want the US to bail out California. Perhaps diverting some AIDS money from Africa, or something like that.

My Own Impression: Basically a Democratic plan with a Republican twist.

NotMrKnowItAll · October 9, 2003, 2:27pm

Drat:

governor and wants.

rjung · October 9, 2003, 4:39pm

Give him credit, it has a good chance of working. Bush would be petty enough to withhold aid to California until we have a Republican governor instead of a Democratic one.

blowero · October 9, 2003, 6:12pm

Maybe they’ll give him a cushy job with Halliburton on the side, too.

Voodoochile · October 10, 2003, 4:30am

Well, since Cal has paid more into the fed system for 15 years than it has gotten back, its nice to see a gov ask for some of it back. Lets wait and see what the amount is, but I have no problems with us getting the lions share when we create the lions share. Its only a bailout if the amount is more than we contributed. Otherwise, its our due.

Airman_Doors_USAF · October 10, 2003, 4:52am

And, of course, Bush is the only person who handles appropriations for the Federal Gov… what’s that you say? Congress handles appropriations? Thought so.

Thank you for another enlightening post, rjung. I am so glad that Arnie’s your governor, BTW. It’s just another itch for you to scratch at until it drives you crazy.

Apos · October 10, 2003, 5:26am

Damn that Democratic Congress, what a frustrating roadblock they are.

There is good reason to think a federal government bailout by Bush during the energy crisis could have turned the tide and broke the part of the “crisis” that was manufactured by energy companies to play the state for some juicy bucks. But doing so would have cost lots of Bush buddies billions in profits. But now there’s a potential major re-election campaign fundraiser to woo!

NotMrKnowItAll · October 10, 2003, 3:00pm

From the Guardian (cite)

The state has no right to the money that its citizens pay in Federal Taxes(please correct me if I’m wrong). Sure, it would be nice if it all evened out, but just like school financing, it never does. Really, how could this work? Apply extra taxes to the citizens of the states that get more than they receive?

I certainly agree that some well placed money and maybe federal arm-twisting could have alleviated the power problems California had, but that sort of activist goverment action runs counter to general Republican beliefs, right? Deregulation and all that.

The Federal goverment cannot afford to give California $9-20 Billion. It would have to add it to our already burgeoning debt. And if it gave the money, what about the other 49 states, where’s their money? How can a representative of either party vote to aid a state when his or her own state is struggling?

I see in the Guardian article above that Mr. Schwarzenegger has stated that cutting Pete Wilson’s car tax would be problematic, so I should take back that “Republican Twist” bit.

It certainly is encouraging to me that the the Governor-Elect is brainstorming and exploring all avenues, apparently without the need to cowtow to either party, so I give him a better than average chance to succeed just on that.

handy · October 10, 2003, 3:17pm

If the gov gives California money then isn’t it obligated to give the other states the money they need to balance their budget? I think their are more than 40 other states that need the dough.

toadspittle · October 10, 2003, 4:15pm

The Feds owe California money. Boo-hoo. Tell that to us in New York City, where we’ve long had Republican governors and mayors. Arnie doesn’t have a chance in hell of getting that money.

rjung · October 10, 2003, 4:36pm

Yep. When the Davis administration went to the White House and complained about the energy companies diddling with supply and prices, Bush and Cheney told us all to take a flying leap (including Cheney’s bullstuff quote that “There is not an energy crisis, you just use too much electricity”). Of course, it eventually turned out that Enron et al were diddling with the electricity supply, but by then the damage was done.

The Bush Administration’s pettiness in that incident convinces me that they would be petty enough to wait for a Republican governor before charging in with a rescue. If Bush delivers a big California bailout now, he looks like a hero, Schwarzenegger looks good out of the gate, and Airman Doors will misattribute the whole thing to George’s generousity and genius. :rolleyes:

Airman_Doors_USAF · October 10, 2003, 4:46pm

:rolleyes:

Whatever you say, dude.

Sam_Stone · October 11, 2003, 2:55am

Actually, Here is Arnold’s Bold Plan.

There’s a lot of very thoughtful stuff in there. Some very good ideas, perhaps some not-so-good. But no one can call it simplistic.

For example, here’s just the bulleted section of his energy plan:

A Brief History:
California energy consumption has grown over the decades due to rapid economic and population growth. Until the 1970s, California power costs were in line with those of other Western states. However, cost overruns on nuclear plants and mandatory requirements to purchase expensive power caused the state’s power rates to mushroom. In response to this, Sacramento looked for a solution in market driven reforms. In 1996, lawmakers passed AB 1890. Passed with unanimous and bipartisan support, AB 1890 focused on deregulating wholesale electricity while maintaining strict control of retail prices.
There were significant flaws in the original legislation and subsequent policy responses that led to the energy crisis:
[ul]
[li]PUC regulation put utilities at risk. These regulations included restrictions against long-term power contracts, a flawed wholesale market, and a lack of reserve requirements.[/li][li]Deregulated wholesale prices and regulated retail prices forced utilities to operate at significant losses when wholesale prices surged. This caused PG&E’s bankruptcy and pushed Southern California Edison to the verge of bankruptcy. [/li][li]Slow and poor policy response exacerbated financial degradation of utilities - delay in raising rates and discouragement of long-term contracts[/li][/ul]

What We Need to Do:
[ul]
[li]**Create a uniform state energy strategy to stimulate private investment and align the state’s 13 energy bureaucracies to support that strategy. **[/li][/ul]
Policy makers need to take action to cut the risk of future power supply shortages. The state needs an energy policy that links wholesale and retail markets and rationalizes and clarifies the role of state agencies. States like California that project regulatory uncertainty heighten risk for investors and threaten further delays in new power infrastructure investment. A rational and consistent power policy will ultimately result in lower costs and greater reliability for Californians.

As Governor, I will:
[ul]
[li]Issue a clear energy strategy that focuses on attracting new investments in California. Align the state’s 13 energy agencies with the overall state strategy and make certain that they issue clear and consistent guidance to the regulated communities. Also evaluate the California Power Authority to determine if its purpose can be reformed to support a sustainable energy policy.[/li][li]Affirm the commitment to private power by dismantling the California Power Authority (CPA) and transferring to other agencies those functions (if any) determined to support a sustainable energy policy. Its current mission to build and operate publicly owned power plants is in direct competition with private industry and serves only to divert private investment in electricity generation and transmission away from the state.[/li][li]Pass legislation that expedites prudency rulings on utility power purchase agreements (PPA) and limits the CPUC’s ability to review such contracts after the fact.[/li][li]Create a working wholesale power market based on the lessons learned from other states and the FERC standard market design. California is one of several states that adopted electricity restructuring. However, only California’s restructuring caused severe price hikes and energy shortages. It is time to learn from other successful restructurings enacted by Texas, the New England states, and the Mid-Atlantic states of Pennsylvania, New Jersey and Maryland. In addition, California should also look to the standard market design created by FERC.[/li][/ul]

As Governor, I will:
[ul]
[li]Restructure the wholesale market. Merge the functions of the CAISO and former PX (transmission operations, generation dispatch, and wholesale trading) into a single entity. [/li][li]Make sure there are adequate power reserves to prevent market manipulation.[/li][li]Make markets work. Consumers that want stable prices must bear the costs of power reserves, and businesses that don’t bear these costs must pay full floating market rate for power.[/li][li]Assure adequate and diverse fuel for power generation. Currently, 43% of the state’s generating capacity is derived from natural gas. An additional 13% is derived from hydropower, 13% coal, and 16% nuclear. Renewable wind, biomass, and geothermal provide the remaining 16%. Because of our dependency on natural gas fired generators, California needs to increase its investments in transmission to ensure adequate access to natural gas. But in the long-run, power price stability will require diversification away from gas to assure a portfolio of alternative fuel sources for the state.[/li][/ul]

Liquefied Natural Gas (LNG) provides an opportunity to assure a reliable supply of natural gas. LNG is cryogenically cooled natural gas, turned into a liquid, that is easier to ship. This is a proven technology that will create more natural gas capacity. Current LNG proposed projects for construction in Baja California will facilitate imports from Bolivia, Alaska, and other sources.

As Governor, I will:
[ul]
[li]Encourage investments in natural gas transmission.[/li][li]Explore building facilities for safely importing liquefied natural gas.[/li][li]Encourage cost-effective conservation by increasing demand response to changing electricity markets. One of Governor Davis’s great errors was his delay in permitting retail prices of electricity to move with wholesale costs. This failure prevented conservation of power during peak hours. These actions cost the state billions of dollars. No market can function without proper prices. Commercial, industrial, and government consumers should be given the right to opt out of these reserve charges if they allow the state to remotely turn off their power when supply is tight. These specific consumers must use hourly meters that permit remote dispatch. This interruptible load can be included as reserve power. [/li][/ul]

As Governor, I will:
[ul]
[li]Link retail prices to wholesale costs for large commercial and industrial users.[/li][li]Implement real-time pricing for the largest customers. This will not only protect California against shortages, it will also help reduce the cost of doing business for energy-intensive industries, such as manufacturing.[/li][li]Enact electricity reserves requirements for power generators. Electricity markets are extremely volatile. Electricity reserves provide the critical buffer needed to prevent blackouts and electricity price spikes. In the old regulated model, it was easy for a regulator to demand minimum generation reserves, and it was painless for the regulated utility could provide these reserves. However, in a competitive world, it is less obvious that the market will assure adequate reserves because there is no requirement or incentive to build excess capacity. California must coordinate reserve policy with the other member states and provinces of the Western Electricity Coordinating Council (WECC) to assure reserve adequacy across the entire region. Failure to assure adequate reserves increases the risk of a repeat of the California Energy Crisis.[/li][/ul]

As Governor, I will:
[ul]
[li]Require the utilities to meet minimum reserve requirements and impose penalties for those that fail to meet these requirements. The cost of these reserve requirements will be funded through distribution charges. These reserves will assure that our power needs are met even during peak hours and seasons. This will not only encourage more private sector investment, but it will also protect Californians against a return to the chaos of 2001.[/li]
[li]Address the burden of overpriced legacy power purchase agreements on the citizens of California. Unfortunately, the new Governor will inherit $43 billion of overpriced electricity power purchase agreements (PPAs). In total these contracts will require a payment of about $4 billion a year for the next 10 years and smaller amounts beyond that time. The prices in these contracts are about twice what one would expect to be the wholesale price of electricity over that time. Therefore these contracts will cost ratepayers about $2 billion a year more for electricity than what would have been the case without the contracts. [/li][/ul]

As Governor, I will:
[ul]
[li]Explore options for renegotiating or otherwise reducing the cost of the $43 billion of overpriced electricity power purchase agreements that Gray Davis signed.[/li][/ul]