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Blackout blackmail

Study shows energy crisis was created by power suppliers By Savannah Blackwell

Every day, it seems, the evidence grows stronger that California's energy crisis is being manufactured by a handful of private companies in the name of higher profits.

On March 18 the Foundation for Taxpayer and Consumer Rights the organization that backed a 1998 initiative that would have eased some of the financial burden of deregulation from consumers' shoulders and corrected some of the mistakes of the state's deregulation law released a report concluding that the demand for electricity in California in four of the last six months was actually lower than in 1999.

"The blackouts were intended to blackmail the state into pumping money into the pockets of the energy companies while re-igniting the sense of urgency around bailing out the utilities," the report states. The group indicted "utility, energy and Wall Street firms" for manufacturing the crisis "for their financial gain."

The report concludes that despite the recent spike in the cost of natural gas, there has been plenty of fuel available to run California's power plants. It states that generators abused regulations allowing them to withhold power for "unplanned outages" and "unscheduled maintenance" to drive up the cost of electricity on the market.

(Indeed, Loretta Lynch, the head of the state Public Utilities Commission was quoted in the March 20 San Francisco Chronicle as calling it "highly suspicious" that some 12,000 megawatts, one-third of the electric capacity of the state's mainstream power plants, were taken off-line for maintenance March 19, the day of the most recent blackouts.)

The foundation report makes a neat point of demonstrating the close relationship between blackouts, or the threat of blackouts, and capitulations from state legislators and Gov. Gray Davis. For example, on Jan. 16 Pacific Gas and Electric Company and Southern California Edison announced they were broke and defaulted on payments to generators. On Jan. 17 blackouts occurred. On Jan. 18 emergency legislation was passed giving Davis the power to use taxpayer money to buy electricity.

On March 24 representatives of the state's Independent System Operator the agency responsible for making sure there's enough juice on the grid announced that power generators have overcharged Californians $6.2 billion since May.

And yet, on March 26 the CPUC announced another 40 percent hike in electricity rates.

The crisis is encouraging efforts both in the state legislature and in communities around the state to take public control of the electricity business.

"The promises of deregulation were so syrupy with free-market wisdom," Paul Van Dyke, legislative director for state senator Nell Soto (D-Ontario), told the Bay Guardian. "You don't hear about how smart the free market is anymore."

Soto is sponsoring a bill that would make it easier for cities to form municipal utility districts (see "Policy Roundup," 2/14/01).

The state senate's Judiciary Committee voted unanimously March 20 to refer the bill to the Energy, Utilities, and Communications Committee. Evan Goldberg, a spokesperson for energy committee chair Debra Bowen (D-Marina del Rey), said the bill would be scheduled for a hearing before the committee but could not say when.

Van Dyke characterized the move as somewhat of a victory in that the Republicans on the committee, who were going to vote against it, did allow the bill to continue to wend its way through the legislature.

The cable industry is the MUD bill's most vocal opponent. Van Dyke said the rumor is that those companies are really opposing the bill as a political and financial favor to the utilities.

"Everyone with half a brain can see that what the investor-owned utilities have been telling the legislature hasn't been true," Van Dyke said. "Nobody wants to be seen as supporting them right now. The cable industry doesn't have the same blemish."

PG&E is, of course, opposed to the Soto bill. A March 1 company letter to Soto states, "Municipalization is a blunt instrument."

Meanwhile, the Los Angeles Times reported March 23 that officials in Chino are considering forming a MUD with the neighboring town of Ontario, Soto's base. In Berkeley the city council voted 5-2 March 20 to authorize spending $85,000 on a feasibility study that could lead to public power. The study would look at the possibility of Berkeley joining with the East Bay Municipal Utility District to create a public power system or, if EBMUD is not interested, of Berkeley forming a MUD on its own, councilmember Kriss Worthington told the Bay Guardian.

Even factions within labor which has come to side frequently with the utilities are starting to embrace public power. The California Federation of Teachers adopted a resolution March 11, at the group's annual convention in Los Angeles, stating officially that the group favors the transfer of the power system into public ownership.

-- Martin Thompson (, March 29, 2001


The question is: Is there any special significance to the period from March 17 to March 19 of 2001, as a date when a short-term Y2K "patch" fix ran out of time?

The reason why few Y2K problems were immediately apparent at the Moment of Truth, is because remediators used every method possible to delay and scatter the failures, even setting back computer clocks when necessary to prevent crashing at Y2K's "Ground Zero" of Dec. 31 1999 at 11:59:59 pm. Although this practice was good triage, avoidng and preventing the dreaded "Ice Storm" sudden simultaneous Y2K "hit", these "patch" fixes generally "run out of time" at some point. These "patched" systems thus fail on various scattered dates, each failure date depending on the specific "patch" method used; if not fully remediated in time.

If the answer is in the affirmative, that a specific Y2K temporary fix "ran out of time" between March 17 and March 19 of 2001, then those who stand accused now have their opportunity to be heard.

-- Robert Riggs (, March 29, 2001.

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