No solution seen in California energy debacle : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread

Sunday, April 8 4:21 PM SGT

No solution seen in California energy debacle LOS ANGELES, April 8 (AFP) - The lights were still on in California early Sunday, two days after the state's largest energy utility declared bankruptcy, but there was no little hope that the state's protracted power crisis would be resolved quickly.

Pacific Gas and Electric Company's Friday filing in federal Bankruptcy Court is the third largest Chapter 11 filing in US history, and the latest development in California's intractable energy quagmire.

Locals are a little embarrased that the Pacific coast economic powerhouse that can't seem to find enough juice to keep its mighty turbines running.

California is home to Silicon Valley, the dream merchants of Hollywood and a massive defense industry, the world's eighth largest economy with a Gross Domestic Product of 1.03 trillion dollars.

Yet businesses, facing assembly line shutdowns, have trouble meeting orders, while their employees face darkened traffic lights and can't be sure if their electric alarm clocks will wake them for work.

"My husband is Australian," says student Jennifer Wade, 28. "He laughs about it."

Just about everyone in this state of 34 million souls agrees on what caused the debacle: the mishandled deregulation of California's energy markets that an enthusiastic state legislature unanimously adopted in 1996.

Under that law, investor-owned utilities gave up control of the state transmission grid, and were obliged to sell off most of their power generating plants.

In return, they were free to buy low-priced power -- so the free-marketers' theory went -- created by new producers.

But instead rates have soared as supply has dried up. No new power plants have been built in recent years, while demand has increased with the booming economy and growing population.

Also utilities had their prices capped, while generators were free to charge utilities whatever the market would bear.

PGandE chairman Bob Glynn took a swipe at California Governor Gray Davis after his company filed for bankruptcy, saying talks with Davis officials had gone "nowhere."

"We expect the court will provide the venue needed to reach a solution that, thus far, the state and state regulators have not been able to achieve," Glynn told reporters.

PGandE, which serves 13 million customers in Central and Northern California, Southern California Edison and San Diego Gas and Electric have been warning of the looming power crunch since last summer.

But most didn't start paying attention until January, when the unthinkable happened -- the first "stage three" power alerts.

From Oregon to Nevada to the Mexican border, rolling blackouts plunged hundreds of thousands of homes into darkness, shutting down businesses, factories and schools.

The Federal Energy Commission -- which regulates wholesale power -- did not react to PGandE's Friday bombshell.

But speaking to the Los Angeles Times, commission member and Democrat appointee William Massey called the bankruptcy "the result of a massive failure of policy makers at all levels to effectively respond to a crisis caused by a wildly disfunctional wholesale electricity market."

Californians have become fluent in the emergency's jargon: "rolling blackouts," "stage one, two or three" alerts and "interruptible customers."

And for the record, "shedding" refers to utilities cutting back on juice, not something the dog does to your furniture.

That vocabulary lesson has come with a price tag -- three billion taxpayer dollars since last fall for expensive, short-term energy contracts.

The timing of PGandE's filing -- the morning after Davis went on statewide television to blame California's power woes on those running the state in the 12 years before he was elected -- was itself a slap in the governor's face.

"We listened to the governor's speech last night," Glynn said. "We heard a lot of the words, but have not seen actions."

But Davis lashed back.

"PGandE put itself into bankruptcy," he said. "They have dishonored themselves."

-- Carl Jenkins (, April 08, 2001

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