Study: Energy crisis cost California estimated $45 billion

San Jose Mercury ^ | January 15, 2003 | Associated Press

[snopercod]

SACRAMENTO (AP) - California's energy crisis cost the state as much as $45 billion over two years in higher electricity costs, lost business due to blackouts and a slowdown in economic growth, says a study released by the Public Policy Institute of California.

The study, released Wednesday, concluded there was no one cause for the energy crisis, which peaked in the winter of 2000-2001 and led to six days of rolling blackouts.

A shortage of electricity generating capacity, a flawed market design from the state's attempt at deregulation, generator market power and regulatory missteps all contributed to the energy crisis that spread to other Western states.

But the state was also hit by circumstances it couldn't control. In 2000, the cost of natural gas and air quality credits rose, making electricity production more costly, and a drought in the Northwest limited the supply of electricity from hydroelectric sources.

``Even if the electricity sector had remained regulated, prices would have increased, and some blackouts would have possibly occurred between May 2000 and June 2001,'' said the report, which was written by Christopher Weare, a research fellow at PPIC.

Though no ``smoking gun'' has been revealed, the report's author said, the newly deregulated market was ``ripe for the exercise of market power.''

Utilities also relied too heavily on the volatile spot market, rather than buying long-term contracts with steady prices.

This led to a ``full-blown financial fiasco,'' the PPIC said. And policy-makers were hampered in trying to respond to the crisis because of the rift between federal authorities, which oversee the wholesale market, and the state regulators, which oversees the utilities and retail operations.

The resulting crisis left the state's energy market in disarray, and state officials will have to rebuild it ``almost entirely from scratch,'' the report said.

PPIC's recommendations for a redesigned market include using more demand-management programs, such as time-of-use pricing that encourages conservation during peak hours. It also suggests better long-term planning of the state's energy infrastructure, and reorganizing California's maze of energy agencies.

``Electricity sector restructuring followed by crisis has led to an ad hoc and confusing mix of state agencies and departments,'' the report said.

State and federal officials did make some moves that helped stem the crisis, including Gov. Gray Davis' executive orders that streamlined power plant construction and created conservation programs.

Retail rate increases by the California Public Utilities Commission helped utilities stave off more debt and encouraged conservation. And the Federal Energy Regulatory Commission's wholesale price cap in June 2001 limited how much generators and marketers could charge helped stabilize the market.

The Public Policy Institute of California: www.ppic.org

[snopercod]

For those in Rio Linda, that works out to $3750 per California household.

[snopercod]

"I could have solved this problem in 20 minutes..."

--Gray [doofus] Davis

[snopercod]

[The California Electricity Crisis: Causes and Policy Options in .pdf available here]

[Godel]

For those in Rio Linda, that works out to $3750 per California household.

The price of liberalism.

Bet they wish they hadnt shut down those nuclear plants but had instead actually built new ones to meet demand.

[Mo1]

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[RedsHunter]

The real kick in the teeth is that one of the legislative architects of that debacle, Steve Peace, since being term limited out of office, has since signed on as Gov. Doofus' budget director -- to solve the very budget crisis that he himself had a very large part in creating. Wonderful, just freakin' wonderful.

[randita]

For those in Rio Linda, that works out to $3750 per California household.

And they'll be paying far more than $3750 per household in the long term, given all the tax and fee increases and interest on bonds and loans.

All so avoidable had Davis just allowed the concept of supply and demand to work freely.

[Grampa Dave]

California's energy crisis cost the state as much as $45 billion over two years in higher electricity costs, lost business due to blackouts and a slowdown in economic growth, says a study released by the Public Policy Institute of California.

Now for a little quick math for the math deficit sheeple of Kalifornicator:

$ Surplus before the Grayout crisis: 10 to 12 Billion

The estimated current deficit in Kali: 30 to 36 Billion

The real total $' deficit in two years: 40 to 48 Billion

California's energy crisis costs: 45 billion $'s.

Anyone see any cause and effect here?

[NormsRevenge]

Tom McClintock was on KSFO 560 a little while ago and laid out the trail of deception, corruption and manure that be now overwhelming the dikes of California's livelihood.

He was on during the last hour from about 810 to 830 AM.

This show will be replayed shortly and if you get a chance and want to tune in via the internet about 1110 AM PT and listen in to Tom and Lee and Melanie, go to KSFO 560 HotTalk Radio.

A couple of tidbits. RE : Recent appointments of Steve Peace and wife to 6 figure incomes for both, and the real slap in the face is the appointment of a naturalized citizen'goo'goo socilaist in the guise of a RINO uniform, Maurice Johanesssen was appointed Director of Veteran Affairs, he was the deciding R vote re: the fake budget that passed last year until Davi$ could steal the election. These appts. are sickening and symptomatic of a demRatic process run amuck.

All the folks that did the deed for Davi$ have gotten cush positions recently, further proving that Davi$ is as low and loathesome as they get.

Tune in.. if you can, I hope McClintock makes a run for Senator in '04 myself.

[Grampa Dave]

Thanks for the feedback.

Maurice Johanesssen became a Rino with caps RINO! What a worthless POS, he became. I hope that he enjoys his 40 pieces of silver.

[NormsRevenge]

Correction on time for replay of Tom McClintock .. It would be at 1220 PM PT , not 1120.

MONDAY - FRIDAY
12am - 5am: Sean Hannity - REPLAY
5am - 9am: The Lee Rodgers & Melanie Morgan Program, "The KSFO Morning Show - LIVE
9am - 1pm: The Lee Rodgers & Melanie Morgan Program, "The KSFO Morning Show" - REPLAY The first half of this hour.
1pm - 3pm: Sean Hannity - LIVE
3pm - 7pm: Sean Hannity - REPLAY
7pm - 9pm: Brian Wilson - LIVE
9pm - 12mid: Sean Hannity - REPLAY

[NormsRevenge]

The parallel Energy Crisis we have suffered is the result of the lack of energy by eligible voters that was exhibited on Election Day... and thus allowed such moronic imbeciles as Davi$ and his court of crony clowns to continue to rub the state economy's and its citizens' noses in more manure of their own making. What will it take to stem the Red Tide?

[Grampa Dave]

I blame the phoney conservatives who trashed Bill Simon everyday and because of their great moral compasses, they didn't vote and convinced others not to vote.

These are the same people who if they saw a woman being raped would walk away because of some so called moral compass. Well Lady California was being gang raped by Davis, Burton, the rats in the Kali legisature and of course the mediots. These phoney conservatives used their so called moral compasses not to vote for Simon. That helped to enable the gang rape to continue for 4 more years.

[Ernest_at_the_Beach]

Great thread, been out and away all day!

calgov2002:

calgov2002: for old calgov2002 articles. 

calgov2002: for new calgov2002 articles. 

Other Bump Lists at: Free Republic Bump List Register

[gitmo]

All so avoidable had Davis just allowed the concept of supply and demand to work freely.

A little deregulation can be worse than none at all. You can't "deregulate" half the equation and expect the system to function.

[NormsRevenge]

FReep the Nation This Week-End!!!

[d14truth]

"Though no ``smoking gun'' has been revealed, the report's author said, the newly deregulated market was ``ripe for the exercise of market power.''

Utilities also relied too heavily on the volatile spot market, rather than buying long-term contracts with steady prices".

Davis gambled and lost(our money) and still managed to 'sucker' enough votes to win. Whoda fools?

[snopercod]

Utilities also relied too heavily on the volatile spot market, rather than buying long-term contracts with steady prices"

For the record, it was the CPUC who made it impossible for the utilities to make long-term contracts.

[Grampa Dave]

Thanks for catching this. Shall we call it an innocent lie or the typical lie in trying to put the blame on the utility companies folling the rules set up by the deregging!

Utilities also relied too heavily on the volatile spot market, rather than buying long-term contracts with steady prices"

As Snopercod noted in his reply, this totally wrong: For the record, it was the CPUC who made it impossible for the utilities to make long-term contracts.