As George W. Bush so fuzzily put it, “The California crunch really is the result of not enough power-generating plants and then not enough power to power the power of generating plants.” Whatever that means, his main responses to California’s deregulation crisis have been to tout drilling in the Arctic National Wildlife Refuge (ANWR) and to bar federal intervention that would curb the profiteering by big generating companies.
Since a tiny percent of the nation’s electricity is produced by burning oil, drilling in the refuge is irrelevant to the problem. But, of course, it’s quite relevant to the big oil and gas companies’ expectations of a payoff from this Administration, in which they had invested millions in campaign contributions. They’re salivating for exploration on hitherto off-limits federal lands with ANWR as the opening wedge. Bush plays along by fanning fears of power crises nationwide to overcome the pro-environment sentiment among voters. (Recent polls show that two-thirds of Americans favor a ban on drilling in the wildlife refuge.)
As for withholding federal intervention, that’s simply the old-time deregulation religion preached by conservative pundits who blame the failure to deregulate fully for the California crunch. Actually, California’s deregulation bill was drafted by the power companies, which made hefty contributions to grease its way through the legislature. Seeking to recapture from consumers the costs of their bad investments in nuclear plants, the utilities devised the very freeze on consumer rates on which they now blame the current crisis, and which they are trying to overturn in the courts. They also agreed to divest themselves of much of their generating capacity, leaving them vulnerable to the market manipulations of independent power producers–including their own parent companies, which are reaping huge profits from this contrived crisis. Those same parent companies are using their “near bankrupt” utilities to launder more than $20 billion in the stranded-cost bailouts that prompted the crisis in the first place.
Clearly, more bailouts for utilities and unleashing Big Oil to ravage the wilds are not the solutions to California’s–or the nation’s–power problems, especially when there is a native California solution at hand: municipal ownership and conservation. The model is the Sacramento Municipal Utility District, which, after closing down its one nuclear reactor in 1989, held prices steady, invested heavily in wind and solar power and promoted energy efficiency through programs like subsidized buyouts of old, energy-guzzling home refrigerators.
Unfortunately, Governor Gray Davis and the California legislature have chosen to ignore the lesson of Sacramento and to “solve” the crisis by throwing more billions in public money at the utilities. Davis should be using public money and eminent domain to buy the assets of these rogue utilities out of bankruptcy and turn them over to direct public control. A statewide network of public-owned, democratically run municipal utilities would work just fine.
Municipal ownership like Sacramento’s is now being urgently considered by San Francisco and other beleaguered California cities. Rather than catering to his energy “adviser” Ken Lay of Enron (who injected $500,000 into Bush campaign coffers, making him the largest single contributor in the last election cycle) and the rest of the oil and gas companies, Bush should recognize that the wind and sun provide more than enough “power to power the power of generating plants” and that power is rightfully owned and most efficiently operated by the public itself.