California dreaming
Editorial / Courier Journal (Louisville, KY) 26jan01
If you want people to use less of something, raise its price.
This lesson, which applies to every product except those marketed on the basis of snob appeal, was proven anew last year in the case of gasoline.
Prices at the pump soared last year, much to the dismay of motoring America. And despite a rise in the number of cars on the road, gasoline consumption fell.
The 1 percent decline, the first since 1991, a recession year, made perfect economic sense. Discretionary driving -- such as long automobile trips with the kids -- are a lot more attractive when gas is $1 a gallon than when it's $2.
But how to explain, then, the odd phenomenon in California? The state, as everyone in America is now aware, is in the grips of an electric power crisis. Yet many office buildings remain lit up all night.
As Associated Press business writer Brian Bergstein reported, "Cruise around a bend in a freeway or trudge to the top of a hilly street in the San Francisco Bay area, and suddenly it comes into view -- a downtown skyline ablaze with specks of light."
Why?
The answer is that, for all its seeming complexity, the situation in California boils down to this: The Golden State's utility deregulation scheme allowed allowed the wholesale price of electricity to rise, but it froze rates at the retail level.
As a result, the state's two biggest utilities are nearly bankrupt, while consumers have little incentive to conserve.
There's a lot more to the California mess, of course, including a failure by the utilities to build enough capacity to keep up with growing demand for power -- and a failure of timid politicians to back construction of new power plants in the face of opposition by not-in-my-backyard obstructionists.
But the pricing scheme is at the heart of the matter. As long as consumers are protected from reality by artificially low prices, the only way to cut consumption is to cut off the power. And that's what California has been forced to do: impose rolling blackouts.
Gov. Grey Davis wants power producers in neighboring states, such as Oregon, to be forced to help meet California's demand, but those states may soon face shortages, too.
President Bush has agreed to extend for two weeks federal orders requiring power producers to sell surplus electricity and natural gas to California. But he has warned that Californians are on their own after that.
That sounds harsh, and certainly the sheer size of California, and its huge role in the national economy, argues for some sort of federal role.
But the longer Californians are sheltered from the mess their politicians and utility executives made, the longer it will take them to bite the bullet and let prices reflect economic reality -- the same reality the rest of America endured, without catastrophe, at the gas pumps last year.
Click here to respond to this editorial.
Response by Paul Goettlich
28jan01
re: California dreaming http://www.courier-journal.com/cjextra/editorials/010126.html
Dear Editor,
In your commentary "California dreaming" you neglected to include the other part of the President's message about how we Californians should reduce the environmental standards in order to allow the utilities to "survive." Bush can't wait to reduce standards all across the board. You also neglected to write that rather than supporting sustainable power generation such as wind and solar, the powers that be have been giving many trillions of dollars in subsidies to polluting, inefficient, unsustainable power generators such as oil, gas, and nuclear.
Aside from the fact that the supply oil will run our in a matter of a few decades, its combustion creates greenhouse gasses that cause global warming.
The mining of coal, both subsurface and surface mining, has left a path of disaster. Coal-fired power plants also contribute heavily to global warming. At the same time its mountains of highly toxic coal waste, named combustion coal waste or CCW, have destroyed rivers, lakes, well water, and many lives.
Next comes the myth that is popular to the nuclear power industry, that nuclear energy is clean energy. In reality, during 99.999% of its life, it is the most highly toxic and long-lived pollution known to this planet. During its creation, possibly millions have had their health destroyed, not to mention the environmental damage.
Yes, please don't mention the environmental damage by nuclear creation, use, and waste that has happened in the past, is happening right now, and will happen for many thousands of years into the future. Because if you do, the actual costs of making nuclear power would be so incredibly high that only mad men would suggest it. One point that always seems to get lost in the typical news about nuclear power is that it takes an incredible amount of power to refine the raw material into the fuel rods. The source of that power, for the most part, is coal. That brings us back to the story of coal again.
Subsidizing these industries is the real story, not the California lifestyle. It's a vicious cycle that is being fueled by our government by funding this kind of unsustainable power generation. If we are to survive, we must create a level playing field by cutting back on subsidies for coal, oil, and nuclear power. The trillions of dollars should be shifted to the proliferation of wind and solar power generation.
This Californian dreams of a day when we have enough common sense to own up to how we live our lives.
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