In the midst of a power crisis, there was no shortage of energy in the Price Center Ballroom on Thursday, March 23. But some people brought flashlights just in case.
Nearly 1,000 people filled the ballroom to hear Ralph Nader speak about California’s power crisis. Former U.S. Senate candidate Medea Benjamin, Texan radio host Jim Hightower and local environmental journalist Robert Nanninga also spoke at the event.
California’s electric utilities have lost millions of dollars in the last year. Their financial trouble made “”rolling blackouts,”” once industry jargon, a household word in California.
Nader and other Green advocates want the state either to readopt cost-based regulation or to take over the state’s electrical grid. “”There is no reason why electricity should be subjected to corporate price manipulation,”” Nader said.
Cost-based regulation would require utilities to charge consumers the price of generating their electricity plus a small, set profit.
Southern California Edison and Pacific Gas & Electric welcomed deregulation and thought they would become international energy companies. Their parent companies, Edison International and PG&E Corp., bought profitable holdings in other parts of the United States and the world, but have been beat at home by bigger companies from out of state, and are begging for their second consumer bailout in four years.
When deregulation took effect, the two utilities had incentive to sell their fossil fuel plants. Most of the plants were sold for more than market value to corporations such as Texas-based Dynegy, Inc. and North Carolina-based Duke Energy.
But instead of offering the output of their plants to the California Power Exchange at slightly more than the cost of generating it, as was intended by deregulations architects, out-of-state suppliers have sold power only at inflated prices, or not at all. Dynegy, which owns three major California power plants, tripled its net income last year
“”You’ve got corporations caught with their hands in the cookie jar,”” Nader said. “”If they are truly going bankrupt, then why are they paying [Edison International] CEO John Bryson $3 million a year?””
Consumers have been overcharged $5.5 billion for electricity, according to California’s Independent System Operator.
Benjamin was also skeptical about the crisis.
“”Consumption has increased 4 percent, but rates have increased 289 percent,”” said Benjamin.
Now, compared with March 2000, five times as many power plants are down for undisclosed reasons, often cited as “”unscheduled maintenance.”” The power shortage is so severe that blackouts recently occurred when the state’s peak demand was at 30,000 megawatts, far less than the summertime peak of 45,000 megawatts.
Benjamin suggested that instead of bailing out the utilities, California should buy them out. If the utility companies are really going bankrupt, she said, “”they should be having a fire sale. They should sell [the grid] to us for half of what it’s worth.””
Thirty communities in California, including Los Angeles and Sacramento, have municipally owned utilities. Consumers there are not affected by blackouts and typically pay 25 percent less than elsewhere in the state for electricity. But instead of taking over the grid, the California Public Utilities Commission recently approved a rate increase of 3 cents per kilowatt-hour, a 40 percent hike that could cost customers $5 billion a year.
Nanninga said that the rate increase would be especially hard on the poor. “”They have to decide between putting food on the table and turning on the lights or the heat.””
He also suggested that California develop alternate sources of energy.
“”We have an energy source that comes up every morning,”” Nanninga said. “”We’re wasting all this space on top of strip malls that could be used as a source of solar power.””
