Wholesale energy generation has been deregulated at the national level for
five years. Across the country, 24 states have passed deregulation laws. In
Texas, the law allows utilities to hike prices twice a year, thus avoiding the
problems of California.
Sacramento Bee columnist Dan Walters says, "It's also evident that it
would have been a relatively minor bump in the road had (Gov. Gray) Davis not
frozen when the first indications of price spikes arose. Had Davis done what
private utilities, power suppliers and others urged him to do then -- adjust
power rates slightly and allow utilities to sign long-term contracts with energy
brokers and generators -- the major crisis could have been averted."
California "progressives" share a good deal of blame for this so-called
crisis. Power must be generated. This requires the construction of power plants,
something not seen in California in any real sense for over 10 years. Environmental
activists stopped the construction of power plants dead in their tracks. Joseph
Perkins, San Diego Union-Tribune columnist, states, "Indeed, because California's
liberals have so vehemently opposed construction of new power plants (on the
grounds that they are injurious to the environment) and because they have held
such inordinate sway with state regulatory agencies, no new power plants have
been built in California over the past 10 years. Meanwhile, the state's electricity
demand has grown 30 percent over that span."
Inevitably, some "consumer advocates" blame the utility companies
for the entire problem. They "conspired" to hike prices, holding consumers
under their thumb. After all, goes this thinking, utilities fail to invest properly,
anticipate correctly, blah blah blah. But many "consumer advocates"
assume a divine right to wake up, flip on a switch and get light -- all for
a "reasonable" price. But make no mistake, life involves tradeoffs.
The advocates' refusal to support power plant construction means less generating
capacity, which means higher prices and fewer options for consumers. Duh.
No doubt, California's "cautious" Democratic governor read the polls
showing darkened 2002 re-election prospects should angry voters see electricity
price hikes. So he dawdles and spends $50 million of taxpayers' money a day,
"purchasing" power at high wholesale prices and "reselling"
it to consumers at low fixed-rate prices. My grandfather called this kind of
thing "burning furniture to keep the room warm."
Price controls do not work. They merely temporarily postpone something that
most of us eventually come to terms with -- there ain't no such thing as a free
lunch.
Larry Elder is an attorney, syndicated columnist, Los Angeles radio talk-show
host and the judge on TV's "Moral Court." To find out more about Larry
Elder, visit the Creators Syndicate web page at www.creators.com.
CREAT