Power Supply Timeline
Here is how we got into the power shortage mess we’re in, and where we’re going with it in the future.
The past:
The voters pass an initiative to “deregulate” the power industry. The promise is that with deregulation, profit-hungry power companies will stampede into California and new power plants will spring up like mushrooms all over the state.
The reality is somewhat different. Hidden in the fine print of the craftily worded initiative is the fact that while production of power will be unregulated, the California Legislature will continue to meddle in the distribution of the power produced. (Can you say “price fixing”?) The power entities see the handwriting on the wall and wisely stay away in droves. Thus, not a single new power plant has been built since the so-called deregulation went into effect.
The present:
While demand continues to soar, supply remains static. But this will soon change for the worse. The “fast track” legislation signed into law by the governor this summer was touted as a quick fix for the impending crisis, when in fact, it is a Band-aid. The legislation only mandates a streamlining of the procedures in place to process the applications for new power plants.
Even if a permit for a new plant were to be applied for tomorrow (not likely, as explained above), in a best-case scenario we might see that new plant go on line in late 2004, assuming there were no problems in the construction. Meanwhile, we are about to lose our artificially contrived reserves of power.
These would be the entities and individuals who signed on to the voluntary “switch off” programs offered by the power companies in return for reduced rates. It is now painfully obvious to those who took advantage of the offer to save money, that being switched off will become more and more prevalent. Most will bail out of their contracts as soon as possible.
The future:
As our population continues to swell, so will the demand for electricity. There is no hope of getting any meaningful increase in supply any time soon, so do the math: Right now we’re at 98.5% capacity every time the temperature climbs over 90 degrees. What will happen in the next couple of years? I submit that rolling blackouts will become as routine to Californians as our daily gridlocked traffic.
Moreover, out-of-state power companies, which have up until now been selling their excess production to California (at premium rates) will inevitably be redirecting power to their own burgeoning populations. Were I an enterprising entrepreneur, I would buy up thousands of surplus generators to sell next summer. But with SUV-driven gas prices of $2 a gallon, who could afford to run them?
The answer:
Get government out of the power business with real deregulation. Let a truly free market dictate the prices for the power we use and we will eventually see power companies competing for our business. With the volatility of natural gas prices (the most likely fuel for new power plants), it is unlikely we will ever again have cheap power, but at least it will be available.
STEPHEN C. LEE
La Habra
