A Jolt to Energy Optimists
With the state Assembly letting an ill-advised electric industry re-regulation bill die in committee and federal regulators deciding to expand their probe of power market manipulation, it’s tempting to believe in a brighter energy future for California. But Thursday’s record electrical usage underscores a still-bleak reality.
After SB 888 died, its sponsor, state Sen. Joe Dunn (D-Santa Ana), argued that lawmakers would rather stick their fingers in electric sockets than tackle any substantive energy legislation. And Uncle Sam’s decision to widen its market investigation was simply part of the Bush administration’s belated attempt to clean up the mess it created by siding with energy firms at California’s expense.
By refusing at the height of the energy crisis to institute power pricing caps -- and labeling it a state problem -- the administration helped push one utility into bankruptcy, left another teetering and saddled Californians with billions of dollars in inflated, long-term power contracts.
The commission widened its investigation to include the key period of May 1 to Oct. 2, 2000. California authorities claim that energy firms manipulated the market to push up short-term electricity prices during this time.
This latest ruling will force more than 60 providers -- including Dynegy, Enron and the Los Angeles Department of Water and Power -- to prove the integrity of their power sale profits or return ill-gotten gains to California.
There’s still a long way to go, though. In March, commissioners ordered power companies to refund $3.3 billion to California and its major utilities. That’s far short of the $8 billion California believes it is due. In June, commissioners stubbornly required California to honor $12 billion in high-cost, long-term electricity contracts signed at the power-madness peak. Gov. Gray Davis is right to challenge that decision in federal court, because regulators want California to pay some of the same firms that gamed the system.
Although Thursday’s heat didn’t prompt power disruptions, California wasn’t as lucky May 28, when energy officials called a Stage 1 alert, the first step to rolling blackouts. All the more reason for quick review of Southern California Edison’s plan for its first electric plant in a decade.
As Texas, Pennsylvania and other states lurch into deregulated energy systems, California’s sorry power saga shows the need for federal enforcement to ensure that big energy companies play fair.
