State on Wrong Track With New AES Plants

The danger of another energy crisis in California (“AES Plans to Build More Power Plants,” Oct. 5) is not from inadequate electric generation but from the ability of owners of current and future supplies to gouge the market again.

The blackouts California suffered in 2000-01 were the result of shortages manufactured by unregulated generators and other market players who wanted (and obtained) sky-high prices for electricity. Because the Federal Energy Regulatory Commission finally acted to prevent market manipulation, the state hasn’t suffered a single supply-related outage, even during the extreme demand levels experienced during this summer’s heat waves.

Let’s be clear: AES, whose record in California includes price gouging, market manipulation and $17 million in environmental fines, told your reporter it was “encouraged by Gov. Arnold Schwarzenegger’s vision for the future” precisely because that vision offers renewed opportunities for companies like AES to charge higher prices, at the expense of California consumers.

The governor vetoed AB 2006, a bill that would have ensured adequate generation resources at reasonable prices, in favor of a return to deregulation. And more deregulation means generators such as AES will be back on the California gravy train.

California needs an energy policy that will ensure that we avoid supply shortages in a manner that best serves the state’s economy and mitigates environmental damage. Paving the way for unregulated companies to build fossil-fuel-fired peaker plants to take advantage of future price spikes is a step in the wrong direction.

The fact that AES is drooling over the prospects under his “vision” ought to cause the governor to understand that he is putting the state on the wrong track.

Bob Finkelstein

Executive Director

TURN, the Utility

Reform Network

San Francisco