Poll Analysis: Californians Believe Power Crisis Created by Market Manipulation

     While six in 10 California residents still say they think the state's economy is doing fairly well, almost the same proportion indicated they aren't happy with the direction the state is heading, according to the latest survey by the Los Angeles Times Poll. Opinion on this subject keeps moving inexorably downward, and with it comes a growing concern that recession may lurk in the state's near future.
     Most residents see the power crisis as providing the impetus for the economy's slide, and despite months of blackouts and near-blackouts, rebate programs, and exhortations to conserve, a majority remain skeptical of the reality of the shortages--saying they have been manufactured by greedy electricity wholesalers out to maximize profits. State and national leaders received low marks in the survey for their handling of the crisis, and nearly half of state residents go so far as to say that they believe President Bush's policies toward California have been motivated by political revenge for the state's endorsement of his opponent Al Gore in the presidential election last year.
     California and the Economy
     Fifty-seven percent of the state's residents now say things in California are seriously off on the wrong track, vs. 29% who indicate it is generally headed in the right direction. This is ten points more negative than when last measured by the Times Poll in February of this year. Over six in 10 respondents named the energy crisis, deregulation, electricity prices, or another power issue as the most important problem facing California today, overshadowing traditional state concerns such as education (16%), crime issues (15%) and economic issues (16%). Another, dramatic, indicator of Californian's growing concern over the direction of the economy is that while nearly two thirds characterized the state's economy as doing fairly or very well, those figures have shifted sharply down from when it was measured by a Times Poll taken just six months ago. Back then, nearly one in five said the economy was doing very well, compared to only 6% in the current poll. One in 10 said the economy was doing fairly badly. That number has now increased to over one in four. Overall, the number of residents who considered the economy to be doing well has dropped 17 percentage points in those seven monthsfrom 81% to 64%.
     Similarly, majorities of Californians characterize their own financial situation as at least somewhat secure--two thirds responded very (15%) or fairly (52%) secure when asked to describe the state of their personal finances--and thirty one percent described it as shaky . Registered voters are slightly more optimistic about their finances--72% say they are at least fairly secure, a proportion that remains virtually unchanged since it was last measured by the Times Poll last February, but which is down sharply from a survey taken in more optimistic times (October of last year) when 81% of voters said their situation was secure, and only 19% characterized it as shaky.
     Many residents predict rougher times ahead--71% said they think a recession is very (23%) or somewhat (48%) likely in the next year while 19% said not very likely and 8% didn't think it was very likely at all. When those who predict a downturn were asked why they felt a recession looms over California's future, 29% said that the energy crisis would drive the economy down., followed by 13% who said they thought businesses would flee the troubled state, and 10% who predicted a rise in unemployment.
     And of course, the state's lowest income residents are feeling the sharpest pinch from the tightening economy. Only a quarter of the state's currently employed residents overall said they were concerned that they could lose their job in the coming year, but more than half of employed residents whose yearly household income is less than $20,000 said they feel insecure. In addition, about half of those residents characterize the rise in their household utility bills as a big problem compared to 27% among residents in all income categories. Eight in 10 of those lower income respondents who said it is a problem also said the increases make it difficult for them to pay their monthly bills. Like other state residents, a majority of those with lower incomes are customers of the private utility companies and so have seen electricity rate increases in the last month in addition to the statewide increases in the prices of natural gas, gasoline, and heating oil that affect all residents.
     Among Californians of all incomes, 44% said the increases in household energy costs aren't a financial burden to them, but a majority (55%) indicated that they are. Among those who said they are finding the increases a financial difficulty, 64% said the increases had made it hard to pay their bills while 35% said they were able to deal with the added expense. Four in 10 said their electricity bill has increased, including 48% of those whose households subsist on $20,000 a year or less. One third overall said their bill is unchanged, and 23% said their bill has actually gone down.
     It makes sense that almost all (97%) of those whose electricity bill is now lower indicated that they have been making efforts to conserve, but nine out of 10 of the larger number of respondents whose bills have increased are also conserving, and their bills are still higher.
     Politics and Government
     Californians are paying attention to the developments in the energy crisis--over eight in 10 say they are following the news very (35%) or somewhat (47%) closely--and nearly six in 10 characterize the states' energy problems as very serious.
     Residents are unhappy with the way state, and especially national, leaders are dealing with the problems. Governor Gray Davis and the state's legislators are feeling the sting of Californian's anger over the crisis, but citizens of the Golden State, who gave their electoral votes to Al Gore in the 2000 Presidential election, are especially unhappy with President Bush's response to the issue.
     Governor Davis is not the most popular elected official right now either, but when respondents were asked to say who of Davis or Bush is doing the better job of solving the energy crisis in the state, Davis wins hands-down--62% to Bush's 17%.
     President Bush
     Almost seven in 10 said they think the Bush administration is doing too little to help the state with its energy crisis. About two-thirds said they disapprove of the way the administration is handling the electricity situation in California, and nearly half said they feel that disapproval strongly.
     The state is more divided on the question of whether the President's lack of enthusiasm for playing the white knight to the state's damsel in distress is due to pique over lack of votes in the close election of 2000. Almost half of the state's residents (47%) said they agree that if a majority of Californians had voted for Bush and Cheney in the presidential election, the Bush administration would be more helpful to the state during its ongoing energy crisis. However, just over four in 10 overall weren't willing to attribute such political motives to the Bush administration's non-action.
     Not surprisingly, opinion on this subject varied by political party. Registered Democrats agreed with the statement 52% to 32%, Republicans disagreed 58% to 29%. Independents inhabit the middle ground, splitting 46% agreed to 47% who disagreed.
     Governor Davis
     As for Gray Davis, the longer the energy crisis goes on, the more public opinion of the governor erodes. Slightly more Californians now disapprove of the way the governor is handling the crisis by 47% to 45%, a change from the more positive 49% approve to 37% disapprove found in a Times poll last February.
     However, Davis is holding his ground. The state is now evenly split 45% to 45% over whether the governor has shown decisive leadership during the crisis. In January 2001, when last measured, only a third rated his leadership positively, while four in 10 were less complimentary. In addition, four in 10 in the current survey give him the benefit of the doubt on the subject of encouraging the building of power plants in the state--saying he is doing everything he can , compared to three in 10 who say he could be doing a lot more and 14% who think he could be doing a little more .
     The Energy Crisis
     Despite months of blackouts, rebates and advertisements exhorting them to conserve, more than half of Californians continue to think the shortage of electricity isn't real. A whopping three quarters of the state (including over three quarters of registered voters) agreed strongly that Independent power companies have manipulated the electricity market in California in order to make a higher profit. An additional 12% agreed with that statement somewhat.
     But the negative effects of the crisis are seen to be real enough. Nearly four in 10 of those who see a recession looming on the horizon blame the energy crisis, or loss of jobs, for that economic concern. An overwhelming nine out of 10 in the state agree that the energy situation as a very (58%) or somewhat (33%) serious problem. For comparison, 64% say the nation's energy problems are at least somewhat serious.
     However, blame for any power shortage blackouts that might occur this summer was spread among the privately owned utility companies (27%), Governor Davis (16%), President Bush's policies (15%), out of state electricity wholesalers (11%), the state Legislature (10%) and consumer waste of energy (11%).
     There is a small gleam of light in otherwise gloomy findingsÉ while nearly half of the state's respondents said the energy situation has not been improving, a sizeable four in 10 said it seems to be improving at least a little, perhaps encouraged by recent Bush administration concessions on price caps and the assurance by Governor Davis that loosening emission controls on power plants will make blackouts less likely.
     More than four in 10 Californians say they have been personally affected by a blackout this year, while 55% said they have not. While almost half of Californians in general indicated that weathering a blackout would be at least slightly inconvenient for them, those at the lowest income levels are twice as likely as the more affluent to say that a power outage would constitute a personal crisis . One in 10 of the lower income group consider blackouts a crisis and another third say it would be a very serious inconvenience.
     Power Plants and Alternative Energy Sources
     When respondents were told that no new power plants have been built for many years, then asked if they were in favor or opposed to building more non-nuclear power plants in California, nearly six in 10 residents said they not only favored building new plants but they would be willing to have construction begin in their own community. Just under two in 10 said they liked the idea but weren't willing to have them in their own backyards, while about one in 10 said they don't favor building more power plants at all.
     There is much less support for nuclear power plants. The question was posed without suggesting drawbacks or benefits, and while 43% said they favored the idea of building more of these power plants, 46% said they were opposed. Overall, 29% said they favored the idea and were willing to have them built nearby and 12% said they favored the idea but didn't want one in their own community. When measured in a Times Poll in February of this year, opposition was much stronger--60% at that time indicated they were opposed to the construction of any more nuclear power plants. (Note: This measure has been found to be easily affected by question order and context and should be used with caution.)
     Six in 10 Californians said they liked the idea of expanding the state's reliance on alternative, renewable energy sources such as wind and solar power beyond the eight percent share it makes up now, while 20% of survey respondents felt it was about the right amount and just under one in 10 felt the state is already relying too heavily on those sources.
     Energy Policy
     Californians aren't thrilled with the way any of the players in the energy crisis have handled the situation. In a series of questions, the survey asked "Generally speaking, do you approve or disapprove of how officials have handled the electricity situation in California?" In addition to Governor Davis and President Bush, the question was asked about the California Legislature, the California utility companies, the Public Utilities Commission, and the Federal Energy Regulatory Committee.
     While quite a few residents aren't entirely sure how they feel about the way any of these groups have handled the crisis, sentiment is overwhelmingly negative about all of them. The California Legislature fares the best, with three in 10 applauding their performance, which isn't saying much. Over seven out of 10 Californians disapprove of the way the private utilities have behaved. Not surprisingly, customers of those companies (who are now subject to electricity rate increases) are even more unhappy with the PUC, FERC and the private utility companies than are the rest of the public.
  Legislature Utilities PUC FERC
Approve 30% 16% 18% 18%
Disapprove 47 72 65 59
Don't know 23 12 17 23

     As noted above, more Californians disapprove than approve of how Governor Davis is handling the crisis, and this lack of enthusiasm may stem from a similar lack of enthusiasm for his policies. Over the past few months, Davis and other state officials have negotiated a set of long-term contracts for power at fixed prices that were well below the peak cost of electricity, but well above the prices paid before the crisis hit. They argue that long term contracts are the only way to guarantee a stable supply of electricity in the state at reasonable prices. Detractors have claimed that the contracts will cost consumers more in the long run, when supply increases and prices for electricity on the open market go down.
     Survey respondents were read arguments for and against, and then asked if they approved or disapproved of the long-term contracts. By 45% to 39%, those who were against the idea edged those who approved of it. Sixteen percent weren't sure.
     Similarly, environmentally conscious but energy-hungry Californians were nearly split over Davis' decision to trade air quality for boosted electricity supply in order to reduce the possibility of blackouts this summer. Just under half (49%) disapproved of the governor's decision to relax emission controls on pollution-emitting power plants in order to let them run for longer periods, while 41% thought it was a good idea. Ten percent weren't sure.
     But Davis has been fighting hard for federal controls of electricity prices and if he succeeds, he will have hit upon a policy that many Californians enthusiastically support after watching their state coffers depleted by the high cost of electricity in recent months. Sixty-three percent said it is better for consumers in the long run if power rates are regulated, vs. 27% who said it is better to continue to let prices fluctuate according to rules of supply and demand.
     In addition, a majority (54%) agreed with the statement Price caps on energy rates are good because they will prevent price spikes during normal fluctuations in electricity supply and demand. Twenty-eight percent agreed with the alternative statement Price caps on energy rates are bad because they discourage investment in power plants and result in higher energy prices in the long run .
     Still, about half wouldn't go so far as to say that utilities should be government-owned. Forty-nine percent said it was better for consumers if utility companies were privately owned and operated. Thirty-seven percent would put the government in charge of gas and electricity plants.
     But Californians want new power plants. Nearly half (47%) said they thought development of new energy resources to increase the supply should take priority over conservation practices in order to insure future supplies of electricity would be sufficient to meet the state's demand. Twenty-eight percent felt the opposite, and 20% suggested equal priority should be given to both.
     In a state that has been blamed for its own problems because of power-hungry and wasteful ways, the survey found that instead of waste, conservation has been on most people's minds. Nearly everyone in the state (9 out of 10) said they have done something in the way of trying to conserve electricity. By far the most popular conservation effort (66%) was simply turning off unused lights, followed by 41% who said they are cutting down on running heating and air conditioning, 38% who said they are limiting usage of electrical appliances such as stoves and computers, 28% who said they try to use electricity mainly during off-peak hours, and 13% who have replaced inefficient appliances.
     When asked why, nearly the same proportion responded that they were trying to conserve because of the shortages (27%) as said they were trying to save money (28%) while 45% said it was a bit of both.
     Customers of public utility companies were slightly more likely to say that they are doing nothing to conserve--12% of those residents said they aren't doing a thing, compared to 7% of private utility customers. Not surprisingly, those who pay the deregulated privately owned utilities for their electricity are also more inclined to favor price caps and regulation of the market than are the already regulated public utility customers.
     Governor Davis has asked Californians to conserve even more than they already are doing in order to stave off power shortages during the heat of the summer and most (71%) survey respondents indicated they are willing to try. Only two in 10 said they wouldn't or couldn't cut back any further. Twenty percent thought they could cut back by less than 10% over what they are already doing. Seventeen percent said they could reduce usage by an additional 10% to 14%, and a third said they could cut back even more than that.
     There seems to be a certain amount of confusion over the state's 20/20 rebate program, in which customers of the big three private utilities--Southern California Edison, San Diego Gas and Electric, and Pacific Gas and Electric--have been offered a 20% rebate on their electricity bill if they cut household usage by 20%. For example, similar proportions of customers (12%) of those utilities and non-customers (14%) said that the program did not apply to them, and four percent of both groups said they hadn't heard of the plan at all.
     However, the survey found the program to be having some limited success. Nearly four in ten of the customers of the big three said they have tried successfully to reduce by that amount. Fourteen percent said they had tried but not yet succeeded, and a third haven't tried at all
     How the Poll Was Conducted
     The Times Poll contacted 1,541 Californians by telephone June 23-26. Telephone numbers were chosen from a list of all exchanges in the state. Random-digit dialing techniques were used so that listed and unlisted numbers could be contacted. The entire sample was weighted slightly to conform with census figures for sex, race, age, education and region. The margin of sampling error for the entire sample is plus or minus 3 percentage points. For certain subgroups the error margin may be somewhat higher. Poll results can also be affected by other factors such as question wording and the order in which questions are presented. The poll was conducted in English and Spanish.