ratville times: deregulation and the fake energy crisis

The following 11 works provide the antidote to the fantasy that there's a shortage of energy and that deregulation controls the amount of price-gouging and profiteering utility corporations can extort from the public. The crux here is not about supply but who controls the supply and the money that pays for it. Electricity can only be provided as a service, not as a speculative commodity. "The solution is to take over the private utility industry, make them directly responsible to the public that owns them, and switch them over to wind, solar and increased efficiency."

--ratitor

"This is Personal Power Cart," says Ziegler, wheeling out a shiny black box resembling a miniature moon buggy, replete with impellor from a wind-generator and solar panels, sitting innocuously in the corner of his Fairfax office. "One day very soon, everyone is going to own some sort of energy storage device like this, and we are going to create our own energy grid much like the World Wide Web. Then watch and see what happens when politicians or corporations don't have their hands on the switch." . . . At night the system plugs into the regular electrical grid. This is where the story gets really interesting.
If you charge up the power cart from the sun and wind during the day and plug back into the grid at night, you can generator power when it is needed and then sell "back to the grid" when there is a demand. In other words buy low, sell high. One square meter of solar panel generates about 125 watts at any given time. . . . At 25 cents per kilowatt hour and 800 Kilowatt hours produced per year, the PPC will save you about $200 per year with 3 120-watt panels. Big savings, however, are in overnight purchase and storage. Utilizing a "time of use meter" ($277), if you buy power at off-hours from PG&E at 8 cents per KW hour and sell back to the grid at the peak hours (noon to 6PM) for 35 cents per KW-hr, the system will quickly pay for itself.
Also, as a renewable energy device you can deduct $1,500 a year (20 percent of the value of the system per year) from your taxes. The $5,000 purchase price (plus about $2,500 for more photovoltaic panels) will pay for itself in about 4 years. It must be said that there are much larger systems than the PPC.

California's deregulatory meltdown will likely cost its ratepayers some $60 billion, for which they will get virtually nothing in return. . . . The economic and ecological shock waves of this tragedy will reverberate for decades. But for pure psychotic fantasy, none can exceed its use as a pretext to build more nuclear power plants. . . .
        In the late 1970s the safe energy movement again pushed for massive investments in renewable and efficient energy sources. This time the Reagan administration sent a booming wind and solar industry packing to Denmark, Germany, Japan and Israel.
        At 2.5 cents per kilowatt-hour, wind is now the cheapest and fastest-to-build form of new electric power generation, with capacity growing worldwide at 25 percent every year. In 2000, Germany alone installed some 1,300 megawatts, more than what's generated by any single U.S. nuke.
        Between the Rockies and the Mississippi, as well as offshore and in hundreds of Eastern locations, the U.S. has more than enough wind potential to generate its entire electrical supply more cheaply and more quickly than any other source. Photovoltaic cells, which convert sunlight directly to electricity, are more expensive, but with a large-scale industrial infrastructure, they offer the secure promise of clean energy independence. Increased efficiency -- we still waste half of what we burn -- can save energy far more cheaply than we can generate it with any new source. Not to mention that the time required for a new nuke to come online -- five to 10 years, assuming a site can be selected tomorrow with no public opposition -- would hardly ease the current power "crisis."
        But in the face of all that, the hugely financed nuclear power industry persists.
        Strangely, much of the nuclear hype has been on a new technology called "pebble bed reactors." The rhetoric is familiar: inherently safe, too cheap to meter, no environmental impact. But no such operating reactors exist today. There was one pebble bed prototype in Germany. It's now shut. Another may be built in South Africa, but that will take five years.
        Meanwhile, some 500 less exotic "light water" reactors have been built worldwide since the 1950s. By downplaying the technology on which it's relied for a half-century in favor of an untested new design, what is the industry trying to tell us? . . .
        Yet even without factoring in unknown future costs for radioactive waste management, health impacts and the inevitable meltdowns, increased efficiency and conservation are cheaper. So is wind power. And photovoltaics will join them long before the first "new generation" reactor can come on line, no matter which breed of this failed technology gets the nod.
        A combination of these renewables and efficiencies would allow communities and individual homes and businesses to control their own power supply, independent of the oil, gas and utility companies. Which is the real reason for this nuclear diversion -- just as it was 50 years ago.

Energy efficiency and renewable energy could immediately begin to stem the energy crunch. For example:

If the 11.5 million households in California replaced 4 (average 100 watt) incandescent light bulbs with 4 (equivalent 27 watt) compact fluorescent light bulbs, burning on average 5 hours per day, we would save enough energy to shut down four 350 Megawatt power plants.
The California Energy Commission is providing low-interest loans to convert traffic lights to more energy efficient modules that cut electricity use by 80 to 90 percent. The change is expected to save Sacramento County $67,000 a year in electricity costs.
A bill currently under consideration in California would increase funding for energy efficiency by more than $1 billion.
America has abundant renewable energy resources. With today's technology, wind energy alone could economically provide 20 percent of America's electricity. A typical wind farm generates electricity within six months of groundbreaking for the project.
The current cost for wind projects with up-to-date technology is 4 to 5 cents per kilowatt-hour (kWh) at good sites. Electricity from large new wind farms in the western United States will cost less than 2.5 cents per kilowatt-hour (kWh).
By comparison, recent hikes in natural gas prices have driven fuel costs alone for older gas-fired power plants past 5 cents per kWh produced, and spot market shortages have led to much higher prices -- $10 per kWh and up.
Leading states have made commitments that will increase the total use of wind, solar, geothermal and biomass power by 8,550 megawatts. That's enough electricity to power 5.6 million homes, reducing as much carbon dioxide - the main greenhouse gas causing global warming - as planting 1.2 billion trees or taking four million cars off the road.
Sales of residential wind turbines in California are already skyrocketing as consumers seek refuge from high energy bills. Sales for one company are seven times greater for the month of January 2001 than they were for all of 2000.

. . . To keep it simple, we'll start with the top 10 truths about this unnatural disaster:

There is no electric supply shortage threatening California (or the nation), only a series of complex, cynical manipulations that have ramped prices sky high, yielding enormous profits for a few distributors and generators.
The deregulation bill at the root of this crisis was drafted by the California utilities now facing bankruptcy and was rammed through the California legislature (unanimously, in 1996) by the utilities' own lobbyists.
The Natural Resources Defense Council, through its chief energy spokesperson Ralph Cavanagh, and with support from the Energy Foundation, played a key role in drafting, passing and then defending that bill.
But the California bill's catastrophic outcome was accurately predicted in intricate detail by a wide range of grassroots, consumer and environmental groups that challenged the deregulatory scheme in a 1998 statewide referendum.
The utilities now screaming for help spent at least $40 million to defeat the referendum that would have saved the state and nation from the current crisis.
The utilities now screaming for help walked off with more than $20 billion in "stranded cost" bailouts as part of deregulation, but nobody seems to be able to account for where the money went, nor is there a concrete plan for getting that money back.
The consuming public would gain, not lose, if the utilities now threatening to go bankrupt actually did go bankrupt, and the public then took over the utilities.
The public-owned utilities that supply Los Angeles and Sacramento are prospering in the midst of this crisis, proving once again that public power is the answer to the nation's long-term energy needs.
Those municipal utilities are deeply invested in energy efficiency and renewable sources (wind and solar), which has provided them with a stable supply in the midst of the crisis.
Any new electricity production added to the state and national grid should come from wind, which is the cheapest and fastest-to-build new power source, and from solar power, which can be installed on rooftops and at industrial sites, freeing homeowners and businesses from the lethal fluctuation of monopoly manipulations. . . .

The [power generators are] also using the "power shortage" as an excuse to demand construction of more fossil fuel and nuclear generators, burning natural gas, oil and coal and trying to revive the atomic energy industry, all to the detriment of the public and the environment, but all certain to generate gigantic profits for the very people causing the crisis.
Here, instead, is what should happen:

The public should take direct ownership of the utilities, which have clearlyfailed. The system should be controlled on a municipal basis, as in Sacramento and Los Angeles and, hopefully, soon in San Francisco and other cities, towns and counties across the state and nation.
No new fossil fuel or nuke plants should be built. All new construction money should go to building windmills, solar panels and increasing efficiency. Wind is the cheapest and fastest to build form of new generating capacity in the world today. Solar photovoltaic panels should be generating electricity atop virtually every rooftop in the nation, starting with all new construction. All water should also be heated by the sun, again starting with new construction.
All this work should be done with union labor, starting with the International Brotherhood of Electrical Workers, which has been training its labor force for just such a conversion.

The California crisis is not one of supply -- it's one of manipulation by an obsolete private utility industry and a fleet of cynical power generators. The solution is not to feed them still more warehouses full of money. The solution is to take them over, make them directly responsible to the public that owns them, and switch them over to wind, solar and increased efficiency.

[T]he electricity crisis in California has been a contrived, corporate-driven epic that has socked ratepayers and taxpayers with a staggering double-whammy, destabilizing a huge energy delivery system that had functioned reliably for nearly a century.
        The disaster's primary driving force was a botched 1996 deregulatory scheme that forced ratepayers to hand more than $20 billion in "stranded cost" bailouts to the very utilities now crying uncle. Those companies have still not fully accounted for what happened to that money. . . .
        [California Governor Gray] Davis himself has been compromised by large campaign donations he has taken from SoCalEd and the other in-state utilities. He has helped spread the widely held myth that California simply doesn't have access to adequate power. In fact, it has more than 45,000 megawatts, while peak demand during the blackouts this winter hovered below 30,000, according to the state. In part because SoCalEd fought so successfully against building new power plants inside the state, the stability of the grid now rests on little more than private companies' willingness to sell on the daily spot market. The blackouts, consumer advocates contend, merely show that unregulated companies find it more lucrative to sell less power at a higher price than to sell more power at a lower price.
        Moreover, the activists -- and a growing segment of the public -- now suspect the utilities of exaggerating their losses by as much as $6 billion, through an elaborate shell game: one branch of the company profits lavishly from high prices for energy that it sells to the other branch, while that second branch clamors for a government bailout. Since 1997, for example, the PG&E utility has shifted at least $4.69 billion to its parent corporation. While the utility was hiring bankruptcy lawyers last summer, its top executives were dumping shares of the parent corporation's stock. . .
        The proposal to lift environmental restrictions to promote the drilling and burning of natural gas will also create a host of problems. "It's not about supply," says Fenn. "There's plenty of capacity around. It's a problem of who controls the supply, and the money that pays for it."
        Indeed, says Fenn, the state's electricity demand has peaked at 33,000 mgw, but there is 40,000 mgw of in-state capacity. "As in the oil crisis of the 1970s, this shortage is political, not physical. It is being caused not by a physical lack of energy supply, but by politically-conceived market structures written into AB1890 that prevent non-utility-controlled power from reaching consumers, much as the local telephone monopolies have prevented competition in spite of the law for years.
        "That's why local control of electricity supply is critical to real solutions. And why the idea of gutting environmental laws under the auspices of energy relief is such a horribly impotent gesture."
        Equally futile, say the critics, is bailing out the utilities that created this mess, and whose parent corporations are profiting from it as never before. "We're so afraid to let these companies go bankrupt," complains Fenn. "But when all is said and done, the public would be better off letting them go bankrupt and using eminent domain to buy their assets. At least then we'll have gotten something tangible out of the deal.
        A trip to bankruptcy court, some argue, might also force the utilities to account for where all that stranded cost and other bailout money has gone. . . .
        Most advocates see municipal ownership as inseparable from a strong push away from fossil and nuclear fuels, which can be too easily manipulated, and toward renewables, most immediately wind. Since natural gas prices have skyrocketed, industrial-sized windmills have become the cheapest and quickest-to-build source of new generation. By December, a massive 450-megawatt wind farm now under construction along the Oregon-Washington border is expected to be pumping out juice at 3-5 cents/kwh, putting it at the cutting edge.
        Such green developments, the advocates say, will remain marginal as long as the grid is dominated by a few huge corporations heavily invested in centralized technologies. Electricity is a service, not a commodity, says Gene Coyle. "It can never be subjected to true competition. It needs to be controlled by the public."
        "Deregulation of the electricity monopoly is a failure," adds Bee Publisher McClatchy. "The monopoly should be returned to the tax-paying consumers who support it and depend on it."
        But given the wall of "free market" media spin and the fossil-nuclear orientation of the Bush regime, such lessons will not come easily into the mainstream. The powerful fossil-nuclear interests close to the administration are about to push a federal energy bill headed exactly in the opposite direction, interpreting the California crisis from which they have profited so hugely as a mandate for precisely the technologies that helped create it.

The ten myths debunked are:

Deregulation does not work because California did not deregulate enough
Deregulation will lower costs for consumers
Prices for electricity are being driven up because the demand for electricity is increasing
The problems are being caused because there is not enough power to supply California
California's environmental laws are preventing new power plants from being built in the state
Deregulation is good for the environment
California's energy crisis is best resolved through state, not federal, actions
California's three big utilities were forced, against their will, to sell their power plants
California's utilities are close to bankruptcy and need to be bailed out
Electricity deregulation is working in other states . . .

Electricity is an absolute necessity that should not be a speculated product. Consumers have a right to affordable energy, produced in the most environmentally sustainable fashion possible. But, when treated as a speculative commodity, the cost and supply of electricity becomes uncertain. This situation invites price-gouging and profiteering, as we are witnessing today in California.
We must critically analyze the intentionally perpetuated myths by the proponents of deregulation, because it is clear that what many pro-deregulation politicians are saying just is not true. We need to carefully look at their assertions, or we will not only continue to bailout utilities, we will higher prices, less reliability, and a threatened environment. It is time to hold policymakers accountable for the mess they have created, and roll back dangerous electric utility deregulation schemes.

WASHINGTON, D.C. -- Proponents of deregulation have developed a repertoire of excuses for why electricity deregulation is failing miserably. Rather than admitting that a speculative market for a life-sustaining commodity such as electricity does not work, they have cultivated such myths as, "California just didn't deregulate enough."
In fact, if the retail price for electricity was completely deregulated as the industry suggests, the average consumer's electric bill would be $600, rather than the approximately $55 charged before deregulation, according to Public Citizen's calculations.
This is just one of ten myths debunked by a Public Citizen report released today. The report examines in detail arguments that deregulation proponents are making and explains why these contentions are false.

The three main arguments against nuclear electricity are even stronger now than they were 30 years ago, when CNR began putting them forth. This very short summary, with some updated resources, will be handy during the new effort to revive nuke-power. . . .
        The hydrogen economy, with the hydrogen provided by various types of solar technologies, can liberate the planet both from production of more radioactive poisons by nuke-plants and from the greenhouse gases and other pollutants produced by fossil fuels. The USA could commit itself to the hydrogen economy now, for the sake of health, the environment, national security, and abolition of wars over oil. The fuel of responsible civilizations will be renewable solar-generated hydrogen gas.
. . . Claims, that "advanced" nuke-plants are inherently safe, merit no credence until their proponents show that they believe their own claims. If they do, they would openly beg Congress to exempt every "advanced" nuke-plant from the law (the Price-Anderson Act) which protects the nuke industry from full liability for catastrophic radioactive releases.
        In any case, sudden catastrophic releases are a threat limited to a few decades of operation. The real problem endures for over 1,000 years. About 400 nuke-plants now operate worldwide (100 in the USA). Permission to operate a few additional nuke-plants might appear like a minor issue. But if ten new nuke-plants each operate for at least 30 years, they would commit posterity to isolating (containing) additional radioactive poisons equivalent to the long-lived poisons produced by exploding 300,000 Hiroshima-bombs: 1,000 bombs/year per plant * 10 plants * 30 years. The poison generated by just ten plants would be about 20 times more than all the long-lived radioactive fallout from all the atmospheric nuclear bomb-tests conducted by the US, UK, and USSR combined . . .
        Each additional nuke-plant of any design inevitably increases the legacy of radioactive poison --- to threaten posterity for at least 40 generations. This fact was and remains enough to make nuke-plants unacceptable --- the ultimate selfishness. Ethics aside, it is clear that nuke-plants were not necessary in the past, and will not be necessary in the future. Case closed.

Some parts of California are not suffering from power problems of any kind. In Los Angeles and Sacramento, the lights are still on and the rates have not doubled or tripled. As it happens, the people of Los Angeles and Sacramento own their own power plants. This glaringly obvious fact has for some reason escaped media attention, except in California. . . .
In the current issue of Business Week, the cover story is on Exxon Mobil's plan to take advantage of the "energy crisis." This would normally be funny, given that Exxon is in the oil business and (as most people outside the Oval Office are aware), the oil business has nothing to do with electricity. However, Exxon's acquisition of Mobil, which is rich in natural gas, unleashes a corporate behemoth of unprecedented size. Exxon also has a corporate culture that would give nightmares to "Chainsaw Al" Dunlap of business fame.
Here are some interesting facts from the Rocky Mountain Institute: The cheapest source of new electricity is efficiency; the next cheapest is burning soft coal, which is a gross polluter; and the next cheapest after that is wind power -- 2.5 cents per kilowatt-hour.

Contents
1.	Power Play--Reinhold Ziegler's Energy Gizmo Helps Light the Way, by Michael McCarthy, 7/25/01
2.	A Return to Madness--The Psychotic Fantasy of Electric Deregulation Continues, With Renewed Interest in Nuclear Power, by Harvey Wasserman, 4/5/01
3.	Bush Administration Exploits Energy Issue to Assault Environment Clean choices available to resolve energy crunch in California, nation, Union Of Concerned Scientists, 3/22/01
4.	Unnatural Disaster: Deregulated California Utilities are Electrocuting the Public, by Harvey Wasserman, 1/25/01
5.	Our Fake Energy Crisis, What Really Happened in California, by Harvey Wasserman
6.	Debunking The Ten Myths of Electricity Deregulation, by Wenonah Hauter and Tyson Slocum, 1/01
7.	Debunking The Ten Myths Press Release, 1/30/01
8.	Solving Energy Shortages without Nuclear Power: Three Easy Rules, by Dr. John W. Gofman and Egan O'Connor, 4/01
9. 10.	Got Juice? Bush's Refusal to End California Electricity Price Gouging Enriches Texas Friends and Big Contributors and Press Release, 2/15/01
11.	Molly Ivins on Harvey Wasserman's "Our Fake Energy Crisis", 4/13/01