Vol. 12, No. 3,009 - The American Reporter - October 19, 2006

American Reporter Staff
Hollywood, Calif.

Printable version of this story

LOS ANGELES, January 17, 2001 (2:20 p.m. PST) -- In a dramatic demo= nstration that California'sderegulation of electric utilities has been an a= bysmal failure, the state's independent power grid operatortoday ordered "r= olling blackouts" of an hour each in Northern California cities including S= an Francisco andOakland as a hard-edged cold wave increases demand and the = prospect of bankruptcy looms for its majorutilities. Theblackouts were sus= pended after about two hours but may resume later in the day, authorities s= aid.

The crisis was precipitated over the past several months as indepen= dent energy producers -- someof whom had bought plants from Pacific Gas & E= lectric (PG&E) and Southern California Edison (SCE),two of the state's larg= est power retailers, when deregulation permitted them to be sold -- demande= dpayment of hundreds of millions of dollars and PG&E defaulted on critical = payments for power, including some purchased from the plants it soldsevera= l years ago.

The popular Pier 39 in San Francisco and the high-tech Silicon Val= ley cities of Sunnyvale,Burlingame and Santa Cruz have already been hit by = blackouts. Some providers charge that so called"dot.com" companies have be= en responsible for the growing demand on the state's newly-limited powersup= plies.

In San Francisco, a group of students were trapped on an elevator= at the Hastings School of Law onMcAlester Street during the blackout. The= y have now been freed.

A group of Houston-based power generators are refusing to sell powe= r to the utilities unless they arepaid now for about $500 million in energy= already provided to them.

The utilities say they have spent $12 billion on power that has n= ot been recovered from ratepayersbecause of a state cap on electricity pric= es. But in recent days PG&E has spun off key assets into a newcompany to p= rotect them from seizure.

The two firms have earned an estimated $22 billion since deregulati= on by selling power-generatingassets they said were too expensive to operat= e and reaping higher payments from consumers in the earlystages of deregula= tion.

PG&E was the first affected by the blackouts. "The likelihood that they will spread south increases asthe day goes by,"= a spokesman forPG&E in San Francisco said. However, the Los Angeles Dept.= of Water and Power is not affected as itgenerates a surplus of energy for = the nation's second-largest city.

"This is a managed or controlled emergency, not like an earthquake,= " the Edison spokesman said. The utilities' plan calls for turning off a si= ngle circuit serving one community at a time that will "minimize theimpact = on any one community," he said.

As many as 75,000 to as many as several hundred thousand customers = in will be affected duringeach blackout, the spokesman said in an interview= carried live by KFWB in Los Angeles, an all-news radiostation.

Joe Shea, a candidate for Mayor of Los Angeles, in a letter sent to= the Los Angeles Times thisaftrernoon said the state needs to act quickly t= o end the crisis.

Shea advised the state to seize the two utilities before they are= forced into bankruptcy, seize theplants located in California that were so= ld and assure their present owners of reimbursement, andimmediately begin t= o "scour" California, the country and the world for new technology and alte= rnativeenergy sources that can reduce the state's dependence on oil- and ga= s-fueled power generation.

"It may be too late tomorrow to exercise any of these options," She= a warned. Power generators thatsupply the two utilities have said they may= take the utilities into court Thursday if they are not paid by then. = The alternative to seiuzure is a massive bailout and huge rate increases = that may not be sufficient ormay need to be repeated in a couple of years, = he said.

Shea, who is now on leave as Editor-in-Chief of The American Report= er to seek the office, also saidthat as Mayor he would order the Dept. of W= ater and Power to provide as much energy as practical fromthe city utility'= s surplus at any time the prospect of substantial power failures is imminen= t.

The editor, who will be listed on the April 10 ballot as a "se= cession advisor," said that proposals bySan Pedro, Hollywood and the San Fe= rnando Valley to secede from Los Angeles will be difficult ifcommunities ca= nnot prove they can either buy power from the DWP or generate it themselves= , as LosAngeles and nearby Burbank do.

Copyright 2006 Joe Shea The American Reporter. All Rights Reserved.

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