I subsequently wrote a series of articles at ChronWatch.com that still may be in their archives.

In a nutshell, California was not running out of energy in 2001, it was running out of clean sky. Here’s why. In 1996, the Clinton-led EPA mandated California clean up its smog basins by 2001 or Federal highway and schools funds would be cut off. The only way to do that was shut down the old polluting power plants along the coast owned by the IOU’s – Investor Owned Utilities (SDG&E, PG&E, Edison). In the winter of 2001 you could actually clearly see the San Gabriel Mountains from Pasadena for the first time in years.

The real problem was who was going to pay for the “stranded assets” – the unpaid bonds on the old mothballed power plants? The IOU’s, the governor, and the legislature played hot potato for a while over who would pick up the tab. Finally they agreed on trying to deregulation energy markets.

By bringing competition into a closed market the idea was that prices would drop, say, 20%, and then could be increased 10% to pay off the bonds, still leaving a 10% decrease for ratepayers. This failed miserably for a number of reasons that were dubbed “the perfect storm” – drought in Northwest cut hydropower supplies, Cal-Trans ordered a shut down of a regional natural gas line in the middle of a cold snap in winter of 2001, Cal Energy Commission had not permitted enough new power plants, etc. The result was that without cheap hydropower to keep electricity prices low, natural gas prices spiked resulting in a crisis.

A Democratic Party controlled legislature came into power along with Gov. Gray Davis after that. They pulled the plug on deregulation and shifted to price controls, which created the crisis most of us remember. California’s Blue legislature didn’t want to deregulate electricity and end up being held hostage to Texas natural gas providers. California put a cap on the retail price of electricity but not on the wholesale price in order to induce a pricing fever or bubble in an attempt to pay off the bonds. As always, price controls failed.

Then there was a recall election and Arnold became governor. In 2003 he rolled $42 billion in unpaid debts on old power plants into a mega bond to be paid off by long terms energy contracts to expire in 2012. The Global Warming Solutions Act – AB 32 – is an attempt to capture the revenues from these expiring contracts for green power by 2012.

California’s Green Power Law is an attempt to embargo cheap coal and hydropower so that the prices of green and conventional power are allowed to rise. Otherwise, green power can’t compete in the energy market. But the shift to green power won’t clean up the air in the urban smog traps of California because wind and solar farms are in deserts and mountains where the wind blows and there is no pollution. “The solution to pollution is dilution,” and vice versa. So Green Power is a mechanism to lessen California’s dependence on cheap imported energy from other states to plug the state budget deficit. It’s a way to stop the imbalance of energy trade, which sends billions of bucks to Red States.

Bottom line: Enron did not cause the California Energy Crisis of 2001 despite all their other chicanery and accounting fraud. Even the U.S. Supreme Court ruled that Enron did not cause the Cal Energy Crisis.

Enron originally devised the idea of Cap and Trade – now embraced by the California Air Resources Board. Enron taught government regulators how to game the system. They were “the smartest guys in the room.” Green Power is a shift from a public utility model to a highly risky and speculative game of energy arbitrage as discussed in Jose Ibanez’s book “Regulating Infrastructure: Monopoly, Contracts and Discretion” (2003). In other words, “high finance” is the new model for energy in California. This is a political-economic model, not a public utility model.

Interestingly, in June 2010, the Obama-controlled FERC denied then Attorney General Jerry Brown’s appeal for “Feed-In-Tariff’s” for green power in California which would have shifted the high green power premiums to electricity ratepayers. FERC ruled that if Cal had the power to regulate both wholesale and retail end of the energy market they could game the system a la Enron. Obama wants to bust the proposed Cal Green Power Cartel and open up the western U.S. Energy Grid by “socializing” the costs of new transmission lines. California opposed this proposal even though it might save wind power from an eventual collapse because wind farms could supply power regionally rather than just within a state or sub-region of a state. If wind isn’t blowing in Tehachapi it might be blowing in West Texas or New Mexico or Arizona.

So this is how we got to where we are today. Capish?

Here are a couple of partial links. I will try and find more:

http://www.freerepublic.com/focus/f-news/1446069/posts
Exponential Enrons Not Ahead – PUHCA (Pooka) Hobgoblin Exorcised

http://www.freerepublic.com/focus/f-bloggers/1338581/posts
Enron Shutdown of Power Plant Didn’t Mean Diddly Squat to California Crisis

YES… Right now the increased costs (over $1 billion to date, before the new higher renewables mandate now being passed in the legislature)are paid for by the business, commercial and industrial customers, not the residential consumers. But when the businesses leave, there will be no choice but to increase residential rates dramatically. Coming to us in about 4 years….

The California PUC has it upside down when dersigning electric rates for residential investor owned utility (SCE & PG&E) customers. As a result, a typical homeowner pays about 100% more for [power than retail electricity should cost.

“Green politics” electric tariffs have been pushed for 15+ years in order to falsely “improve” economic justification and force California electric utilities to purchase the entire outputs of large solar, wind, and othe every expensive and unreliabler “green” power projects.

Coupled with electric only cars (e.g., Volt), “greenies” believe they will soon drive down freeways using solar and wind energy purchased by them through their electric utility that is forced to buy it no matter what it costs.

One theory is that “green thinking and green organizations” are not disimilar to other religious organization, that “green” religion should be divorced from federal, state and local government policies and budgets as being an unconstitutional union of religion and government.

“Green religion” activities should be banned from all offical hearings; funding of all “green” research, since it stems from unproven myth and beliefs should be discontinued.

Let’s go back to logical thinking, proven scientific facts, and professional management of our electric utilities. This should lower the retail residential electric rates by at least 50% in California.
Electricity should be priced in declining prices as one uses higher volumes, since SCE overhead costs would be covered in the lower usage blocks and of of rates should be fabout stepped tariffs to stay extremely high

http://www.eia.doe.gov/dnav/ng/ng_pri_sum_dcu_SCA_a.htm
http://en.wikipedia.org/wiki/Natural_gas