Heated rhetoric

Pressing ahead with the environmental emphasis characterizing his final term in office, Brown asked the presidential hopefuls to outline their own policies. “Longer fire seasons, extreme weather and severe droughts aren’t on the horizon, they’re […] here to stay,” he wrote, as the Sacramento Bee reported. “Given the challenge and the stakes, my question for you is simple: What are you going to do about it? What is your plan to deal with the threat of climate change?”

Brown’s office told the Bee he submitted his question via the Facebook page of Fox News, which solicited questions from viewers of the debates, which it hosted and televised.

This month, as the San Gabriel Valley Tribute noted, Brown hit out against the field again, using a fresh report on July temperatures to lambaste “Republicans, foot-dragging corporations and other deniers.” Surveying the damage to the fire-stricken Clear Lake area, Brown “repeated his challenge to Republican presidential candidates,” the Los Angeles Times reported, warning that “California is burning” and asking, bluntly, “What the hell are you going to do about it?”

Republican responses

So far, at least three Republican candidates have touched on environmental issues in the wake of Brown’s challenges.

Not all their remarks have been directly responsive, however. Wisconsin Gov. Scott Walker recently took the opportunity to critique “radical environmental policies that stop things like dams from going in so that water … can be used effectively,” according to the Bee.

But Texas Sen. Ted Cruz and former HP CEO Carly Fiorina, who had challenged Sen. Barbara Boxer’s re-election, both addressed Brown head on, the Bee added. While Cruz dismissed “alarmists” as power-hungry schemers, Fiorina took a more nuanced approach; although she first conceded it “may well be true” that California’s drought was worsened by climate change, she also criticized policymakers for failing to prepare for the kind of droughts the state has had “for millennia.”

Shifting opinions

Republicans on the campaign trail have broadly reflected opinions among constituents nationwide. Even in California, Republicans have demonstrated consistent skepticism toward claims that human activity has fostered dangerous alterations in temperatures and weather. In a new poll conducted by the Public Policy Institute of California, a majority of Golden State Republicans said “they don’t believe that climate change is happening and that they don’t think it will be a serious problem in the future,” as the San Jose Mercury News reported. “They also support expanding fossil fuel production — from increasing offshore oil drilling along California’s coast to expanding fracking.”

Yet the poll evinced some wiggle room on environmental policy issues. Fully 43 percent of California Republican respondents supported stricter in-state climate rules than what the federal government has passed into law. “Californians of all parties said they support increasing tax credits for electric vehicles and solar power,” the Mercury News added.

In a recent nonpartisan poll commissioned by a water policy foundation, Californians seemed to confirm that the drought had become a leading issue of worry across the ideological spectrum. According to the Los Angeles Times, “62 percent of poll subjects said they would be very willing or somewhat willing to pay $4 more a month for water if the funds were used to improve water supply reliability. Such an increase, if applied to the entire state, would generate about a billion dollars, according to poll sponsors.”

Environmentalists divided

Brown’s environmentalist policies haven’t satisfied all critics. His administration’s emphasis on reducing emissions, for instance, has led some to wonder why he hasn’t pushed harder for cheaper electricity rates, which would benefit owners of many zero-emissions vehicles. One objection, recently voiced in the San Diego Daily Transcript, warned that Brown’s policies “will systematically shift profits into a few private hands instead of building, managing and maintaining a solid and reliable electric-charging infrastructure comparable to our utility grid.”

CPUC changes tier system, implements minimum charge

Last week, the California Public Utilities Commission unanimously approved changes that would move electricity rates from four to two tiers.

“Most residential customers in California will see their electricity bills increase under a new rate structure passed … by state regulators,” reported ABC 7 News. The new plan essentially “raises rates on more efficient users while giving a break to big energy users.”

The tier overhaul was prompted by utility companies and regulators looking to charge based on the actual cost of providing power. According to the San Jose Mercury News, proponents of this new plan argued, “Low-usage customers have essentially been subsidized by high-usage ratepayers under the current system, which has been in place since the electricity crisis 15 years ago, when there was a push to encourage conservation.”

PUC President Michael Picker said in a prepared statement, “Rate reform is necessary to move us into a future where consumers have the tools they need to manage their own energy use, and can install new, clean technologies such as storage and renewables.

“Our decision helps align rates with the actual cost of service. It also builds a more nimble rate structure to allow us to add more and more renewables to the grid, and to encourage customers to use energy when we have excess renewables and to cut back during peak periods.”

The changes would also introduce the following items:

1. Time of use rates: By January 1, 2019, “residential customers will default to time of use rate … but can opt to remain on the tiered rate structure. Time of use rates reflect predictable daily changes in the cost of electricity service, and enable customers to reduce usage during peak hours when electricity prices are higher.”
2. Tier flattening glidepath and new rate structure: “The rate structure moves from four to two tiers with a 25 percent differential by January 1, 2019, and with a Super User Electric (SUE) surcharge introduced in 2017. … Some high usage customers currently paying above the cost of service will experience bill reductions, while some lower usage customers paying below the cost of service will experience bill increases.”
3. Fixed charges/Minimum bill: “The utilities must implement a minimum bill beginning in 2015 of $10 for non- 3 CARE customers and $5 for CARE customers.”

LADWP floats rate hike proposal

In addition, the Los Angeles Department of Water and Power on Wednesday also proposed rate hikes over the next five years.

According to CBS Los Angeles, the proposal would “raise more than a billion dollars for infrastructure repairs, including broken underground pipes and power poles.” The $1.3 billion in new funds would be split, with $230 million going to water projects and $900 million for power projects.

Rates would be increased across all spectrums of energy and water users. “If approved, low water and power users would see an increase of 2.4 percent or about $2 more a month, while average users would see a 3.4 percent increase equating to about $5 more per month. High users, though, would see a 5.4 percent raise, which comes out to about $18 a month.”

The DWP board will not vote on the increase until October; even after approval from the board, it must also be approved by the L.A. City Council and Mayor Eric Garcetti.

In the meantime, the DWP has planned four months of public outreach at business groups, neighborhood councils and other areas. Southern California Public Radio notes that the DWP “must overcome bad publicity from its poor oversight of $40 million given to two trusts run by its employee union, a recently-discovered embezzlement of several million dollars by an employee, and the botched rollout of its new customer billing system.”

Dueling schemes

“Under the current rules, homes served by Southern California Edison pay higher prices for higher electricity use. That would still be true under the new rules, but the pricing differences wouldn’t be nearly as stark, with costs rising for those who use the least and falling for those who use the most,” the Desert Sun reported. “The new rules would also mandate a minimum bill for all residential consumers, set at $5 for some low-income customers and $10 for everyone else.”

The proposed pricing system resulted from a prolonged research effort. Both the PUC and the utilities that would be affected by the change quickly moved to rebut criticism. “Utilities have framed the proposed changes as a matter of fairness, arguing that above-average energy users are currently subsidizing below-average energy users,” the Sun noted. “High-end users, the thinking goes, are paying more than their fair share to maintain the electric grid, while low-end users are paying less than their fair share.”

The PUC will have to keep working if it wishes to reach a unanimous consensus on its own proposal, however. One commissioner, Mike Florio, has put forth a much different plan, backed by the alternate energy and environmental advocacy groups that dismissed the PUC plan.

“I’m concerned the tier flattening of the Proposed Decision shifts too many costs from high-usage to low-usage customers,” Florio said in a statement. “Low-usage customers typically have fewer means of conserving; their consumption is already limited to basic needs.”

Activists were cautiously optimistic that Florio could have an outsized influence, perhaps nudging the PUC to consider making revisions to the dominant plan. As Utility Reform Network staff attorney Matthew Freedman told the Sun earlier this month, “I’d like to say there was an audible gasp from the utilities, but there was not. From our perspective, it’s very encouraging to see that there’s an alternate on the table.”

Golden Staters worried about their fate will be kept in suspense for at least another month. “The California Public Utilities Commission will consider both options and a decision is not expected until the agency’s June 25 meeting at the earliest,” according to the San Gabriel Valley Tribune.

Opening greener markets

The debate has played out over a high-profile spike in energy technology — a marked turnaround from the days of Solyndra’s bad PR and ultimate failure. For that, California has owed Elon Musk, the serial entrepreneur who recently unveiled Tesla’s new “Powerwall” home battery units.

Nevertheless, as the Wall Street Journal observed, the market for home batteries hasn’t expanded quickly. “Even Mr. Musk concedes the battery doesn’t make much economic sense right now for individual homeowners; grid power is still cheaper than solar-battery combinations. But a trend toward sharply higher electricity prices may change that,” the Journal noted. “The cost of traditional grid power is rising, while solar power costs are plunging.”

In his book on successful ventures, Musk’s fellow superstar entrepreneur Peter Thiel has argued that startups should seek monopolies in areas where robust, competitive markets do not yet exist.

Faced with the proposed changes to California electrical rates, environmentalists have claimed that electricity providers are jacking up rates to head off big losses to cheaper solar. “Monopoly utilities nationwide are struggling to respond to competition from solar companies,” argued the Sierra Club’s Evan Gillespie in the Los Angeles Times. “Instead of adapting their business model to the 21st century, utilities have launched a lobbying campaign to convince the public and the PUC alike that these changes are in everyone’s interest.”

Now the Los Angeles Times finally has caught on:

U.S. electricity prices may be going up for good

Experts warn of a growing fragility as coal-fired plants are shut down, nuclear power is reduced and consumers switch to renewable energy.

As temperatures plunged to 16 below zero in Chicago in early January and set record lows across the eastern U.S., electrical system managers implored the public to turn off stoves, dryers and even lights or risk blackouts.

A fifth of all power-generating capacity in a grid serving 60 million people went suddenly offline, as coal piles froze, sensitive electrical equipment went haywire and utility operators had trouble finding enough natural gas to keep power plants running. The wholesale price of electricity skyrocketed to nearly $2 per kilowatt hour, more than 40 times the normal rate. The price hikes cascaded quickly down to consumers. Robert Thompson, who lives in the suburbs of Allentown, Pa., got a $1,250 bill for January.

“I thought, how am I going to pay this?” he recalled. “This was going to put us in the poorhouse.”

It’s ironic. The far more expensive “renewable” sources are being imposed to fight “global warming” even as record cold temperatures are forcing people to use more electricity and other energy just to keep warm!

Under AB32, the Global Warming Solutions Act of 2006, CARB was charged with overseeing the lowering of greenhouse gas emissions to 1990 levels by the year 2020. That effectively meant a 25 percent reduction.

Mission accomplished. As I reported from a March hearing, CARB Officer Richard Corey admitted, “The last three years have seen the biggest drop in carbon emissions” in the state’s history. He said California has nearly met its 1990 levels of carbon emissions.

But CARB’s AB32 functions are not going gentle into that good night, to paraphrase another Irish wit, Dylan Thomas.

Claiming authority AB32 actually did not provide, CARB has expanded its mandate well beyond AB32 and is now also responsible for the Low Carbon Fuel Standard, the Renewable Portfolio Standard, and the cap and trade carbon allowance auction program.

Cap and trade is the program set up a year ago that conducts quarterly auctions of carbon dioxide emissions, with “dirty” companies trading for “clean” credits from “clean” companies.

Specifically, CARB is targeting transportation, 
electricity, industry and commercial and residential sectors for emissions reductions. These sectors “must reduce … greenhouse gas emissions through the direct regulatory measures recommended by the program,” a study by the Legislative Analyst’s Office found. “However, after accounting for GHG emissions reductions resulting from the plan’s direct regulatory measures, the four sectors must together achieve additional reductions of approximately another 33 MMTCO2E (millions of metric tons of carbon dioxide equivalents) through the cap-and-trade program.”

Numerous studies have shown that California’s cap-and-trade auctions will lead to significantly higher energy costs.

The idea behind the cap-and-trade program is that annual greenhouse gas emissions from certain sectors of the economy will be capped, started in 2013. This cap will be reduced over time, enforced through a carbon allowance purchasing system, managed by CARB.

Yet, the Legislative Analyst explained in a 2012 letter to the Legislature that CARB’s cap-and-trade program is not needed to meet AB32’s mandates.

The LAO has also warned the Legislature that cap and trade would greatly increase production costs for businesses forced to comply with CARB’s regulations. But the Legislature has taken no action to curb CARB’s overreaching.

AB32 concerns

For five years, the Legislative Analyst’s Office has raised questions about CARB’s overreaching. The LAO has specifically expressed concerns with the AB32 scoping plan, and the non-legislated Low Carbon Fuel Standard. CARB has never done a rigorous analysis of the costs and benefits of the scoping plan.

The 2008 Legislative Analyst’s Office review found that CARB’s early economic analysis raised numerous questions:

* How implementation of AB32 was compared to doing business-as-usual;

* The incompleteness of CARB’s analysis.

* How specific greenhouse-gas reduction measures are deemed to be cost-effective;

* Weak assumptions relating to the low-carbon fuel standard;

* A lack of analytical rigor in the macroeconomic modeling;

* The failure of the plan to lay out an investment pathway;

* The failure by CARB to use economic analysis to shape the choice of and reliance on greenhouse gas reduction measures.

The LAO continues to use the 2008 report in legislative testimony, as it is still relevant and has been disregarded by the Legislature and CARB.

“[By] assuming that no actions are taken to reduce GHG emissions by 2020, CARB overstates the problem that it then credits the scoping plan with addressing,” the LAO’s 2008 report found.

The scoping plan includes an inconsistent and incomplete evaluation of costs and savings associated with its recommended measures, the LAO has consistently reported.

Low Carbon Fuel Standard

The LAO said CARB had a very weak basis for its assumptions about the Low Carbon Fuel Standard.

The $25 billion in annualized costs that CARB attributes to the scoping plan are largest in the Low Carbon Fuel Standard. That measure alone accounts for $11 billion, or 44 percent of the scoping plan’s annualized costs. Yet it provides just less than 9 percent of the plan’s emissions reductions, the 2008 report found.

According to the report, “However, CARB further claims that these $11 billion in annualized costs would be offset by equivalent savings on petroleum products (mainly gasoline) that would no longer be purchased for transportation purposes. Therefore, according to CARB, the net annualized cost of this measure is zero.”

Tiffany Roberts, an economist and analyst with the LAO, has been critical of CARB’s macroeconomic analysis. “The findings are highly dependent upon key assumptions, some of which are based on incomplete data,” she said at the Senate Transportation hearing in March, which I reported on.

However, nothing is likely to change. Gov. Jerry Brown is a big supporter of AB32. And CARB Chair Mary Nichols, pictured above, is one of his longtime associates.

gnnone size-full wp-image-51681″ alt=”AB-32″ src=”http://calwatchdog.com/wp-content/uploads/2013/10/AB-32.jpg” width=”300″ height=”167″ align=”right” hspace=”20″ />California's headlong rush to force a broad switch to cleaner-but-costlier energy has long been depicted as something that's either neutral or beneficial for the state's economy, with little or no downside. AB 32 and other state laws mandating use of renewable energy are rarely looked at with anything resembling critical objectivity.

Maybe all the reports about what AB 32-type policies are doing to Europe will change that. Here's a fresh example from Forbes.com:

“The stability of Europe’s electricity generation is at risk from the warped market structure caused by skyrocketing renewable energy subsidies that have swarmed across the continent over the last decade.

“This sentiment was echoed a week ago by the CEOs of Europe’s largest energy companies, who produce almost half of Europe’s electricity. This group joined voices calling for an end to subsidies for wind and solar power, saying the subsidies have led to unacceptably high utility bills for residences and businesses, and even risk causing continent-wide blackouts.

“The group includes Germany’s E.ON AG, France’s GDF Suez SA and Italy’s Eni SpA, and they unanimously pointed the finger at European governments’ poorly thought-out decision at the turn of the millennium to promote renewable energy by any means.

“The plan seemed like a good one in the late 1990s as a way to reverse Europe’s reliance on imported fossil fuels, particularly from Russia and the Middle East. But it seems the execution hasn’t matched the good intentions, and the authors of the legislations didn’t understand the markets.

“'The importance of renewables has become a threat to the continent’s supply safety,' warned senior global energy analyst, Colette Lewiner …”

Didn't even help reduce greenhouse gases

What's striking about Europe's energy policy is that it didn't even achieve its fundamental goal.

“'We’ve failed on all accounts: Europe is threatened by a blackout like in New York a few years ago, prices are shooting up higher, and our carbon emissions keep increasing,' said GDF Suez CEO Gérard Mestrallet … '”

In the U.S., meanwhile, carbon dioxide emissions are plunging. Not because of AB 32-type policies. Primarily because of fracking — which greens hate but which has yielded access to natural gas reserves and spurred a shift away from much-dirtier coal.

An argument can be made that Europe's approach is fundamentally more flawed than California's because of its heavy subsidies. But in general, any time government issues sweeping mandates that affect large parts of the economy instead of letting the free market sort things out, costly inefficiencies will result.

By Katy Grimes

With industrial electricity rates 88 percent higher in California than in Texas last year, the news that the San Onofre nuclear plant in is not going to be restarted is just more evidence of a government created energy crisis in the making.

Due to  political pressure from Sen. Barbara Boxer, D-CA for the closure of one of California’s largest power plants,  a shortage of electricity is expected, power producers agree. But they claim they can handle it. At what cost?

It is 108 degrees in Sacramento today. If this is a sign of the summer ahead, a shortage of electricity is not good news.

And it’s even tougher to take knowing my $300-a-month California electricity bill would be $61  in Texas.

Gov. Jerry Brown wants us to practice conservation measures. Could this be a Gray Davis redux? “The governor also is urging continued conservation of electricity as the hot summer months approach,” Sacramento’s News10 reported.

“Steve Berberich of the California Independent System Operator, which runs the state’s transmission grid, said pockets of Southern California will likely be subjected to conservation alerts this summer as the demand for electricity grows,” the Sacramento Bee reported.

“‘It will be tight – we will have to have conservation messages out there,’ said Berberich, the ISO’s chief executive. ‘If we ask for conservation, we need (consumers) to respond.’ Gov. Jerry Brown issued his own call for conservation.”

California politicians created the problem the last time, and they can do it again.

California’s No-Nukes Act

“The Nuclear Waste Act of 2012” was a ballot proposal which would immediately have prohibited the generation of nuclear power in the state, including by existing power plants. Fortunately, the initiative did not make it to the ballot. But that is the mindset of the party in political power in California.

The authors of the nuclear waste act claimed the Legislative Analyst’s Office’s fiscal analysis for the initiative was false and misleading, and prejudiced voters against signing our petition. They sued and tok the case all the way to the California Supreme Court, which refused to hear the case.

The last electricity crisis

The 2000-2001 California electricity crisis was caused by market and price manipulations, delays in approval of new power plants, and capped retail electricity prices.The state suffered from large-scale rolling blackouts. one of the state’s largest energy companies collapsed, and the economic fall-out led to the historic recall election of then Governor Gray Davis.

“California has a new energy crisis,” Forbes reported last month. “It’s not about power marketers manipulating electricity prices. And it’s not about oil spilling into the Pacific Ocean. It’s about the future of the long-standing nuclear facility in Southern California and whether the 1.4 million homes that it services will feel the effects of its shutdown.”

It takes double the power to replace the nuclear power by renewable and conventional energy. Most nuclear plants calculate 1000 Megawatts of power generates electricity to one million homes.

The California Legislative Analyst addressed the very real problem of what to replace nuclear power with, in their analysis of the 2012 proposed ballot initiative. “The state’s electricity authorities have stated that it would take many years to replace the electricity generating capacity of the two nuclear plants due to the current complexity of siting power plants and transmission lines.”

The two nuclear plants referred to by the LAO are The Diablo Canyon Nuclear Power Plant, located in San Luis Obispo and owned by PG&E, and the San Onofre Nuclear Generating Station, mainly owned by Southern California Edison in San Diego County.

“These two plants produce enough electricity to power more than 6 million homes — nearly 10,000 megawatts of of power,” I wrote in 2012. “The cost of power generation to replace clean nuclear power would be more than double what nuclear power costs. This is because renewable energy only produces intermittently, and needs double the amount of conventional or nuclear energy produced in order to address the intermittency issue. In addition to needing more renewable energy to power the same number of homes, wind and solar still need conventionally produced energy as backup.”

It would take more than 20,000 MegaWatts of conventional energy to replace the nuclear power generated by the two nuclear plants in the state —  if additional conventional power plants could even be built.

Although the radiation isotopes must be contained, nuclear power only generates steam; there are no greenhouse gas emissions produced, which is why it is considered clean energy. Renewable energy is far more expensive to produce than nuclear, and unreliable as a primary energy source, according to the energy expert.

What now?

How is this going to impact the cost of power? Increases are inevitable. It’s not going to be pretty.

Texas has electricity deregulation, which is the direction California should be headed. But don’t hold your breath with the governor urging conservation measures.

By Joseph Perkins

After giving a speech in which he refused to bail out New York City from impending bankruptcy, Gerald Ford prompted the famously pithy headline in the New York Daily News:  FORD TO CITY:  DROP DEAD.

The Los Angeles City Council this week did not exactly tell San Diego and Orange County to drop dead, but it did send them a message that LA is perfectly sanguine with the prospect that the state’s second- and third-largest counties spend the upcoming summer in the dark.

In a unanimous vote, the 15-member council passed a resolution urging federal regulators not to allow the San Onofre Nuclear Generating Station to restart either of its two reactors, both of which have been offline since January 2012, owing to premature wear on steam generator tubes.

Essentially, the council wants the U.S. Nuclear Regulatory Commission to reverse its finding earlier this month that allowing Southern California Edison to fire up one of the nuclear plant’s reactors would pose no threat to public safety. SCE has a 78 percent ownership stake in San Onofre, San Diego Gas & Electric 20 percent and the city of Riverside 2 percent.

The council is following the advice of S. David Freeman, a former head of the Los Angeles Department of Water, who is now a “consultant” with the extremist environmental group Friends of the Earth, which is crusading to permanently shutter San Onofre.

Freeman and anti-nuke Friends demand that the NRC require Edison to obtain a full-blown license amendment to restart San Onofre. That may sound reasonable, but it entails courtroom-like proceedings at which Edison would be on public trial.

All Edison wants to do is get San Onofre operating at reduced capacity by this upcoming summer, the peak season for electricity demand in the Southern California region.

When San Onofre is operating at full capacity, it accounts for a fifth of the electricity both Edison and San Diego Gas & Electric deliver to their business and residential customers.

Rolling blackouts

Now, if L.A. businesses and residences faced the prospect of a summer with 20 percent less electricity than normal, and the resultant possibility of rolling blackouts, there’s no way the City Council would urge that San Onofre remain idle.

But because San Onofre generally doesn’t supply atoms to the L.A. Department of Water and Power, the City Council felt free to dump on the nuclear plant, no matter the consequence to Edison’s Orange County customers and SDG&E’s San Diego County customers.

In fact, a report last month by the California Independent System Operator (CaISO), which oversees the electrical grid for 80 percent of the state, warns that the combination of the continued shutdown of San Onofre and the significant drought-related reduction of hydroelectric generation — which helped replace the nuclear plant’s electrons last summer — could cause “Enron-style” power shortages this summer.

While the power shortages would affect all of Southern California, they would fall hardest on southern Orange County and San Diego County.

That suits the L.A. City Council just fine. After all, who cares if the bumpkins to the South have to deal with rolling blackouts this summer?

By Joseph Perkins

George Santayana famously warned, “Those who cannot remember the past are condemned to repeat it.”

So it is that, only a decade after the Great California Energy Crisis, during which wholesale electricity prices ran up 800 percent in an eight-month span, state energy officials once again find themselves complaining of market manipulation by an electricity provider.

In 2000, the scapegoat was Houston-based Enron, which was alleged to have created an artificial shortage in electricity, enabling energy traders to fetch premium prices from defenseless California.

A dozen years later, Houston-based JP Morgan Ventures Energy Corp. a subsidiary of banking giant JP Morgan chase, stands accused of gaming California’s $8 billion a year energy market, raking in $73 million more than it should have for the electrons it shipped to the Golden State during the first half of 2011.

Well, there’s hardly any dispute that now-defunct Enron had its way with California. And it very well may be that JP Morgan Ventures Energy took advantage of the nation’s biggest electricity consuming state.

But California is no blameless victim. That’s because it remains as dependent on electricity generated out of state as it was in 2000. And it remains subject to the tender mercies of energy companies, like JP Morgan, that couldn’t care less how much California businesses and residences pay for electricity.

It’s very much like the relationship the United States has with OPEC. Since this nation depends so much on foreign oil to meet its domestic needs, we can only bitch and moan when the sheiks hold back the supply of crude to artificially inflate prices.

Indeed, were this country producing a sufficient supply of oil to satisfy domestic demand,  motorists in California and the rest of the country wouldn’t seen a 17-cent run up in pump prices during the past month.

By the same coin, the California Independent System Operator, the nonprofit corporation that oversees the state’s electrical grid, wouldn’t be chasing JP Morgan for $73 million in refunds if the state produced enough electricity to supply all of its needs.

And it’s not that California lacks the natural resources to do so. It just doesn’t want to.

That’s because our one-party state government has surrendered energy policy to hard core environmental interests, which believe that consumption of fossil fuels is on moral par with, say, clubbing baby seals.

That’s why no coal-powered electric plant has been built in California in more than two decades; why coal generates 45 percent of electricity nationwide, but only 1 percent in California.

That’s why enviros are trying to permanently shut down the state’s two nuclear power plants, though they supply 15 percent of the state’s electricity, more than generated by solar, wind and geothermal combined.

It is because California considers fossil fuels such an anathema, because it will not allow another megawatt of electricity to be produced in this state from coal, nuclear fuel or natural gas, that California imports more electricity than any other state.

And as long as California continues to rely on imported electricity, rather than electrons generated in state, it will remain susceptible to out-of-state energy providers, like JP Morgan Ventures Energy, which will continue to figure out clever new ways to game the Golden State’s energy market.

That will continue to make California consumers pay a premium for the state’s misguided energy policy.

By JOHN SEILER

More evidence California has descended into Third World status: Yesterday evening I sat in the dark in my apartment for two and a half hours as a blackout blanketed Huntington Beach.

The Orange County Register reported: “HUNTINGTON BEACH — A widespread power outage in Huntington Beach left more than 21,000 customers without electricity on Tuesday night, authorities said.

“A technical problem with a breaker at a substation knocked out power to 21,285 customers at about 8 p.m., Southern California Edison spokesman David Song said….

“Officials have not determined what caused the breaker of the substation, which they described as the ‘nerve center’ of the local power grid, to fail.”

I’ll tell you the cause: California’s slide into incompetence, poverty and Third World governance.

I remember that, growing up in a Detroit suburb in the 1960s, blackouts struck only when a major thunderstorm, sometimes whipping up tornadoes, crashed through the area. The blackouts hit maybe once every five years, and with good cause. While sitting in the darkness clutching a flashlight and comforting my dog and cat — who were freaked out — I used my cell phone to call my brother, and he affirmed my memory.

In those halcyon days, Detroit Edison, the local power company, even distributed free light bulbs before the government made them stop on anti-trust and environmental concerns. Imagine that: a company actually encouraging customers to use its product. And if you lived through one of those harsh Michigan winters in the 1960s and 1970s, bogus global “warming” wasn’t a threat, but something to be hoped for.

But in Southern California in recent years I’ve been hit with one of these blackouts about once every year. And as with yesterday, there’s no good reason for them. The weather was typical Southern California balmy in February, the reason I moved here instead of to Alaska. Haven’t there been advances in power-grid technology in the past 50 years? Apparently not, at least not in Third World areas.

And I well remember the blackouts of 2000-01, during the California electricity crisis. The incompetent, Third World utilities and state government couldn’t keep the lights on for millions of people at a time.

Utilities = Regulators

Part of the reason is that the regulators and the utility executives are the same people, an obvious instance of Third World-style crony capitalism. The head of the California Public Utilities Commission the past nine years has been Michael R. Peevey. According to his bio, he originally was appointed by Democratic Gov. Gray Davis in 2002. After Davis was recalled, one might have expected that a changing of the guard was in order. But Peevey was re-appointed by Republican Gov. Arnold Schwarzenegger, showing the virtual identity of the two parties.

According to his bio, “Mr. Peevey was President of Edison International and Southern California Edison Company, and a senior executive there beginning in 1984.  Mr. Peevey has served on the boards of numerous corporations and non-profit organizations.” So he’s regulating where he formerly was regulated. And both political parties are just peachy with that. How cozy. How crony capitalist cozy.

Naturally he’s also politically correct on the right issues: “He is also a strong supporter of renewable energy and renewable procurement requirements for utilities, and is a leader in implementing California’s Solar and Greenhouse Gas Initiatives. He also serves as Chairman of the California Emerging Technology Fund.”

Even after Solyndra went bankrupt last year, blowing $535 million in loans from the federal taxpayers and a $25 million tax break from California, the PUC under Peevey continued to support such breaks for similar companies. Reported Bloomberg, “Paul Clanon, a deputy to Public Utilities Commission President Michael R. Peevey, said California would risk losing advanced-energy companies to other states if the incentives were taken away.

“’This is exactly the wrong time to be pausing a green-jobs program’,” Clanon said.

“In November 2010, the authority granted Solyndra a tax break on equipment for its manufacturing facility for cylindrical solar modules in Fremont, California. The break was valued at $34.7 million, according to a report from [California Treasurer Bill] Lockyer’s office, of which the now-defunct company has used $25.1 million.

“Solyndra’s exemption accounts for nearly 80 percent of the tax relief used so far, according to figures from Lockyer’s office. The program, initiated in 2010, has awarded a total of $104 million in tax breaks, most of which haven’t been used.”

But when you’re “pursuing a green-jobs program” instead of the real job of keeping the lights on, you end up with endemic blackouts, such as those that keep striking California.

This is typical of third-world areas: More concern by public officials for subsidies for crony capitalist companies, such as Solyndra, than for providing efficient services to customers.

‘Culture of Corruption’

My colleague Katy Grimes has written a popular series of articles of how the PUC under Peevey has erected dangerous power lines through Chino Hills to bring power from trendy “renewable” energy sources, such as windmills, to Southern California. She wrote: “In the Southern California city of Chino Hills, there is a palpable anger spreading as the landscape is changing from bedroom community to industrial park. The bedroom community landscape now includes 200-foot electrical towers near homes, churches and parks.

“The Tehachapi Renewable Transmission Project has had many of the 76,000 Chino Hills residents up in arms, but they are now left feeling impotent against one of the largest power providers in the state. Residents are watching helplessly as the installation of new massive electricity towers —  200 feet tall and 60 feet wide — are erected quickly, as close as 40 feet from some residents’ backyards.

“Southern California Edison’s Tehachapi Renewable Transmission Project will cost a total of $1.8 billion in order to access and construct renewable energy generators from Kern County to western San Bernardino County. The City of Chino Hills has proposed various alternate routes that would move the transmission lines away from residential communities and schools into a local state park area, but were rebuffed by the California Public Utility Commission.”

In another article, “CPUC Stuck In Culture of Corruption,” she wrote, “It was on Peevey’s watch that a succession of deadly events took place, including the horrific 2010 San Bruno gas pipeline explosion, which killed eight, injured more than 100 and destroyed 38 homes (pictured at right). Peevey was CPUC President when a gas line exploded in Rancho Cordova on Christmas Eve 2008, destroying a home and killing the occupant, as well as the very recent September pipeline explosion at a Cupertino condominium, which did not receive much press coverage.

“After years of approving rate increases earmarked for the San Bruno pipeline upgrades, the CPUC never followed up to make sure that PG&E actually did the work. Instead, PG&E pocketed the rate increases, shined on the pipeline upgrades and kept going back to the CPUC trough for additional rate increase approvals.”

Other Third World Indicators

There are other Third World indicators for California:

* Corrupt elections. As my colleague Steven Greenhut just wrote, Attorney General Kamala Harris, who’s charged with upholding the law in California, destroyed a pension-reform initiative by giving it a “false and unfair title…. Harris runs the Justice Department, yet she chose to wield her power to help her political allies and harm her opponents by posting a blatantly dishonest title. This is a totalitarian approach. If there is no semblance of fairness in the Justice Department, then all we are left with is the exercise of raw political power. Fear a society in which people like Harris rule the roost. Actually, we’re already in that society.”

* Crony redistricting. As John Hrabe has detailed on our site, the California Citizens Redistricting Commission rigged the process of drawing new lines for legislative and congressional districts. It should be renamed the California Crony Redistricting Commission.

* One-party politics. In addition to the corrupt elections and the crony redistricting listed above, Republicans bear much of the blame for their own descent into irrelevance. But however it happened, California now is a typical one-party Third World state. The Democratic Party dominates everything, beginning with all 10 statewide offices (including the supposedly “nonpartisan” Superintendent of Public Indoctrination). There’s no competition and no choice for voters.

* One-party union power. A major facet of one-party Democratic domination of California is the control over the party wielded by the government-employee unions. The taxpayers funnel billions to the union employees. The union bosses siphon off hundreds of millions in dues for political campaigns. The campaigns elect favored Democrats to office. The Democrats then do the unions’ bidding. Hence, there never is any substantial reform of pensions, or poorly performing schools or massive pay and perks for union members.

* High taxes. Crony Third World countries soak the productive to subsidize the crony unproductive. This was described by the great Peruvian economist Hernando De Soto in his book, “The Other Path: The Economic Answer to Terrorism.” The title is a reference to the Shining Path (Sendero Luminoso) socialist insurgent group in Peru, which attacks capitalism in favor of aiding the poor with wealth distribution. But De Soto points out that the real cause of Peru’s poverty is a crony capitalist system that prevents wealth creation by high taxation and massive bureaucracy. He detailed how hard it was  to go through all the red tape just to start a small business.

High taxes in Peru forced the wealthy to move their money to other countries, instead of investing it at home to create businesses and jobs.

The solution, De Soto said, isn’t socialism, but cutting taxes and getting rid of red tape. Such reforms create businesses and jobs, which in turn lift the poor into the middle class.

The whole situation in Peru sounds just like California with its anti-business, jobs-killing policies and attitude. It’s a message that should be heard by the Occupy Oakland and other Occupy movements.

* Bankruptcy. Looting the productive seems a good idea for a short time, until the looted leave for more favorable investment and business climates. Too much spending, too much taxing that drives away producers and a general anti-business attitude are major reasons why California effectively is bankrupt.

* Shrinking Middle Class. The pattern in First World areas — such as California once was — is to have a small ruling elite; a large middle class that can be entered by anyone just by working hard; and a small lower class that can be escaped by diligence, determination and savings that move one into the middle class, or even higher. All societies have ruling elites; can’t avoid that. But in First World countries, the ruling elites at least take some interest in the other classes, and in particular are solicitous of encouraging and preserving the middle class as the bedrock of prosperity and social progress.

By contrast, Third World countries also have a small ruling elite; but they have a small middle class that may be shrinking; and the have a large lower class that’s hard to escape. This now is California’s condition. In December, the Public Policy Institute of California reported that, since 1980, California’s middle class has shriveled from 60.5 percent to 49.7 percent of the population.

The Contra Costa Times reported that, according to report co-author Sarah Bohn, “Globalization and technological progress contributed to the long-term changes, which hurt some but were not always bad for everyone over the decades, she said. While some fell out of the middle into poverty, others moved from the middle to the higher income brackets.”

A better explanation is that high taxes and increasing government regulations slammed the middle class, while leaving California still attractive to the wealthy, such as those in Silicon Valley. If you’re a 180-IQ computer nerd, California still is the place to be. But if you’re just a middle-class person, it isn’t.’

In particular, I would add, the state’s regulations severely restricting housing construction have made home ownership prohibitive to the lower end of the middle-class, especially in coastal areas. Especially devastating has been the California Coastal Commission, a Soviet-style agency imposed 40 years ago that severely restricts home construction along the coast, thus keeping prices artificially sky-high, even after the recent real-estate bust.

This has a ripple effect, forcing up housing prices in areas next to the coast, and so on inland.

For example, the median price of a modest home in Huntington Beach was $20,000 in 1970, about the national average. That would be about $200,000 in today’s inflated dollars, well within the reach of most middle-class families. And as recently as 1998, the median home price there was about $160,000. But the actual median price now is $550,00, according to Zillow. See the line with the light-blue dashes in this graph:

California Nightmare

The result of all the heavy-handed government government taxation and bureaucracy is the destruction of the California dream. That dream is to move to California, buy a modest house, work hard at a decent private-sector job, raise some kids and have fun frolicking in the surf and sun. That dream still is enjoyed by a wealthy few: the 180-IQ Silicon Valley geniuses, the government workers with their generous pay and pensions, some private-sector business leaders who haven’t yet moved to Texas, and drug dealers.

For everyone else, its a California Nightmare of low wages dropping fast, unaffordable housing, a shrinking middle class, government schools that churn out illiterates and innumerates and blackouts that leave people fuming in the darkness.