Letters

From the October 2001 issue

(Page 2 of 2)

Sandy Hebenstreit
Norcross, GA

Power Tripped

I commend Michael W. Lynch and Adrian Moore for their excellent article regarding the California energy crisis ("Power Tripped," June).

I am in the electric utility industry in Arizona and have been watching the situation develop with both amusement and frustration. This is a homegrown problem with an obvious solution, but the apparent cure for this foray into socialism will be more socialism. California's electric system will soon become one huge public power entity if the clueless Gov. Gray Davis gets his way. All of the adults must have left the Golden State years ago.

My sense of frustration stems from the failure of the major utilities to raise a huge red flag early when the problem became obvious. Why didn't PG&E and the rest of the companies just throw in the towel and say, "We can't operate like this!" when they saw the river of money start to flow out, knowing that the trickle of customer payments coming in could in no way cover their obligations. I'm sure that these large aggregators could have exercised some power over the suppliers had they acted sooner.

What were the suppliers' options? Most of the other states in the West have not deregulated yet and are far less dependent on spot prices, so dumping that capacity elsewhere would be difficult.

When businesses have gone bankrupt and industry leaves the state for more friendly environments, California will finally achieve the demand reduction it seeks to cope with the supply problem it alone created.

Bill Twardy
Phoenix, AZ

"Stranded costs" is not merely a euphemism for goofy expenses caused by bureaucrats, as this article implies. It refers primarily to expenses from constructing nuclear power plants, which, not surprisingly, the utilities were unable to sell.

The floating barge plan was shot down because no one wanted a pollution-belching diesel plant in the middle of the bay. The Coyote Valley power plant plan likewise has issues. Cisco opposes it, because it will be built next to the huge new campus the company wants to build there -- poetic justice, many feel. Naturally, environmentalists are opposed to the plan as well. But your authors will be pleased to know that several weeks ago, the mayor of San Jose gave in to pressure and approved it. Now citizens are attacking the huge subsidies the city has agreed to pay.

Also absent from the article was mention of the fact that there is no crisis in Los Angeles, due to its city-owned power system.

Steven Barnes
Palo Alto, CA

Editor's Note: Assistant Editor Sara Rimensnyder takes a more critical look at the Los Angeles Department of Water and Power in "Power Shocked" on pg. 16.

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