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Re: [vox] [OT] we got spammed by a politician
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Re: [vox] [OT] we got spammed by a politician

On Tue, Dec 11, 2001 at 11:06:24PM -0800, Peter Jay Salzman wrote:
> begin Joel Baumert <kender@geeksource.net> 
> > Who
> > made more money for the energy industry.  I bet it was
> > Gray Davis' decision to involve the state in the energy
> > commodities business using energy insiders to "help"
> > him out.  We will be paying for Gray's mismanagement
> > for over 30 years in higher energy bills.
> that's pretty misinformed, joel.  i thought you knew this topic better than
> that.   the mess actually started with pete wilson.
> the public utility commission (a board of wilson appointees) laid down the
> groundwork for deregulation in the mid 90's.  the republicans were confident
> that if the PUC order was ever challanged in court, it would stand up because
> our great nation is based on the free market.

And what does that have to do with anything?  Two points.  First
Wilson had a Democratic Assembly from what I remember voted
unanimously for the so called "deregulation" bill.  Which is more
aptly named a re-regulation bill.  This bill encouraged the power
companies to divest themselves of their power plants and forbid
them from holding long-term energy contracts with the general 
promise that the consumer rates would be unlocked.

So PG&E sold off their power plants to out-of-state interests for
large sums of money.  These interests took out large bonds to pay
for the plants and began recouping their costs by raising the rates
for the power.  

In California for a couple of reasons a large portion of our 
energy comes from natural gas and hydroelectric.  Both of these
options are pretty friendly from the standpoint of air pollution.

Last winter something horrible happened.  We had a combination of
weather and a season shortage of natural gas that was aggravated by
lower supplies than normal.  The cost for PG&E and Cal Edison went
up, but these companies were not passed on to consumers because the
companies had not completely met the conditions of the re-regulation
bill.  I have to look, but PG&E was going to qualify around 2003.

It is now Christmas in California and consumers did not have a
reason to conserve the valuable resources because their bills were
not going up.  Why should they, it won't change their pocket books
right?  PG&E is having problems making energy payments because
the out of state companies are reluctant to sell power to a company
that is not on a sound financial footing.  Of course, if PG&E 
promises to pay a large additional fee to cover its credit unworthiness
things are fine.  So from the standpoint of PG&E the prices are
spiraling upwards and what they can charge is fixed.

The Governor is busy helping matters out encouraging companies 
to invest money in California by threatening to seize the power
plants in the state.  Nice... The power generation was not really
the problem, the shortage of natural gas was.

Things have finally gotten bad for the Governor because the power
producers for a large portion of the state have finally accumulated
enough debt to declare bankruptcy.  This presents two problems for
the governor.  First the contracts with the state that lock the
rates could be ruled invalid by the proceedings.  A bankruptcy 
judge could unilaterally raise the rates on consumers, something
that Gray has been promising he would not allow.  The second problem 
is rolling blackouts that would place the governor in an equally 
awkward position with the public.  

What does he decide?  He decides to spend tens of billions of
the California surplus to buy long term contracts at inflated
rates, but California lost big.  Because of the economic down-turn
and an increase natural gas supply, there is plenty of natural
gas.  So now California is buying power at a premium and selling
it in some cases for pennies on the dollar because Gray played
the commodities game and lost.  Well we lost.  California has
lost Billions of dollars that would be useful in revitalizing
the California economy, but was flushed by someone that didn't
have a clue about the energy market.

Is Davis responsible for the re-regulation bill?  Probably not,
but his party and the opposing party could probably be held
accountable, but how would you do it.  The bill passed
_UNANIMOUSLY_ through both the Assembly and Senate and was
signed by the governor.  Who should we point the finger
at?  The Democratic Legislature or the Republican governor
or all of the above because everyone voted for this mess.

There is plenty of blame to go around for the shortsighted
re-regulation bill, but the blame for wasting the surplus on
buying power at inflated rates falls solely on the governor.
If the governor would have unlocked electricity rates to the
levels that he finally settled on later we would still have
much of the surplus and would not have billions of dollars
worth of bonds hanging over our head for the next thirty years.

What raise rates... NO WAY... Well that is what ended up
happening.  If it would have happened earlier, I suspect 
that people would have changed their behavior because the 
price of energy would directly hit their (our) wallets.

Supply and demand would have come closer together...

You admit that the governor did nothing.  He had a Democratic
senate and assembly, but he did nothing.  There were plenty
of warning signs and he did nothing.  We he could no longer
do nothing it was too late for him to be effective.  So now
we are paying for his inaction.

The governor badly mismanaged this situation by sitting on his
hands blustering, but not doing what really need to be done.

I think that you should spend a couple of days outside of the
university and do a little fact checking yourself :-).

> in any event, the point became moot because that framework became law in
> 96, the year i graduated san francisco.  the democrats had their hands tied.
> they just barely controlled the votes in the house, but wilson made it clear
> that he'd veto anything that was too different from his PUC commission's
> framework.
> in return for his pushing for california deregulation, wilson had to disclose
> that the backing behind deregulation, republican backing, donated over a
> million dollars to his presidential campaign.
> wilson's ironic quote as he signed the 1996 deregulation bill:
>     "this is so no one is, literally, left in the dark"
> actually, this is paraphrased.   anyway, the big interests you mentioned
> weren't davis pals.    the biggest donators were pge, southern con edison and
> sandiego gas & electric.   and the donations were actually made out to the
> GOP.
> now, fast foward to gray davis.
> he truly did inherit the problem.   the difficulty lies not in davis making
> the wrong decision.  he simply made no decision.   deregulation went along
> its merry way.
> and we all know the rest.
> clearly you need to spend less time at zworld and more time checking your
> facts.   ;-)   (that was said sarcastically.  actually, i need to spend less
> time reading news and more time with school).
> > I think that Microsoft should be punished, not because
> > they are a Monopoly, but because they abused it.
> i think we all feel that way.
> pete
> _______________________________________________
> vox mailing list
> vox@lists.lugod.org
> http://lists.lugod.org/mailman/listinfo/vox
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