California's Electricity Crisis
Special Report
9.1.2001
Pacific Research Institute > Focus Issue
California’s Electricity CrisisPRI has long been a leader in supplying California and the Nation with information on energy policy. In fact, our 1986 book Electric Power: Deregulation and the Public Interest predicted many aspects of the current crisis. The following publications provide a layman's guide to the causes of California's power woes, as well as practical and immediate solutions for the state's lawmakers.
Will California’s Leaders Choose What’s Best for Consumers
or What’s Best for the State’s Government?
As California’s political leaders prepare to decide on several critical energy proposals, the Pacific Research Institute has released several timely reports from economist and senior fellow Benjamin Zycher that warn that California’s state leaders appear bent on choosing what’s best for the state government, rather than California’s citizens. The following reports provide economic analysis and policy recommendations. They are excerpted from a larger study by Dr. Zycher on the California energy market, which PRI will release this fall. Los Angeles Times – August 28, 2001, Given Davis’ proposal for staving off the imminent bankruptcy of Southern California Edison and the Public Utilities Commission’s perverse rule-making, it seems clear that the governor’s real intention is to shift blame.
The California legislature’s plan for dealing with Southern California Edison’s debts will force the utility into bankruptcy, shift responsibility to other creditors, and preserve, rather than end, the state’s role in power purchases, warns Dr. Zycher. The report finds that the Edison Memoranda of Understanding (MOU) will move California toward a more politicized electric power sector, but that the long-term interests of Californians would be better served by policies relying on market forces.
Action Alert | Press Release
On September 6th, the California Public Utilities Commission (PUC) is expected to vote to suspend the right of consumers to "direct access" to electricity suppliers. Dr. Zycher cautions that blocking direct access will harm California consumers and further distort the state's economy and long-term energy market. The report discusses the importance of direct access in any energy policy that hopes to protect the long-term interests of California.
Action Alert | Press Release
Publications
Mr. Izumi examines the causes of the disaster, Governor Gray Davis’s policy responses, the political ramifications of the crisis, and practical solutions that could be implemented immediately.
Mr. Izumi provides a brief six-page summary of the causes of California’s energy crisis and proposes policy solutions.
Dr. Hayward compares the environmental impact and efficiency of conventional and renewable resources. Hayward finds that conventional resources are abundant and cleaner than ever, and that renewables have their own environmental disadvantages.
Note: Adobe Acrobat Reader is required for these publications.
Periodicals
 5/10/01: Davis’s Bond Scheme Ignores Reality 4/23/01: Davis Melts Down 2/13/01: The Carterization of Gray Davis 1/12/01: Gray Davis Meets Huey Long Op-Eds
August 28, 2001:
Davis Leaves Edison Up the River Without a Paddle, Los Angeles Times July 6, 2001:
Is This Man to Blame for the Western Power Crisis?, The Arizona Republic June 21, 2001:
Scheduled Blackouts, Planned Crisis, San Francisco Examiner June 13, 2001:
Davis Blacks Out: Power Politics Is a Poor Substitute for Energy Supply, Investor’s Business Daily January 15, 2001:
Gov. Gray Davis Gets It Wrong on the Electricity Crisis, Knight-Ridder News Service January 14, 2001:
How To Create an Energy Crisis, San Francisco Examiner January 2001:
“Energy Crisis” Turns the Light on Ignorance, Investor’s Business Daily
Forthcoming
Chapter reprints from Electric Power: Deregulation and the Public Interest, edited by John C. Moorhouse, Fall 2001
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