The American Spectator : You Stay Classy, Sacramento

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You Stay Classy, Sacramento

By William Yeatman & Jeremy Lott from the March 2010 issue

The centerpiece of California's energy policy is really the absence of energy.

(Page 2 of 2)

(It's worth batting that down, briefly. California has a moderate climate, high urban density, and an energy policy that drives up the cost of electricity. So, less air conditioning + less heat + high energy prices + most energy intensive industries have already fled the state = lower per capita energy usage.)

Writing in the Atlantic, Ronald Brownstein celebrated the "California Experiment" that "has consistently defined the forward edge of energy policy in America." In Time, Michael Grunwald argued that "California is not just ahead of the game" when it comes to energy, but that, "it's playing a different" -- altogether better -- "game." Think of it as Monopoly, except in this version everybody goes broke and has to sleep on the street.

Everybody except the well connected, that is. One California program that's being celebrated at the moment is called "decoupling plus." It is supposed to give utilities an incentive to pursue energy efficiency. Here's how it works: California regulators allow utilities to increase electricity rates to fund programs that lower energy consumption. If these programs reduce energy use below targets set by the state, then the utilities get to keep some of the value of the saved electricity.

Decoupling plus is supposed to restructure the utilities' interest calculus so that they give priority to energy efficiency. In practice, it's a huge transfer of wealth from taxpayers to favored utilities, with little enforcement. In September, the Public Utilities Commission slashed the utilities' savings targets for 2012 by 42 percent. According to a staff analysis, "review of the PUC's actions relating to energy efficiency incentives...reveals how the scales have been tipped further and further in favor of utility shareholders."

Brownstein writes that decoupling plus has "changed the motivation of utility companies." He's right, just not in the way he thinks. The program has given the utilities the motivation to lobby politicians and regulators in order to reap windfall profits.

For 2010-2012, the Public Utilities Commission has increased electricity rates by $3.1 billion to
pay for energy efficiency programs, and it has complete discretion over how much of this rate increase will end up with the utilities. So a utility's success will be achieved by overcharging rate payers and currying favor with politicians, who will then, no doubt, blather on about how Sacramento has saved us from ourselves.

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About the Author

William Yeatman is an energy policy analyst at the Competitive Enterprise Institute.

About the Author

Jeremy Lott is editor of RealClearBooks.com and RealClearReligion.org and associate editor of RealClearScience.com.

Letter to the Editor View all comments (26) | Leave a comment

Bram| 3.11.10 @ 9:48AM

I used 50% less energy when I lived near the beach in Southern CA. It never got hot or cold!

basur| 10.27.10 @ 6:42AM

I'm thinking that the pols in Sacramento are counting on an inexhaustible supply of hot air to power their energy future.

Tim| 3.11.10 @ 11:05AM

Can't wait for the next Enron to bend them over and rape them.

Matt Morehouse| 3.11.10 @ 11:05AM

I have a remote ranch in N.W. California. Getting permission to build a half mile of private gravel road across my private land required three years of harassment by the various state agencies, almost $7,000 in legal fees and paperwork totaling literally hundreds of pages.

I was planning on building a Nuclear power plant but now I'm not sure...

dissent555| 3.11.10 @ 11:39AM

I'm thinking that the pols in Sacramento are counting on an inexhaustible supply of hot air to power their energy future.

Now why shouldn't we believe them? Sounds like they have plenty.

Marc Jeric| 3.11.10 @ 11:54AM

I am a retired engineer who spent most of my career designing power plants - coal-fired, oil & gas-fired, nuclear, geothermal, solar. California is sentenced to a dismal death under the club of its eco-nazis. San Francisco will end up relying for its winter heat on masturbatory efforts of its population.

L. Ross| 3.11.10 @ 12:32PM

Nice.

C.J. Taylor| 3.11.10 @ 1:51PM

Just love pithy and witty!
Right On!!!

Blackwatch| 3.11.10 @ 1:54PM

I live 35 miles outside Sacramento for a reason--its not classy. It's a pit.

If we could just split this state in three pieces and let the libtards "own" their sh*t for a change. I would vote for that!

John II| 3.11.10 @ 4:54PM

The great majority of busybodies who run the state of California belong to a relatively small class of degenerates whose tyrannous eco-frenzies make up a kind of substitute for morality. Their enthusiasms exist in a realm beyond rational discourse; you can't argue with the creeps because, as Swift pointed out, you can't reason a man out of a position he never reasoned himself into.

Their personal lives are a staggering disaster: broken marriages, abandoned children, casual abortion, serial "partners" in every conceivable "relationship" outside of the normal, colossal neuroses, minutely cultivated nihilism and narcissism, icy hostility to traditional religion and to the human species at large. The consequent vacuum in their hearts is then stuffed with their prim green politics as a cheap substitute for interior moral order.

We are witnessing a civilizational crisis precipitated and driven by a toxic mixture of fanatic immoralists and acquiescent opportunists. California's at the cutting edge, all right, and decent people are leaving the state at the rate of about 3,500 per day. It remains to be seen how much longer such people will have someplace else to go.

Matt Morehouse| 3.12.10 @ 10:41AM

Good and productive citizens are leaving only to be replaced by illegals from "South of the Border Down Mexico Way"

PCP Smoker| 3.11.10 @ 6:22PM

But don't you get that green regulations create jobs. Millions and millions of "high- tech, sustainable" jobs.
Who cares? Let them starve to death or end up on the welfare rolls. This is the hard school of knocks for those fools, and school is in session.

sfsean| 3.11.10 @ 7:11PM

I live in the East Bay. If I can hang on for 9 years, I can retire out of state. There is no way I will stay in California any longer than I have to. What an armpit this State has become. I am thinking about moving to another country because I believe that what is happening to California now, will happen to the rest of the country. All thanks to our incompetent and corrupt politicians.

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Big Elk| 3.12.10 @ 11:58PM

Californians can thank Jerry "Moonbeam" Brown and John Burton's Frisco political machine, and crooked county registars of voters (they count the votes in California and they are dishonest as hell!) for the feces-laden hole California has become. And now, crooked Jerry Brown is running for the governorship again. For those who don't know or can't remember; Jerry Brown was the worst governor of the 20th century, aster his crime boss father, the criminal Pat Brown. Other states and the Federal government should not bail out California. As a Californian, I say, let California go bankrupt!

Big Elk| 3.13.10 @ 12:02AM

As for Feinstein, she and her husband Richard Blum have made millions of dollars for Blum's companies off of the taxpayer, Feinstgein is a crook, and the reason she doesn't want solar energy in the deser is because either she and Blum arewn't going to make any money off of the deal, or they aren't going to make enough. Feinstein and Blum belong in jail!

Mike H| 3.17.10 @ 11:28PM

Interesting. I worked on an upgrade to Mirant's Potrero plant about 10 years ago and we ran into a similar issue. An old coal fired unit was going to be converted to a combined cycle unit. Although the plant already had a permit for their once through cooling, the new project was essentially litigated to death over water use issues.

The entire facility, including its peaker units is scheduled to be closed in a couple of years. The lost generation will be made for via a new transmission project. What I find deliciously ironic is that the existing plant is one of the few black start units in the area, and considering the Bay Area’s vulnerability to seismic events, even a modest earthquake could sever the Bay Area’s power supply and leave them in the dark for weeks … even months.

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andy k| 4.15.10 @ 6:41PM

Interesting. I worked on an upgrade to Mirant's Potrero plant about 10 years ago and we ran into a similar issue. An old coal fired unit was going to be converted to a combined cycle unit. Although the plant already had a permit for their once through cooling, free WoW cards the new project was essentially litigated to death over water use issues.

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