Forwarded from David Walters (deregulation)

Louis Proyect lnp3 at
Fri Jan 26 11:51:40 MST 2001

Louis,  Can you post this, it's a reply to Wasserman.

Response, point by point, to Harvey Wasserman by:

David Walters
IBEW 1245 Shop Steward,
Public Power activist and power plant control room operator,
Potrero Power Plant, San Francisco, CA

[my comments are in brackets, they are mine, not the view of my employer or
my union]

Unnatural disaster
Deregulated California utilities are electrocuting the public.
Ohio is next

by Harvey Wasserman
Electric utility deregulation has become a spectacular catastrophe,
starting in California and stretching deep into our economic and
ecological future, here in Ohio and nationwide.

To keep it simple, we'll start with the top 10 truths about this unnatural

1. There is no electric supply shortage threatening California (or the
nation), only a series of complex, cynical manipulations that have ramped
prices sky high, yielding enormous profits for a few distributors and

[A partial truth. The fact is there is an unusual drought existing in the
Pacific Northwest, that, under normal conditions, provides up to 30% of the
power here in California. Little of this hydro power is coming to the state.
Secondly, load has increased, although it didn't take a 'big jump' between
this and last year, as the utilities like to imply, but enough, to put us
into a questionable reserve category. Thirdly, there are an unusual amount
of older steam plants, like mine, that have come down for emergency outages
due to tube failures]

2. The deregulation bill at the root of this crisis was drafted by the
California utilities now facing bankruptcy and was rammed through the
California legislature (unanimously, in 1996) by the utilities' own

[True, but it wasn't "rammed" at all, which would imply some opposition, but
was welcomed without dissent as a bi-partisan movement toward the religion
of the free-market...]

3. The Natural Resources Defense Council, through its chief energy
spokesperson Ralph Cavanagh, and with support from the Energy Foundation,
played a key role in drafting, passing and then defending that bill.

4. But the California bill's catastrophic outcome was accurately predicted
in intricate detail by a wide range of grassroots, consumer and
environmental groups that challenged the deregulatory scheme in
a 1998 statewide referendum.

[The 1998 referendum had to deal with the bailout provisions of the AB1890,
the state Assembly Bill that legislated deregulation. Most of the opposition
statements dealt with this aspect, not the potential 'crisis'. Supporters of
Prop. 9 as it was called, unfortunatly didn't address issues of concern to
energy workers, thus allowing my union, the largest in the energy field in
the state, IBEW Local 1245, to be against the Proposition and it went down
to defeat]

5. The utilities now screaming for help spent at least $40 million to defeat
the referendum that would have saved the state and nation from the current

[I agree]

6. The utilities now screaming for help walked off with more than $20
billion in "stranded cost" bailouts as part of deregulation, but nobody
seems to be able to account for where the money went, nor is there
a concrete plan for getting that money back.

[Yes, true enough. They used the money to be deregulated power plants in New
England where PG&E now plays the same role their screaming about with regard
to "out of state" generators...]

7. The consuming public would gain, not lose, if the utilities now
threatening to go bankrupt actually did go bankrupt, and the public then
took over the utilities.


8. The public-owned utilities that supply Los Angeles and Sacramento are
prospering in the midst of this crisis, proving once again that public power
is the answer to the nation's long-term energy needs.

[L.A. is prospering...thank to the building of several large natural gas
steam plants. I can't say Sacramento is actually "prospering" but they have
avoided the pitfalls of the market approach to power distribution. Don't
forget, they screwed up big time when they tried to build a nuclear power
plant which never even went online]

9. Those municipal utilities are deeply invested in energy efficiency and
renewable sources (wind and solar), which has provided them with a stable
supply in the midst of the crisis.

[This is simply untrue. They've invested some in efficiency and renewable
resources but the overwhelming majority of the power produced by, and
distributed from these MUDs, are from  traditional, and CHEAP, sources, like
hydro and natural gas]

10. Any new electricity production added to the state and national grid
should come from wind, which is the cheapest and fastest-to-build new
power source, and from solar power, which can be installed on rooftops and
at industrial sites, freeing homeowners and businesses from the lethal
fluctuation of monopoly manipulations.

[I think this is Utopian madness. I've seen this popping up where ever
Green, non-Profit and alternative energy advocates intervene in this
discussion. Wind power, contrary to popular beliefs is only "cheap" when the
price goes up above the cost to build, maintenance and get's "tax
write-offs". Solar even more so. IF people want these sort of resources,
then they shouldn't complain about the high cost of power, because, megawatt
per megawatt, nuclear is probably cheaper. Additionally, wind power is
unreliable and outside where the load is, thus requiring transmission lines
through peoples backyards, etc. The BEST source, medium to long term, are
the low polluting natural gas fired combustion gas turbines (GTs). One of
these units produces is equal to, on an average, to 500 MWs. The price of
gas, while rising, is also very plentiful (more than oil in fact) with many
sources (including, BTW, renewable, since methane gas can be collected from
a variety of recyclable enterprises to be used to power GTs).]

The core of the California power crisis is simple: The utilities got greedy.


[Snipped: how the energy crisis happened, no disagreements here]

Here, instead, is what should happen:

 The public should take direct ownership of the utilities, which have
clearly failed. The system should be controlled on a municipal basis, as in
Sacramento and Los Angeles and, hopefully, soon in San Francisco
and other cities, towns and counties across the state and nation.


 No new fossil fuel or nuke plants should be built. All new construction
money should go to building windmills, solar panels and increasing
efficiency. Wind is the cheapest and fastest to build form of new generating
capacity in the world today. Solar photovoltaic panels should be generating
electricity atop virtually every rooftop in the nation, starting with all
new construction. All water should also be heated by the sun, again starting
with new construction.

[See my point about Utopian madness. What needs to be done is an integrated
solution based on GTs with massive R & D into non-traditional sources.
Generation should be located as close to the load as possible, which means
very limited wind and solar but more on the GT side. Use solar where
possible but keep solar power in solar areas! What's the environmental
effect of massive lead battery production??? What's the cost to put solar
into an average Bay Area home? How many kilowatts, etc? Most people, even
with tax credits, MIGHT, go to SOME solar water heating, but that's it, in
my estimation. The point is that we could CONTROL this direction, but only
if it's under OUR CONTROL, then we could have a democratic discussion on
which way to go...]

All this work should be done with union labor, starting with the
International Brotherhood of Electrical Workers, which has been training its
labor force for just such a conversion.

[Again, any talk of conversion is silly until we control the system. Again,
I believe most people will opt for clean burning natural gas units. 8,000
MWs of this sort of power is currently under consideration, with 3,000
already being The state should seize these plants and run them
as part of a State Power Authority under a nationalized energy program...but
build them indeed!]

The California crisis is not one of supply--it's one of manipulation by an
obsolete private utility industry and a fleet of cynical power generators.
The solution is not to feed them still more warehouses full of money. The
solution is to take them over, make them directly responsible to the public
that owns them, and switch them over to wind, solar and increased

[Only if you want to live in the dark! Take them over and develop them, put
some money into wind and solar and fuel cells, etc.. but there is no way
solar or wind in 10 years could solve our energy crisis. You have to be real
in this discussion]

 David Walters

Louis Proyect
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