Will Hazel

April 15, 2001

As a state known by most for its surplus of scenic landscapes, California is on the brink of being recognized, in a much less enviable manner, as a state of darkness.  An ongoing energy crisis has recently plagued California with rolling blackouts.  On both March 19 and 20, rolling blackouts were ordered as a result of the crisis that has been "caused by soaring wholesale energy prices and California's own bungled power deregulation effort."[1]  Power was terminated from San Diego to Sacramento on consecutive days, "leaving offices dark, traffic lights off, and everything from factories to computers to gas pumps inoperative."[2]  Now, as summer's warmer temperatures approach and energy demands become greater, the frequency of these outages will likely become much more common.  However, each person in the state can play a part in alleviating summer outages by learning of, and implementing energy conservation techniques in their daily lives.

The root of the energy crisis in California can be traced to 1996 state legislation that was designed to restructure the power industry. [3]  To achieve its intent, the legislature chose to break up the existing monopoly of power producers - thus allowing competition to take hold in the area of electricity generation.[4]  Yet, the utilities responsible for transmitting and distributing electricity were kept intact as a regulated monopoly.[5]  Although they were strongly encouraged to sell their power plants and purchase their electricity from the newly competitive wholesale electric market.[6]  New competition, it was expected, would result in a greater supply of electricity that would in turn result in lower wholesale rates.[7]  These results have not followed, however, as the supply of electricity in California continues to fail in meeting the state's demand.[8]  Moreover, "the restructuring law froze electric rates [to consumers] at a level 10 percent below where they were in 1996."[9]  Expectations were that the rate freeze would provide the utilities with enough income to allow them to recoup their prior investments, while also guaranteeing lower rates for consumers.[10]  Electricity supply in the wholesale market, however, has not increased, and prices in the wholesale market are inflated to such a level that the utilities are nearing bankruptcy as the price they may charge a consumer continues to be frozen in time.[11]

The Federal Energy Regulatory Commission ("FERC"),[12] on March 14, issued a sweeping order aimed at increasing California's wholesale supply of electricity.[13]  As stated in the FERC press release:

Effective immediately, the Commission is streamlining regulatory procedures for wholesale electric power sales, expediting the certification of natural gas pipeline projects into California and the West, including the reallocation of staff resources to more quickly address pending pipeline applications, and urging all licensees to review their FERC-licensed hydroelectric projects in order to assess the potential for increased generating capacity.[14]

Recognizing the potential harm that power development and production may at times have on the environment, FERC stated that environmental regulations will not be compromised during this effort to increase wholesale electric power supplies.[15]

While governmental bodies, including the state, are now taking steps to increase the wholesale supply of electricity, it will still be some time before the supply is great enough to pull California out of this energy crisis.  In the interim, the citizens of California should accept their own responsibility for the rolling blackouts by conserving power when at all possible.  The citizens have been awarded with over 5 years of frozen rates, and "because consumers were not charged the true price of power, they had little incentive to conserve and did not respond to higher prices."[16]  Yet the recent blackouts provide one of the strongest power conservation messages available.[17]

Simple, energy efficient, techniques may be undertaken by all households and businesses that will assist in alleviating the current energy crunch.  By simply turning off his TV and VCR when he leaves the room, one Californian has cut his electricity bill by $20 a month.[18]  Special plugs may also be purchased that allow an individual to kill the power to a variety of appliances with a single switch.[19]  Households may further conserve power by using battery powered lanterns and radios, and by cutting down on television use.[20]  Businesses may also conserve power by dimming lights, lowering thermostats, and turning off building signs and parking lot lights after hours.[21]  Society has not always been blessed with the benefits that flow from electricity, and now that our evolution has carried us into a technological age, it is high time we fully recognize the importance of power to us all by respecting its use as a privilege, and not a right.

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[1] FACTBOX-How California implements rolling blackouts, REUTERS, Mar. 21, 2000, at http://biz.yahoo.com/rf/010321/n21674945.html.

[2] Id.

[3] PACIFIC GAS AND ELECTRIC CO., A CONCISE GUIDE TO THE CALIFORNIA ENERGY CRISIS [hereinafter CONCISE GUIDE], at http://www.pge.com/006_news/current_issues/energycrisis/concise_guide.pdf.

[4] See id.

[5] See id.

[6] Id.

[7] See id.

[8] See id.

[9] Id.

[10] Id.

[11] See Leonard Anderson, California pushes power savings to avert summer blackouts, REUTERS, Mar. 21, 2001, at http://biz.yahoo.com/rf/010321/n21529993.html.

[12] FERC, an independent agency within the Department of Energy, maintains jurisdiction over interstate power rates.

[13] See Press Release, Federal Energy Regulatory Commission, Commission Moves to Remove Obstacles, Expedite Energy Supplies to Western Markets, 1 (Mar. 14, 2001), available at http://www.ferc.gov/news/pressreleases/mkts.pdf.

[14] Id.at 1.

[15] See id.at 3-4.

[16] CONCISE GUIDE, supra note 3, at 2.

[17] See Associated Press, Energy crisis prompts conservation (Jan. 20, 2001), available at http://www.enn.com/news/wire-stories/2001/01/01202001/ap_energy_41497.asp.

[18] See id.

[19] See id.

[20] See id.

[21] Id.