State
senator speaks out on electricity crisis
By Ruth Estrada
On-line Forty-Niner
California
will endure a long journey before reaching
an end to the energy crisis, said Sen. Joseph
Dunn, D-Garden Grove, as he talked to a
group of Cal State Long Beach students and
faculty Thursday.
Economics professor Darwin C. Hall invited
Dunn to speak with his class about the manipulation
of the wholesale markets for electricity
and natural gas. Dunn said that California
does not have a crisis in electricity, but
instead has an economic crisis.
“As long as we focus on the solutions for
electricity, the farther away from the real
solution we will get,” Dunn said. “If we
focus on economics, we can resolve this
more quickly.”
Hall said that it will be some time before
California will see the end of the energy
crisis.
“As Senator Dunn stated, we may just be
in the eye of a hurricane,” Hall said. “When
the economy finally turns around, California
will again face the problem of matching
generation demand.”
The economic crisis began much sooner than
most people think, Dunn said.
“We really started to see it - at least
from the public eye - in the summer of 2000
down in San Diego,” Dunn said.
Dunn did not go into detail about San Diego
Gas and Electric Company, the retail provider
in that area, but emphasized that San Diego
is where the crisis first generated. He
also said that there has been a never-ending
parade of excuses from companies like Mirant,
Duke, Dynerg, Reliant, Williams, and AES
that are referred to as the “Big Six.”
Companies were blaming the energy crisis
on unexpected increases of demand for electricity,
Dunn added.
“It was their first excuse out of the book,”
he said. “Twenty years ago, the California
Energy Commission made a prediction of what
our demand for electricity would be and
we are right on track.”
Dunn said that their second excuse was that
California is experiencing a shortage in
energy supply because the state had not
built enough electricity generation plants
to keep up with the growth of population
as well as the demand.
Dunn also mentioned the reasons behind the
state’s rotating blackout problems. He said
that the cause of the blackouts was not
due to an insufficient amount of electricity.
Instead, the reason was based on the fact
that California was not willing to pay high
enough prices for electricity.
“Once we were willing to [up] the price,
when we as Californians were willing to
pay, electricity magically appeared on the
grid,” Dunn said.
He also said that there was some truth to
the idea that deregulation played a part
in California’s energy crisis.
“In some sense, it would not have happened
if we had not deregulated the market,” Dunn
said.
The biggest flaw that California made was
establishing a bilateral market, he said.
The state created two markets to train electricity
in, setting the stage for companies like
Enron to steal the public’s money, he added.
“Deregulation did not cause the crisis,”
Dunn said. “Maybe us dumb politicians deregulated
it in a bad way, but we did not cause those
generators to charge prices that were way
up there.”
Joseph Gonzales, a Long Beach loan consultant
who attended the speech, said that he does
not believe that California has an energy
crisis.
“Companies are just trying to find excuses
to raise prices,” Gonzales said. “I think
that what they are doing is wrong.”
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