Headline: California Power Crisis Replays Familiar Theme [excerpts]

Source: New York Times, 25 Jan 2001

Link: http://www.nytimes.com/2001/01/25/national/25CALI.html

LOS ANGELES, Jan. 24 — California is long used to fires, floods, droughts, earthquakes, riots, mud slides and mockery from most of the other 49 states and the world. But no problem in a century and a half of statehood can quite compare to the electricity crisis gripping the Golden State...

...The truth has dawned only gradually that California, the epicenter of the nation's booming high tech economy, is subject to the episodic daily failure of a vital piece of its modern infrastructure that would not seem surprising in Bangladesh but still feels mostly surreal here.

"It's not just an economic story," said Kevin Starr, the state librarian and author of a series of histories of the California experience, who said that even the devastating San Francisco earthquake and fire of 1906 was not so daunting...

..."It's a cultural and imaginative story," Mr. Starr said. "Once again, Californians have to be alerted to the fact that they have to earn California, that it doesn't come for free. Massachusetts knows that. New York knows that. Any place where it snows knows that. Californians have to learn that again and again."...

..."You have a first-world economy that's suddenly been plunged into a third-world economic environment," said Jack Kyser, chief economist of the Los Angeles County Economic Development Corporation. "There were some early warning signs, but we were probably too busy reading our own press clippings to pay attention."...

..."It's a problem that's come out of nowhere and it's put all the other issues in the state on hold for now," said Mark Baldassare, the institute's survey director. "It has already shown signs of draining much of the rest of our viable resources, the terrific surpluses that we were looking to as a source of solving problems from a lack of roads and infrastructure to new schools and education."

"Here we are in the heart of the new economy," Mr. Baldassare added, "and we're spending our money furiously just to keep the lights on. It seems as if everything we learn about this, the fixes are more and more complicated."

No one will bear the brunt of those complications more than Gov. Gray Davis, the placid Democratic centrist who has presided over boom times with high approval ratings since taking office two years ago, but who had yet to be tested in a crunch. In the current crisis, Mr. Davis has been criticized in many quarters as moving too slowly and has vowed to oppose electricity rate increases at virtually all costs, a goal some other prominent politicians consider unrealistic, since higher rates would help force conservation. The State Legislature, which approved the deregulation plan four years ago, has struggled with potential solutions, including having the state take over the hydroelectric plants or transmission systems, but no consensus has emerged.

"I'd been saying this is the worst crisis a governor had faced since the Medfly, but that doesn't do it justice anymore," said Dan Schnur, a longtime aide to former Gov. Pete Wilson, a Republican who was in office when deregulation was approved. "This is going to sound partisan, but it's just unflattering analysis: Davis has never had to make an unpopular decision. He came in during a period of extraordinary economic growth, where the government's biggest problem was how to divide up its surplus, and now he's in a situation where there are no palatable options available and he's having huge difficulty." ...

...One of the oddities of the crisis is that Los Angeles, the state's largest city and its most economically and culturally dominant one, has been largely immune, since its municipal utility, the Department of Water and Power, was not subject to deregulation, has its own sources of generation and has sold hundreds of millions of dollars worth of surplus electricity for use in other parts of the state. But soon enough, experts predict, it will feel the cost of the power crisis as state revenues that might have gone to repair roads or build new schools are diverted to buy electricity.

In the longer term, Mr. Starr, the historian, said: "Anybody who wants to put money on California going under is going to lose that money. Because it'll come back. It always does. Right now, it's like an adolescent that just spurted up by a foot and a half. But it'll adjust."

-- Andre Weltman (aweltman@state.pa.us), January 25, 2001