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Jewish World Review Jan. 29, 2001 / 6 Shevat, 5761

Thomas Sowell

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Consumer Reports


Rolling blackouts

http://www.jewishworldreview.com -- CALIFORNIANS are not only seeing rolling blackouts, they are seeing chickens coming home to roost. They are learning the most elementary facts the hard way.

Fact number one: You cannot go on obstructing the building of electric power generating plants for years on end without eventually running out of enough electricity to supply your growing population and your growing industries. It has been more than a decade since the last power plant was built in California.

Fact number two: You cannot force California public utilities to charge consumers less for electricity from out of state than the utilities have to pay to get it, without reaching the point where the utilities' deficits exceed the money they have on hand to pay their bills.

Fact number three: You cannot continue indefinitely pandering to the shrill voices of people who call themselves "environmentalists" or "consumer advocates" without reaching the point where the chickens come home to roost.

Regardless of what environmentalists say, you cannot continue to treat every worm or reptile as sacrosanct, and as a reason why you cannot build hydroelectric dams or nuclear power plants that might inconvenience them -- not unless you are prepared to sacrifice the interests of millions of human beings affected by blackouts.

California Governor Gray Davis has continued to pander to the self-styled "consumer advocates" by blaming California's electricity shortage on the "greed" of electricity suppliers from out of state. But let's do what politicians assume we will never do: Stop and think about it.

If out of state "greed" is our problem, are these greedy people greedy only toward California?

Does it even sound plausible that someone would be greedy toward California but not toward any of the other 49 states? If greed is the cause, then why is the effect -- the electricity crisis -- confined to California?

The other great bogey man of the "consumer advocates" is "deregulation." But the political micro-management of California's utility companies can hardly be called deregulation without twisting the meaning of the word beyond recognition. There was real deregulation of those who supply electricity to utility companies in California -- and that should have been a warning against setting the rates charged to consumers at levels too low to cover the cost of buying the electricity that California utilities passed on.

There have already been signed statements by consumers who announce that they are going to refuse to pay the new 9 percent increase in electricity rates. Apparently somebody else should be paying for the electricity they use. "Consumer advocates" want the holding company that owns the utilities to pick up billions of dollars in costs. In other words, having driven the utilities to the edge of bankruptcy, they now want to do the same with the holding company. And after that, who?

The childish quest for a free lunch is what has led to blackouts all over the state of California. Californians whose work or business has suffered financial losses because of the blackouts should at least understand the history behind the current crisis. Remember all the protests and obstructions that disrupted attempts to build power plants in California in years past? And remember the wrist-slap punishments -- or no punishments at all -- received by these disrupters who sacrificed millions of other people's needs and livelihoods to their own ego trips? Now the chickens are coming home to roost.

People trapped in elevators that stopped between floors when the electricity was cut off should understand that this is part of the price paid for years of moral posturing by the environmentalists and the "consumer advocates." These are more chickens coming home to roost.

What is happening to the electric utilities is what has happened before to other businesses regulated by politicians. Municipal transit companies were once privately owned but political regulation kept their fares too low for these businesses to survive. So buses, subways and trolleys ended up being taken over and run by government in city after city -- and not run as well.

The same process may be repeated with California utilities supplying electricity. That could mean still more chickens coming home to roost.

JWR contributor Thomas Sowell, a fellow at the Hoover Institution, is author of several books, including his latest, Basic Economics: A Citizen's Guide to the Economy.

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© 2001, Creators Syndicate