Originally posted by Anders
I never understood this. What does the state of california have to do with the energy system?
A brief and not necessarily correct answer:
(I apologize for any inaccuracies and admit that I am writing this off the top of my head and did not do any supporting research. I also apologize in advance to those who believe I am sidetracking the thread, since this is a reply to a specific post rather than to the specific subject of the thread.)
The State of California had regulatory agencies to set the price that the energy distributors could charge.
Some years ago, Californians voted to deregulate the system and let market forces determine the cost of energy.
The deregulation was not complete and there were still restrictions on the energy distributors. For instance, they were prohibited from entering into long term contracts with the energy suppliers. Even during the "energy crisis", they were not able to secure long term contracts and had to buy energy at the spot price, while the state still limited the amount they could charge, and in some cases, the energy distributors were actually subsidizing the consumer. This is one of the factors that drove one of the companies, Pacific Gas and Electric, into bankruptcy. One question I have is that after PG and E went bankrupt and the state took over the procurement of power, one of the first things Governor Davis did was to secure long term contracts and stabilize the cost of power. This was the very thing he and the state had prohibited PG and E from doing and which was, I believe, a contributing factor to the crisis in which the state is now in, since the state used its billions of dollars in surplus to ensure that consumers could receive power at reasonable prices.
(I believe the state surplus was about 11 billion dollars at the time. It went from PG&E subsidizing energy costs to the state subsidizing the energy costs and exhausting a good part, if not all, or the state surplus.)
My criticism is not that the governor was unwise in making long term contracts, because he did that in the best interest in the citizens of the state to ensure they had access to power. The long term contracts minimized the manipulation of the energy market by the energy suppliers and contributed to "calling their bluff". Only after the situation had stabilized did we find out that much of the energy crisis was caused by the manipulation of the energy market and only in hindsight can we say that Governor Davis' long term contracts were a bad investment. I would fault the governor for squandering the state surplus only if it can be proven that he knew the market was being manipulated. (I do fault him for not allowing the local utilities to negotiate long term contracts. I would think that he would have been able to issue some sort of executive order to allow this, just as he could have eliminated MTBE from our gasoline by now - but that is another story.)
The failure of deregulation in California has other states concerned because they are also considering deregulation. However, deregulation in California was not implemented well because the state still controlled prices.
Is this what you were looking for, or did I not understand your question?
P.S. Did Stanford's tuition go up by 20% At the University of California and California State University, the Regents recently (last week?) voted a 30% increase in tuition. That is in addition to the 10% increase earlier this year. As a side note, the amount represented by that 30% increase is almost twice the total tuition cost I (or rather, my parents) paid for my freshman year at Berkeley 30 years ago ($212/quarter). The increase at CSU is $238/semester and the increase at UC is $1097 (per year, I assume).