A powerful public

California’s energy crisis should have been a lesson to everyone that energy deregulation is not the right alternative. Yet, the Bush administration and a number of states continue along this path.

Harvey Rosenfield of the The Foundation for Taxpayer & Consumer Rights says that self-interest makes deregulation unworkable. Self-interested people and groups tend to do things that benefit themselves.

Most people would probably agree that the theory of self-interest is strongly evident when it comes to big business. The idea of regulating energy is to keep big power companies from the temptation of big profits at any cost. It has nothing to do with one’s position for or against a free market economy.

All free economies are regulated to some extent. There are laws against price gouging, monopolies, dumping and so on. What makes energy regulation different is the prices are controlled for the benefit of the public.

Publicly owned power is right because energy is an essential basic element in our lives that cannot be entrusted to big business. Entrusting the power market to the corporations requires that the power companies always do the right thing. However, the California and Enron examples suggest this is not a good assumption.

Not only was there a failure to do what is right, but often an intentional plan to do things that were very wrong.

There’s also a tendency to cut costs in a deregulated market that can be dangerous. When a farmer tries to cut costs by trying something experimental, any possible negative impacts might last only one season. However, when power plants are built poorly in an effort to reduce cost, the impact can last for decades.

Fortunately, we in Sacramento have SMUD, one of the nation’s best public utilities. However, we still had to pay a hefty rate increase because of the statewide mess.

California was able to wiggle out of the energy crisis. A number of factors helped send natural gases prices down steeply. The problem is not gone, though. Many feel that a new energy crisis is just around the corner unless drastic action is taken.

Pacific Gas & Electric is using bankruptcy proceedings to try and move assets from its regulated division to its unregulated one. That’s one of many signs that all is not yet right.

Rosenfield is correct in saying that the answer is to stop the transfer of the remaining regulated public utilities into private hands. All unregulated energy procurement should be done by an agency like the California Power Authority under the watch of the Public Utilities Commission.

We need to learn from the energy crisis and promote public power throughout the state. If we don’t, we in Sacramento will have to pay for others’ mistakes.