Originally posted by: manly
Okay tm37 probably thinks I'm ducking his PM, when I'm just plain lazy, so I'll respond with my 2 cents.
First off, I live in L.A. but that isn't entirely relevant.
As for the topic of the energy crisis that tm37 described, I'll throw out a few points. For starters, I don't think anybody gives Gray Davis good marks for handling the crisis. But what I do remember are dire predictions that
armageddon would break out in the hot summer months. Remember that rolling blackouts hit NorCal in mild winter months; all the pundits expected the whole state to expect daily rolling blackouts come summer 2001.
Instead, the much derided long-term contracts went a long way to help stabilize the markets during the worst days of the manufactured crisis.
but one must ask what was the cause of this electrical shortfall. When before deregulation did we run into these problems of rolling blackouts? What caused the shortage was that energy produced in california when sold in california had a much lower price than anywhere else. They drove the power out of state because the price was so low. SO while you may praise davis for dealing with a shortage I will continue to contend that HE CREATED the shortage."
My recollection of the contracts is that nobody believed he could deliver long-term contracts at his stated
goal of 6 cents/Kwh. They did come pretty close at 6.9 cents average, which actually surprised a lot of the analysts IIRC. Now we that know the extent of the criminal market manipulation, IMO it's actually an accomplishment to have gotten what was considered reasonable,
stabilizing deals done. In a recurring theme, how is it now Davis' fault that FERC wants to uphold those contracts signed under duress, with many of the same players that gamed the market? Regardless of FERC, the fact that Davis has successfully pressed many companies to renegotiate those deals says a lot about the market pricing under which they were signed. Let's not forget the prices paid on the disfunctional spot market were orders of magnitude worse in comparison.
see the above to see how I feel about this. Davis signed what many believe(including myself) to be illegal contracts signed and HID from the taxpayers until the courts ordered him to disclose them.
Or would all the whiners have literally preferred that the state do nothing, let the utilities go bankrupt without a backup plan, and
have chaos ensue? While the governor can issue an executive order to take over the entire power grid, he simply doesn't have the authority to force out-of-state suppliers to sell power at any set price.
actually they could have done away with the power exchange and allowed the producers to deal directly with the providers as was proposed by susaan golding and mayor dick murphy.
Secondly, you simply can't blame Davis for the flawed energy marketplace that was implemented. I must say I didn't know a heck of a lot about Steve Peace, alluded to complicit fault by tm37. After doing the requisite Googling, what I learned is he headed the crafting of the deregulation bill in the legislature. But he was not an architect of the actual flawed energy marketplace; in fact, he was credited with making sure deregulation was more consumer-friendly than the proposed plan.
Steve peace is a fool. He championed deregulation. When My bill started rising Steve peace told me who to blame was it the energy producers? No Was it the power exchange? Of course not the party to blame was of course that evil SDG&E that was vcharging it's customers the price that was determained by the GOVERNMENT RUN Power Exchange. Steve peace was actually telling people not to pay there elcetric bills becuase sdg&e was ripping them off. for someone who was championing this he really didn't have a clue.
If you want to pin energy deregulation on one person, then pin it on Pete Wilson. Based on my readings, he was probably its biggest champion in CA politics, and actively sold it to the legislature.
Besides Props. 187 and 209, energy deregulation AS IT WAS IMPLEMENTED probably are Wilson's crowning achievements.
the original deregulation was a bipartisian bill and signed by pete wilson. While the original bill was seriously flawed, Grey Davis took those flaws and maginfied them. He took everything that was bad about the deregulation and made it worse.
As for Steve Peace, the energy crisis is credited with costing him his political career, even though like I said, he wasn't actually an energy markets architect.
Anyhow, like most of us would agree, it's fairly fruitless to debate the failings of deregulation in order to assign blame. More importantly, Davis has received poor marks for not handling the crisis effectively. But while it appears
no administrators confronted the nascent crisis as it emerged in San Diego, the crisis could also have persisted and become
much worse. Not to say that I give praise in the final analysis; CA weathered the energy crisis, but only at a substantially painful cost that's amortized over many years.
at the start of the crisis mayor susan golding went to sacromento to get help. Davis told her it was "a local issue" soon after Murphy was elected he made a trip and told Davis of the impending doom agian davis said there was nothing he could do.
On that topic, Michael is correct that
FERC was not responsive beginning at that the end of the Clinton administration. However, the record does show V.P. Dick Cheney on multiple news shows affirming that deregulated energy markets are sound, that the crisis was a state problem, and that the federal government absolutely would not intervene. Obviously, FERC's board is appointed by the administration, so it isn't exactly an independent agency. If Cheney was so correct with his poweful assertions in March 2001, why did FERC eventually relent? On balance, it was the price caps (and not any Davis' actions) that were most effective in stabilizing the wildly broken energy markets. Unfortunately, they came so late as to literally cost CA billions of dollars.
Even now, it was comical when FERC chaiman Pat Wood said something like it's
coincidental that the long-term contracts he voted to uphold are with some of the same market participants that FERC is not only investigating, but will likely eventually (half-heartedly) penalize. Everybody understands that if I point a gun at your head, and force you to sign over your life savings, that contract is wholly invalid. That a majority of FERC thinks this situation is merely coincidence, and that the legal sanctity of contracts is more important is just plain goofy. The tricky question is what about contracts signed with suppliers who did not actively game the markets, but still benefited from Enron and friend's fraudulent ploys?
We could debate the deregulation/energy crisis for days and still not be done. I've probably left out some points I wanted to mention, but I've written enough on the topic for one post. It's actually tangential (but definitely related) to this thread anyhow.
Anyhow, I'll have to add my opinions on the budget crisis and the recall in a later follow-up.
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