“Can 40 million suffer third-world electric reliability without a political upheaval?” asks Holman Jenkins, 29oct19 WSJ
George Rebane
Northern Californians have now suffered multiple power blackouts in recent weeks and we are told by many that from here on this may become the new norm for our state – in other words, prepare your life to adopt the daily routines of third world countries where electric power is a sometime thing. As opposed to all the now usual causes for these outages, ranging from climate change to a rapacious PG&E, I’d like to focus here on these blackouts as political events, and examine the new norm of power outages from that perspective.
I’m writing this while the power is still out in our part of western Nevada County. This is the fourth day of our third ‘safety blackout’ in the last two weeks. Most of northern California now knows a bit what it’s like to live in a third world country with sporadic and unpredictable electrical service. But let me start this record with the strong statement that people who believe that PG&E is a regular for-profit private enterprise, and not a wholly-owned subsidiary of Sacramento, can be ascribed as certifiable idiots whose impact continues to be disastrous for our state.
The actual centralized command structure that oversees and controls PG&E operations starts with decades of California’s one-party government that appoints members to the California Public Utilities Commission (PUC) which is supposed to oversee PG&E, its rate structure and directed expenditures. Within this ‘management’ structure, PG&E operates like a corporatist monopoly that embodies every inevitable corruption of a large bureaucracy that for years has considered its customers only as minimally-served and powerless herd of cash cows.
Starting in the latter half of the 19th century, California was a blessed land that had everything except people. Its commerce-oriented citizens and entrepreneurs emplaced state governments that shared their vision for the state’s future which focused on attracting Americans from the east. And for over a century the people came by the millions to enjoy the state’s climate, scenery, and rapidly expanding and diverse economy. It was hard to resist the promotional materials that blanketed the east showing palm trees under blue skies, orange groves backed by beautiful mountains, and cities filled with smiling tanned Californians enjoying the beach in January. If you were willing to work at literally anything, California had a job and a place to live for you. (In 1957 the Rebanes were part of that grand migration from the Midwest, attracted by California’s burgeoning aerospace industry.)
The premature end to this glorious age started about fifty years ago around 1970. The causes for California’s slide are many and not all home-grown; the entire nation was then reeling from the turbulent 60s that included massive civil rights and anti-war activism abetted by an incompetent federal government that promoted ‘guns and butter’ policies which were carried out in Vietnam and with the launch of the Great Society programs. The most significant outcome of those years was that the country’s Left was finally able to take control of America’s public schools.
At that time California had the nation’s best performing schools that ranged from kindergarten through world class university systems that led the nation in producing and attracting STEM graduates who were naturally drawn to entrepreneurial enterprises in a business friendly state. California’s dominance in the entertainment and aerospace industries served as a natural launch pad for the new and expanded multi-media Hollywood and, of course, Silicon Valley. As post-Vietnam aerospace pulled back, entertainment and computer-based technology companies became the state’s major wealth producers. More wealth was produced by an ever-shrinking share of Californians.
Since that transition the large body of Californians have “tended to mistake the success of Silicon Valley and Hollywood, whose economic hinterland, talent base, and revenue source are the world for (a) California being well-run. … It’s not. Any such illusion is belied by its homeless and poverty problems, its Nimby-driven housing costs, the black hole of its bullet train, the decampment of families and businesses to Texas, North Carolina and Tennessee.” (more here)
Today, with two generations of public schooled Californians taught a revisionist history of America as the world’s most deplorable country dripping with capitalist greed, the wealth-consuming collectivists have discovered how ‘democracy’ enables them to vote their largess from other people’s pockets. And many of the remainder have been indoctrinated so thoroughly in Marxist dogma that they view minimally regulated markets and capitalism as society’s source of all evils. Today more than half of Millennials decry capitalism as the organizing principle for an economy, 70% are likely to vote socialist, more than 1 of 5 want private property abolished, and more than a third of them approve of communism – talk about the arrival of our dumbest and most dangerous generation. (more here)
In the meantime, drawing down the account of its golden years, California is still looked upon as the nation’s leader in progressivist programs and all things socialist. One of the most celebrated myths among the Left is the over-promotion of all things locally self-sufficient. In their brave new world we will depend less on ‘the grid’ and make/grow what we need in our villages or learn to do without. No one seems to understand any longer what scaling means in production, and the massive QoL improvements such economies of scale have brought to hundreds of millions (billions) all across the world. Our (especially local) Left promotes lifestyles that call for compact living, less travel, reduced consumption of all things, altruistic volunteering, shared property, and the establishment of commons in every possible sphere of activity and need.
To promote centralized control by the correct-thinking elites, California’s Left is leading the nation in all things ‘green’. And this includes mandating that its utilities use their revenues to support various cash-hungry green initiatives that Sacramento regularly rolls out. Here is a short litany of how such leftwing policies continue to impact PG&E –
- PUC is in charge of enforcing state safety laws and regulations. PG&E has received no fines related to the mismanagement of its power grid. PUC instead is focused on enforcing Sacramento’s climate mandates.
- Sacramento has mandated that utilities obtain 33% of electricity generated from renewables by 2020, and 60% by 2030, thus skewing spending on infrastructure maintenance.
- PG&E, along with other utilities, must spend hundreds of millions annually to reduce the cost of green energy for low-income (loyally Democrat) households.
- In 2018 PG&E had to spend $509M on discounts to low-income customers.
- In 2018 PG&E had to spend $125M for no-cost weatherization and efficiency upgrades for disadvantaged communities.
- Since 2012 PG&E has had to divert $7.5B of cap-and-trade allowances for various “ratepayer benefits” that reduce carbon emissions.
- PG&E spent the lion’s share of state mandated $100M for solar systems in low-income communities, and $2.2B in customer rebates for rooftop solar installations, and then rebates on electric bills under the state’s net-metering program.
- In 2018 PG&E invested more than $150M in battery storage and other “sustainable technologies”, funded by a special charge on its customers.
- Over the next three years PG&E must spend $130M to install 7,500 electric-car charging stations, and also offer participating drivers an $800 “clean fuel” rebate.
All of this has been imposed by Sacramento Democrats to advance their climate change agenda, ostensibly without raising taxes. Instead the state’s legions of light thinkers quietly accept paying twice as much as Oregon and Washington for their electricity. In doing so, the utility has redirected its revenues from maintaining/upgrading its grid and paying for the needed tree-trimming around its power transmission and distribution lines. In short, “PG&E has prioritized political obeisance over safety.”
In the meantime, Democrats make hay by accusing PG&E of putting profits over safety despite the fact that the PUC approves the utility’s return on equity at a level needed to attract private investment. And that investment doesn’t come from high return seeking hedge funds or other greedy capitalists; it comes mostly from pension funds and elderly private investors seeking moderate but safe streams of retirement income.
The alert reader can relate all of this obvious malfeasance to a conglomerate of government bureaucracies that operate independently from their customers’ feedback, customers that such government monopolists view as vassals of the state. This explains “California’s return to the dark ages (as) a direct result of the Democratic political monopoly in Sacramento.” So how do we go forward from this mess years in the making? (more here)
America was built by people willing to take risks for the promise of profit. And the country continues to thrive from the efforts of those who still expose themselves to risk in the hope of commensurate returns. But in the interval, the public has been taught that all risk is bad, a social failure (injustice?) to be avoided and eliminated at all costs. And that this will be possible only through the beneficial workings of an all-encompassing government through its growing slate of programs all commissioned for the greater good. In the meantime, PG&E CEO Bill Johnson dispenses supportive pabulum for ongoing blackouts, stating that “We must have zero risk of a spark, we will very likely have to make this kind of decision again in the future.”
Readers know that as a lifelong capitalist and entrepreneur, I am a proponent of prudent risk taking that promises an acceptable expected return. Without having successfully taken myriads of risks, humans would still be living their short and brutish lives in caves or on the open savannah. The well-read individual knows there is no way that we can have “zero risk” in any endeavor, especially those endeavors that provide us value. We know that the cost is immeasurable in the attempt to eliminate the last vestiges of risk.
Also, when we consider what is required to move past these promised regular blackouts, we can take a lesson from nature about large scale systems such as our all-controlling government/corporatist utilities conglomerate. Nature has no such large-scale systems. Its resilient and magnificent complexity is made up of an evolving and layered configuration of smaller systems always operating with the most amount of local control and information which enables them to survive in a competitive ecosystem.
In this spirit and for starters, I offer the following shortlist of Rebane Doctrine tenets for a post-blackout epoch of habitation in what today are considered California's high fire-danger regions –
- Large power generating utilities should be broken up into smaller for-profit competing utilities that transmit and distribute power over government (state, county, local) owned transmission and distribution lines (like roads and highways). Customers contract with individual utilities for their power.
- Power and energy utilities’ charter is to provide reliable, low-cost electricity to the customers using existing, available sources and technologies, and not be subjected to government mandates for promoting other energy related agendas.
- Enable and encourage movement toward a distributed production of power.
- Encourage timber harvesting to build a sequence of effective fire breaks, and return sparsely populated forest areas to their pre-inhabited copses configuration (thus localizing lightning started fires).
- Pass legislation to enable the state to plan and carry out prescribed burns without liability from accidental collateral damage.
- Insurance companies can charge premiums based on their assessment of risk.
- Consumers do their own trade-off of risk vs the return (profit) of living in a scenic area.
- No one has a right to live in a fire danger area at another’s expense.
Since all such proposals can benefit from and be improved upon by the participation of other good-willed and similarly motivated people, I invite interested RR readers to contribute their own edits, corrections, and thoughts to what I have outlined above.
"Complaining about a problem without posing a solution is called whining." Teddy Roosevelt
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