Why is there a power shortage in California?

Are the power companies thieves? Is it because buildings in SoCal have no insulation? Is it because we have dismantled all of our nuclear power plants?

I have a second question: is nuclear power inherently non-green? I am a big fan of nuclear power.

-- Tau-Mu Yi (tmy@caltech.edu), March 25, 2001

Answers

There is a power shortage in California because demand exceeds supply.

The industry is only partially deregulated, so market forces are not able to bring things into balance. The result is not dissimilar to the situation in the communist USSR, which caused long lines for basics like toilet paper.

In a free market, rising demand leads to rising prices, which lead to rising supply. Ultimately supply and demand balance. In California prices are fixed, so rising demand leads only to shortages.

Regulations have kept retail electricity prices artificially low. (Rates in California are 2-3 cents per kWh below rates on the east coast). Without incentive to conserve, consumption goes up. Because rates are so low, there is no incentive to provide new sources of energy.

The power companies are not thieves. The problem is the illogical regulations. The laws of economics and market behavior cannot be overturned by legislation any more easily than the laws of physics.

Re: nuclear power

While nukes do not contribute to global warming, I hardly consider any method of power generation which creates hazard waste with a lifespan in the thousands of years to be green. Having said that, I'm sure there isn't a place for it in some cases. Certainly more research should continue.

I find it striking that while G.W. Bush offers drilling in Alaska as the solution to our energy "crisis", his proposed budget cuts funding for renewaable energy research by 30%. Is he looking out for America's interest or just the oil industry?

-- chris schaffner (chris@greenengineer.com), March 28, 2001.