State’s Electricity Deregulation, Energy Crisis Debated at Lecture

Ani Asatryan
El Vaquero Staff Writer

Three Glendale Community College economics professors were featured in the forum “Power Play: California Consumers are Zapped Again” Thursday at Kreider Hall as a part of the Humanities/Social Science Lecture Series.

Discussing the energy crises and deregulation of utilities were Amber Casolari, Dr. Mark Maier, and Steve White. They also examined possible causes of the blackouts and shortages and whether or not the energy crisis is a hoax.

For nearly a hundred years, California had regulated electrical rates. But many consumers complained that the prices were higher than those in Nevada and Oregon. This was in part because California had invested in Nuclear Power. Deregulation promised lower prices because of competition, and a law mandating deregulation was passed in 1996.

But instead of resulting in lower prices, deregulation brought on many problems. In November and December of 2000, there wasn’t enough energy being produced, resulting in rolling blackouts throughout California. As a result, prices for energy almost tripled because there was more of a demand than a supply.

The high prices came from “lack of energy” due to plants that needed to be shut down for repair last year. When deregulation passed in ’96, the prices remained frozen for three years. Big companies like Southern California Edison went bankrupt buying energy at higher prices than they could sell it for. To make up for their losses, high prices were charged.

The prices were unreasonably high though. “May 22 was a hot day where a lot of energy was used and the price skyrocketed to triple the amount,” said Casolari, who was against deregulation. “The price bore no resemblance to the actual cost of producing the power. Unfortunately, energy is a commodity and people are willing to pay whatever price necessary for it.”

Maier said, “I agree that energy is a commodity. We do need some sort of regulation from the government, which is the voice of the people, to protect us.”

In the end all three economists agreed with White, who said that “deregulation is a nightmare; there’s no dispute about that.”