Dear Friends,
It seems to me, every year California has rolling blackouts because, you know the thing, summer. Apparently it shocks the politicians and bureaucrats who set energy policy in that state… that it gets hot in the summer. Every year they institute rolling blackouts, demands for people to conserve along with a round of finger pointing… only to repeat the process again next summer. As if they don’t know California gets hot every summer. If every other southern state had this problem we could say it is a systemic issue with the US grid. That it is unique to California indicates an individual problem with California itself. The California problem, that creates this pernicious issue with delivering sufficient power to California residents, can be a teachable moment.
Arizona, New Mexico, Texas, Louisiana, Florida and Mississippi are every bit as hot as California, but don’t have the annual problem delivering power to their customers. In fact, no other state has so mismanaged it’s power infrastructure, through absurd and counterproductive regulations, as California. Which is saying something because there are some shockingly stupid regulators out there. Not only do Californians get to pay the highest rate for electricity in the nation… the crumbling infrastructure gives them a slew of wildfires every year. A win win. Rolling blackouts, highest electricity rates in the nation and wildfires caused by failing infrastructure, who wouldn’t want to emulate that? Oddly, you don’t see people in Texas clamoring for California style regulations?
The problem is limited to California so what is it that California is doing wrong? The elite in California would say it is the fault of the evil energy companies. Nothing is the fault of government, government only gets credit, results be damned. So the regulators in California keep adding ever more absurd regulations, making the problems more insolvable instead of less. The regulators in California apparently think the laws of physics does not apply to them, nor do the laws of the nation or our Constitution. Perhaps making ideologically captured SJWs, with degrees in Woman’s Studies the regulators of energy companies, was sub ideal? Making California’s regulatory environment and system the poster child for what not to do… unless you want rolling blackouts, wild fires, and high costs.
California gets a huge amount of energy from Texas wind farms. Imagine the resistivity losses transporting electricity that far? Even if the voltage is bumped up to 150 KV the loss will still be huge. Much more electricity has to be produced to get 70-90% to the customers. The regulators in California care not though. They don’t want those unsightly wind farms in their backyards. So, adding in an extra 10% to the cost of California’s total electricity consumed, is a price the regulators are willing for us to pay. Remember Enron? They were charged with intentionally creating energy shortages. Just like the ones that have been going on every year since they went away. By every measure and in every way, California has screwed up their electricity infrastructure through absurd regulations.
The government of California has put so many regulatory restraints on their captive energy companies they have made it impossible to deliver the electricity Californians need. This set of incentives and disincentives apply to every other industry… the more it is regulated, the less efficiently it is run. Because the incentives invert, from profits by delivering a product, to profits by lobbying government. The needs of the customers become second to the wants of bureaucrats. This has happened in the Californian energy market and will happen in any other market such philosophy is applied. This is another example of how socialist, or a rationally managed (regulated) economy, always fails. The incentives are not only backwards they are pernicious leading to the opposite of their stated intent.
Sincerely,
John Pepin
