what energy crisis?
May 3, 2001 9:40 AM   Subscribe

what energy crisis? forbes responds to cheney.
posted by lescour (7 comments total)
The headline in the Times should read:

Cheney Lied

His characterization of the California energy situation as having something to do with supply, rather than the obvious mismanagement, makes it obvious that he is still filling the role of oil industry shill. He disgusts me.
posted by tranquileye at 9:52 AM on May 3, 2001


Cheney admits SUV owners lack "personal virtue"
posted by xiffix at 12:06 PM on May 3, 2001

Welcome to Advanced Capitalism, as practiced by the Pacific Gas & Electric Corporation in the state of California, from energy deregulation in March 1998 to bankruptcy in April 2001...
The Set Up: Split your company into Wholesale and Retail arms. Now, get the government to deregulate Wholesale prices while still regulating Retail prices. Shift all of your assets to the Wholesale operation, leaving the Retail operation with nothing but customers, lots of employees, and short-term power-purchase contracts with the Wholesale arm.
Step One: Look at the last four years of energy consumption patterns and shut down exactly enough operating capacity for 'scheduled maintenance' to squeeze by the next expected peak demand.
Step Two: Just before that next peak, engineer a contrived 'emergency shutdown' at another five percent of your power plants.
Step Three: With the fake 'electricity shortage', raise the Wholesale prices (which are deregulated) into the stratosphere. The Retail arm becomes functionally insolvent, while your wholesale arm gets loads of cash and IOUs from the Retail arm.
Step Four: Having sent the Retail arm to the brink of bankruptcy having to pay 'market' prices for power, get the State to buy power (at the current outrageous price) and sell it to the Retail arm on credit. That money goes straight into the coffers of the Wholesale arm, for which the State gets IOUs from the Retail arm.
Step Five: Bankrupt the Retail arm, leaving the State with worthless IOUs from Retail, and the Wholesale arm with huge profits, plus massive tax write-offs from the IOUs that were bankrupted.
Fringe Benefits: The Republicans (to whom the Wholesale and Retail arms have contributed millions of dollars) can safely dismantle those pesky environmental protections by blaming the fake 'power crisis'. Unions representing the utility's workers are hobbled in asking for raises and benefits (their contracts are up for renegotiation this year; what a coincidence). Customers get used to higher Retail power rates (which will not drop when the Wholesale arm brings the price of power back down), making a bailed-out Retail arm profitable in the future. Management receives $50 million in bonuses and raises the day before the Retail arm files for bankruptcy.
posted by SenshiNeko at 1:58 PM on May 3, 2001

Our economy is obviously overregulated. Mega dittos.
posted by ParisParamus at 2:13 PM on May 3, 2001

This administration will definitely try to use the perception of what's happening in California to scare us into accepting compromises that we don't really need to make.

There is even some reason to suspect that some of the 'crisis' (isn't everything nowadays, according to media Chicken Littles?) was manufactured deliberately to create a climate that would drive compromise... even to do a Lazarus on nuclear energy.

Chavez and Forbes deserve (rare) kudos. Or... hmmm... what are they REALLY up to?

most of the oil drilled in Alaska is now exported to Japan, which is far more exposed to world energy markets than the U.S.

posted by Twang at 4:53 PM on May 3, 2001

Man, those commies at Forbes are out to undermine our economy.
posted by dhartung at 6:48 PM on May 3, 2001

Yeah, dhartung, it's all part of the liberal media conspiracy to discredit the true heroes of the American way. Let's ask Rush what we should think about this, huh? Has to be either fuzzy math or fuzzy science getting in the way of our one true savior and his infallible logic. :)
posted by nofundy at 11:05 AM on May 4, 2001

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