The Power Crisis: Don’t Worry About the Money


Text Box: $60 BillionA lot of people say we should be concerned about all the money we’re losing because of the power crisis.  One consumer group warns it may exceed $60 billion dollars before things are over.[1]  Frankly, I’d be glad if that were the worst of it.


Sure $60 billion sounds like of money, but let’s get real. We’ve already paid the utilities an extra $14 to $20 billion dollars[2] to cover their cost overruns and guarantee their profits on nuclear power plants.  Did that hurt?  Did you even notice it?  And those charges at least appeared as a separate item on our utility bills. 

Text Box: You’ll never see it.
Though you will feel it.

The money we’re paying now is nicely buried: some will appear as higher utility bills, but a lot won’t.  Taxes will be a bit higher, and we’ll do without a lot of other things we could have bought with our tax money.  The cost will be spread out over many years and many people.  With a population of 34 million, the extra cost is under $2,000 per person.  Spread it over 10 years, and it’s down under $200 a person per year¾worst-case scenario!


Text Box: The real deficitNo, it’s not the financial deficit that worries me.  It’s the democracy deficit.  Because I know that if someone tried to steal my money, I’d try to stop them.  But our elected representatives are opening up our pocketbooks and pretending they can’t do anything else.


The Governor says the federal government should regulate the prices.  He’s absolutely right.  But we can solve most of the problem without the help of the federal government.  By the way, in case you’ve forgotten, Clinton was in office when the feds first refused to perform their legal duty to regulate prices.  Here’s a simple program for our Governor and Legislature, in the absence of a liberal administration such as Herbert Hoover’s:

  1. Text Box: A simple recipe to end the crisis.  No federal action required.  Just add spine.Impose an excess profits tax on the profiteers.
  2. Seize the plants, transmission lines, and anything else attached to the California soil.
  3. Revoke the corporate charter of PG&E, SCE, and SDG&E.  States charter corporations to serve the public interest.  All those companies have served only their own interest for way too long.[3]
  4. Prosecute the individuals and companies responsible.[4]
  5. Repeal the “deregulation” law.
  6. Create state and local public power authorities.


Text Box: Just Say NO!It’s becoming increasingly clear the reason the lights are going out is that the power suppliers make more money by artificially restricting the power supply than by supplying it.[5]  That’s the profit motive, the engine of capitalism.  I wouldn’t leave my daughter alone with a box of chocolates; I wouldn’t leave an alcoholic in charge of a liquor cabinet; and for damned sure I wouldn’t leave a capitalist in charge of my power system or my wallet.  They just can’t help themselves.  But we can.


Why aren’t our politicians doing it?  The answer is there for all to see: they’re not working for us.  Worry about that.


(c) Ross Boylan

San Francisco, CA

Thursday, June 07, 2001

(415) 550-1062

[1] “Special Report: The Manufactured Energy Crisis,” Bailout Watch 21 (March 19, 2001), The Foundation for Taxpayer and Consumer Rights,

[2] Wenonah Hauter and Tyson Slocum, Jan. 2001, “It’s Greed Stupid! Debunking the Ten Myths of Utility Deregulation,” Public Citizen.  Pp. 2 and 3 put the total cost of the earlier bailout at $28 billion, of which we have paid $20 billion.  In conversation, members of the PUC put the number at $14 billion.

[3] For example, after the US Congress mandated that San Francisco would use the power from Hetch Hetchy, and after San Franciscans paid to build the dam and string wire from the Sierras to the east bay, the project mysteriously ran out of money at a PG&E switching station.  We sell the power to PG&E low; PG&E sells it back to us high.  The entire board of supervisors was voted out at the next election, but the damage was done.  For example, a 1941 Congressional investigation found that San Francisco sold its power to PG&E for $2 million dollars a year, and PG&E resold the power to San Franciscans for $9 million. Daniel Berman and John O’Connor, 1996, Who Owns the Sun, pp. 77-82.  On corporate charters, see Richard Grossman, January 2001, “The Strategy for Electricity is Democracy” (

[4] In fairness, some of this has begun.

[5] See, for example, “The Manufactured Energy Crisis”; pp. 9—10, Myth #4, Hauter and Slocum; and “Power Juggling Ramped Up Price”, p. 1, San Francisco Chronicle, May 20, 2001.