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Sat Sep 06 2008

Columns

Harvey Wasserman

Forget Arnold, "Blackout Pete" Wilson is the electric terminator
August 17, 2003

The California media has been whining that Pete Wilson, Arnold's chief press flak, won't let them ask Schwarzenegger any direct questions.

But in the wake of the big northeast blackout, they're missing the boat---it's "Blackout Pete" they should be grilling. If the policies he enacted as governor of California are any indicator, the Terminator will be destroying a lot more than just the Golden State grid.

Wilson was the Republican governor of California in 1996 when he made utility deregulation the centerpiece of his doomed campaign for president. Competition in the electric power business, said Wilson, would usher in a new age of lower prices. The "miracle of the marketplace" would mean better, cheaper, more reliable electricity from a host of competing suppliers.

Deregulation is also the centerpiece of Schwarzenegger's campaign for Wilson's old job. The Terminator isn't allowed to say much. But the few short sentences he does utter seem to have something to do with policies that would mirror what Wilson did when he set the utilities free.

Unfortunately, what Wilson did led directly to the staged rolling blackouts of 2000-1. As we now know, those blackouts were actually a form of blackmail used by Texas gas companies to rob California of more than $60 billion. Among the chief perpetrators were Kenny-Boy Lay of the now-bankrupt Enron (George W. Bush's number one campaign contributor) and James Baker, George H.W. Bush's Secretary of State, the man the GOP sent to Florida to finally fix the election of 2000.

Wilson's big idea then was to cut the utilities loose from the 90 years of public supervision that had kept prices and supply reasonably stable in California and most of the rest of the US. Regulation was not a perfect system. But the regulatory checks and balances that had evolved from the early 1900s through the New Deal and the Carter 1970s formed a complex, sophisticated counterbalance to utility greed.

Wilson's AB1890 unanimously passed the California Assembly with virtually no public hearings or media debate. The bill let Southern California Edison, Pacific Gas & Electric and other utilities force ratepayers to foot the bill for nearly $30 billion in bad capital investments, most of that from commercial reactors built near earthquake faults at the infamous San Onofre and Diablo Canyon sites.

AB1890 was actually written in the offices of Southern California Edison by its president John Bryson. Former chair of the state's Public Utilities Commission, Bryson had been strongly identified with California's powerful grassroots movement for solar power.

But as the million-dollar-per-year chief of SoCalEd, Bryson killed a massive green plan for some 600 megawatts of solar, wind, biomass and other renewables.

In 1978 Herb Gunther of San Francisco's Public Media Center, Harvey Rosenfeld and other consumer campaigners challenged the deregulation bill with a statewide referendum. They predicted the utilities would take the bailout money and then play games with the California grid. Bryson and the other utility barons spent more than $40 million to protect their $30 billion subsidy. They beat the repeal, 70-30,

But in 2000, the Wilson-Bryson dereg plan blew up, as predicted. Enron and the other gas companies began "gaming" the market. By manipulating supply and shutting down key generators at crucial moments, they jacked up spot prices and walked away with some $60 billion.

Rather than prosecuting John Bryson, the new Governor Gray Davis essentially groveled at his feet. Faced with catastrophic shortages, Davis held endless private meetings with Bryson, practically begging for new power sources to keep the state's lights on, and then overpaying billions for whatever power he could get. It's those meetings and those overpayments that most thoroughly anger those now demanding Davis's ouster.

But if Wilson and Bryson had not killed that 600 megawatt green power plan, the 2000-1 crisis could never have happened. Wilson's AB1890 has crippled California's budget.

Arnold's sound bites continue to focus on the "miracle of the marketplace" that has already cost California at least $100 billion. The media should directly demand answers from Blackout Pete about his utility deregulation fiasco, instead of begging to get it all rehashed by Arnold.

Harvey Wasserman is author of THE LAST ENERGY WAR and senior editor of freepress.org. He is co-author with Bob Fitrakis of THE SUPERPOWER OF PEACE, available from freepress.org in September.

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