An Energy Crisis? Not for "Munis"

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by Martin Walter, Ph.D
May 2001

Question: Can you name a city in California which is having no energy "crisis"?

Answers: Los Angeles, Sacramento, Anaheim, Alameda...and more.

These cities have several things in common:
1) They are "munis" (municipally-owned utility companies), so the customers ownthe company;
2) they did not sell off their own energy generating sources;
3) they are using a modest amount of renewable energy like wind and hydroelectric;
4) they emphasize conservation.

Unlike investor-owned utilities such as Pacific Gas & Electric (yes, the same corporation responsible for poisoning hundreds of citizens of Erin Brockovich fame) and Southern California Edison, munis are not motivated to sell as much electricity as possible at the highest possible price -- which presently is capped in California at 50% above the national average retail price.

None of the arguments prevalent in the corporate media for this energy crisis hold up to close inspection. Both total electricity consumption and average peak demand in California increased less than five percent from 1999 to 2000, a sharp contrast to claims of industry representatives who have claimed growth as high as 20 percent.

The deregulation system was designed by the (investor owned) utilities themselves via lobbying, and when a citizen initiative to stop deregulation gathered 700,000 signatures in 1998, the utilities spent over $40 million to defeat it. They really wanted it. One reason was a 28.5 billion dollar give-away to these utilities to rescue their losing investments in nuclear plants, money that their parent companies immediately took on a spending spree buying up properties across the nation -- properties they do not want to give up if they declare bankruptcy.

The war between munis and investor owned utilities goes back over 100 years. The munis almost invariably have provided better service at lower cost. Keep this story in mind next time you hear about a push to corporatize a public service!