California money problems caused by attempt to municipalize utilities?

[terryg11]

That was a statement/question asked to me on the phone last night by some "researcher". He wanted to know on what scale I agreed with that statement. My answer was "not at all" but since I don't live there can't be sure. Never read about it or heard it here, in fact I was pretty sure that a decent portion of California's financial woes stemmed from the whole energy debacle a few years back and that was due to the exact opposite of a municipally owned utility n'est pas?

Just for a little background, the town I live in is looking into taking over the utilities from Alliant Energy and had a study done by an independant third party who, after crunching the numbers and poring over data said Kalona would save much money over the following years if they did this. Kalona is one of twenty or more communities looking to do this and it's starting to heat up. Anyway, the caller asked me a string of questions that became increasingly related to the situation in Kalona and althoug claimed not to knw who was sponsoring the survey (he was from Texas) it reeked of Alliant energy who I must add has been a fairly good energy provider thus far.

What think you all, any truth to the subject line of my post?

[Don Claybrook]

1. No truth whatsoever

And I'll bet you my next unemployment check that the survey was being done on behalf of the energy company you mention.

I hope your town municipalizes the electricity.

[WhoCountsTheVotes]

8. push polling from the privatization crowd?

you're right on, I bet the energy companies are doing this.

[KissMyAsscroft]

2. Nope, it was caused by Enron bilking the state for billions...

and the horrible Bush economy.

[wryter2000]

3. Sounds like bull droppings

Some cities do provide their own power. Some of those cities, I believe, may also have been involved in gouging other cities during the whole mess. But I'm not aware that any significant number of cities were planning to take over power supply. Sounds like a loaded question, hoping to elicit an anti-municipal ownership response from you.

Enron et al. didn't cause the whole money disaster in California. But we did spend our entire surplus buying power from anyone who would sell it to us -- including Mexico. (Davis got a bum rap for paying too much for power...for a while there was a question as to whether anyone would sell to us at all, for any price.)

Unemployment, leading to lower income tax revenues, also helped create the financial drain. Orange alerts contributed. They were hugely expensive, and the state had to pay for them.

[mydawgmax]

7. City of Los Angeles DWP

made substantial money selling excess power to the state during the power crunch. The DWP had been criticized for making investments in facilities and coal contracts becuase it would not allow them to have the cheap power that they could get on the new deregulated market. When the exact opposite happened, they served as an example of why public utilities make sense.

[terryg11]

10. about that newly deregulated market

there are a significant number of utilities in Iowa that don't generate their own power and buy it on said market (bad idea in my opinion) that are starting to raise their rates (in some cases dramatically) due to the fact that their long term contracts are coming to an end and low and behold, there is barely a cheap price out there on the deregulated market. It's getting very hard to find cheap power out there unless they can find another municipality that can generate enough to sell it to them and is willing to do so at a lower price

If/when we municipalize, they are going to have to generate our own power for this to make any sense

[Nederland]

4. I Think

...that California's money problem were created by the stock market collapse. More than any other state, California had a large number of Internet startups that generated a huge amount of Capital Gains revenue for the state. When the bubble burst, so went the Capital Gains revenue and so went California.

[Name removed]

5. Deleted message

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[DBoon]

6. LA DWP is municipal

I love it. There are very good about subsidizing alternative energy programs (we got photovoltaic for our house and they heavily subsidized it). Also no problems at all during the energy crises, as they weren't part of the ISO and owned their own generating facilities.

[MsUnderstood]

9. Out of State Energy Companies Caused the Crisis

From what I recall:

In California, the legistlature (with the support of Pete Wilson, Rep) decided to privatize the utility structure. The system privitized wholesale electricity but left resale electricty under government control.

Suddenly, what should have brought utility rates down resulted in out of state electric companies charging an arm and a leg to in state utility companies (PGE, Edison, City of Riverside to name a few) who were controlled on what they could charge.

Next, the instate companies could not afford to buy electricty at the high rates and began loosing their credit status because they had too much debt. To make matters worse, electric companies complained about an electrical shortage within california forcing us to rely on private wholesalers for our electricity at a pretty penny.

When Davis finally stepped in, the mess was impossible to fix. Utility companies had to file for bankruptcy. While Davis negotiated a long term (albiet inflated) price for electricity from wholesalers so the fear of brown outs would be calmed, he asked the newly appointed president Bush to begin a federal investigation into wholesale electric companies who inflated prices and created false shortages. The president refused to investigate.

Suddenly, the economy begin to slide downward then FALL with 9/11.
Californians focused on Davis as the reason behind our economic woes (he negotiated the electric contract, he was spending the money, he reinstated the DMV tax to get 4 billion for the state and he proposed a 10 billion dollar bond to stablize the budget until the economy righted). Instead of replacing the idiotic legislature that created the mess, California selected the Terminator who is going to create a 15 billion dollar bond, which will save us and sacrifice our children.