The Real Grinches are Environmentalist Luddites Who Stand In the Way of a Free-Market For Electricity

Windmills and candles and warm woolen mittens. Staticky sparks from the fur of small kittens. Campfires and solar panels and thermal paddings. These are a few of the favorite things that radical environmentalists would rather rely on for warmth, light, and electricity than the modern power plant.

To the delight of eco-Luddites, energy shortages in California and the Pacific Northwest are forcing residents to live like 17th-century peasants. The Seattle Times urged readers this week to turn down their thermostats to 50 degrees at night. "Wear a sweater and throw another blanket on the bed," the paper flippantly editorialized. Others pine for subsidized sunshine sources. "If there were sufficient state or federal incentives for using solar power," one San Francisco Chronicle reader bemoaned, "there wouldn't be an energy crisis."

Good luck convincing the denizens of Silicon Valley -- and everywhere else, for that matter -- to unplug their computers and wrap their roofs in tin foil. As author and Manhattan Institute fellow Peter Huber writes: "Wind, solar and other 'alternative' energies sound great in theory, but they rarely make much economic or environmental sense in practice. They require a lot of expensive, unreliable hardware. And they generally use more land to deliver less energy."

Huber and fellow energy consultant Mark P. Mills estimate that the use of home and office computers, phone lines, printers, fax machines, and other peripheral devices accounted for 13 percent of America's energy use last year. Internet-related energy usage will likely rise to 35 percent or more by the end of the next decade, they project. In the midst of this high-tech-driven power crisis, Calif. Gov. Gray Davis took the laughable step of turning off the Christmas tree lights at the Sacramento capitol and urging homeowners to do the same.

Every hapless home improvement wannabe knows it takes more energy to put up those darned lights in one afternoon than they consume over the entire course of the holidays.

On a serious note, Davis and the state's left-wing consumer groups attack electricity deregulation for the West Coast's energy woes. But the real Grinches are naysaying activists and bureaucrats who continue to stand in the way of a truly free market in electricity. Although much ado has been made since the Golden State passed electricity "deregulation" measures in 1996, high prices and red tape remain. It's government failure, not market failure, that short-circuited success.

While demand for electricity has skyrocketed, government officials continued to clamp down on supply. Overzealous air-quality laws, environmental permit applications, and siting paperwork have slowed the construction process to a near-halt. No new major generating plants have been built in over a decade. Only in the past year did the state Legislature pass fast-track measures to lower the regulatory barriers to building new plants.

The 1996 law also forced power companies to obtain regulator approval before doing major repairs or refits. In addition, new competitors from out-of-state were frozen out of the market. The state required utilities to buy power through two pools run by quasi-governmental agencies and kept tight rate caps in place, distorting price signals.

Adrian Moore, director of economic policy at Reason Public Policy Institute, puts it plainly: "The fact is, California embarked not on deregulation of the electricity market at all, but 'restructuring.' While the generation of electricity was partly deregulated, additional regulation and controls were placed on the rest of the system. The result is not a market, but a hash of semi-markets run by a government body ... so complex that no one fully understands what is happening."

In fact, Moore notes, "California's electricity 'deregulation' law violated most basic principles of deregulation -- it discouraged entry into the market, it restricts expansion of capacity, and it sustains the old systems and rules that defy competition."

Panicked politicians and environmental activists are calling for a return to the good old days of the electric monopoly. But centralized control is the reason for this year's outages, not the solution - -- and it would do nothing to alleviate the supply problem caused by continued opposition to new plant construction. The green NIMBYs' power trip is enough to give you the shivers.