Modest Demand, Withheld Supply
by Robert Weissman

No one disputes that a mismatch between supply and demand underlies the California energy crisis. But consumer advocates point out that the data show California's energy demand to be growing slowly, not surging as many news reports suggest. And, they say, the electricity shortage reflects not any real limits on supply, but the market manipulations of the independent generators.

A comprehensive San Francisco Chronicle study in March showed that California's energy demand is in fact rising slowly. "The industry has painted the summer of 2000 as the equivalent of a 100-year storm in meteorology—an event so powerful and unexpected that the existing infrastructure was devastated by its force," the Chronicle reported. "The statistics show that 2000, taken in total, was nothing of the sort." Overall electricity usage in California rose approximately 2 percent a year in the 1990s.

Most importantly, peak use—the demand level that actually stresses the system—was lower at the end of 2000 than in the previous year. While peak demand was high in May 2000, in four out of the last six months of 2000—July, August, October and December—peak demand was lower than in 1999, according to an analysis of statistics from California's Independent System Operator (CAISO) by Public Citizen's Critical Mass Energy and Environment Project.

California's available capacity and electricity on contract vastly exceeds its peak demand. In total, California has 55,500 megawatts of power generating capacity and 4,500 megawatts of power on long-term out-of-state contracts—approximately 15,000 megawatts more than peak demand, Public Citizen reports, citing statistics from CAISO.

The problem California is facing isn't supply, say the consumer/green groups, it is that the power supply companies, now a separate industry segment from the utilities, simply refuse to make the supply available. The independent power generators' alleged market manipulation is now the source of numerous lawsuits and investigations.

© Multinational Monitor June 2001