Wednesday, May 20, 2009

Reacting To the California Model

Now that the ballot props have been eviscerated at the polls, we'll have to wait and see how forthcoming spending cuts and revenue fixes impact California's energy agenda, but reaction to the "California Model" that President Obama has embraced for country, has been swift.

Here's an opinion from the right wing, courtesy of the Fox Forum blog in which Competitive Enterprise Institute policy experts Ian Murray and William Yeatman take a decidedly dim view of applying the California model to the rest of the country:

"That should worry all Americans, because California’s energy policy is an unmitigated disaster. California’s expensive energy has driven industries out of the state. According to the Energy Information Agency, California has some of the highest electricity prices in country, due in part to the laughably-misnamed “deregulation” of California’s electricity industry. Californians were actually left with an over-regulated energy supply that cannot deliver energy at the affordable prices the rest of the country can. No wonder, then, that it has exported most of it electricity generation to other states.

The Republican Governor Arnold Schwarzenegger was left bemused recently when it became apparent that he cannot even build a solar power plant in the middle of the Mojave Desert, due to the federal Endangered Species Act which prohibits any construction that disturbs the habitat of species designated as endangered. The state’s remaining hydro-power plants are offline because of the drought, so rolling blackouts like those of 2005 will be inevitable. This is the energy policy that President Obama in now trying to impose on the rest of the nation—to cut out all affordable sources of energy and cause bills to, as he once famously said, “skyrocket,” to encourage development of alternative energy sources.

The effect on California’s economy has been disastrous. Heavy manufacturing in the state is dead. The industries it has left—entertainment in Hollywood and technology in Silicon Valley—are not enough to supply the tax base the state needs to support its expansive social welfare programs, which in turn have seen demand spike because of high unemployment caused by the energy policy."

Messrs. Murray and Yeatman-- and their allies-- are either a clarion voice of reason, or cannon fodder. Fox reports, you decide!