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Brownouts or Greenouts? Let's Open Up Production by Harold Hochstatter, State Senator Guest column, Seattle Times - February 8, 2001

Russian soldiers stripped Berlin of light bulbs, believing they could take them home and plug them into knotholes to illuminate their homes. But if the Russians seemed backwards and foolish, we can forgive these primitives for not understanding that light bulbs must be wired to something: a power source.

In Washington, dire predictions of energy shortages in the 1970s sparked a supply-side scramble. To enlarge that source, Washington Public Power Supply System (WPPSS) nearly produced the right solution, 20 years too soon. But the lights blazed, the power remained cheap, the crisis was delayed, and the public turned green to the point that more electricity became a glut and nuclear, coal or hydro anything became a threat, an eyesore and an ecological liability.

Enter deregulation. States with high prices and an energy deficit liked the idea. After all, when dealing with a commodity that moves at the speed of light, the playing field levels at an astounding rate. They get our electricity; we get their prices. A good deal, right?

But just before the electricity-rich, low-price states like Washington took the deregulation bait, salmon clobbered electrical ratepayers with hundreds of millions of dollars worth of turbine retrofits and pool drawdowns. Prices edged up, salmon trended down. Dams became unpopular and salmon moved onto the endangered species list and the menu simultaneously. Greens, who refuse to accept demand-side solutions for fish, rejected supply-side solutions for electricity at the same time.

Now what? Historically, a free society has a myriad of salesmen trying to move the too much. Totalitarian societies of right and of left have a myriad of bureaucrats trying to ration the too little. It all depends on where you live. The current hope was that cheap natural gas from Canada and turbines located near major loads would decentralize the grid, provide an element of flexibility and unburden transmission facilities. But elemental to the functioning of a free economy is the essential price signal. For political purposes, California deregulated wholesale prices only and the wholesale price went through the roof. But the homeowner never felt the pinch because retail rates remained fixed.

Free societies allocate resources by the price system. The price tells us to conserve, but regulations that fixed retail prices blunted these price signals. Electricity producers further muddied the water by shifting the price of saving salmon onto electric ratepayers, thus sending the wrong signal to the wrong people. Government intervention does that. So, while the lights are still on, you and I must be certain that increases in the electrical rate will increase the supply of electricity and not the supply of bureaucrats, as salmon expenditures have done.

If the Russian soldier returned home with an intact light bulb, he experienced reality if not illumination when he plugged it into the knothole. While we still have illumination, we must face the reality that the surplus is gone. If supply is not increased, current demand will stabilize prices at unacceptably higher rates.

But we know how to prevent that. Washington didn't become electricity-rich by accident. Those wires really do attach to a supply source. It's the supply-side answers that have made Washington a low-cost state.

So the power stayed on. It even remained cheap while dams killed fish, nuclear plants threatened to explode and coal- and gas-generating plants put holes in our ozone layer. Still, it was great to be Green while the lights were on. But in much of the world, the lights go off at 10 p.m.

The crisis-du-jour folks trimmed the fat from our electric supply. Will we allow them to cut sinew, bone and muscle from our economy as well? This is a valid question. We need to hold this discussion while the lights are still on.

One thing is for sure: You can't turn a turbine with hypocrisy. If you and I expect Greenies to turn in their power meters and get off the grid because of fish, ozone or nuclear hazard, get ready for disappointment — it won't happen. Rather, we will hear the old Soviet saying, "Everyone suffers a little but nobody suffers a lot."

I'm not buying it. I want to buy electricity instead. It is time to get out of our electrical producers' way and allow them to generate a way out of this crisis.