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discussion: What are your views on California's power crisis?  Is the Bush/Cheney Energy Plan setting the right course for America's energy needs?

Dear FRONTLINE,

I generally look forward to Frontline shows, and was excited you were doing a show on the California power "crises". I felt confident the key questions would be answered. Unfortunately, when the show ended, not one question had been answered, with the exception that the Govenor will say anything to keep his job. Key questions not addressed in the show :

1) Why did Los Angeles opt out of deregulation? What did they know that the rest of the state did not? 2) Quantify the drop in power produced by hydro power caused by the drought. 3) When did deregulation complete and when did prices start to go up? 4) What percentage of power is purchased outside the state now compared to prior to deregulation? 5) What are the issues with the infrastructure in California regarding bottlenecks in tranferring power? Does California have problems accepting enough power to meet its current needs? 6) How much power in total is purchased from out of state? 7) Who made all the money?!?

Will they be addressed by the people in California? I doubt it. They have propped themselves up on the backs of the other states. California doesn't build new power plants in its own state because of environmental concerns. However, California has no problem with the rest of us polluting our states, as long as we're "fair" about what we charge. Hoover Dam is a great example of the mentallity of California. Over 50% of the power generated at Hoover is sent to California, with Nevada only getting around 17% (Another state gets the remainder) . Las Vegas has coal fired plants to supply their power. Las Vegas is less than 30 miles from Hoover, how far is California? Oh, and the power is sold at cost, by federal law. The US built the dam, but three states receive power at cost and will until about 2017. Nobody complained when they were underpaying. What comes around goes around...

Dehn Smith
dallas, tx


Dear FRONTLINE,

I'm watching a PBS piece on the California energy crisis while I type this note. My heart sinks. The piece is clearly an assignment of blame piece (unsuprisingly for PBS to the new Bush administration and evil corporate interests).

I am so disappointed about this foolish consumers vs corporations and Republicans argument. All but the ideologues know its more complicated than that! I'm no Republican and never will be. But intellecutally this sort of work bankrupts the real knowledge and perspective people require to understand and contribute to changes to an economic system. It finds enemies where there are none. It has become increasingly hard for me to contribute to PBS because its politics and agenda drives such pieces as these energy pieces.

Until political agendas and issue advocacy are out of PBS I'm no longer contributing. Blackout just illustrated intellectually how differently PBS and my thinking have diverged. In Blackout, I wanted to understand the issue. Backout wanted me to believe in the producers point of view. I don't pay for advertising nor advocacy. I pay for insight.

delray beach, fl


Dear FRONTLINE,

The failure of deregulation is obvious by its characteristic calling card...price gouging. I believe that consumers have the right to expect public utilites to be regulated to control the inevitable phenomenon of human greed from destroying the whole system.

If the finacial wizards want to trade electricity as a "commodity" then those who rightfully own the natural resources that are exploited to produce this form of energy should have the right to share in that trade. Power traders are raping our nation...we must take back what belongs to our country.

Peter Gross Jr.
youngstown, oh


Dear FRONTLINE,

I question whether former Commissioner Santa (Ed.Note: see his letter posted below) accurately characterizes the Federal Energy Regulatory Commission (FERC) of the recent or distant past (when he was a Commissioner). I offer a different perspective based on my experience as a staff economist with the FERC currently and in the distant past (since 1975).

I take exception to a number of points made by Commissioner Santa. First, like many other defenders of the FERCs actions in response to the California debacle, he focuses on the flaws in Californias retail electric markets as the reason FERC could not fix the wholesale electric markets. Perhaps its a matter of perspective but from mine it was wholesale prices that rose dramatically to average ten times cost not retail prices. The wholesale electric market in California is not now and has never been a competitive market. In my recollection, the FERC has steadfastly avoided ever making a finding that the California wholesale electric market is or was competitive. I believe the FERCs position throughout the 1990s was that if you create a free market (deregulate sellers), a competitive market will develop on its ownwhat I call the Field of Dreams approach to deregulation.

Commissioner Santa seems to forget (or perhaps was never told by FERC staff) that the retail market flaws he points to in California existed when the FERC deregulated that market. In other words, FERC deregulated the wholesale electric market in California without any determination that the market was competitive. The Commissioner knew (or should have known) that investment in new generation facilities in California had not kept pace with increases in demand in California just as it had not kept pace anywhere else in the country. The Commissioner knew (or should have known) that the [universal] practice of fixing retail rates during the transition to deregulated markets would limit the responsiveness to wholesale price changes by retail and wholesale customers. When the FERC approved the California experiment, some of its staff raised concerns about various other features of the plan but the Commission chose to ignore them.

Second, Commissioner Santa criticizes Frontline for not mentioning how federal law limits FERCs ability to deal comprehensively with Californias flawed retail restructuring. On the other hand, he fails to note how federal law limits the state of California from declaring the wholesale electric rates unjust and unreasonable for pass-through in retail rates. California took a big risk in its deregulation plan: it transferred control over a large portion of electricity costs to the federal government. It is paying dearly for that decision now.

Third, Commissioner Santa criticizes Frontline for suggesting the FERC has not been diligent in its enforcement of open access over the transmission lines. I doubt anyone working in the industry toady would not laugh at the statement that FERC has made the transmission system equally accessible to all. If FERCs landmark ruling in 1996 were enough, why did it feel a need to make another landmark ruling dealing with the same issues in the year 2000? Even now complaints abound about the preferences and loopholes that remain in FERCs transmission rules.

Fourth, I disagree with the Commissioner when he says that the failure to add infrastructure [generating and transmission facilities] was not the product of deregulation. The construction of such infrastructure came to a virtual halt when it became clear in the 1980s that the federal government was going to deregulate the industry. The last 10+ years has been a period of uncertainty about the rules under which investments would be recovered. There is no evidence that utilities or others were clamoring to build new facilities and that supplies would have been plentiful had it not been for state siting procedures and NIMBY stakeholders. For years, the Department of Justice and Federal Trade Commission and others have been telling the FERC to bite the bullet and tell transmission owners how transmission rates will be set so that they have some certainty in their investment decisions. Instead, as it has chosen to do everywhere else, the Commission has let its policies evolve through the voluntary and sometimes contradictory pricing proposals made by industry stakeholders and that it has accepted.

I agree with the Commissioner that it is legitimate and appropriate to debate the effectiveness of the FERCs regulation of wholesale power markets and whether the agency has fulfilled its public interest mandate from the Congress. However, I believe that we come out on opposite sides of that debate.

Ron Rattey
washington, dc


Dear FRONTLINE,

I am writing in response to you report concerning energy. Where are the people who opposed:

Kiwopattis (sic)? WPPSS? Marble Canyon? Black Canyon?

The opponents to these projects should be paying the bill for the increased energy costs in the west. They have clean air and clear vistas and now should pay the price, not some poor family in East Los Angeles.

If these projects had been built and operated by public power agencies Mr. Lay would be back in Omaha selling natural gas on Dodge street and his bright MBAs would be asking, Can I get you ketchup with those fries?

Chuck HunterMann
minneapolis, mn


Dear FRONTLINE,

Kudos to Lowell Bergman for being right on! I am an antitrust attorney for 36 years and have recovered over $100 million in the California Courts for injured plaintiffs. It is difficult to cover such a complex problem in one hour, but he did it as best as can be done.

The problem is not California's laws, environmentalists or the State's politicians, who failed to see the problem coming. That is like blaming the body for having the sickness. The problem is overcharging for a commodity and passing it on to consummers when the product is not replacable. The question is how do we now get back the $10-20 billion for the overcharging before it is all distributed to the generators who overcharged in the first place.

California has a law that can be used. It is Government and Professions Code 17203, which allows anyone affected to bring an action in any Court of the state to enjoin an unfair business practice (ie., overcharging) and recover restitution (the $10 to 20 billion in overcharges). So Governor Davis--move quickly to recover these amounts while they are still owed in large part by PG&E and So. Cal. Edison. Those amounts can be cancelled under this law. People forget that the PG&E debt is simply the amount of the overcharges that they were not allowed to pass on to the consumer. I have gathered a group of outstanding law firms, who do not have a conflict of interest, who are willing to assist as deputized private attorneys general to help the state in this category. Let's get this money back now before it's too late! Lowell-you have done a great job of exposing the problem. Thank you.

William Lukens
sasn francisco, ca


Dear FRONTLINE,

As a long-time west coast energy policy analyst, it pains me to see the myths presented in the comments persist. Frontline's report was quite accurate, as far as it went. But you failed to explore several relevant leads.

For one, the year prior to the advent of the "crisis", California's electric demand peaked at something just over 40,000 megawatts. Last year, rolling blackouts were being instituted at just over 30,000 megawatts. Where are the missing 10,000 megawatts? There are answers to that question, but Frontline never asked it. For one, drought conditions have significantly reduced the hydro power available. In summers past, the Pacific Northwest has been able to supply some 4,000+ megawatts of capacity to California. California typcially returned the "favor" in the winter, when peaking occurred in the Pacific Northwest. But this power isn't available in a water-constrained Columbia-Snake hydro system.

Another answer might be found in the fact that planned maintenance outages in market generator plants are up 50% compared to previous years. Generators claim these plants are overtaxed, but some digging is in order when the supposedly so-much-more-efficient private sector can't seem to maintain the plants during the shoulder seasons, like the regulated utilities did before them.

The myth of California's failure to site new powerplants is an ugly one. No one yet has named a single plant that was proposed and not sited. The fact is that once deregulation became inevitable, there was no entity remaining in the system whose responsibility it was to plan for and invest in powerplants. This was the inevitable result of deregulation. At that time, there was a 10-15% generation reserve, used when the weather got ugly or plants went down unexpectedly. It was the regulated utilities' responsibility to provide the reserve, and every customer paid a tiny amount each year to maintain it. These reserve plants, mostly well amortized, seldom ran more than 60-80 hours per year, but they were there at times when system demand peaked.

What private sector generator has an incentive to invest in a plant that will only run, and earn revenue, 60-80 hours a year and dampen market price spikes?

The biggest myth, however, and one that was barely touched on in Frontline's report, is that the deregulation of the electricity industry was an intelligent thing to do, or that there is any civic benefit that can come from treating electricity as a free market commodity. It isn't and there isn't. The electric grid is an economic necessity, the foundation of our economy. Electricity can't be stored, and the demand for it is significantly weather-dependent. Without significant reserve margins, paid for by all who benefit from a reliable electric supply, prices can (and obviously do) fluctuate wildly. What is the economic benefit that derives from that degree of instability in the most essential commodity we use?

It is true that California did a horrible job of deregulation. But just who is "California?" Who actually wrote the legislation? Who was at the table when it was decided to prohibit long-term utility power purchase contracts? Whose idea was it that the utilities should sell off half of their generation assets by date certain? Where did the money from those sales go?

Judging from the degree of misunderstanding evident in the comments here, there is much more to this story than people understand. Some of us predicted most of this in 1996. Contrary to what some people seem to believe, deregulation of the electricity industry is not working any better anywhere else in the country - those other places simply haven't quite yet arrived at California's circumstances. But they are in the process of doing so now, as will become evident soon. Demand is growing (another source of the crisis), but by nowhere near as much as the ten-fold increase in prices suggests.

In the end, like the air we breathe, the rivers and oceans we depend on, and the ecosystems that provide services of far greater economic value than entire world's economic output, the electric grid is a commons. And it is not in the private sector's narrow economic self-interest to protect, nurture or enhance the commons for the benefit of all. It never has been.

portland, or


Dear FRONTLINE,

I question whether "Blackout" accurately characterized the Federal Energy Regulatory Commissions actions in responding to California's electricity crisis. My perspective is based on my experience as one of the FERC's five members from 1993-97, the period during which the agency launched many of its initiatives to encourage greater competition in wholesale electricity markets. I now am a partner with Troutman Sanders LLP, a law firm representing several clients in connection with issues arising out of California's electricity crisis.

A viewer of "Blackout" was left with the strong impression that FERC has sat by idly as California suffered from unrestrained wholesale electric power prices in connection with that states failed attempt to restructure its retail power markets.

Since August 2000, the FERC has issued no fewer than 17 separate orders concerning California (and this total does not include numerous orders on rehearing and clarifications). These orders included actions to fix the flawed market structure adopted by the state, mitigate the potential for wholesale generators to exercise market power, and expedite new energy supplies for the state when such projects were within the scope of the Commissions jurisdiction.

The agency also has initiated proceedings to investigate whether wholesale generators and energy marketers have acted illegally by manipulating the price of energy. The Commission, however, has not acceded to the state's (and others') demands that it impose absolute price caps or otherwise return to inflexible, cost-based regulation of the wholesale power market. Still, the fact that the agency has refused to take this step does not equate to inaction.

While much was made of the "just and reasonable" ratemaking standard under the Federal Power Act, Frontline didn't mention how this federal law limits the FERC's ability to deal comprehensively with the market dislocations caused by Californias flawed retail restructuring plan. For example, the FERC cannot site new power lines, nor does it have authority over the location, design or construction of new non-hydroelectric power plants. The Commission lacks jurisdiction over the publicly-owned and federally-owned utilities that control upwards of one-third of the hydroelectric generators and interstate transmission lines in the western United States. Many of the steps that could be taken prospectively to establish competitive and efficient markets for electric power are, in the first instance, the responsibility of Californias elected officials and regulators.

The Frontline broadcast also incorrectly suggested that the agency had failed to act on matters within the scope of its authority. For example, the broadcast suggested that the FERC had refused to compel transmission-owning utilities, such as the Southern Company, to provide new entrants, such as Enron, with access to their transmission lines. This plainly is not the case. In 1996, the Commission issued a landmark rulemaking mandating that all transmission-owning utilities subject to its jurisdiction provide non-discriminatory transmission access to third parties for wholesale transactions. Some have disputed whether the FERC went far enough in mandating transmission access, and Enron currently is litigating this question before the U.S. Supreme Court. Still, there is no disputing that in mandating open access the Commission bucked the influence of the incumbent integrated utilities, pushed the envelope of its legal authority under the Federal Power Act, and greatly encouraged emerging competition in wholesale electric power markets. Indeed, while Enron has sued the FERC for not going far enough, several states have taken the Commission to the Supreme Court for going too far. Last year, the Commission followed up its open access rule with another regulation encouraging utilities to relinquish control of their transmission lines to regional transmission organizations that are independent from companies that generate and sell electricity.

Again, some have disputed whether the Commission went far enough with this action, but there is no question that the agency has continued moving the ball in the direction of greater competition in electric power markets. Thus, while it is valid to ask whether the FERC has been sufficiently aggressive with its open access policies, it is inaccurate to suggest that the Commission has protected incumbent utilities from new entrants by refusing to compel access to interstate transmission lines.

In addition, little was made of California's failure to act promptly to correct the flawed market structure that it had adopted or to rescue its largest utility from financial insolvency. While it belatedly has taken steps to raise retail electricity rates and encourage conservation and demand responsiveness to prices, the state for months refused to act as the situation worsened. Meanwhile, regulators in other states throughout the west were compelled to raise consumer rates in response to rising prices resulting, in significant part, from Californias flawed market structure.

Clearly, federal and state regulation and stakeholder politics have shaped the markets for electric power. But it is equally important to acknowledge the role played by market fundamentals in setting the price for electricity. Within California, and more broadly throughout the country, we are witnessing the consequences of the failure to invest in the electric power industrys infrastructure. As the Nation's economy grew during the 1990s, few new transmission lines and powerplants were added. This failure to add infrastructure was not the product of deregulation, but rather the failure of traditional regulation to provide the proper incentives for incumbent utilities to make such capital investments. Unfortunately, the Frontline broadcast touched only tangentially on this problem.

A federal law, the Energy Policy Act of 1992, encouraged competition in wholesale power markets and removed many of the barriers to entering the business of generating electricity. A tidal wave of investment in new, non-utility generating plants has been unleashed as a result of this law and the FERCs policies mandating non-discriminatory access to transmission lines. Admittedly, new powerplants cannot be brought into service immediately, and there is a lag between the market signaling the need for new generators and completing the construction of such facilities. Still, in California this lag was greatly exaggerated by a state deregulation plan that failed to create a market for generating capacity, state siting procedures that discouraged investment in power plants within the state, and opposition to such plants from many of the same stakeholder groups that decry the current situation. While California now claims to be siting new generating plants expeditiously, not a single new significant generator was added to the grid in that state during the past decade.

Unfortunately, the picture is not as promising with respect to the interstate transmission lines that form the backbone of the electric power industry. Investment in new transmission lines has lagged the growth of peak electricity demand throughout the nation. Furthermore, wholesale competition and open access have placed new demands on the transmission grid. Currently, the siting of new transmission lines is within the exclusive jurisdiction of the individual states, and there has been little impetus at this level to plan and expand the transmission system on a regional basis. Federal leadership is sorely needed here. Taking a page from what it did with respect to wholesale generation in the Energy Policy Act of 1992, the Congress should encourage the construction of the new transmission lines that are needed to maintain reliable electric service and support competitive wholesale power markets. In particular, the Congress should authorize the FERC to site interstate transmission lines and amend the tax code and other laws that stand as barriers to investment in this vital part of the nations electric power infrastructure. An initiative to address these issues is one of the most constructive and significant proposals in the Bush Administrations National Energy Strategy.

I commend Frontline and The New York Times for taking on the complex and important issues associated with California's crisis and, more broadly, the competitive restructuring of the nations electric power industry. It is legitimate and appropriate to debate the effectiveness of the FERCs regulation of wholesale power markets and whether the agency has fulfilled its public interest mandate from the Congress. Still, any discussion of such issues should include a full and fair treatment of the agencys actions and a recognition of the legal limits on its authority to address the situation. Similarly, this discussion should include an equally critical evaluation of Californias central role in creating the deregulation plan that has given rise to the electricity crisis, the state's belated response to the crisis, and a recognition of the fundamental supply and demand and infrastructure issues that are a root cause of the current turmoil in electric power markets.

Donald F. Santa, Jr.
washington, d.c.

FRONTLINE's editors respond:
FRONTLINE stands by the analysis and reporting in the program and would make the following points re: Mr. Santa's comments:

1) The report's criticism of the FERC is strongly supported by William Massey, one of the five current members of the Commission, as well as by longtime staff economist Ron Rattey whose interview appears on our Web site. Massey and Rattey point out that the FERC had to approve the Ca. deregulation plan and that they did so without any determination that it would create a competitive market. In the rush to deregulate, the FERC made no recommendation that Ca. amend its plan to cap retail rates while wholesale rates fluctuated in the spot market. [see Massey and Rattey interviews on this site]
2) On 6/03/01, the Senate Gov't Affairs Committee heard from a panel of expert economists on the electricity crisis. Some were obvious critics of the deregulation plan, such as Frank Wolak [see his interview this site], but the panel also included Bill Hogan of Harvard who helped design the California model. All these experts joined in criticizing the FERCs role in this crisis over the last several years.
3) As for Ca. being solely to blame because it failed to plan for sufficient energy supply to meet demand, in 1995 when Mr. Santa was a commissioner, the FERC overturned a 12/21/94 order of the Ca. Public Utilities Commission, requiring the state utilities to sign contracts for 1200MW of power from qualifying facilities. The FERC overturned the order after the utilities (Southern California Edison and San Diego Gas and Electric) appealed to FERC saying they had enough power for a decade.
4) The FERC bears a considerable part of the blame. Nonetheless, "Blackout" makes the point that Ca. is also responsible for its energy problems, and the program concludes with a clear statement that "there is plenty of blame to go around," including elected officials from both parties, the utilities, the energy companies, the FERC, the Ca. Public Utility Commission and consumers.
5) The argument that the FERC does not have direct jurisdiction over the siting of power plants and other matters is disingenuous. The FERC can strongly recommend and can listen to others. [see former Energy Sec'y Bill Richardsons interview]. Moreover, the FERC issued an order on 6/19 /01extending its jurisdiction over entities like LA Power and Light and the Bonneville Power Administration, undercutting the argument that the FERC did not have jurisdiction over a lot of the power market.
6) The fact is that the FERC's failure to act and intervene in California is now being acknowledged by the Commission. On 6/19/01--two weeks after FRONTLINE's report aired-- it extended the FERCs wholesale power-price controls to cover all transactions in the electricity market, not just during critical emergency stages, both in Ca. and in ten other Western states. While they are calling it "market mitigation," the Commission and the Bush Administration are in effect acknowledging that a free market needs rules to insure "just and reasonable prices"...that are enforced.
7) Finally, re: the criticism "Blackout" did not spend enough time criticizing the state's "dumb deregulation"-- a point shared by other letter writers--the purpose of the documentary was to focus on those aspects of the California story that helped a national audience understand the broad issues involved in a deregulated energy marketplace, the rise of a powerful new breed of energy traders, and the role of the federal gov't in overseeing a fair and competitive system. Within the confines of a single hour to report this complex subject, we chose to summarize what had already been widely reported about Californias "dumb deregulation." This allowed us to devote more time to the ongoing investigation of charges of market manipulation and lack of vigorous oversight and enforcement by the FERC.




Dear FRONTLINE,

I love Frontiline but I was a bit disapoointed in your installment on the (causes of) the California energy crisis. You failed to measure the enormous increase in actual energy demand in the state in the past decade and never discussed the obstructionist role played by environmental and "consumer" groups in power plant construction. Worse still, your correspondant suggested towards the end of the program that all the deregulated states are now re-thinking their largely successful, free market approach! Bunk. He provided no supporting evidence to support this wild, provocative claim.

Why didn't Frontline closely examine the many states where deregulation is working? It would have totally changed the tone of the analysis. Gross, gross oversight! Energy production is not about 'consumers vs. corporations.' The question is: what's the best, long-term approach to creating and disseminating energy? Your program was tendentious, not up to Frontline's usual standards.

ps- I've never seen a Frontline correspondent get so much air time. He even took over the role of narrator!

pps- Frontline is still the best news program on television. Keep up the great work.

mark green
san francisco, ca


Dear FRONTLINE,

Thought it was quite good and fair insofar as it went. This CA energy crisis is really kind of like the perfect storm scenario. Every interest group and industry is just going along doing their thing and the result is a real economic disaster and tragedy for those of us who live on the economic edge.

There is plenty of blame to go around for what has happened and I will not dwell on those things. The major good that may come out of this is that the states that haven't done it yet had better think long and hard before going ahead with their so called deregulation programs. This was a real bill of goods which CA bought hook, line and sinker. Having given this matter considerable serious consideration whilst I sat though a couple of rolling blackouts here in Northern California my conclusion is that there is really no good way to let a free market prevail in the power business.

Power is consumed the instant it is produced and there really are no short term substitute products that can take its place or be stockpiled. This inelasticity of supply will of allowed inevitably lead those that control the supply to manipulate the market to their advantage and the disadvantage of the consumer. Mouthing platitudes about the wisdom of the market is so much bull, and I feel those that say this know it is disingenuous to put it mildly.

So--even though I am firmly in favor of free markets in almost every other instance, health services comes to mind as another possible exception, the power commodity really is different and the Government, imperfect though it may be, must regulate the business to guarantee that reasonable and fair prices and adequate supplies are ensured. We just cannot risk putting the country into a recession or worse by letting shrewd market manipulators to run amok. FDR was right when the FERC was established.

Saratoga, CA

Irv Halland
saratoga, ca


Dear FRONTLINE,

There was one noteable element missing from the recent " Blackout " Frontline presentation. The environmental movement was never mentioned as a cause for the lack of electric supply improvemnts in California. Most of us know that environmental activism and regulation result in denials and delays in siting and construction of power plants. California has succumbed and the resulting energy supply problem follows. Our Federal system was established with a system of checks and balances to prevent abuses of power.

There appears to be no checks or balances regarding the environmental demands of a few. Perhaps, if Lowell Bergman had reported this, we might begin to create some sanity between people needs and environmental protection.

Bill Dwyer
hyannis, ma


Dear FRONTLINE,

I challenge you to do a piece on the supply side of the energy business.

Your presentation really showed little understanding about where the power really comes from. The only proposed solution was to go back to the old days, where the government regulated electicity (and made sure it was cheap).

Your characterization of "energy cowboys" from Houston focused on one group, the electricity brokers.They are not the villians. It doesn't take much of a shortfall of an essential commodity to really spike prices. California made the wrong bet, that the spot market would always have the lowest prices. Californians need to vote those guys out of there.

Electricity generally comes from burning things. We don't want dirty air, so we are switching most of our generating plants to burn natural gas. Natural gas comes almost entirely from wells drilled in this country and Canada, which is then piped throughout the country. We have about an 8 years supply of natural gas reserves in this country, and we have had about that amount of reserves for years--because we keep drilling more wells, and finding more gas. Exploring for gas is risky and expensive. When the price of natural gas is low, there is little incentive to drill more wells.

The country has enjoyed a long period of time of low energy prices. It has been good for the national economy, but it has made the supply of natural gas uncertain in a time when demand for the cleanest burning fuel has greatly increased--not to mention low prices have made us more dependant on other countries for the majority of our oil. All the energy companies did poorly during this period of low prices. They survived by laying off staff, shutting in low performing wells, and minimizing expenditures for exploration and development.

No one wants to hear this, but higher prices are a good thing. Wells can now be drilled for smaller and more risky or expensive targets. More drilling will improve the supply picture. Bush and Cheney are only telling the country what it needs to hear. We need to work on the supply side. Increased price will also bring a lot of foreign natural gas to our market as well as liquified natural gas.

Sure we need to conserve, but price will work its magic here as well. Sure, alternative energy will be nice, but it's not here yet, and we want our electricity now.

Sorry, there is no easy, cheap fix to our energy problems. Our politicians and the media need to help people really understand the problem and the solutions. This Frontline program was focused on finding blame, and blame was concentrated on the Republicans and the corporations. Try again, and this time talk about solutions. Thanks,

Chris Griffith
houston, tx


Dear FRONTLINE,

Congratulations on an excellent report. I think you should have done more on competition.

The theory behind deregulation is that free market competition would reduce prices and favor the consumer. Sounds good!

But I get the impression from your report that there really is no or very little competition so that essentially someone like Enron has a monopoly and thus no incentive to reduce prices.

My question -- Is there any real competition to Enron as a supplier to California? Whht is the competitive story in the rest of the Country.

Its perferctly ok for the Chairman of Enron to talk about the greatness of the free economy and the objective of maximizing profit but if there really is no meaningful competition then the whole thing is a sham.

Joseph Farber
white plains, new york


Dear FRONTLINE,

Why is that, except for an exception that proves the rule, we Californians, minus our lame governor, accept the fact that this so called "energy crisis" is our fault.

We, much like the nation as a whole has done on an international level, decided we were too cool to do the dirty work of civilization like producing energy, and pawned it off on those "rubes" down in Texas and Oklahoma.

Well those "rubes" probably went to Harvard and Stanford, and when we were stupid enough to deregulate wholesale and continue regulating retail, well you could have gone to Waco Juco and known that the "rubes" were going to have the last laugh!!!

So unlike our pathetic governor, most Californians are not whining about this, and secretly are perversely happy. Cause now all those granolas and tree huggers from Minnesota and Kansas that have moved here in the last decades will no longer have a place at the table when debating energy issues. We are building our power plants now and Enron and the like will do like the insurance companies do, pay us to just to have a shot at this market in a few years.

Here's a tip for the rest of the country though, don't do anything hybrid. You can't get a little bit pregnant, and you can't have a regulated deregulated market!!

As for the story, lets just say that its not surprising that the NY Times was behind this. Frontline took a severe credibility hit with this. This piece of "journalism" seemed to traffic in the language of late night dorm room discussions around the bong. The big evil corporate conspiracists against the pure citizen. It was beneath you, and Al Pacino plays a much better "journalist" than Bergman.

Craig Raggio
rancho cordova, ca


Dear FRONTLINE,

My thanks to Frontline and The New York Times for "Blackout." It certainly helps to know just who the players are in this game of "the pig in the poke."

I have some questions. In the process of divesting of interests, which major political players are saying they have done, or are doing, how does that work exactly? Do they put their holdings into some kind of trust, or do they sell them outright....if selling, how and to whom?

And second, in the matter of transmission lines--who will end up owning the transmission lines within California once the generators declare bankruptcy? Can they then be bought up by such companies as Enron?

Also, having discovered that some of the major oil companies, as well as some of the major auto manufacturing companies, are investing in alternative fuel sources--like the fuel cell for instance--I am wondering why there is so little mention about that during this long ordeal.

Are the big companies trying to reap such large profits now in order to fund the manufacture of alternative energy production devices which will in the long run make the current infrastructure obsolete? The renewable sources will be developed--I don't think anyone can put that off forever--and they will be more efficient and environmentally friendly.

Is this big crisis being manufactured now as a last grasp for profit before the old power grids go the way of the dinosaurs?

Barbara Smith Smith
meadow vista, ca


Dear FRONTLINE,

Earlier this year, "Frontline" aired a program on genetically altered foods. I never thought I'd be advocating a practice by the creepy Monsanto company, but the power companies could learn a lesson from that corporation's flexibility in order to maintain the same customers.

Monsanto, long the largest maker and supplier of pesticides to farmers and consumers, has been trying to phase out these harmful, cancer-causing products and instead sell to farmers genetically modified crops that are bug-resistant.

The power companies have had 25 years, a quarter-century, since the energy crisis to develop alternative power sources. They haven't and are instead blaming us, the people, for not letting them build polluting plants in that time.

They should have been responsible enough to spend research dollars on the future like Monsanto did. It shows just how behind their management is.

tim koos
houston , texas

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