An Energy Horror Trilogy

Hollywood brought us epic trilogies through the years: Star Wars, The Godfather, Lord of the Rings, and Clint Eastwood’s the-man-with-no-name trio of westerns (A Fistful of Dollars, For a Few Dollars More, and The Good the Bad and the Ugly), to name the best. Who doesn’t love debating which of the three films of these masterpieces is best (excluding Godfather III, of course)?

In the genre of horror, the most frightening modern trilogy does not come from Hollywood but is brought to us by politicians, environmentalists, and bureaucrats. Unfortunately, the stories are real, not fiction.

There are a trio of real-world energy disasters. The calamities and victims are the result of consciously embracing ill-advised policies pursued in the name of saving the planet.

Yet the true intentions of these policies are to impose environmental fundamentalism over the free market. The winners are subsidy-seekers feeding at the public trough. The losers are the innovators and anyone who uses energy (which is everyone).

Channeling Siskel and Ebert, let’s provide a critical review of each installment of this trilogy.

Part One: California’s Grid Goes From First-Rate to Third-World

The first installment of the trio has been under development the longest. California bureaucrats and politicians have prided themselves on being at the fore of environmental extremism for decades. Much attention concentrates on developing nonsensical policies to address climate change alarmism, despite everyone knowing the policies will have little impact on climate.

The Golden State’s power grid has suffered the most under this approach. California’s grid used to consist of a resilient portfolio of in-state nuclear, coal, natural gas, oil, wind, and solar generation sources as well as a similarly diversified portfolio of out of state suppliers. The bulk of the transportation fleet ran off gasoline. The state’s energy infrastructure was the resilient backbone that a powerful economy rested upon.

Once the Left assumed power in the Sacramento legislature, urban areas, and the governor’s mansion, the resilient grid and energy infrastructure built on sound science and engineering began to devolve via policy and edict.

The California Public Utility Commission (PUC) was stacked with those more interested in green virtue signaling than the nuts and bolts of maintaining a reliable grid. The PUC president’s bio focuses on prior achievements of “green government,” renewable energy promotion, and social responsibility. The bios of the other four commissioners of the PUC tout environmental justice, decarbonization, sustainable communities, and environmental equity.

These bios of the California PUC commissioners expose the ineptitude of California’s political leadership, starting with Governor Newsom. That’s because the politically-appointed PUC presided over the worst utility debacle in the nation’s history: the epic fail of Pacific Gas and Electric (PG&E). The PUC’s leadership then, like now, obsessed on the optics instead of the fundamentals. That led to tragedy and an ongoing crisis that has no end in sight.

For years, the California utility enjoyed its focus on optics and racked up accolades from self-proclaimed experts. The utility was designated as an ESG outperformer and ranked as the top utility in responsibility. The company boasted that over a third of its power came from renewables, which helped deliver a string of best-possible governance ratings from experts. PG&E had all the impressive, yet hollow, optics a utility could hope for to curry favor with the politically-correct.

But PG&E was a severely dysfunctional organization in the arenas of governance, safety performance, and environmental stewardship. The utility’s rap sheet over the past twenty years includes convictions for over 700 misdemeanors that took the court clerk over an hour to read aloud (1997) and felony convictions stemming from misleading regulators and the public about the state of a gas pipeline that ruptured and killed eight people (2010).

Erin Brockovich became a movie sensation when she represented clients who were eventually awarded over $600 million from PG&E in court cases stemming from contaminated drinking water. From 2012 to 2016 PG&E supervisors looked the other way as employees fabricated thousands of on-time results to hit internal targets for responding to excavation work around buried power and gas lines, accumulating over 170,000 violations of state law.

Then, in 2017 and 2018, wildfires raged across California and it was determined that over 1,500 fires, several of them catastrophic, were caused by PG&E’s poor maintenance practices, deferred safety upgrades, slow responsiveness, and obsolete equipment. The death toll exceeded 100; and, 22,000 buildings were destroyed across 350,000 scorched acres. A company audit months after the fires reported nearly 10,000 problems with power lines throughout its system.

Before you knew it, the utility was facing tens of billions of dollars in liability. PG&E filed for bankruptcy in early 2019, bringing home the reality of wiped-out investors despite all those hollow credentials.

PG&E customers today suffer the largest intentional blackouts in history, exemplified when two million Californians had power cut for days in October 2019, during fire-prone windy periods as the utility post-bankruptcy looks to pass on risk to the rate payers. The CEO went on record that same month lamenting that it might be a decade before the self-inflicted blackouts end.

Of course, the jettisoning of risk to those the utility exists to serve will be justified on the ever-accommodating excuse of addressing climate change and serving corporate greed; Governor Newsom’s assessment of the root cause of the intentional blackouts was found in his quip that, “It’s about corporate greed meeting climate change.”

What won’t be named are the true root causes of the crisis by the governor. First, for years government bureaucrats, environmental groups, and politicians forced the regulated utility to divert billions of dollars from necessary line maintenance and equipment upgrades to various climate change and renewable energy adventures. The consequences were dire: a failed 100-year old metal hook designed to suspend high voltage transmission lines started the deadly 2018 Camp Fire.

A second root cause was those same bureaucrats and environmental groups prohibiting the utility and other businesses from practicing effective vegetation clearing practices, making the wildfires more intense and faster moving. The PUC may have set the stage for the catastrophes by prioritizing renewable energy and climate change mandates ahead of electricity grid safety and reliability oversight.

Intentional blackouts by a government-controlled utility have serious negative consequences, spanning from macro GDP to the individual. Each blackout event imposes $2.5 billion in costs for residents and businesses in the state. Intentional blackouts mean health risks for the elderly who won’t be able to use medical devices that require electricity as well as lost revenues and increased expenses for businesses such as restaurants and grocery stores when they can’t serve customers in the dark and lose refrigerated inventory.

Homeowners and businesses are now buying carbon-fueled generators in droves because everyone knows the utility cannot be trusted to supply safe, reliable electricity. Adding insult to injury is that intentionally turning California into a third world electricity grid does not prevent the inept utility’s decrepit infrastructure from starting more fires: PG&E disclosed in late 2019 that one of its transmission lines failed in the area of a Sonoma County fire that destroyed hundreds of buildings.

California’s political and bureaucratic ineptitude hits rock bottom and then digs deeper. Mandating electric vehicles is the latest malfeasance, which will stress grid capacity thinner and expose yet another vital link of the economy, transportation, to the same ills being experienced by the power generation link. While California residents and businesses will suffer more, the climate will not benefit by a single part-per-million of carbon dioxide reduction.

The energy nightmare continues for California residents.

An Energy Horror Trilogy