California has obvious problems with its electricity supply system.
The state is currently plagued by wildfires set off by collapsing power lines, and the major utility company, PG&E, recently went bankrupt for the second time in two decades. As a result, millions of people are losing their electricity supply. Thankfully, there’s a solution to this: higher prices for electricity. This being California, of course, it’s the one answer that won’t be permitted.
Instead, there’s all the usual muttering that perhaps a for-profit company isn’t the right way to be organizing essential services such as electrical power. Democratic Vermont Sen. Bernie Sanders, for example, thinks state ownership might be the answer. This all wrong, and the answer is still higher prices.
It is time to begin thinking about public ownership of major utilities.
— Bernie Sanders (@BernieSanders) October 27, 2019
The basic technical problem is that power is transported via overhead lines. Given storms and high winds, sometimes these lines fall over. Add this to seasonally dry underbrush, and we have an obvious possible cause of the fires raging in California right now.
PG&E is bust again, just recently, as a result of having to pay damages for fires that broke out in recent years — fires that broke out because power lines fell over and set off the vegetation. Another part of the recipe for disaster is that California gets high winds at about the same time of year the underbrush is as dry as it’s going to be, which is right about now.
This is why we’re seeing repeated reports of this or about part of the state being without electricity. In these dangerous few weeks of the year, it’s either keep the power on and maybe spark a fire, or turn it off and have no fires. Leaving it on might lead to billions again in damages, so the power goes off. The company’s incentives here, and thus the decision, aren’t hard to understand.
The technological answer is the power lines should instead be buried beneath the surface. This is entirely doable, it just costs much more than leaving them waving in the air on poles. Consumers aren’t prepared to pay that cost.
And the prices the utility company can charge are set by the government anyway. PG&E has asked for permission to charge higher rates so that it can clear the paths of those lines, replace old posts, and generally maintain the system better. They’ve also been told, so far at least, that they can’t have them.
So, changing the system or ownership of provision is not going to change matters. Moving to a community-owned, state-run, or even just more regulated provider isn’t going to solve the problem.
Consumers, given their voice through that regulation process, aren’t willing to carry the costs of the maintenance and upgrade of the current system. Let alone move to that more expensive technology, the burial of cables. Who owns the system doesn’t change this underlying reality.
We are fully capable of providing an electricity grid year-round without burning down half the countryside. Other places in other countries manage it without problems. It is, though, more expensive. Which is, of course, the problem they’ve all got over there in California. Socialist state politicians will have to accept the constraints of reality eventually.
Tim Worstall (@worstall) is a contributor to the Washington Examiner‘s Beltway Confidential blog. He is a senior fellow at the Adam Smith Institute. You can read all his pieces at The Continental Telegraph.
