Released: June 02, 2006

Energy: Wiser on the West Coast

Source: By Christopher Palmeri, BusinessWeek Online

It was six years ago this summer that the great California energy crisis began. The state hadn’t built enough power plants to meet demand. Rogue energy traders swooped in, prices soared, and the state’s largest utility went bankrupt.

The crisis branded the nation’s most populated state as a energy-industry basket case. “What’s the difference between California and the Titanic?” recently convicted former Enron CEO Jeffrey Skilling once joked. “The Titanic went down with the lights on.”

Now, as temperatures creep up in much of the country and the peak air-conditioning season begins, it’s worth noting that from an energy perspective, there’s much good happening in California. More than 30 new power plants have come online in the past six years, generating 12,000 megawatts. The California Energy Commission estimates that it will have generation reserves of more than 20% this August, nearly three times what’s required should power usage spike.

The better story, though, lies on the demand side of the equation, or what the state’s fitness-focused governor might call portion control. Since California began aggressively pursuing energy efficiency in the mid-1970s, the state’s per-capita electricity usage has remained flat at around 6,500 kilowatt-hours per person. In the rest of the country, consumption has risen from 8,000 to 12,000 kilowatt-hours in the same time frame.

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