The wholesale price has risen 1,000 percent, but California's demand has only grown 4 percent. Loretta Lynch, California Public Utilities Commission president, testified to the state Senate that electric producers scaled back electricity output and then benefited from the high prices. She also presented graphs showing how three plants reduced production and then went to maximum production after the price for electricity rose. The fundamentals of the problem are not even being addressed. This despite the successful use of conservation to alleviate the statewide crisis here.
Conservation does make a difference if done on a national, structural and long-term basis.
America's energy needs are expected to grow at 2 percent per year, meaning that in 20 years America will need 40 percent more power. Conservation can stem that. Energy intensity, the amount of energy required to make one dollar's worth of the gross domestic product, has dropped by 1.3 percent a year because of switches from manufacturing to services and greater efficiency. Bush offers nothing to check the abuses and only encourages a shift to a new market system that creates a new structural demand for power like the SUV exemption from emission standards that affects passenger cars. The increased capacity will only encourage continued forced gorging when restraint is needed.