Californians were deluded in believing electricity rates could be capped without regard to the cost of producing it or the basic laws of supply and demand. California's short-term fix will cost tens of billions of dollars in the short run, and supply contracts negotiated under duress guarantee unnaturally high electricity rates for years. So far, New England has avoided California-style overdependence on natural gas. However, New England has been betting heavily on natural gas in recent years. By 2005, gas-fired plants are expected to be producing 45 percent of the region's power.
Gas is about the only politically safe power source left.
A few intrepid political leaders, including some with impeccable environmental bona fides, seem to have grasped the need for a diversity of power sources. Last week, Massachusetts Sen. John F. Kerry urged consideration of building new nuclear power plants, pointing to the Navy's nuclear fleet as proof of the safety of properly designed plants. The United States has drifted for decades without a coherent energy policy. The California crisis may change that.