Document:California Press Release 26 January 2001 Experts Agree Electricity Not Deregulated

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14547 Titus Street, Suite 214
Panorama City, CA 91402
For immediate release: January 26, 2001
For additional information:
Juan Ros, Executive Director
Phone: (818) 782-8400

Experts agree with Libertarians: Electricity is not 'deregulated'

PANORAMA CITY -- California's electricity crisis is not the fault of "deregulation" or the market -- because California's electricity market was never deregulated, the Libertarian Party of California asserted today, an assertion with which a growing number of economists and deregulation experts agree.

"Politicians who are predisposed against the free market have taken advantage of the current situation to blame deregulation and justify more government intervention," said Libertarian state executive director Juan Ros.

"Members of the media have followed along, continually referring to the 'deregulation' law passed by the Legislature in 1996. The fact is, as Libertarians will point out, the 1996 law did not deregulate electricity in California but rather forced power companies into a regulatory scheme that has led to the skyrocketing prices, shortages, and blackouts we are seeing today."

A consensus of experts agree with the Libertarian position that the electricity market in California is far from deregulated — and that government intervention is the real problem:

  • Economist Thomas Sowell in his syndicated column published January 25: "The political micro-management of California's utility companies can hardly be called deregulation without twisting the meaning of the word beyond recognition."
  • Lance Izumi, Senior Fellow in California Studies at the Pacific Research Institute for Public Policy in San Francisco, writing for the Knight-Ridder News Service on January 15: "The that government, not the market, is the cause of California's power woes. Despite [Governor Gray] Davis's slam against California's 1996 'deregulation' of electricity, state government did not totally deregulate the pricing mechanism for electricity."
  • Pepperdine University Professor of Economics George Reisman wrote: "We do not yet have such a [deregulated] market yet. We have merely taken a modest step towards it, in the aftermath of numerous, more powerful steps in the opposite direction."
  • Adrian T. Moore and Lynne Kiesling of the Los Angeles-based Reason Public Policy Institute noted: "California didn't deregulate its electricity market, but rather 'restructured' it, requiring far more state intervention in electricity transactions than existed before."

Concluded Ros, "Further regulation will worsen the situation. Libertarians and experts know that only immediate and complete deregulation will bring about an end to our power problems."