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The Byrne Report

Frontier Folly


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CASTING GOV. ARNOLD SCHWARZENEGGER as a closet environmentalist--as many hopeful Californians do--makes as much sense as a vegan inviting a tyrannosaurus to a tofu dinner. Just because the Guv threw a few antismog bones to the clean-air folks does not mean he's not bent on polluting for profit--his own profit.

Case in point: The governor is undermining the power of the California Public Utilities Commission, which attempts, albeit feebly, to oversee the piratical electricity industry. In May, Schwarzenegger appointed an energy "czar," Joe Desmond, CEO of Infotility, which designs software for arbitraging energy sales. Then the governor announced a plan to build a 1,300-mile transmission line from Wyoming to California. He proclaimed that never again would bad actors like Enron be able to gouge California consumers by manipulating the electricity supply.

The great conservationist is planning to save us $400 million a year by importing 12,000 megawatts of "clean" electrons from the Rocky Mountain states, promising that Wyoming winds will pump 6,000 megawatts into millions of California homes. "Clean coal" energy, he says, will generate another 6,000 megawatts. Building the so-called Frontier Line, Arnold boasts, will only cost consumers $3.3 billion!

There are several problems with this proposal. Only a few hundred megawatts of generated wind power exist in Wyoming and there are no plans by private industry to construct the thousands of wind generators promised by the governor. Although there is technology to "gasify" coal, which exists abundantly in the West, it costs 25 percent more to build a "clean coal" plant with near zero emissions than a dirty plant. Of 31 coal-fired plants planned in the affected states, none use the new technology; all are of the old-fashioned carbon dioxide- and mercury-spewing variety--you know, the stuff that melts the ice caps and retards our children.

By the end of the decade, 20 percent of California's electricity must be manufactured by clean, renewable resources. Consequently, energy corps prefer to build relatively cheap global-warming plants in the quasi-pristine West and export energy to California over privately owned grids that can be bottlenecked at the will of profit-maximizing energy traders. Sempra Energy, which monopolizes energy in southern California, is building a coal-fired factory in Nevada that would connect to the Frontier Line. The company is on record saying that it will not consider using "clean coal" technology. Subsidizing R&D for conglomerates such as Sempra, Schwarzenegger budgeted an initial $2.5 million for planning the new line. A September 2004 government report, written mostly by representatives of the electricity industry, concludes that the affected states should collaborate to reduce the impact of environmental regulations on building the transmission line. States' agencies should identify the line's snaky route--with plenty of time for speculators with inside knowledge to buy up the right of ways, of course. Once the route is ready for its easily acquired permits, the states are slated to turn over the project to the likes of Sempra, PacificCorp, PG&E, Calpine Corporation and their Wall Street backers.

Matt Freedman, staff attorney for the Utility Reform Network, based in San Francisco, says, "We have abundant clean energy resources in California. But there is no clean coal power being developed in the West. The minimal amount of wind power existing in Wyoming is under long-term contract to go elsewhere besides California."

Freedman also says that the "branding and packaging" of the Frontier Line is mythological. "Anybody can build a plant and hook up to the line, regardless of what fuel is being burnt."

As is his habit, Schwarzenegger stands to benefit personally from a dip into the public boondoggle. The wealthy governor's Statements of Economic Interest reveal that he and his wife, Maria Shriver, held large investments in Sempra and similar energy concerns. When the actor assumed office, the couple sold off some of their energy holdings, reinvesting the proceeds into a blind trust. But the governor held on to millions of dollars of stock in venture capital firms and investment banks, such as Goldman Sachs, that finance public and private electricity infrastructure projects. And, since mid-2003, the financial industry as a whole has blessed his network of "campaign" committees and nonprofits with well over $6 million for his political and personal use.

California Public Utility Commissioner Geoffrey Brown says that the Frontier Line "does not pass the smell test." Nor does he expect regulators to save us from the energy companies, which have donated at least $1.2 million to the governor for his services.

"The CPUC can sometimes talk the governor's office out of the unwise ideas that emanate from it, but [due to Schwarzenegger's appointments] the commission is increasingly reactionary, increasingly the slavish protector of industry.

"It wasn't that much different under the Democrats," Brown sighs.

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From the August 17-23, 2005 issue of the North Bay Bohemian.

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