Both pieces were objections to the planned Monterey Bay Community Power project, a three-county, government-led consortium that would compete with Pacifc Gas & Electric Co. One piece was one written by Pacific Grove businessman Jeff Gorman and the other by Libertarian Party stalwart Lawrence Samuels, who seems to be opposed to just about everything.
The headline on Gorman’s piece, reflecting a theme also picked up by Samuels, reads “Monopoly on power not the answer.” OK, as I pointed out a jillion times in my reporting days, the headline is not written by the author. It is written by a copy editor, who, in the case of The Herald, probably lives somewhere near Chico.
Regardless, it’s an airball of a headline even if it isn’t entirely Gorman’s fault. The three-county MBCP entity would be an alternative to Pacific Gas & Electric Co., a true monopoly. As a competitor of PG&E, the new entity would, by definition, not be a monopoly. PG&E would remain in business. And here’s a point not made in Gorman’s piece, residents of the three counties involved – Monterey, Santa Cruz and San Benito – would be allowed to opt out of the new power structure and stay with PG&E at a cost of $10 a month.
Gorman writes that state law “allows these new government entities to convert PG&E customers into government customers without customer approval.” That simply is not so. Rather than be a monopoly, MBCP would eliminate a monopoly and customers would have a choice.
Organizers of the MBCP, led by former Republican state senator and California Secretary of State Bruce McPherson, say the goal is to provide cheaper power than the power we are forced to buy from PG&E and to promote the use of sustainable power supplies such as solar and wind-generated energy. Low-income households now receiving discounts from PG&E would be able to retain the discounts.
Each of the three county governments and most of the cities in those counties have signed onto the plan.
The headline on Samuels’ piece declares “Rates will zoom with new agency.” Which might be true but a more accurate headline would have been “Rates will zoom with new agency or they might actually go down.” A similar setup in Sonoma County led to lower rates while the other consortiums in California are still pursuing that goal.
Samuels, like Gorman, gets lost in the monopoly thing. “As any first-year student of economics can attest, government monopoly and state ownership is far less efficient and greatly more expensive than the private sector …. “ He mentions “backward incentives.” But quite a few first-semester students of economics would remind Gorman that there is a worse creature out there, generally less efficient and more expensive than the others, and that is the government-regulated monopoly. If PG&E isn’t proof of that, just think about California American Water, which pretty much invented backward incentives. Enough said.
Samuels wasn’t finished, though, having still another foot to shoot. After his wayward lecture on monopolies, he tells us “no private sector utility is able to compete with a government agency swimming in taxpayer-provided state subsidies.” In other words, he seems to be saying MBCP’s prices would likely be lower than PG&E’s, which maybe should have been his point in the first place.