Powerful Advice

Leaders should ignore the temptation to over-regulate energy policy and let competition reign

The company's meanwhile now asking for $500 million in rate increases, permission to impose new late fees on bill payments, and wants to shut down its 84 public offices, according to The Utility Reform Network, an S.F. advocacy group. Per usual, the company will spend vast sums on lobbyists and attorneys to obtain a close facsimile of what it wants.

Before renewing the fight against the company on its own terms, however, it's worth imagining what might have happened if Democrats in California state government didn't act in 2001 as if preserving the old Pacific Gas & Electric monopoly was a cure to all that ailed the state's disastrously restructured energy market.

Had PG&E been allowed to metaphorically burn to the ground, instead of receiving a financial bailout along with favorable bankruptcy terms, other companies might have purchased the cinders. We'd have a competitive market, similar to what we have in the market for gasoline. Supply or demand shocks, rather than successful rate-case lobbying, would drive prices. PG&E would have to contend with competitors, rather than rubber-stamp regulators.

And ratepayers would be far better off.

Richard Branson, Britain's celebrity dabbler in businesses ranging from soda to cell phones, has brought on partners who are contributing $89 million to start up an airline out of Burlingame called Virgin America.

But starting up a new U.S. airline during some of history's worst market conditions isn't the maddest of his new U.S.-oriented ventures. He says his Virgin Group is plunking down $300 million to $400 million over the next two to three years for factories to make ethanol, an alternative fuel derived from plants. According to a February Q&A in Fortune magazine, he thinks the greatest opportunities lie in a substance called cellulosic ethanol, which derives its energy from enzyme-stewed chaff, the reedy and grassy residue left after the harvest of grain. The idea, he says, is to save money over time on airplane fuel. Enviro-friendly air flights would be a wonderful first for the San Francisco Bay Area. But Virgin America is having a hard time getting off the ground.

According to an April 14 article in the San Jose Business Journal, the U.S. government is questioning Branson's role in the startup, possibly in response to complaints by U.S. airlines saying Virgin's plans fall afoul of Department of Transportation rules limiting foreign ownership of airlines.

Branson's airline competitors should back off.

And for San Franciscans I have some new, energy-sensible causes celèbres.

Democrats, let gas prices climb unperturbed.

Supervisors, replace empty proclamations with proposals for fuel-efficient, dense urban design.

California, let's revisit the notion of competition in energy markets, without letting PG&E dictate the rules.

America, free Richard Branson!

Power-crazy citizens unite! You have nothing to lose but the energy confusion in your brains.

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