Notes

²⁰¹ Christopher Flavin and Nicholas Lenssen, Power Surge, pp. 176-77.

²⁰² DOE Task Force Study: Annex 1, p. 63.

²⁰³ In the early 1970s the National Petroleum Council ("U.S. Energy Outlook: An Interim Report," November 1971) predicted that U.S. geothermal capacity would be between 3,500 and 19,000 megawatts by 1985. Actual capacity in that year would be 1,580 megawatts (Energy Information Administration, Annual Energy Review, 1994, p. 279) In 1989 Christopher Flavin (Slowing Global Warming, p. 39) predicted that year-2000 geothermal capacity in the U.S. would be between 4,200 MW to 18,700 MW; capacity today is around 3,000 MW with little growth anticipated.

²⁰⁴ Energy Information Administration, Electric Power Annual, Vol. I, Table 10; Vol. II, Table 58.

²⁰⁵ Pacific Gas and Electric, Form 10-K for the Year Ended December 31, 1994, p. 21.

²⁰⁶ Pacific Gas and Electric, Form 10-K for the Year Ended December 31, 1995, p. 28.

²⁰⁷ "Many of the most promising geothermal resources are located in or near protected areas such as national parks, national monuments, and wilderness, recreation, and scenic areas." EIA, Renewable Energy Annual, 1995, p. 79.

²⁰⁸ "The steam-powered Coldwater Creek Geothermal Plant, hailed as 'inexhaustible' clean energy at its opening eight years ago, may soon be shut down." Kimberly May, "SMUD Plans to Shut Down Steam Plant," Sacramento Bee, June 21, 1996, p. 1B.

²⁰⁹ "In a 'stunning blow' to supporters of geothermal energy, California Energy Co. has 'mothballed' drilling operations at the Newberry National Volcanic Monument in Oregon, because it did not find enough superheated water at shallow depths." Mike Freeman, "Failure to Find Geothermal Hot Spot Puts 'Green' Energy Project at Risk," Seattle Daily Journal of Commerce Online, October 22, 1996.

²¹⁰ See, generally, DOE Task Force Study: Annex 1, p. 70. Dennis Wamsted, "GAO Throws Cold Water on Geothermal Industry," The Energy Daily, p. 3; Energy Information Administration, "Geothermal Energy in the Western U.S. and Hawaii: Resources and Projected Generation Supplies," September 1991; Murray Silverman and Susan Worthman, "The Future of Renewable Energy Industries," pp. 17-20.

²¹¹ "LADWP and Calpine Terminate Contract to Develop Geothermal Plant at Coso," Electric Power Daily, February 19, 1997, p. 10.

²¹² Arthur O'Donnell, "A Geyser of Ill Will, Part II," California Energy Markets, November 3, 1995, p. 8.

²¹³ Christopher Flavin and Rick Piltz, Sustainable Energy (New York: Renew America, 1989), p. 30.

²¹⁴ Christopher Flavin and Nicholas Lenssen, Power Surge, p. 191.

²¹⁵ "Carbon dioxide is released in direct steam and flash systems at a typical rate of 55.5 metric tons per gigawatt hour, or at approximately 11 percent of the rate for gas-fired steam electric plants." EIA, Renewable Energy Annual, 1995, p. 78.

²¹⁶ Ibid.

²¹⁷ Ibid., p. 79.

²¹⁸ Ibid.

²¹⁹ Complained one senator to a representative of the Natural Resources Defense Council in congressional hearings in 1989, "Now we have environmental concerns about geothermal energy. In other words, just about the time we want to use them, somebody comes along and says well, do not change the pattern of everything under the ground. And so we have to leave that alone." Arctic Coastal Plain Competitive Oil and Gas Leasing Act, p. 140.

²²⁰ Daniel Yergin, "Conservation: The Key Energy Resource," in Robert Stobaugh and Daniel Yergin, eds., Energy Future: Report of the Energy Project at the Harvard Business School (New York: Random House, 1979), p. 136.

²²¹ Ibid. The father of modern energy conservation is Amory Lovins, whose article "Energy Strategy: The Road Not Taken," (Foreign Affairs, October 1976, pp. 65-96)popularized "soft energy" (conservation) as an alternative to "hard energy" (new megawatt capacity).

²²² Quoted in Ralph Cavanagh, The Great `Retail Wheeling' Illusion -- and More Productive Energy Futures (Boulder, CO: E Source, Inc., 1994), p. 8.

²²³ CEC, 1994 Electricity Report, p. 40.

²²⁴ Energy Information Administration, Electric Power Annual, 1994, vol. 2, p. 82.

²²⁵ Energy Information Administration, Electric Power Annual 1993 (Washington, DC: Government Printing Office, 1994), p. 108; Energy Information Administration, Electric Power Annual 1994, vol. 2, p. 77. DSM expenditures for 1995 are conservatively estimated at one-half of 1994 levels or $1.36 billion. Pre-1989 data for the U.S. are not available, but California's 1980-88 expenditure of $1.5 billion is included in this estimate. All estimates are restated in 1995 dollars.

²²⁶ DOE Budget Study. See Appendix B.

²²⁷ PG&E, Form 10-K For the Fiscal Year Ending December 31, 1994, p. 14.

²²⁸ Two principals of the consulting firm Barakat & Chamberlin, who were instrumental in the analytical framework used to implement California's record DSM commitment, recently stated: "It is now clear that the industry led itself astray regarding the value and appropriateness of DSM activities; the erroneous views that developed regarding the source of the value of DSM came about at least in part because of the way in which the standard tests were applied." John Chamberlin and Patricia Herman, "The Energy Efficiency Challenge: Save the Baby, Throw Out the Bathwater," The Electricity Journal, December 1995, p. 39. While these authors estimate the loss from understated costs and overstated benefits in the "millions of dollars" (p. 45), Herman elsewhere has estimated the national cost in the "hundreds of millions of dollars." Patricia Herman, "Reforming Demand-Side Management for the Competitive Power Era," paper delivered at the conference New Horizons in Electric Power Deregulation, Cato Institute, March 2, 1995.

²²⁹ For a discussion of the CPUC reversal of April 1994, see Robert L. Bradley, Jr., "The Electric Restructuring Debate in California," in Robert Michaels, Restructuring California's Electric Industry: Lessons for the Other Forty-Nine States, pp. 11-15.

²³⁰ The source of this "inside joke" at his company wished to remain anonymous.

²³¹ Seymour Goldstein, "California Utility DSM at the Crossroads," California Energy Commission, January 1995, p. 3.

²³² Both studies were brought to the author's attention by the manuscript of Paul Ballonoff's forthcoming Shock Therapy: Ending the Never-Ending Energy Crisis (Washington, DC: Cato Institute) 1997.

²³³ From personal communication between Illinois Commerce Commissioner Ruth Kretschmer and Paul Ballonoff, 1995. Reference found in Ballonoff, ibid.

²³⁴ Energy Information Administration, Electric Power Annual 1995, Volume II, November 1996; Table 43, p. 77 for DSM program costs and savings; table 13, p. 35 for the relative costs of the fuel presumably avoided.

²³⁵ For different criticisms of DSM from academic and professional economists, see Alfred Kahn, "An Economically Rational Approach to Least-Cost Planning," Electricity Journal, June 1991, pp. 11-20; Paul Joskow and Donald Marron, "What Does a Negawatt Really Cost: Evidence from Utility Conservation Programs," Energy Journal, vol. 13, no. 4 (1992): 47-74; Albert Nichols, "How Much Energy Do DSM Programs Save? Engineering Estimates and Free Riders" (Cambridge, MA: National Economic Research Associates, 1993), "Estimating the Net Benefits of Demand-Side Management Programs Based on Limited Information," (Cambridge, MA: National Economic Research Associates, 1993), and "How Well Do Market Failures Support the Need For Demand Side Management?" (Cambridge, MA: National Economic Research Associates, 1992); Ronald Sutherland, "Market Barriers to Energy Efficiency Investments," Energy Journal, vol. 12, no. 3 (1991): 15-33, "Income Distribution Effects of Electric Utility DSM Programs," Energy Journal, vol. 15, no. 4 (1994): 1-15, and "Economic Efficiency, IRPs, and Long Term Contracts," presentation before the Western Economics Association, June 12, 1993; Larry Ruff, "Equity vs. Efficiency: Getting DSM Pricing Right," Electricity Journal, November 1992, pp. 24-35; Douglas Houston, Demand-Side Management: Ratepayers Beware (Houston, TX: Institute for Energy Research, 1993); Bernard Black and Richard Pierce, Jr., "The Choice Between Markets and Central Planning in Regulating the U.S. Electricity Industry," Columbia Law Review, October 1993, pp. 1381-84; and Andrew Rudin, "DSM: An Exorbitant Free Ride Into an Unsustainable Future," paper submitted at the Great Lakes Conference of Public Utility Commissioners, July 13, 1992.

²³⁶ On these points, see Robert L. Bradley, Jr., "California DSM: A Pyrrhic Victory for Energy Efficiency?" Public Utilities Fortnightly, October 1, 1995, p. 44.

²³⁷ David Lapp, "The Demanding Side of Utility Conservation Programs," Environmental Action, Summer 1994, p. 27.

²³⁸ "The regulated monopoly structure [of] . . . utilities . . . has more often than not led to an exacerbation rather than diminution of environmental problems. Investors need to be free to succeed or fail in the marketplace without recourse to the safety net of cost recovery if we are to efficiently match energy investments with demand." Statement of Environmental Defense Fund before the House Subcommittee on Energy and Power Resources concerning Electric Regulation: A Vision for the Future, May 15, 1996, p. 1.

²³⁹ For a discussion of some of these issues, see Lee and Darani, "Electric Restructuring and the Environment," pp. II, 12-15, 24-25.

²⁴⁰ Ned Ford, "What Role for DSM Now?," The Electricity Journal, March 1996, p. 87.

²⁴¹ For a brief review of the early industry's drive to trade franchise protection for rate regulation, see Marvin Olasky, Corporate Public Relations: A New Historical Perspective (Hillsdale, NJ: Lawrence Erlbaum Associates, 1987), pp. 33-43. For a longer review, see Robert L. Bradley, Jr., "The Origins of Political Electricity: Market Failure or Political Opportunism?" Energy Law Journal, vol. 17, no. 1 (1996): 59-102.

²⁴² Statement of Edison Electric Institute before the House Subcommittee on Energy and Power Resources concerning Electricity Regulation: A Vision for the Future, May 15, 1995.

²⁴³ Michael Maloney and Robert McCormick, Customer Choice, Consumer Value: An Analysis of Retail Competition in America's Electric Industry (Washington, DC: Citizens for a Sound Economy, 1996) and Robert Crandall and Jerry Ellig, Economic Deregulation and Customer Choice: Lessons for the Electric Industry (Fairfax, VA: Center for Market Processes, 1997).

²⁴⁴ This directly led to the political pressure to suspend PURPA auctions, described elsewhere.

²⁴⁵ Wind, for example, often peaks in the early evening versus the demand peak of midafternoon. See Alfred Cavallo et al., "Wind Energy: Technology and Economics," in Thomas Johansson et al., eds., Renewable Energy: Sources for Fuels and Electricity (Washington, DC: Island Press, 1993), p. 151.

²⁴⁶ The declaration and signatories are reprinted in Ralph Cavanagh, The Great `Retail Wheeling' Illusion--and More Productive Energy Futures, pp. 25-28.

²⁴⁷ Ibid., p. 3. Also see "Electricity Shopping Can Be a Bad Deal," New York Times, June 12, 1994, p. 11. A study by the Worldwatch Institute similarly complained that the "mirage" of retail wheeling "would severely undermine the long-term planning that has been so vital to the evolution of an efficient, environmentally sound electricity market." Christopher Flavin and Nicholas Lenssen, Powering the Future: Blueprint for a Sustainable Electricity Industry, p. 46.

²⁴⁸ One report states that environmentalists have conceded as much, finding solace in the fact that competitive restructuring could hasten the phaseout of the nuclear industry and accelerate "green pricing" to help renewables compete. James Ridgeway, "The Green Movement's Shock Treatment," The Village Voice, May 28, 1996, p. 22.

²⁴⁹ Statement of James Rhodes on Behalf on behalf of the Edison Electric Institute, Hearing before the Committee on Energy and Power, May 15, 1996, p. 10.

²⁵⁰ For a summary of the first year of the "Blue Book" debate, see Michaels, Restructuring California's Electric Industry.

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