NCPA - National Center for Policy Analysis

Hurdles To Building Power Plants In California

February 9, 2001

California's Gov. Gray Davis has suddenly discovered how daunting a task it is to get permission to build electric power plants in his state. To avert future blackouts due electric power shortages, he wants to streamline the permitting process. There will be a lot of bad policy to reverse, experts warn.

  • As the state's population climbed 14 percent over the last decade and while peak demand of electricity jumped 19 percent, no new power plants have been built in the state.
  • While the California Electricity Commission has recently given the go-ahead to 10 new plants, it will be years before they come on line.
  • Applications take 12 months to work their way through the permit process in California, compared to 90 days in Texas -- where, incidentally, nine large power plants have been built since 1990.
  • The need to conduct as many as 17 assessments -- from historical significance to impact on fish and wildlife -- can require changes to plant blueprints resulting in ancillary costs of as much as $30 million for one project, compared to $1 million in Texas.

Electricity demand in Silicon Valley alone has shot up 33 percent since 1996. Experts say that California politicians should have been able to couple that fact with recognition of the state's notorious regulatory hurdles -- and realize that something had to give.

Source: Lynn Cook, "My Kingdom for a Building Permit," Forbes, February 19, 2001.


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