Lights Out.(California power shortage)

Pop quiz: Name this country. Rolling brownouts in one of its largest states leave high-school students in the dark, huddling in jackets, hats and gloves. Human screw-ups darken traffic lights, strand elevators, stop washers and dryers in midcycle and set off a run on flashlights. Newspapers blame an "antiquated" electric network, and run daily power alerts. Forced to close plants and lay off workers, multinational corporations threaten to pull out unless the crisis is resolved by government officials, who blame profiteering "outsiders." The president creates an emergency commission to deal with a debacle that is threatening to spread throughout--India, the Philippines?

No, the United States. In what the California governor's own spokesman has confessed is an embarrassment to "the wealthiest state in the richest nation on earth," the electricity shortage is now spreading throughout the West. Amid warnings that the crisis could push America into recession, George W. Bush put Vice President Dick Cheney in charge of a blue-ribbon panel to come up with a national energy plan. They cast California as the latest in a series of shortages, from heating oil last winter to gasoline last summer, created by Bill Clinton's "eight years of failure" to come up with an energy policy.

Bush made his agenda clear during the campaign: open new supply frontiers, whether by permitting oil exploration in the Alaskan wilderness, lowering barriers to natural-gas production in the Lower 48, or funding research on cleaner coal-fired electric plants. In a twist, Bush promoted this hunt for fossil fuel as crucial to the future of America's high-tech New Economy, noting that 8 percent of all energy supplies now fuel Internet enterprises. Outages battering Silicon Valley are the perfect moment to press ahead this supply-side agenda. Addressing a conference of Western governors last Friday, Energy Secretary Spencer Abraham warned that the United States had not built a major new oil refinery or nuclear plant in decades. "The problem isn't limited to California," he said. "It's a national problem. And it's not an electricity problem, it's an energy problem."

The Bush administration is loath to speak of a national "crisis," for fear of killing what's left of consumer confidence. Rising layoffs had U.S. markets jittery late last week. Prices are at or near recent peaks for all major power supplies--oil, gas, natural gas and electricity-- though it's not clear it's all Clinton's fault. But this is clear. Copied worldwide for its largely successful deregulation of airlines and telecoms in the early 1990s, the United States later set the stage for disaster when it left the far more complex job of deregulating electricity markets in the hands of local "stakeholder democracies," instead of experts, says Larry Makovich of Cambridge Energy Research Associates. "It's a grand experiment that blew up in California, and it will blow up in other places, in different ways."

Everywhere, the new energy rules were crafted by committees of politicians, businessmen, consumers and environmentalists, all working at cross-purposes. California's results were worse than most. They gave utilities little incentive to build new plants, and none were built in the '90s, leaving supplies tighter and tighter as the economy boomed. The new rules also gave consumers little incentive to conserve electricity under an unworkable system that fixed retail prices, but freed wholesale prices for utilities. ...