California Power Crisis: PG&E Shrugged
Apr 9, 2001

       MARINA DEL REY, CALIF.--The bankruptcy of California's largest investor-owned utility, Pacific Gas & Electric Co. (PG&E), is the fault of Governor Gray Davis, not PG&E, said the executive director of the Ayn Rand Institute.

       "Rather than blame 'greedy' capitalists or 'inefficient' energy producers and distributors, we should identify the real culprits of the power crisis and the destroyers of private property: California's governor and legislature," said Dr. Yaron Brook, a former professor of finance. "How can any company stay in business if the government forces it to sell its products or services below costs? Yet that is what the government did in its so-called deregulation. Like all government imposed 'solutions,' California's phony deregulation of the power industry did not create a building boom of power plants or increase the number of new energy providers able to sell their products and services for a profit. PG&E's bankruptcy is simply the natural and foreseeable result of government intervention."

       Brook noted that the Public Utilities Commission, the legislature, and Governor Davis, scared by pressure groups and polls from raising electrical rates to allow the utilities to recoup costs, sent PG&E spiraling into its $9 billion black hole.

       "Davis should not be allowed to use PG&E's bankruptcy as an excuse to further nationalize the California power industry," said Brook. "The 9th circuit court should be allowed to restructure PG&E based on financial not political considerations. Further, legislation should be passed that will ensure the protection of the property rights of power companies, and that will scrap all regulations that inhibit companies from operating their plants freely, from constructing new plants, and from charging market-driven prices."
 
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Dr. Yaron Brook is available for interviews. To interview Dr. Brook or book him for your show, please e-mail media@aynrandcenter.org

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