Energy

Gov. Davis and the failure of power

California's energy crisis is another lesson in the need for campaign finance reform.

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Gov. Davis and the failure of power

Money equals power. That truism is becoming truer every day in Washington — and is what’s driving the renewed push for campaign finance reform. And if you go 3,000 miles west, you’ll see just how true it has become.

There are many angles to the California energy crisis, but the one with the most urgent national implications — now that the president and Sen. John McCain have met for a “friendly” chat about the McCain-Feingold campaign finance bill — is the role campaign contributions play in determining policy and in blinding politicians to the consequences. With Big Power’s donations filling their coffers, California’s leaders have been suffering even more rolling blackouts than its citizens.

Gov. Gray Davis, a middle-of-the-roader whose grand political vision begins and ends with the desire to offend no one — especially anyone with a checkbook — was found asleep at the wheel while his state careened toward an energy disaster. The interesting question is: What made him so drowsy?

Could it be the steady IV drip of soporific campaign cash he received from the two giant utility companies at the center of the current crisis? According to state records, since 1998 Davis has taken in $550,000 from Southern California Edison and Pacific Gas & Electric — his share of the $7 million the companies have doled out to politicians from both parties during that time. One of them, state Sen. Steve Peace, hailed as the “architect of electricity deregulation,” received $179,409 between 1994 and 1998. If only the utilities were as good at buying electrical power as they are at buying political power.

Of course, as is de rigueur in political circles, the governor has issued the standard, boilerplate denials that the money influenced his decisions. “It doesn’t affect him one way or another,” said Steve Maviglio, Davis’ spokesman. “There is no connection between contributions and policy.”

This has become one of those lies — like “We’ll be pulling away from the gate momentarily” — that we hear so often we don’t hear it at all. If it were true, then why did the Davis camp tout to the press that the governor has not taken any money since October from the companies he’s being asked to bail out? As though abstaining from orgies of campaign cash for a few months can restore one’s political virginity.

Indeed, the governor’s office proudly announced that Davis had turned down an offer by a group of independent energy producers to hold a fundraiser for him last month. Putting aside the ludicrousness of painting the rejection of a fundraising opportunity as an act of great strength and moral leadership, why would Davis stop accepting utility company contributions if, as he claims, there’s “no connection between contributions and policy”? And if he wants credit for turning the money down when the lights — at least the media ones — are on, why won’t he accept the implications of taking the money when they were off?

And what are we to make of the governor’s decision to avoid meeting with the utilities’ top executives prior to their recent negotiations because, according to his spokesman, “he wanted to stay away from the fray and not be influenced”? So Davis can be influenced by meeting with people, but not by pocketing their money?

In the same spirit of pretending that campaign contributions really don’t matter, the utility companies decided last month to hold off on making any more donations. “We didn’t want it to be misunderstood,” explained PG&E vice president Frank Regan.

Yeah, you know how confused taxpayers can get when they’re being asked to fund a multibillion-dollar bailout of two companies that, between them, made more than $6 billion in profits since deregulation began and have combined assets of approximately $71 billion. Don’t you worry, Mr. Regan — we understand perfectly.

For those of us following the money, an interesting story line we’ll be watching is whether there will be even a sliver of daylight between the wishes of Bush-backer extraordinaire Kenneth Lay, chairman of energy giant Enron, and the Bush administration’s energy policy. Lay — who was the single biggest contributor to Bush’s presidential run with more than half a million dollars in campaign donations and an additional $100,000 for the inaugural festivities — would love nothing better than to see the state bail out California’s struggling utilities, thereby ensuring his company is paid the huge sums it is owed.

Not surprisingly, this week Bush shifted from his previous zero-federal-intervention stance and extended until Feb. 7 orders forcing California’s neighbors to deplete their own energy resources to keep the lights on in the Golden State. I guess this is a case of donor rights trumping state rights.

For his part, Lay, who is also a key member of the advisory panel Bush formed to help shape energy policy, has proved exceptionally adept at playing the political money game. Why else would a close friend of Bush’s, and ardent supporter of the Republican agenda, have his company donate $93,000 to Gray Davis?

The crisis in California is an object lesson in the corrupting, and disorienting, influence of money on our political leaders. Let’s hope those opposing campaign finance reform back in Washington take it to heart — before the lights go out on our democracy.

Arianna Huffington is a nationally syndicated columnist, the co-host of the National Public Radio program "Left, Right, and Center," and the author of 10 books. Her latest is "Fanatics and Fools: The Game Plan for Winning Back America."

Don’t blame the geeks

Scientist Jonathan Koomey says Internet companies are not responsible for California's energy crisis.

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Don't blame the geeks

With institutionalized rolling blackouts becoming a reality for California businesses and residences, many have started to point the finger at the thousands of dot-coms that have sprung up in the past few years. One might imagine that so many more computers running, lights burning and copiers copying would cause a massive strain on the state’s power supply.

Jonathan Koomey says this just isn’t the case. He is the staff scientist with the E.O. Lawrence Berkeley National Laboratory and leader of the End-Use Forecasting Group, which studies and reports on power usage and efficiency, and whose clients include the EPA and the U.S. Department of Energy. Here he speaks with Stephan Cox about this common misconception.

Green power in the red

Electricity deregulation is bankrupting California's fledgling eco-friendly energy industry.

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Green power in the red

In April, Ray Levinson persuaded the U.S. Postal Service to make the largest federal purchase of eco-friendly power in U.S. history. After two years of effort, Levinson, an environmental compliance manager for the USPS, led 1,100 California post offices away from power generated by coal and natural gas and to Go-Green, a “green” power company. Go-Green promised to generate its competitively priced electricity from a mix of underground steam and methane — renewable, environmentally friendly energy.

A press release announcing the switch bragged of “social responsibility” and noted that the three-year deal would “save about 25 million pounds of carbon dioxide, 60,000 pounds of nitrogen and 18,000 pounds of sulfur dioxide each year from being released into the atmosphere.” The Postal Service planned to move an additional 1,000 offices to green power in 2001.

But just a few months after the contract was signed, electricity prices in California started to jump — an unforeseen result of the state’s flawed electricity deregulation scheme. Levinson hoped that the contract would remain secure. Go-Green’s power wasn’t subject, theoretically, to the ups and downs of the fossil-fuel business, so shouldn’t the cost of steam remain stable? He figured Go-Green would be less likely to go bankrupt than a traditional utility like Pacific Gas & Electric.

He figured wrong. In September, Go-Green founder Rick Kohl told Levinson that he was having trouble getting enough credit to buy green power from power wholesalers. The wholesalers (Calpine, Enron and others) had jacked up their prices from 6 cents per kilowatt-hour to about $1.50. Kohl told Levinson that some of the post offices would be forced to return to PG&E and other so-called brown power companies. Then, in December, Go-Green went out of business, abandoning not just the post offices but also MCI WorldCom and 2,500 residential customers who had also decided to go green.

Go-Green is but one of many clean-energy companies that have recently ceased operations. TenderLand Power Co. of Truckee, Calif., also booted customers back to the big utilities this month. Several other green power companies in California and in Pennsylvania — another state that’s deep in the throes of deregulation — have also fled the business. The consequences for the environment, say some industry watchdogs, will be horrific.

“It’s a disaster,” says Dan Kammen, director of the Renewable and Appropriate Energy Laboratory at UC-Berkeley. Not only are the environmental gains that were made possible via deregulation now being lost, says Kammen, but the failure of deregulation may well lead to a rush to build new power plants that will only accelerate environmental damage. “These small companies drive the market for cleaner air. When they close down, that cuts off our ability to clean up the power supply. Within a year or two, we’ll see the difference.”

Responsibility for the sordid state of renewable energy can be traced back to the early 1970s. After the oil crisis of 1973, the federal government budgeted heavily for research and development of energy technology for cars and electricity — part of a concerted national effort to decrease dependence on foreign oil. At its peak in 1979, federal and private investment in energy technology totaled more than $10 billion per year, according to National Science Foundation figures.

But interest in renewable energy flagged as oil prices started to decline and as long lines at the pump became as distant a memory as disco. Ronald Reagan sounded the death knell, slashing federal funding by more than 50 percent. George Bush restored some cash to the R&D coffers, but he then cut it back again, a push-pull funding pattern that President Clinton also followed.

“There is no sector of the power generation business that has been more badly ripsawed than the renewable energy market,” says Karl Rábago, chairman of the National Green Power Board, which certifies green power companies with the “green-e” seal. While utilities enjoyed monopoly status and stable government subsidies for decades, alternative technologies failed to get the same favorable treatment. Green power companies also faced a mishmash of incentive programs at both the state and federal levels that varied wildly over time. This unpredictability made renewable energy too risky, so investors stayed away despite technological advances and the promise of lower costs. Advances in solar power ended up on calculators but not in many utility portfolios; windmill manufacturers figured out how to stop killing the hundreds of birds that flew into propellers, but few creditors ponied up enough cash to buy the blustery acres needed to make wind power dominant.

“These technologies have paybacks on investment that take 10 or 20 years,” says Rábago. “So if the market demand is not steady, there will be no capital moving to those facilities.” Potential start-up companies and investors tend to fear the economic threat posed by a sudden influx of fresh “brown” supply. Because it’s cheaper to develop, say, a natural gas plant than a hydroelectric dam, “no one is going to send new investment [into green power] because the traditional market might smother it,” says Rábago.

One benefit of electricity deregulation was supposed to be that individual consumers would be able to choose their supplier. Proponents of green power welcomed the introduction of more choice, and expected environmentally conscious consumers would readily switch to green power. Increased demand would then drive supply. If the big utilities didn’t get involved, smaller players — the Go-Greens and TenderLands of the world — would pick up the slack.

That’s what almost happened. Green Mountain Energy followed the plan, building a national brand by buying green power already available and investing in new renewable energy generators that cleaned up the overall mix and helped the company offer stable prices. TenderLand lined up funding to build a wind power plant in Palm Springs, Calif. And Go Green planned to do the same thing: “My real dream [was] to make it a cooperative,” Kohl says. “I think people would really get into the idea of owning their own power.”

So who is responsible for the current carnage? Most experts and green power providers hang culpability on the power wholesalers. After purchasing facilities from PG&E and other large utilities — which sold their plants under deregulation — Enron and Calpine took advantage of rising demand and sent prices spiraling upward. By charging “unfair and unjust prices for the energy,” says Ken Keddington, TenderLand’s chief financial officer, the wholesalers essentially killed off their own customers.

But wholesalers don’t deserve all the blame, says Amory Lovins, CEO of Rocky Mountain Institute, an energy policy nonprofit. They’re simply charging what the market will bear, taking advantage of a poorly designed deregulation scheme in which excess power is sold to the highest bidder. With prices topping out at about $1.50 per kilowatt-hour, “what would you expect them to do?” Lovins asks. “Why sign long-term contracts when the ‘spot market’ keeps delivering ever-larger returns?”

Green power companies should have recognized the systemic problems earlier, he argues. “Those that didn’t buy a long-term, price-fixed contract were not being very smart,” he says. “They sold themselves short.”

The wholesalers also missed out on an opportunity, says Lovins. By cutting back investments in green options, as they did throughout the mid-’90s, they lost the opportunity “to sell a riskless product.” Wind-generated electricity costs, for example, rarely budge; they aren’t subject to Middle East politics or changes in regulation and federal funding. Lovins suggests that wholesalers could have capitalized on the stability of renewable energy by offering set-in-stone prices that would secure a steady, predictable revenue stream. Customers — ever fearful of rising rates — would have signed up in droves.

Despite what Lovins calls the “failure of commercial acumen on all sides,” California’s mistakes could teach the nation a lesson, says Kohl. Pointing fingers at the wholesalers isn’t enough. People need to think “big picture” and “stop caring only about what’s cheaper, right now,” says Kohl.

Ultimately, they need to recognize that California’s deregulation was not a complete failure. Green power took a giant step forward in visibility, says Berkeley’s Kammen. New companies sprung up and thousands of consumers supported them, aided in part by a deregulation-mandated credit of 1.5 cents per kilowatt-hour for consumers who switched to green power. Without the credit, Kammen and others argue, few would have bothered.

But the credit, which ended this year, was never coupled with a serious public service campaign. “People didn’t understand what deregulation was all about,” says Kohl. While “green energy was even cheaper than brown power at one point,” he says, the expected rush never materialized because the public didn’t know green power was even available. Nor, suggests Kohl, did people understand that renewable power is just as reliable as what’s offered through large utilities or that the costs would appear on the same utility bill as always. And without the necessary demand, supply never ramped up either.

Worst of all, the current electricity disaster in California is fueling a rush to build new plants — which could effectively short-circuit the green power movement. Utilities and investors must not overreact and build in haste, says Rábago. “The green power market will continue to grow if the band-aids aren’t stupid,” he says. “There are an awful lot of people talking about huge, central-station power plants. That will create such a glut of power that the premium differential for green power will be intolerable for customers. They would kill off the market for renewables.”

The death of small green companies combined with a rush to build would undermine “one of the primary hopes associated with electricity restructuring, the idea that people could choose to reduce the environmental impact of the electricity they consume,” says Bill Golove, a Lawrence Berkeley National Laboratories researcher who focuses on electricity restructuring. With too much traditional power available, cost would trump all other factors; the choice to go green would be too painful to bear.

The Postal Service’s Levinson agrees that reactions to today’s crisis will determine green power’s tomorrow. While some people will always place a high priority on environmental benefits — Levinson’s home, for example, runs on electricity from Green Mountain — most live and die by how high or low rates are. Government agencies are no different. The Postal Service, for all its talk of “social responsibility,” still bases contract awards primarily on price. So unless green power companies reappear and get the boost they need to compete, they’ll remain on the fringe forever.

“We’ve been talking to other green companies, but for now it’s still a matter of wait and see,” Levinson says. “It really is disappointing.

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Damien Cave is an associate editor at Rolling Stone and a contributing writer at Salon.

Power politics

California Democrats are trying to buy electricity to sell to state utilities, but Republicans and energy companies are crying foul.

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During his State of the State address last week, California Gov. Gray Davis said he did not want to point fingers or assign blame for the state’s ever-worsening electricity shortage.

But in virtually the next breath, Davis attacked “out-of-state energy companies” for “threatening to disrupt people’s lives and damage our economy,” placing the bulk of the blame for the crisis on non-Californians who also happen to be big boosters of the Republican Party and George W. Bush.

To say that Davis’ attack is the opening salvo in the 2004 presidential race may be a bit of a stretch. But Davis, who is often mentioned as a contender for the Democratic Party presidential nomination, has vigorously attacked energy suppliers, who gave almost $17 million to political candidates during the last election cycle, $11.5 million of which went to Republican candidates. The industry also gave eight times as much money to Bush as it did to Al Gore.

“It makes political sense for the governor to attack them,” said John Nelson, spokesman for Pacific Gas & Electric. But Nelson notes that the Federal Energy Regulatory Commission, controlled by Clinton appointees, has failed to enforce the Federal Power Act, opting instead to allow the markets to set the wholesale electricity price, and pushing California’s investor-owned utilities to the brink of bankruptcy.

California Democrats say the short-term solution is for the state itself to get into the power business. Since suppliers are threatening to stop selling power to debt-saddled utilities, the state, with its stellar credit rating, may step in and buy the power itself. At the Capitol Tuesday, the state Assembly passed a bill that would effectively turn the state into a power distributor. Though the state’s 1996 deregulation bill prohibited utilities from signing long-term contracts for electricity with other producers, the bill passed by the Assembly Tuesday would let the state itself buy power in long-term contracts.

The bill’s language allows the state to pay up to $55 per megawatt-hour for electricity, nearly twice the price of the average pre-deregulation wholesale price. Since the wholesale market was deregulated, that price has shot as high as $300 per megawatt-hour on the open market.

“We’d have been $4 billion ahead if we had signed some of those contracts that were on the table back in August,” said Assemblyman Rod Wright, D-Los Angeles, chairman of the Assembly Committee on Energy Costs and Availability.

The deal, essentially, allows the state to do what it never allowed the state-regulated utilities to do: enter into long-term contracts to lock in energy rates.

Meanwhile state Attorney General Bill Lockyer, a Democrat, has launched an investigation into the manufacturing and sale of electricity, to see “whether there have been illegal or unfair practices associated with it,” said Lockyer spokeswoman Sandra Michioku.

Among the charges being investigated by Lockyer’s office are claims that electricity producers have made money on both ends of the electricity deregulation process. Michioku confirmed that the state was investigating claims that producers sold off natural gas that was supposed to be allocated for the production of electricity, thereby artificially creating an electricity shortage.

“There are a lot of questions, and among the things we’re looking at is natural gas,” she said. Consumer advocates, such as Doug Heller of the Foundation for Taxpayer and Consumer Rights, have also hinted at price-gouging practices by energy producers.

“In a year, we’ve seen wholesale prices jump to more than 10 times what they were,” Heller said. “Something just isn’t right.”

But producers deny the charges. Southern Energy Co. spokesman Chuck Griffin said: “We are running every watt of capacity we have at these plants during these crisis times. We’re burning all the gas we can burn to make electricity.”

Joe Bob Perkins, president of the Houston-based Reliant Energy Wholesale Group, told the Houston Chronicle: “[Davis] has accused us of holding back capacity. He says it over and over again. You say it long enough and people may begin to believe you, and I’m concerned about that. We have done everything we possibly can to run those plants and make power available.”

But PG&E’s Nelson says he has heard conflicting reports about the process known in the trade as “bumping.” “There was a story about that in the paper this weekend. Some of the producers said no way they would ever do that, and others said yeah, of course they do it, so I’m not sure what to think.”

Regardless, Nelson said at least part of the problem is on the demand side. He cites figures that say demand for energy has increased by as much as 6 percent per year over the last five years. At the same time, California has not built a new power plant in 20 years. “Six percent may sound small, but when supply is flat, it makes a big difference.” Other studies, however, show smaller increases in demand.

He said the problem has also been exacerbated by increased demand in the Pacific Northwest. As the region continues its meteoric growth, he said, energy sources California relied upon in the past have dried up.

Davis spokesman Steve Maviglio says the governor has secured a commitment from some producers to sell energy to California at $55 per megawatt-hour, but there’s carping about whether that’s a fair price.

Consumer advocates say it’s too high. Heller says it’s twice what the state should pay. But most of the major energy suppliers say the $55 per megawatt-hour figure is too low. Some producers want contracts as long as 17 years, while others, such as Southern Energy Co., have said they would not be able to sell at $55.

Among those who are said to have agreed to the deal is California-based Calpine. But skeptics in the Legislature say that is because the company wants to build a power plant and needs the blessing of state officials.

“It’s just a way to endear themselves to [Davis] so they can get their pet project,” said one Republican legislator who requested anonymity. “The fact is that this price is still being negotiated, and Lockyer’s investigation is part of the negotiation.”

In effect, the Republican charged, the attorney general’s office is keeping the heat on power suppliers while the governor negotiates a rate. Both Democrats, of course, dismiss that claim.

“That’s just way too cynical,” Michioku said. “We’re taking our responsibility to investigate, and it has nothing to do with the negotiations. These allegations of collusion were raised when energy prices started skyrocketing.”

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Anthony York is Salon's Washington correspondent.

Turn off the Internet!

Is the global computer network to blame for the current electricity crisis? Lackeys of the power industry want us to think so.

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Turn off the Internet!

Every day, at 4 p.m, half the lights go out at Intel’s Folsom, Calif., offices.

It’s part of the company’s voluntary emergency conservation efforts in response to the state’s energy crisis. What better emblem of California’s bizarre energy pickle: 6,000 workers at the chip giant that creates the silicon that powers the very engines of the new economy — the future! — working in the dark.

“It still leaves enough light to work by. It’s not dangerous,” says Richard Hall, the company’s director of corporate government affairs. “It’s one specific measure that we’ve been taking every workday in the last four weeks.”

The Folsom office turns out 50 percent of the lights during the peak electricity-consumption time of 4 to 7 p.m., when overall demand is at its highest as people get home and turn on the TV, the stove, the dishwasher and the microwave.

Last week, Hall went to Washington to meet with federal regulators and staffers from the office of Sen. Dianne Feinstein, D-Calif., to explain why Intel workers are laboring over their monitors under mood lighting, and to find out what the government plans to do to assuage California’s electricity woes. After helping drive California’s high-tech and dot-com boom, Intel is now in the weird position of lobbying the government to help it turn the lights back on.

“Some people say, ‘You guys helped create the Internet economy, and the Internet economy runs on electricity.’ Yes, guilty as charged. We did, and it does,” says Hall. “The issue is really the Internet economy.”

Can California’s power grid handle the Net? “The electric system in California was not originally designed for a high-tech industry. As the high-tech industry has grown, so has the level of technology that we have to provide, or try to provide,” says Scott Blakey, a spokesman for PG&E, one of the state’s largest utilities. “You’ve taken what essentially is a 19th century system of poles and wires, and using late-20th century technology you’ve tried to meet the needs of what is going to be a 21st century industry.”

Some analysts, bolstered by a study declaring that the Internet is responsible for fully 8 percent of all national electricity consumption, assert that the Net itself is responsible for spiking demand to unprecedented heights. The new economy, it seems, is an energy hog. Never mind that other researchers have debunked the 8 percent figure as absurdly inflated. President-elect George W. Bush has already touted it in discussing his energy policy. What better reason could there be to allow oil drilling and coal mining in virgin wildernesses than the need to keep the Net running?

That’s right. There’s a convenient new villain in the California energy crisis, and it’s not the utility companies that can’t meet demand, crying bankruptcy and begging for a bailout by the government. It’s not the greedy oligopoly of power generators cashing in on the state’s failed, half-baked deregulation scheme. It’s not even the environmentalists, whose green-friendly regulations make building a power plant in California about as easy as trying to raise venture capital for an e-tailer in 2001. Nor is it the conservation-clueless customers who can’t even be bothered to turn off the lights when they leave a room.

No, it’s the Internet. In addition to taking the heat for everything from kiddie porn to the gentrification of urban neighborhoods, the Net is now at fault for overloading our national power infrastructure.

But wait a minute. Wasn’t the Net supposed to conserve energy by making businesses run more efficiently? Don’t computers use relatively little energy compared with refrigerators and cars and washing machines? How much power does it really take to run the global computer network?

Mark Mills and Peter Huber are the Chicken Littles of the debate over electricity and the Internet. The two conservative analysts publish the Digital Power Report and have testified about the increased demand for electricity occasioned by the Net everywhere from the pages of Forbes and the Wall Street Journal to a congressional regulatory subcommittee. A year and a half ago, Mills published a report for the Greening Earth Society, a nonprofit backed by coal interests, asserting that by 1998 the Internet was already consuming about 8 percent of U.S. electricity and that the entire “digital economy” accounted for fully 13 percent. Moreover, he forecasted that in the next 20 years the Internet — “directly and indirectly” — would come to consume 30 to 50 percent of all electricity in the country.

“It shouldn’t be surprising that we’re using a fair amount of electricity to keep the Internet economy hot,” says Mills. “This virtuous economic circle is very powerful, and everyone wants to act like it’s free, like there’s no energy cost to it, like living without food.” Mills and Huber want to highlight the dependence of so-called new-economy companies, and all the wealth they inspire, on the oldest of the old economy — power companies. “The digital economy,” they wrote in the Wall Street Journal, “which most everyone loves, is completely dependent on the big central power plant, which most everyone hates.”

So while Silicon Valley lobbyists busied themselves arguing for more H-1B visas, did they forget to worry about what keeps the machines running for all those workers to type away on? “They got very focused on bringing in enough labor and talent, and they forgot about power,” says Mills. “Twenty years ago, it was inconvenient to have a brownout. It’s a killer in the silicon economy. It’s blue-screen death.”

That specter of the blue screen of death has been more than enough to encourage Silicon Valley CEOs such as Intel’s Craig Barrett to start throwing around their political weight to advocate for the construction of new power plants — and fast. And who can blame them when they’ve been reduced to shutting off lights and bracing for rolling blackouts?

But increasing demand for electricity is only one factor in California’s current energy woes — and the overall increase has not been especially dramatic for a time of economic boom. According to the California Energy Commission, electricity demand in California grew at a rate of about 2 percent a year in the late ’90s — the height of the Net boom. It’s not a staggering percentage. In the go-go late ’80s, between 1987 and 1990, U.S. electricity consumption grew 3.3 percent a year, according to the Electric Power Annual, a publication of the Energy Information Administration.

California’s power problems are rooted in a mix of factors, most importantly a flawed deregulation scheme that gave little incentive for power generators to build more capacity in the short term to meet demand. As part of the 1998 deregulation, utility companies sold off much of their power-generating capacity to a handful of wholesalers. But once they enjoyed the market power to raise prices, wholesalers haven’t been in a rush to raise capacity. They’ve taken a wait-and-see attitude about building more power plants — a position that’s somewhat understandable in a state like California, where stringent environmental regulations mean the construction of a new plant can take an average of seven years, compared with three years in a more permissive state like Texas. And with utility companies unable to pass on wholesalers’ rapidly rising prices to customers without government permission, their road to bankruptcy has become painfully obvious.

“The whole California electricity crisis is not a crisis related to rapid increase in demand. Demand growth has not been out of the ordinary,” says Jonathan Koomey, a scientist and group leader of the End-Use Forecasting Group at Lawrence Berkeley National Laboratories. Although no one could have predicted how quickly California’s recession would turn from bust to boom, moving from a power surplus to increased demand, a 2 percent annual increase is hardly a never-before-seen consumption surge.

So what’s the explanation for Mills and Huber’s 8 percent figure? “If the claims that they’re making are true, you’d expect to see vast increases in electricity demand and you are not,” says Koomey. Scientists at Lawrence Berkeley have refuted Mills and Huber’s assertions point by point, based on their own research. They put the figure for all office, telecommunications and networking equipment at 3 percent of the total electricity used in the United States.

It comes down to a war of watts. For example, Mills and Huber argue that after factoring in all the networking and telecommunications equipment required on the back end, like routers and servers, a PC and its peripherals connected to the Net use 1,000 watts of power, which is as much the electricity used by 10 100-watt light bulbs. But Koomey and his group think that figure is wildly exaggerated. Koomey says that a PC consumes only 50 to 200 watts and that factoring in the back-end equipment adds only about 15 watts to the PC’s electricity consumption.

Mills and Huber also assert that a Palm Pilot that is plugged into the Net consumes as much energy as a refrigerator — a nice sound bite that has been widely quoted. But is it true? Koomey says he sent an e-mail to Mills requesting documentation: “I am trying to reproduce your estimate about the electricity use of a Palm Pilot equaling that of a refrigerator, because of the network electricity use. Is there a place where this calculation is documented?” Koomey says he repeated this collegial request eight times over two months, but got no response.

In a rebuttal to Mills’ testimony (“Kyoto and the Internet: The Energy Implications of the Digital Economy”) to the House Subcommittee on National Economic Growth, Natural Resources, and Regulatory Affairs, Koomey wrote, “In the past year and a half, I have been witness to an extraordinary event: An analysis based on demonstrably incorrect data and flawed logic has achieved the status of conventional wisdom.”

Mills defends his 8 percent figure by saying that it’s only an estimate: “The total may be somewhere between 5 percent and 6 percent. Our number is an estimate. No one knows for sure. We know it’s not zero. That’s why the whole debate is sort of silly in a way, if you’re focusing on a few percentage points.”

But Koomey contends that a difference of a few percentage points does matter. “This whole set of bogus numbers has gotten so much play because it is convenient for certain interests to make it sound like growth has gone up at a ferocious pace,” he says. “The people who want to build power plants would like everyone to think that there is huge demand growth so we can reduce environmental regulations. I think that we have to build power plants, but I also think that people are trying to create a sense of urgency to make it easier for them to argue for their interests.”

John “Skip” Laitner of the Environmental Protection Agency’s Office of Atmospheric Programs sees Mills and Huber’s argument as a scare tactic. “I began to think that this is an effort to push people to think: ‘We’re going to lose the new economy if we don’t have all kinds of power to make sure the Internet is maintained.’ There are some areas of the country like Seattle or California or Austin, Texas, in which there are some hot spots — an unexpected surge in data hotels or server farms — and other economic activity that may be causing a temporary mismatch between the planning and the actual load that is required, but it’s wrong to translate that into a nationwide trend,” Laitner says.

All the quibbling over wattage would be little more than a scientific tempest in a teapot if it didn’t have such far-reaching implications for how to solve the power crisis in California. As Huber wrote in Forbes, “Somewhere in America, a lump of coal is burned every time a book is ordered online.” And, in fact, it’s the coal industry that’s licking its chops as politicians buy into the fantasy that the Internet will soon gobble up half the power-generating capacity in the United States.

Mills did the original research for his report “The Internet Begins With Coal” as a scientific advisor for a group operating under the name Greening Earth Society, a nonprofit affiliated with the Western Fuels Association that also promotes the idea that there’s no such thing as global warming. The society’s fossil fuels Web site spins a noble parable, with no apparent irony, about how God above put coal on earth for the greater glory of our humble species: “Fossil fuels are one of the Creator’s greatest gifts to humankind. For eons, coal, oil and natural gas lay untapped and ready for exploitation by humans to create an environment on earth conducive to the spectacular success of life on earth.”

The Internet needs more coal, so put on your miner’s hat and start digging?

A close look at the numbers, say some researchers, suggests that the opposite is true — that the Net may actually be helping to drive down overall energy demand. Joseph Romm, a former assistant secretary at the U.S. Department of Energy, notes that from 1992 to 1996 total energy demand grew at about 2.4 percent a year in the U.S., during a period when the gross domestic product was growing at a rate of 3.2 percent a year. But from 1996 to 2000, when the Net boom was really taking off, the gross domestic product grew at an average of 4 percent a year while energy demand grew at a rate of only 1 percent. In other words, the growth in energy demand was far below the growth in the overall economy; as the economy grew hotter and hotter the rate of increase in the demand for energy actually slowed.

Electricity consumption numbers demonstrate a similar slowdown, says Romm, who is now executive director of the Center for Energy and Climate Solutions. “The pre-Internet era saw electricity demand rise 2.9 percent per year,” Romm wrote in an article for the center’s Web site. “Since 1996, electricity demand has risen only 2.2 percent per year. And this has all occurred in spite of higher GDP growth since 1995, hotter summers (1998 was the hottest summer in four decades in terms of cooling-degree days; 1999 was the second hottest summer), and less support by utilities for demand-side management, all of which would normally lead to higher growth in electricity demand.”

“It’s pretty clear that something big is happening in the way that the U.S. economy uses energy,” says Romm. “I don’t think that anyone can look at the energy data and conclude otherwise … We’re getting a lot of growth from the Internet economy — software, hardware and services. Those sectors of the economy are not very energy intensive, no matter what Mark Mills or anybody says. They’re just not.”

Some advocates of the Net assert that it will actually result in overall energy savings by making businesses in sectors like transportation more efficient. But it’s hard to see how whatever savings the Net may be putting in the pockets of certain industries will get the lights back on at Intel in Folsom, Calif.

Then again, blaming the Internet for the power crisis won’t solve Intel’s problems either.

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Oh Deer!

Can deer-antler velvet increase your sex drive?

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Oh Deer!

The zen-chic Tea Garden, a West Hollywood herbal emporium with a sister store in Santa Monica, Calif., might have been created by a meditative Martha Stewart. It is an oasis of warm light, open spaces and wood tones. Herbs, of course, are king there, their boxes and dark bottles arranged in an almost sanctified order, giving the store off Beverly Boulevard the air of a mystical and elegant apothecary.

It was in the Tea Garden that I discovered deer antler velvet. Coveted, revered and used in Asia for more than 2,000 years, it remains the second most important ingredient in Asian medicine after ginseng. Its active ingredient, pantocrine, can be “of considerable help both to those who are potent but sexually exhausted, and to those who are impotent and wish they could be sexually exhausted,” according to pharmacologist Stephen Fulder.

I’m exhausted, but it’s not from too much sex. The approach of 40, hardcore parenthood, multiple workloads, urban living and long-term serial monogamy have done little to improve my overall energy level, let alone make me feel particularly sexual (or remotely sexually exhausted). In this no-zone of post-boomer weariness I am not alone. Deer velvet interests me and a growing number of strained, health-conscious, alternative-minded consumers. But its reputation as an aphrodisiac, which wrongly puts it in the same queerly zoological and folkloric pen as rhino horn, only touches on its vast therapeutic value.

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A 2,000-year-old scroll discovered in a tomb in Hunan Province, China, listed over 50 different diseases that could be treated with deer velvet. The 16th century “Materia Medica,” which was and remains the standard text of Chinese herbalists, lists deer velvet as one of the most highly prized natural medicinal substances. It’s used today by Asian, Russian and a growing body of Western medical practitioners to treat degenerative diseases, strengthen muscles and bones, promote strength and stamina, stimulate the immune system, ward off common colds and flus, increase the production and circulation of blood and promote cell growth and the healing of ulcers and wounds.

According to Thomas Brown of Gold Mountain Trading Company, velvet is known to “increase the natural flow of chi (vital energy) through the kidney, thus helping to regulate the function of the adrenal cortex and restore a person’s natural vitality.” It has also long been used to restore sexual vitality and balance.

All this could be thrown into the reservoir of folklore and hyperbole were it not for the accumulating body of clinical evidence from ongoing scientific research. One of the first people to apply traditional research techniques to the analysis of deer velvet was Dr. Brekhman, a Russian research pharmacologist and physiologist. Brekhman, who coined the term “adaptogen,” originated a new science of ecological pharmacology by investigating the complex formulas found in the ancient Chinese pharmacopoeia. In the 1960s he was the first clinical researcher to substantiate Chinese claims associated with ginseng, and in so doing introduced the twisted, anthropoid root to the Western world. His work was used in programs for Russian cosmonauts to combat difficulties associated with space flight and later by the Russian Olympic team. It included preliminary studies into the efficacy of deer velvet.

In New Zealand, where Asian doctors, traders and deer farmers have been historically united in an unusual marriage of interests, breakthroughs in research have taken off.

These breakthroughs are being spearheaded by Dr. Jimmie Suttie, a noted expert in antler physiology. He says: “We believe that the
healing function of deer velvet could be important for future human
benefits. Given that deer antler velvet is the only mammalian organ that
regenerates, this healing function may not be surprising.”

Male deer grow and shed their antlers every year. This tremendous feat, which has no equal in the animal kingdom, is equivalent to humans growing, say, a mini exoskeleton through the tops of our heads every year. In full maturity, a stag’s antlers can double its height, rising above the animal in great crenelations and calcified branches like the complex rigging of a mainsail. Used to fight for dominance and secure a female harem, antlers are so lethal that once entangled in battle, stags are sometimes unable to disengage and die of starvation trapped in the bony crowns of their enemy.

The swift growth rate of antlers — sometimes over an inch per day — has had intense scientific scrutiny. Growing antlers consist of warm, spongy cartilage covered in soft fur — hence the word “velvet.” The copious blood flow into this velvet, which is specific to the development of deer antlers and is present during the final forceful burst of calcification, is rich in nutrients, amino acids, protein collagen and a panoply of essential minerals including calcium, magnesium, zinc and iron. It also contains small amounts of male and female hormones, natural steroids and a recently discovered “Insulin-like Growth Factor-1″ or IGF-1. It is this velvet, at its peak nutritional and medicinal value, that is harvested for use by health practitioners.

A note on animal welfare during the harvest: People in the deer-velvet industry emphasize that antler removal does not harm deer and is common practice due to the danger antlers present. It is done in accordance with a code of practice supported by New Zealand’s Animal Welfare Advisory Committee and performed in consultation with veterinarians, animal behavior specialists and other animal welfare organizations. Shortly after antler removal, deer are released to their herds and display natural behavior in their prairies. The antlers grow back the following year. Monica Emerich of the New Zealand Game Industry describes their New Zealand habitat as expansive prairies where deer graze on rye grass, clover and herbs. “New Zealand,” she adds, “set up the world’s first free-range deer farms in 1970 with no artificial feed additives, hormones or growth promoters used.”

Dr. Suttie has been heading the deer-velvet research team in New Zealand for more than 10 years. It was Suttie who discovered IGF-1 and whose studies have confirmed the growth-promoting, anti-inflammatory and immuno-potentiating properties of velvet. Suttie’s collaborators in Korea have also substantiated claims that velvet boosts stamina, reduces the negative effects of stress and may operate to enhance the activity of anti-cancer drugs (AIDs and velvet are also being studied). The Chinese have developed treatments for fracture repair, hepatitis and peptic-ulcer treatment with velvet, and will soon focus their attention on osteoporosis. In his understated manner, Suttie says, “I explain to people that velvet has three functions: normalizing body functions, maintaining normal functions, and at higher doses, boosting performance. Our work concerns the safety, efficacy and active ingredients in deer velvet as it impacts on human health and well-being. Velvet has outstanding market potential in these areas.”

Given velvet’s vast curative potential, Suttie is dismayed by any reference to its aphrodisiac properties, but additional research in Russia has revealed low levels of sex hormones in deer velvet, including testosterone and a Lutinizing hormone (LH) that help regulate the activity and vitality of the sex organs. Implications are not gender-specific; findings suggest that velvet might be a safer, less invasive, nontoxic alternative to hormonal replacement therapy (HRT). In Russia pantocrine is officially recommended for problems associated with menopause and menstruation. According to Alison Davidson, whose informative book “Velvet Antler: Nature’s Superior Tonic” is perhaps the most comprehensive overview on the subject, “Women taking velvet have reported diminished symptoms of pre-menstrual syndrome, even to the point where periods pass by almost unnoticed. They have also reported increased sexual interest and a sense of being in touch with deeper reserves of vital energy.”

It is these “deeper reserves of vital energy” as they relate to increased sexual energy that have reinforced the aphrodisiac reputation of deer velvet, and clearly fueled growing interest in the West. Gold Mountain’s Brown qualifies the common usage of the word “aphrodisiac” as a sexual stimulant as somewhat incorrect. “‘Aphrodisiac’ means an agent that builds up the vital energy,” he says. “In herbology, ‘aphrodisiac’ can imply a libido increase, but it really is more properly defined as an agent that promotes the sexual function of men and women, including the reproductive function. There is nothing wrong with this, as it is the basis of life, and natural medicines have been treating sexual dysfunction for millennia. ‘Aphrodisiac’ is not a bad word; it is a technical term.”

When pressed on the aphrodisiac issue, Suttie replied, “Whether the aphrodisiac effect is folklore, as a scientist, I cannot say as I have not measured it and know of no studies which have,” which leads one to wonder if research has yet to turn its clinical eye in this direction, and if it’s only a matter of time before it does. Be that as it may, it is impossible to ignore deer velvet’s 2,000-year-old legacy as a sexual tonic, and the millions who use, or have used it, for this purpose. Davidson’s book cites Dr. Shi Zhi Chou, a specialist in men’s sexual problems, whose book “The Most Effective Prescriptions for Impotence” includes approximately 300 formulas; antler velvet is listed in almost every one of them. Chinese medical history abounds with cases where sexual imbalance was successfully treated with deer velvet. In Russia, velvet has now replaced ginseng as a common treatment for sex problems.

Says Brown, whose Velvagra product is marketed as a male tonic, “Velvet not only increases sexual desire and capacity, but reduces tension, anxiety and stress, all of which affect sexual performance. It lowers cholesterol levels and normalizes blood pressure, physical causes which can lead to erectile dysfunction.”

The connection between anxiety, stress and erectile dysfunction is echoed by many others, including Dr. Rougier, a French doctor and scientific consultant who developed an herbal product for male sexuality called Tigra. Acording to an international study conducted by Rougier and his associates, approximately eight out of 10 men occasionally experience loss of desire or sexual “failure.” Of this 80 percent, 60 to 75 percent are not linked to illness, but rather to a general state of diminished health and well-being. His study also showed that most men are embarrassed to talk about sexual problems — a fact that often exacerbates the problem.

Tigra, which does not include deer velvet but features a number of herbs traditionally associated with libido increase, has 1.5 million users in Europe and was recently launched in America at K-Mart retail stores. When I spoke with Rougier’s press contact in New York to find out why Tigra was being distributed in K-Marts and not in health food stores, I was offered this qualified personal opinion: “Most guys don’t go to health food stores. But they do go to K-Mart, where they can buy this type of product along with other things without asking for, or talking about, well, you know …” In other words, most men would rather buy a sexual vitality product that is nonchalantly thrown in a shopping basket with the Budweiser, the lawn furniture and the electronics equipment. They might not have clinical erectile dysfunction, but they sure wouldn’t mind a boost. Viagra has opened the doors to this vast playing field. “Ah yes,” says Rougier, “Viagra has been very, very good for us.”

The market is crowded with other sex tonics, including smart drinks and health cocktails with herbal ingredients that have a somewhat folksy past. (An anecdote in this regard: Epimedium, a common herb used as a sexual stimulant, was allegedly first discovered by a Chinese goat herder who noticed that his male goats immediately sought out female mates after eating leaves from a particular bush. The goat herder tried the leaves himself and basically ended up doing the same thing, presumably not with female goats. The literal translation of the word “epimedium” is “horny goat weed.” )

Health Freedom Resources in Florida markets two gender-specific herbal sex tonics packaged in the kitschy exploding volcano motif that has become, along with rainbows and dramatic chakras, the New Age hallmark of direct-marketed health supplements. Their male tonic is described as a “high octane fuel” (Rougier uses an elaborate three-part metaphor involving motors, ignitions and superchargers to describe his product); its developer, Dr. Schulze, elaborates: “Over the years I have had many men in my clinic who were scheduled for prostate surgery and were thrilled when they could call their doctor and tell them to shove the drill up another person’s penis.”

There is more than erectile dysfunction or prostate surgery in question here. As people seek natural ways to enhance physical training and endurance, sexual and athletic performance have become perfect bedfellows. “Growth hormone products are trendy right now,” says Brown. “It appears that the growth hormone complex in velvet is superior to the recombinant [genetically engineered] single GH products on the market, which have side effects … Velvet is a natural dietary supplement, unlike andro [the steroid androstenedione]. It is said that too much andro will shrink the testicles as the body ceases to supply natural testosterone. There is absolutely no danger of this with velvet, even in large doses.”

Doctor Maoshing Ni, a 38th-generation doctor of Chinese medicine and the founder of the Tao of Wellness Center and the Yo San University of Traditional Chinese Medicine in Santa Monica, has seen an “explosion of interest and demand” for natural performance enhancement products with deer antler velvet and herbs. “The same medical doctors who rejected this five years ago are now embracing it,” he says. “In fact, our patient population increase consists mostly of MDs.” According to Ni and other sources, herbs and deer velvet combinations have long been used by the Chinese and Russian Olympic teams. “They give them an edge without creating a steroid imbalance,” says Ni. America is now on their heels with a plethora of herbal sports enhancements products. (Even the Tea Garden sells a “Sports Herbal System” that promises “extra boost,” “maximum potency,” “deep replenishment” and “peak vitality + peak adaptability.”)

These are not to be confused with vitamin and mineral supplements. “Big difference,” explains Dr. Ni. “Like the difference between Mother Nature and man-made. Herbs are really like vegetables, except they are much more intense in properties and nutritive values, whereas vitamins are isolates, molecules compounded together into a pill. The human body is biologically programmed to assimilate best with ‘whole’ food as opposed to ‘isolates.’”

Ni attributes the explosive interest in natural performance enhancements to a number of things: deep-seated grass-roots discontent with the current traditional medical establishment; an aging boomer population open to alternative healing; and scary side effects associated with Viagra. There is also the steady East-meets-West current sweeping ancient Asian practices across the Pacific Rim to California, where they take root and flourish before taking flight, like so many spores, to other distant lands. One of the more prominent examples of this is the fleet of medical graduates who’ve studied Asian medicine at traditional universities, and the graduates from universities of Chinese medicine that have cropped up all over America in the last five years. Now working in the field, these health practitioners are more likely to view the body systemically rather than symptomatically. (Chinese medicine views the body as a system that is treated as a whole, rather than as an ensemble of component parts whose symptoms are treated separately. Historically, Chinese doctors were only paid when their patients were well.)

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My own experience with deer antler velvet was promising but inconclusive. I brought some deer velvet elixir back to France after a three-month absence from my husband. It is hard to know if it was the deer velvet, or the absence, that made both our hearts grow fonder. I was aware, however, of a steady swell of increased energy that would have been squelched by jet lag under normal circumstances. My husband, on the other hand, walked around every morning looking down at his erection and asking, “Is this deer velvet, or am I just happy to see you?” For its many reputed happy benefits we are anxiously awaiting our next bottle of deer velvet.

My other friends, all of them similar tail-end boomers with kids, heavy workloads and long-term spousal units, had more conclusive results. One of them is a serious skeptic of “alternative” products who has become a deer-velvet devotee. “I feel juicier!” she exclaimed as she swerved through traffic on our way to the Tea Garden. “I feel an overall sensual charge everywhere, down to the tips of my armhair!”

Another girlfriend described her feelings differently. “I have felt more sexual and I really notice it,” she said. “Not in a ‘Get the fire hoses out!’ kind of way, but in a subtle, ‘Oh! Hmmm, uh huh …’ kind of way.”

We humans have brought entire species to the brink of extinction in our quest for products that give us that “Oh! Hmmm, uh huh …” kind of feeling. The natural and animal kingdom, in all its abundant and flamboyant manifestations, has always provided raw material for us. (Lest we forget, the sexy, sultry smell of musk comes from the musk pod, a preputial gland found in a pouch in the abdomen of a male musk deer.) As modern science continues its trek through the wilderness of ancient medicine, deer velvet may one day end up a common household item. “Before long it will probably be as thoroughly studied and written about as ginseng, echinacea and St. John’s Wort,” says Davidson. “Science is catching up, albeit painstakingly, with Chinese medicine, which does not need to isolate properties in order to know its precise effect on the body. I guess a 5,000-year-old discipline has had plenty of time to understand these things intimately.”

Unlike the traditional Chinese, traditional Western doctors are more likely to associate deer antler velvet with a stag’s head perched in taxidermic rigor mortis on the wall of a hunting lodge than to any potentially beneficial medical application. My local generalist, who’d never heard of the substance, looked at me with a slight smirk when I spoke of it. “Deer antler velvet will only be accepted by the medical community after it’s gone through years of rigorous testing,” he said, “including double-blind tests like all other traditional pharmaceutical products on the market.”

But as our conversation progressed, he began to wax poetic about the prolific generosity of Mother Nature. “Well over half the pharmaceutical products we use came from nature before being synthetically reproduced — from plants, fruits, animals. Medical researchers, particularly those involved in cancer research, continue to look everywhere for natural sources with curative properties: in Amazonian forests, in Pacific coral reefs. Some of these substances are bizarre. A highly effective antibiotic was recently created using properties found on toad skin. And penicillin, after all, was first discovered on bread mold. So deer antler velvet — well, who knows?”

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Debra Ollivier, a contributor to Mothers Who Think: Tales of Real Life Parenting, is the author of "Entre Nous: A Woman's Guide to Finding Her Inner French Girl." Her work has appeared in numerous publications including Harper's, Playboy, Le Monde and Les Inrockuptibles.

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