"It is the biggest event since Three Mile Island," Wasserman said. "The media has not got one wit of the real story of what happened in California."

The author and radio commentator spoke to a packed hall at Macky Auditorium as part of University of Colorado at Boulder's Conference on World Affairs. The talk was titled "Our Fake Energy Crisis: What Really Happened in California."

"The phone's been ringing off the hook with people asking how to get off the utility grid," said moderator Robert Noun, the director of community and public affairs for Natural Renewable Energy Laboratory, the U.S. Department of Energy's laboratory for renewable energy and energy-efficiency research.

California residents endured four days of rolling blackouts in January and March and have faced staggering utility bills. Last week, the state Public Utilities Commission approved rate increases up to 46 percent for Pacific Gas & Electric and SoCal Edison, the state's largest and second largest utilities.

News media stories have blamed skyrocketing wholesale power prices and the state's 1996 deregulation law, AB 1890, which prohibits utilities from passing those increases to customers. Pacific Gas and Electric and Southern California Edison have said they lost more than $13 billion since June, and they're having difficulties buying power because of poor credit.

Last week California's largest utility, Pacific Gas and Electric, filed for bankruptcy.

But California's 1996 deregulation law was written by corporate lawyers of California's utility companies, Wasserman said.

As part of the law, California struck a deal with the state's three largest utilities, Pacific Gas and Electric, Southern California Edison and San Diego Gas & Electric, he said.

The state paid them billions of dollars to subsidize stranded costs — the money invested in nuclear plants that would make it impossible for those utilities to produce electricity cheaply enough to compete in a open market dominated by inexpensive natural gas, Wasserman said. He said that money was laundered to those utilities' parent companies.

"Going bankrupt the utility companies are still ahead," Wasserman said. "Bankruptcy means they're protected. You can't get at them. They've been morally and spiritually bankrupt for years; they might as well be financially bankrupt."

A referendum was put on the ballot to repeal deregulation, but the utilities spent $40 million to defeat the it and deregulation proceeded, he said.

"Anyone who suggests nuclear power as a solution to this problem belongs in a padded cell," Wasserman said.

Susan Glairon is the Camera's Business Writer.

Copyright 2001 The Daily Camera

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