Nearly 1 million Californians may find themselves without power this week as a result of pre-emptive blackouts imposed by electric utilities Pacific Gas and Electric and Southern California Edison in an attempt to mitigate wildfire risk. But neither denying power to consumers whenever it is dry and windy nor throwing more money at the problem, which appears to be the state legislature’s preferred solution, represent satisfactory long-term solutions. What is really needed is less government interference in the energy and housing markets.
...Let us start with forest and wildland management. Over the years, California has shifted more of its focus and resources from mundane, but effective, preventative measures such as controlled burns, fuel breaks and forest thinning to more reactive, yet heroic, fire suppression (i.e., actually putting down fires once they have started). This has been encouraged by environmental interests who prefer “natural,” untamed growth, though it has brought catastrophic consequences. As the Little Hoover Commission noted in a February 2018 report, this policy has led to dangerous amounts of overgrowth, which has not only provided more kindling for fires, but also less fire-resistant forests, as greater competition for resources among trees makes them more susceptible to drought and beetle infestations (and leads to more dead trees).
Another big factor is the state-protected monopoly status conferred on the “big three” regional utilities: PG&E, Edison and SDG&E. By shielding these companies from competition while dictating “acceptable” prices, profit levels, energy sources and other business practices, California has reduced consumer choice and drastically diminished the incentives to keep prices low while making prudent investments in innovation and safety. In a free energy market, there would likely be a greater number of smaller energy companies, just as there was before collusion between “utilities” and state governments led to protectionism and severe over-regulation, and companies would compete for customers based on price, service quality, and (especially given recent history) safety records.
One of the main reasons we have seen an increase in the destructiveness of wildfires is that more people have been moving to riskier areas. The state and local governments have encouraged this through policies that increase the cost of housing and drive people to cheaper exurban and rural areas. High development fees, restrictive zoning ordinances, lengthy and litigious planning and environmental review processes, prevailing (union) wage laws for construction, rent control and “affordable housing” mandates that make building homes less profitable and less attractive, and unnecessary building standards and environmental regulations (such as the solar roof mandate that will add $10,000 to $20,000 to the cost of a new home starting next year) all serve to suppress the supply of housing and drive up costs significantly. This has pushed many people out of city centers into more fire-prone areas in search of cheaper housing.
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