New 'energy crisis' looming for state.

How easy it is to forget about problems when we are not currently experiencing the pain that they cause. This is why it's important to study history. If we don't remember the problems and don't learn from the mistakes of the past, we cannot avoid the problems and the pain in the future.

In the summer of 2000, not long after concerns about a possible Y2K crisis subsided, residents of California were warned about another possible crisis, an impending energy shortage. Perhaps because the Y2K crisis never happened, people assumed that the warnings about energy were without merit. Or maybe because they weren't feeling the pain, they just didn't care. Whatever the reason, nothing was done to prepare for the crisis that came the following winter.

Once the immediate crisis subsided, the state's leaders engaged in bickering and finger pointing over the cause of the crisis and who benefited. Following the recall of Davis, the energy crisis became a distant memory. The construction of new power plants and the search for alternative energy sources slowed. The results of market forces appeared to reduce the profit potential from these ventures, thus momentum was lost.

Last year, possibly fueled by fear resulting from the failed energy deregulation experiment of the 1990s, Assembly Speaker Fabian Nunez, D-Los Angeles introduced AB 2006, a bill sponsored by Southern California Edison that Gov. Schwarzenegger said would have added "layers of mandates and process that favor monopoly utilities." Governor Schwarzenegger vetoed the bill and offered a proposal for a more flexible, decentralized electricity system that he believes would be more open to innovation.

On January 28, 2005 several of the panelists at a forum warned that Southern California could face power shortages again this summer. Although they said that the state is trying to prevent the shortages by speeding up construction of near-finished power plants and keeping older ones running, they fell short of giving assurances.

Constructing the necessary infrastructure to supply the needed energy takes years of planning, large investments and significant capital. In the short term, businesses and residents in Southern California should be prepared to conserve energy. To solve the mid-term problem, we need to begin building the necessary infrastructure now. We must also secure the fuel needed to generate the power.

Astute business leaders from companies around the world are proposing the construction of infrastructure along California's coast to allow our state to import liquefied natural gas.

Ultimately, to assure economic growth while maintaining compliance with California's myriad of air quality regulations, the solution to the energy problem must include additions to the state's portfolio of alternative energy sources. One step in this direction is contained in SB 1 introduced on December 6, 2004 pushing incentives for solar energy.

I have chosen the following "job killer" bill to profile this month:

* SB 810: The California Department of Forestry and Fire Protection (CDF) approves Timber Harvest-Plans (THPs). Regional Water Boards have a statutory role in forwarding comments to the CDF.

The U.S. EPA determines whether forest practices constitute best management practices (BMPs). This bill requires the State Water Board to co-certify, along with the U.S. EPA, that California's forestry practices constitute best management practices and strengthens the role of the regional boards in the THP approval process. The bill adds yet another layer of costly regulatory approval.

Status: Passed Senate and Assembly, signed by Gov. Davis on 10/12/03.

Valley Legislators voting for bill: Senate: Alarcon, Scott, Kuehl; Assembly: Frommer, Koretz, Levine, Montanez, Pavley.

Valley Legislators voting against bill: Senate: Knight, Margett, McClintock;

Assembly: Richman, Strickland.

Gregory N. Lippe, CPA, is managing partner of the Woodland Hills-based CPA firm of Lippe, Hellie Hoffer & Allison LLP (LHHA) and a Director and Vice Chair of VICA..