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To: KeepItSimple who wrote (55990)	1/10/2001 10:06:14 AM
From: yard_man	Read Replies (1) of 436258

Transmission losses over great distances are only a couple percent at most with HV lines -- most losses are incurred right outside your house at the distribution transformer -- this isn't the problem If there is surplus generation capacity in a neighboring state -- then transmission capacity becomes important ... Electricty follows network flows not a contract path. The US is 3 "networks" -- a western interconnect, ERCOT (Texas) and the eastern interconnect. When PG&E or Edison buys power from some entity up north they are "purchasing" putting additional generation onto the network -- and the right to draw the same amount minus losses from where they are located --- Transmission capacity (i.e. flows physically allowed by the current network configuration) limit the amount that they can purchase ... Jack is right that the main problem has been a lack of investment in generating facilities in CA -- none in 10 yrs if what I've heard is correct. Scarcity then drives the price ... I think there has been a decided preference in many other areas of the US for investment in generating facilities to be preferred over investments in transmission because the tone of regulation was such that it looked like transmission investment -- the ability to use to return a profit -- would be diminished under any new regulatory regime. Again -- I think that is what is broken with the "deregulationb model" -- the idea gen can be competitive, but transmission remain regulated -- how can there be allocative efficiency between the two? The regeulation (deregulation = re-regulation) ignores some physical and economic realities -- product of economists that don't know what they are doing, IMO.

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