Ten, RE: "more evidence"
Are you working in the dark?
Regards, Amy J
Here's some quotes from an article on PGE's website, "Energy Earnings Skyrocket".
Power suppliers cashing in on soaring prices
David Lazarus, Chronicle Staff Writer Friday, December 15, 2000
sfgate.com
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While Californians suffer through one of the state's worst energy crises, major power companies are pocketing billions of dollars in profits as they exploit chronic shortages and soaring electricity rates.
This week, California utilities were paying more than $1,000 per megawatt for power that sold for just $45 at this time a year ago.
At the same time, share prices of companies that own power plants feeding juice to California's thirsty power market have surged on Wall Street, in some cases almost doubling in value since the summer.
"These companies are walking away with billions and billions of dollars," said Mindy Spatt, a spokeswoman for the Utility Reform Network in San Francisco. "It doesn't reflect their cost of making electricity. It reflects their greed."
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ESTIMATED $10 BILLION PROFIT
Estimates vary for the amount of profits earned in California by leading power companies since electricity prices skyrocketed in June. According to some sources, the eight largest companies have made a combined $10 billion since then.
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The leading power generators for California include Reliant Energy, El Paso Energy Corp., Dynegy and Enron Corp., all of Houston; as well as Duke Energy Corp. of Charlotte, N.C.; AES Corp. of Arlington, Va.; Southern Co. of Atlanta; and Cal--pine Corp. of San Jose.
The companies could not be reached for comment yesterday.
Most of the plants within the state now run by these firms were previously owned by Pacific Gas and Electric Co. and Southern California Edison, which were forced to sell off their generation facilities as part of the 1996 deregulation of California's electricity market.
"We used to operate many of these plants, so we know how much it costs to run them," said Ron Low, a spokesman for PG&E. "The prices these guys are charging are completely unjustified."
PROFIT FORECASTS
An analysis in August by Energy Insight, a subscriber-only news service owned by the Financial Times, found that most power-plant operators were on track for huge profits this year as a result of California's power troubles.
Among the findings:
-- Southern Energy's 2,022-megawatt Pittsburg plant, purchased from PG&E in 1998, could exceed $106 million in profit by the end of the year. A year ago, the plant earned just $21.6 million.
-- Reliant Energy's 1,500-megawatt Ormond Beach facility near Oxnard, purchased from Edison in 1998, could post more than $90 million in profit this year, compared with $17.3 million a year ago.
-- Duke Energy's Morro Bay and Moss Landing plants, purchased from PG&E in 1997, could reap a combined $343 million in profit this year, compared with about $65 million last year.
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MANIPULATING PRICES
Some of the companies providing California with power are big enough to manipulate prices on the daily "spot" market, he noted. They can do this, Borenstein said, by withholding electricity until rising demand pushes prices higher.
While not technically illegal, such "gaming" of the power market is now being investigated by state and federal authorities.
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E-mail David Lazarus at dlazarus@sfchronicle.com. |
