Ray, what really sucks here is that a lot of this problem boils down to FERC negligence and complicity. I've had the nagging question for awhile as to why California ceded so much of its former authority to FERC when they deregulated. I think I got part of the answer yesterday.
I was listening to Forum on KQED yesterday where they were discussing the latest developments, and both Severin Borenstein, who's a rather impartial expert, and one of the main consumer advocates Nettie Hoge (?) agreed that when CA passed the bill, they were relying on the "just and reasonable" cost enforcement mandate of FERC as the backup if things didn't go as well as planned in this experiment. Otherwise, they would never have passed such a plan so radically different than the regulated environment of that time. You see where that got us.
Now, I expect CA to go to court for the refunds -- for FERC to order the $8.9 billion Davis is asking for would be for them to admit negligence, incompetence, and/or complicity. That judge Wagner said, BEFORE the hearings were conducted, that the refund MIGHT amount to a billion or so, not $9 billion. Was that tipping their hand as to their pre-judgements, or what ? Ridiculous. Then, that's about what he recommended, adding in for insult that CA might owe more than that to cover unpaid bills ! F*cking joke. Yesterday, an article mentioned FERC said the overcharges might amount to $4 billion, 'cause they were going back only as far as October, 2000. Pick a dart and throw it, see where it lands.
All kinds of ads are running here (paid for power companies and Republicans I suspect) blasting Davis for signing expensive long term contracts. Well, as Borenstein said, a gun was to his head. If FERC had put caps in place before then, he could have signed much more favorable contracts. He got blasted for not signing them earlier, but the gouging hadn't started in earnest yet then, and it wasn't obvious at that time that FERC would not step in to stop it. It seems that the gouging and FERC's blind eye only really began in earnest after Bush got elected, surprise, surprise. Only the changing of the Senate put enough pressure on FERC to do something (which they then ridiculously took credit for "solving" the problem, something they fought tooth and nail a few weeks earlier).
I'm not sure what the best long term solution is, but I'm damn sure the worst outcome is to let Enron and the energy marketers control our ISO and grid. That's what Bush and co. definitely want. I'm sure they've got their eyes on PG&E's and SCE's grids and remaining generators too, especially PGE's in bankruptcy. PG&E seems to be siding with the marketers now, as it looks like their best chance to get paid back, participate in future gouging, and keep the regulators off their backs. If it takes state control to prevent such a bleak future, so be it. There are far fewer plant shutdowns now that the price caps have removed the incentive for gaming. |
