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To: KeepItSimple who wrote (55990)	1/10/2001 2:42:49 AM
From: portage	Read Replies (1) \| Respond to of 436258

KeepItS - Apparently there is a surplus from the LA area that could go north where it's needed, but lack of sufficient infrastructure to carry the juice creates a bottleneck, and there's a long build out time to add to it. It's even worse between states I imagine, and is less efficient over greater distances. Unexpected demand pop overcame supply, and the bidding system under dereg gives the highest peak crunch price to all suppliers, not just the one who got that bid. Who on earth dreamed that one up ? One might guess that some clever power providers slipped it by some tired, unaware, $35,000 or whatever per year state legislators.

To: KeepItSimple who wrote (55990)	1/10/2001 8:36:18 AM
From: Jack T. Pearson	Read Replies (1) \| Respond to of 436258

Transmission losses are significant. One problem with deregulation is that they only deregulated the price the power companies pay for electricity, not the price the consumers pay. Another problem is that California depends heavily on natural gas to generate power. Natural gas prices have quadrupled in the past year and are likely to move much higher as it takes about two years to find and exploit new supplies. It is all about supply and demand. Supply has been constrained by not building new power plants in California for the past ten years. Once demand exceeds supply, power generators can name their price.

To: KeepItSimple who wrote (55990)	1/10/2001 10:06:14 AM
From: yard_man	Read Replies (1) \| Respond to 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.