Lots of blame to go around. But throwing the onus on "the environmentalists" is the red herring that the big power boys always love to pull out of their trick bag. NIMBY's are the bigger problem, and the successful NIMBYs are usually well off, power sucking suburbanites - not real environmentalists, but those who occasionally hide behind that mantle. Flatsville's earlier article about Cisco opposing a new plant near its proposed office while the Sierra Club supports it was one example.
What I've been reading lately is that the reason that the supply-demand imbalance snuck up so quickly was that the uncertainty caused by the specter of the coming Deregulation system ITSELF caused the private sector to decide not to invest in new plants. Meanwhile, the power demand explosion partly came out of nowhere, as CA had a 30% surplus for years, then the dotcom and server farm phenomena burst forth suddenly. A more cynical read would have it that the power companies knew damn well what would happen (or why would they have paid 3-4 times what PGE expected to get when they sold their plants ?), and so decided to sit on their asses and not even try to build new plants until things hit the fan. Which still doesn't absolve California from developing a stupid system.
I also saw that typical winter demand is around 29,000 megawatts in CA, but we have supply for up to 45,000 mgw (I found it hard to believe the gap was this big when I heard it). Plants are normally down in the winter for maintenance, so you lose some of that. But in a recent week, there were 20 some plants down for scheduled maintenance, and another 20 or so down Unscheduled. Result - stage 3 again. The plant owners know it's not easy for outsiders to prove that the unscheduled downtime is not legitimate. Today again, demand is in the range of 28,000 mgw, and supply just a small bit above that, with more unplanned than planned out of service plants. Why is this continually happening ? Where are those missing 17,000 megawatts every day ?
Then there's the freaking lying power execs, who are worse than politicians. At the conference in the NW today, I heard on the radio that some walked out on one guy when they heard it said that there was plenty of power, but Enron said it wouldn't supply it because the price didn't suit them. They withheld it - they didn't sell it somewhere else for a better price. They're gouging, pure and simple - this wouldn't be happening if it were a publicly owned system:
sfgate.com
Scoffing at a warning that price caps would distort
the market, Crisson said: "In my view, a distortion in
this market would be an improvement."
But executives of the generating facilities, including
Houston's Enron and Reliant Energy Wholesale
Group, San Jose's Calpine Corp. and the Williams
Companies of Tulsa, Okla., adamantly disagreed.
All said their costs were rising due to natural gas
shortages, increased demand and state delays in
approving new power plants. <<YEP, PASS THE BUCK, GOUGERS>>
Feinstein resorted to a combination of veiled threats
and pleas to generators, reminding them as
California's senior senator: "I'm going to be around
here for six years, I'm going to be on this
committee, and I'm going to watch this situation."
"Gentlemen," she said, "when spot power at 3 a.m.
in the morning is 500 times higher than it would be
normally, that to me . . . is price gouging."
Then there's the PGE execs potentially inside trading, knowing what was coming last summer as they transferred their utility assets to the mothership:
sfgate.com
Thing is, this summer is where the real problem will occur. We actually don't have a defacto full price cap on the utility bills right now, because natural gas prices are not capped, and winter bills are hitting hard. People are conserving. Retail natural gas usage will tail off this summer, and be diverted to generate electricity for air conditioning. Economists in this article below are spooked, and I agree that we'll need short term higer retail electrical rates -- but it should be two or three tiered with baselines, to encourage conservation and fair usage.:
sfgate.com
As for Wilson:
latimes.com
"It was not ideology that persuaded us to go to deregulation," said George Dunn, Wilson's
deputy chief of staff at the time, now a lobbyist. "It was an assessment of what was going on."
After declaring the system "fragmented, outdated, arcane and unjustifiably complex," the PUC
voted in December 1995 to open the state's electricity industry to competition.
The commission's order resembled an agreement that Dunn had brokered three months earlier,
largely behind closed doors, with Southern California Edison, its biggest industrial customers and
an association of independent power producers. All parties pledged to support legislation that
would create an independent power market.
The parties also agreed that the utilities could pass on an estimated $28 billion they spent
investing in nuclear and alternative energy.
Consumer activists argued that many of those investments were the result of bad decisions by
the utilities and should be absorbed by shareholders. But consumers were largely shut out of the
negotiations.
The deal "was tantamount to the tablets being brought down the mountain by [Edison chief]
John Bryson," said Michael Shames, executive director of the Utility Consumers' Action Network.
"The governor [Wilson] . . . wanted to be elected president . . . wanted to make a big splash that
would get him attention and also help him raise money." |
