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Pastimes : The California Energy Crisis - Information & Forum -- Ignore unavailable to you. Want to Upgrade?

To: Daniel G. DeBusschere who wrote (787)	8/1/2001 10:26:03 PM
From: Zeuspaul	Read Replies (1) \| Respond to of 1715

That's your unregulated government in action fella. It happened.... It happened but not the way you remember. The state stepped in after the utilities ran out of dollars. Prices were out of control before the state started purchasing power. Other states have had a favorable response to deregulated utilities For several years....so did California. Economists and the Governor both agree that California deregulation was fatally flawed when the end user was isolated from the cost of supply. The Texas deregulation plan lowers and freezes end user prices just like the California plan did as do most deregulation plans. San Diego county and parts of Orange County were not isolated from the cost of supply. For years they were in a direct market situation. End users paid market price for the juice. Prices dropped and everyone was happy. With supply greater than demand there was no incentive for the power producers to increase capacity. That's the way the market works.....Econ 101. Then the supply demand curve shifted and the prices went through the roof. End users cut back on their use....many went out of business. That's the way markets work....Econ 101. Power costs had tripled for market juice and still the power producers did not respond by increasing supply.....Profits 101. Zeuspaul

To: Daniel G. DeBusschere who wrote (787)	8/2/2001 10:54:01 AM
From: portage	Read Replies (1) \| Respond to of 1715

In addition to Zeuspaul's comments, I would add that if you're going to continue to ignore the evidence of manipulation by the players and see no negligence by FERC, there's not much point in continuing this. As El Paso was holding back gas supply, other generators were shutting down plants, perhaps independently, but with the effect of exercising market power. Ten to fifteen thousand mw were off-line at the height of the gouging, an unprecedented number. While DavesM has said part of that may have been QFs shutdown due to non-payment, that's another byproduct of the dereg. and just argues further against it. Look at this chart of daily supply and demand in the link : caiso.com During the gougings the demand was only around 30-32,000 mw, and maximum supply was about 45,000 mw including imports. Today, as over the past several years, outages have averaged 3-5,000 mw per day, rarely ever exceeding 6-7,000. In January-May they quickly hit up to 15,000 as the system was gamed. That caused the "shortages" that led to extreme gouging before the price caps. At about the time they were holding the gun to Davis' head to sign long term contracts (he had no assurances price caps would be implemented at that time). It wasn't extreme demand. Now, on the very hottest days statewide, demand has reached around 40-42,000 mw, which is close to a genuine crunch. That's where the caps come into play, but we haven't had this situation except a few days in late June/early July when the heat was really on. We will not cede power over OUR grid to these manipulators. Additionally, we have the new stories coming out about conflicts of interest with advisors and commission heads. Here's two new ones, one a Wilson appointed CEC head, the other a Davis advisor: sfgate.com sfgate.com Just like Drill and Spill Cheney's secret energy panel, the foxes are guarding the hen house. But big energy seems to be quite satisfied with this situation -- after all, they're getting the best government money can buy. Except from Davis, who's confounding them, though he's been lax about checking for conflicts of interest with some of his advisors. Funny how the repubs downplay the Karl Rove stock holdings, while jumping all over Davis though. Politics as usual.

To: Daniel G. DeBusschere who wrote (787)	8/2/2001 11:36:22 AM
From: Sam	Read Replies (1) \| Respond to of 1715

Your analogy is wrong. <<If someone said "I will pay you anything for something you have in large quantity" what would be your response? First, you would double the price. Once you get this like taking candy from a baby, you double the price, then hey! this is easy, you double the price again. Since the buyer is not spending his personal money then who gives a shit about the price? That's your unregulated government in action fella.>> The more apt analogy is, if someone held a gun to your head and says, 'what will you pay me to drop this gun and not shoot you?' what would you pay? Davis had to go into long term contracts, as that was the only way to stabilize the price w/o help from Washington, which was obviously not forthcoming. You say "unregulated government" is the problem, others say "unregulated industry" is the problem, I say both can be problems, and to ascribe problemmatic status exclusively to one or the other is a little stupid. Actually, a lot stupid. We need both spheres of power--along with a vigilant media--to achieve some sort of societal balance of power. Obviously money is their common denominator, and to get these different groups to act as intelligent adversaries is difficult, but it is possible, especially if the court system is reasonably honest and voters reasonably informed. <<California was sitting on cash reserves of Billions of Dollars and Davis seized power and threw the check book at the generators and said "just write in the amount guys and deliver the juice". Now you and I have to pay for this stupidity.>> If the smoking guns on odd plant closings and pipeline withholding that we have heard about are as powerful as have been suggested, I would venture to guess that some of these long term contracts may be modified and reduced, somewhat like an agreement to pay a blackmailer or a hostage taker is not enforceable.