Typical right wing half-truths, conveniently packaged in short sentences and with lots of entertaining insults for consumption by the intended audience. Now its your turn to read 'all the way to the bottom'.
Not many facts here, so let's dig through the few that are presented:
"Between 1988 and 1998, California's electricity consumption increased by 15 percent. Meanwhile California's capacity to generate electricity shrank by five percent, even as the state hesitated to build new power lines to tap into neighboring states' power supplies."
Ah, how careful this passage, and the surrounding insults, were constructed. It quotes a figure of increase demand and decreased capacity for supply, and then insinuates that the reason for the dropoff in supply was wishful thinking and hope for alternative energy supplies. However, it ignores the following FACTS:
- Before deregulation, utility energy providers in the state were incentivized to keep prices stable, even when plants underwent regular maintenance. So, they would make sure that the plants rotated through maintenance so that energy supplies were stable. After deregulation, utility suppliers gamed the system by artifically restricting supply through phony 'maintenance outages'. At the height of the crisis in 2001, natural gas plant maintenance went from a five year average of 5-10% to 50%. Of the 47,000 megawatts of generating capacity, an average of 10,000-12,000 megawatts were offline for 'maintenance', far higher than the 5-10% average.
- Also on the supply side, the managing California Independent System Operator (ISO) also restricted supply by their bureaucratic refusal to deal with small energy suppliers (10 MW and less). By refusing to work with small energy sources, the ISO contributed to the restriction of the supply side.
- The California energy companies based their energy generating ability on conservation programs that they then cancelled. In 1995, the utilities (PG&E, Edison, SDG&E) claimed they did not need the capacity of renewable and cogeneration (1400Mw) and petitioned the FERC to cancel the auction.
- Also in 1995, the California Energy Commission (CEC) made a number of miscalculations as to energy supply. They overestimated the available energy from the Northwest and Southwest generators (2300Mw) when in reality these generators had very little excess and wanted cash up front.
- Another 2000Mw was forecast by the energy companies through energy efficiency programs that the companies did not follow through with (again, believing they did not 'need' them).
These supply side issues were the cause of the initial shortages, not 'hang gliding Californians' or wishful thinking about conservation. Gross mistakes by PG&E/Edison/SDG&E, along with supply manipulation by greedy energy companies, forced California to buy energy on the 'open' market.
More 'facts' from your dim article:
"Mideast oil jitters, cold weather, natural gas price spikes, and the plain unpredictable freedom of the free market caused wholesale electricity costs to rise and California utilities to go $12 billion into the red."
Wrong. The oil situation in Cal in the winter of 2000 was caused by a number of factors, none of which are mentioned above:
1) Deregulation allowed customers to decrease their storage capacity (so that large customers did not have to pay for this storage). So, capacity was underutilized.
2) El Paso sold its pipeline to an unregulated supplier to rid itself of its obligation to refund 35% of the the profits to customers in Nevada, Arizona, and New Mexico.
3) Finally, a mysterious explosion brought down the pipeline for weeks, after which it operated at only 85% (supposedly because it couldn't be fixed without shutting it down for a long period of time, which was a very fishy story).
This reduced storage and pipeline capacity sent the price of gas skyrocketing, and caused many of the losses at the utilities in the winter of 2000.
The other supply issues (in 2001) are well known. Enron and others blantantly manipulated supplies (and, thus, prices) for their own greedy gain. Enron has just received the death sentence, but its too late for the victims. Other companies will also be punished, but again it is little solace to a state that has been robbed of billions by these energy pirates.
So, what have we learned? One is to never trust a poorly regulated market, as there are those that will always try to manipulate and rob. Another is to have oversight that actually has the customer benefit in mind. A third is to elect a President who is not funded primarily by the same energy czars that are robbing the common folk.
So, get your facts straight, read up, and don't rely on flippant uninformed dribblers like O'Rourke. |
