On Fri, Feb 15, 2002 at 01:26:06AM +0000, Steven Johnson wrote:
>
> Just a follow up note to bring everybody up to date. Since last summer, a
> few material facts presented themselves:
>
> 1. California had plenty of capacity.
>
Untrue.
Rough calculations made over figures from California Energy Commission
show that California's actual generated power versus demand was between
7% and 8% over for the period 1990 to 2000. This is a slim margin. These
are averaged figures and don't account for periodic inconsistencies
(where generation may be only 1% or 2% over demand, triggering power
alerts). Further, these same figures show that California imported
between 16% and 19% of its power over this time frame. And none of this
takes into account offlined plants, similar possible increases in demand
in the areas from which California imports power, and lessening of
supply from those same areas.
Also, California's electricity demand has risen roughly in proportion to
its population over this period.
> 2. The capacity planning turned out to be an allocation problem.
>
See above and CEC's figures.
> 3. These allocation problems came about largely due to energy resellers
> like Enron manipulating the distribution of energy.
>
As above.
> 4. Because of the "hysteria" caused by allocation California
> over-engineered the solution. Now, quite literally California is giving
> away energy because California re-acquired too much energy and Californias
> cannot consume it fast enough.
>
> 5. So, now, Hakuna Matata, once again California has more capacity than
> they actually need for the near term and forseeable future.
>
Can't speak to this. However, by 1999, a dozen or so more power plants
were under construction in California, which would likely be online by
now.
The facts remain. In 1996, "deregulation" legislation was passed in
California (Pete Wilson, governor). As a result of this legislation,
California utilities divested themselves of generating capacity.
Consumer rates were also capped at high levels. However, part of the
legislation also created "market price clearing", where the last bidder
(usually the highest) set the price for all bidders for electricity on a
given round of bidding. It is also a fact that no significant sources of
generating power were brought online during the 90's, primarily due to
intricate and mostly environmentalist-friendly regulations. Yet
California's population grew by 16%. It is axiomatic that you cannot fix
prices at the demand point without attendant problems at the supply
point. California (because of the crisis) was forced to buy power on the
[inflated] spot market rather than securing long term (and cheaper)
rates. It is also true that dry conditions in much of where California
secured its "outside" power from caused supply problems on their own.
The "deregulation" legislation was a massively bad step in the
administration of California's electrical resources. At the very least,
you don't sell your generation capacity without garnering long-term low
electricity rates in return. This was left out of the legislation
entirely. And consumer price controls did exactly what one would expect:
force government to subsidize a supposedly "deregulated" industry.
Part of your contention appears to be that Enron and others like them
caused all this shortage business. Investigations were called for in
California at the time, and to my knowledge, none turned up any
misconduct on the part of power generators and wholesalers. I rather
imagine we would have heard about it if they were guilty of anything
significant. And I think the figures alone speak to the fact that the
energy crisis was predictable, regardless of anything Enron and others
did.
Paul
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