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Fwd: [hreg] CA power system problems

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  • Ryan McMullan
    Here is an interesting response/addendum to James Ferrill s laundry list of California s energy woes from a the coordinator of our Center for the Study of
    Message 1 of 1 , Jan 25, 2001
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      Here is an interesting response/addendum to James Ferrill's
      laundry list of California's energy woes from a the coordinator of our
      Center for the Study of Science and Technology, Thomas Williams.


      >From: "Thomas R. Williams" <trw@...>
      >To: "Ryan McMullan" <mcmullan@...>, <EREAD@...>
      >Subject: Re: Fwd: [hreg] CA power system problems
      >Date: Thu, 25 Jan 2001 11:30:55 -0600
      >Ryan: The list you forwarded is a useful one, but some added
      >comment may be appropriate. (My apologies to all if this is redundant based
      >on that conversation.)
      >For example, the connection between low rainfall and reduced generating
      >capacity in the Northwest is not clear. The issue here is that
      >hydroelectric dams in the Northwest released far more than "normal" amounts
      >of water to power generators to meet California's increased demands during
      >the past summer. It is not just that rainfall is below normal, it is an
      >accumulated effect of increased power demand for several years plus
      >decreased rainfall this year that has resulted in critically low water
      >levels behind dams on Northwest rivers. If the water is not behind the dam,
      >it cannot be used for hydroelectic generation to operate the rated capacity
      >of equipment below the dam. This is not a one time deficit that could be
      >made up by "normal" rainfall this year, and if power demand continues at
      >this rate, it may never be made up.
      >A related point not mentioned in this laundry list of problems is that the
      >growth of power demand in the surrounding states has sharply reduced their
      >"available" capacity for export of power to California. Residents in Oregon,
      >Washington, and Idaho, many of whom left California because of the growing
      >problems of life there, are now complaining that California has not done
      >enough to help itself in the period since deregulation. Ironically, it is
      >their movement to other states from California that helped make the problem
      >more severe this year.
      >A second factor not mentioned in this note is that even if someone had
      >decided, at the moment of deregulation, that new generating capacity would
      >eventually be required, the time required to acquire an acceptable site, get
      >all required permits, and design and construct a plant is probably at least
      >six or seven years for a major facility. Even if sites could be found in
      >"someone's backyard," such new capacity would likely have not been on line
      >this year in any event. But NIMBY reigns in California so it is, by its very
      >nature, hostile to such speculative investments. It is not a place where
      >anyone in their right mind would have taken on such an investment five years
      >ago at the time of deregulation. And the way things go in California, it is
      >unlikely that without substantial concessions of some sort to shorten this
      >long process, particularly the siting and permitting processes, new
      >generating capacity will be on stream anytime soon.
      >A third factor not mentioned in this list is that even when the supply is
      >adequate in Southern California and a surplus of power is available there,
      >the transmission capability between Southern and Northern California has
      >bottlenecks that limit the amount of power that can be transferred north in
      >a crisis. Thus available capacity in Southern Calfornia cannot be used fully
      >to stave off rolling-blackouts in Northern California if other states cannot
      >export enough to meet the excess Northern California demand. The cause of
      >this transmission bottleneck is that the lines simply have not been built.
      >The reasons for the lack of construction are unclear, and are probably a
      >complicated mix of environmental permitting problems, low incentives for
      >investment, and the usual North-South antipathies that exist in all such
      >activities in California, most notably in water supply from north to south.
      >As a native Southern Californian who is glad to be gone from there, I find
      >myself in sympathy with James Farrell's views.
      >Tom Williams.
      >----- Original Message -----
      >From: "Ryan McMullan" <mcmullan@...>
      >To: <EREAD@...>
      >Sent: Thursday, January 25, 2001 8:36 AM
      >Subject: Fwd: [hreg] CA power system problems
      > > Here is that list of factors that worked to make the electrical
      > > problems for California.
      > >
      > > Ryan
      > >
      > > >To: hreg@...
      > > >From: James Ferrill <jferrill@...>
      > > >Mailing-List: list hreg@egroups.com; contact hreg-owner@egroups.com
      > > >Date: Sat, 13 Jan 2001 13:57:49 -0600
      > > >Subject: [hreg] CA power system problems
      > > >
      > > >I've been fascinated by the recent events in California regarding the
      > > >energy crisis there. After reading all the news items about this subject,
      > > >I've compiled a list of significant events that is interesting:
      > > >
      > >
      > >---------------------------------------------------------------------------
      > > >
      > > >Factors that reduced generation:
      > > >
      > > > No new plants have been built in 12 years, eliminating the normal
      > > >surplus energy cushion.
      > > > CA energy deregulation caused utilities to put off new construction
      > > >until deregulated market was created.
      > > > CA deregulation law and tough environmental/site restrictions gave
      > > >utilities no incentive to do otherwise.
      > > > Hydroelectric plants in Pacific Northwest cut output because
      > > >was half of normal levels.
      > > > Plants were shut down in the fall for maintenance work.
      > > > After running at full output all summer, plants shut down because
      > > >had met their yearly pollution limit.
      > > >
      > > >Factors that increased demand:
      > > >
      > > > Summer temperatures were some of the hottest on record.
      > > > Winter weather was very harsh this year.
      > > > Energy usage has grown in the affected area a great deal.
      > > >
      > > >Factors that ran up prices:
      > > >
      > > > Short supply as outlined above.
      > > > Increased demand due to growth, harsh winter, etc.
      > > > Run-up in natural gas prices.
      > > > Deregulation moved energy industry to a market-driven model, with
      > > >the associated volatility.
      > > > Speculation of price fixing and artificially produced scarcity
      > > > (unproven).
      > > >
      > > >Artificial conditions imposed by govt that made the situation worse:
      > > >
      > > > Pollution restrictions/limits caused plants to shut down no matter
      > > >the situation was.
      > > > CA deregulation law forbids long-term contracts, exposing utilities
      > > >any market fluctuation, no matter how high.
      > > > CA deregulation law forced utilities to sell off generating
      > > > CA deregulation law capped prices and prevented utilities from
      > > >along market prices to energy consumers.
      > > > Overall effect of state interference in energy market is causing
      > > >utility owners to go bankrupt.
      > > >
      > >
      > >---------------------------------------------------------------------------
      > > >
      > > >In almost all the news articles I've read, about half of the article
      > > >sensationalizes the situation by speculating about "how utility companies
      > > >have artificially driven up prices", but then offering no proof or saying
      > > >that "they'll release their findings soon". It's pretty obvious from the
      > > >list of factors that even if utilities did anything illegal, it would
      > > >hardly change the situation.
      > > >
      > > >In my opinion, the people of California and the Pacific Northwest wanted
      > > >deregulated market for energy and they got it. They wanted strict
      > > >environmental restrictions on plant operation and siting and they got it.
      > > >They wanted to be assured of cheap energy, so the state government passed
      > > >regulations to force the issue by bypassing the normal market controls,
      > > >they got it. But it's common knowledge that everything they wanted can be
      > > >done, but you have to pay for it. You cannot force an industry of any
      > > >into a market-based model and then pass all sorts of regulations that
      > > >the whole thing unworkable. Now that the bill is coming due and utilities
      > > >are going bankrupt, everyone is panicking and pointing fingers, hoping
      > > >their lights don't go out.
      > > >
      > > >I've already heard a lot of politicians come out and take a stand by
      > > >stating that "we need to dedicate funds to alternative energy research
      > > >blah, blah, blah" as a reaction to this. This is BS because the
      > > >has already been developed. It's also noteworthy that California probably
      > > >has the largest concentration of AE powered houses due to the $3/watt
      > > >rebate that has been in effect for a while now, and that hasn't saved
      > > >either.
      > > >
      > > >It will be interesting to see what CA does about this. I think they're
      > > >going to have to make some concessions on some issues. Like first
      > > >down all the businesses that pushed for deregulation when a stage 3
      > > >emergency is declared. Maybe a few dozen rolling blackouts will focus
      > > >attention. You would think that they would have set up some way to
      > > >people about energy conservation by now. Manditory house energy audits?
      > > >
      > > >James Ferrill
      > > >Rant of the Day, Inc. :-)
      > >
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