Fwd: [hreg] CA power system problems
- 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.
>----- Original Message -----
>From: "Ryan McMullan" <mcmullan@...>
>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 email@example.com; contact firstname.lastname@example.org
> > >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. :-)