Rolling blackouts in California tonight!!

Page 2 - Seeking answers? Join the AnandTech community: where nearly half-a-million members share solutions and discuss the latest tech.

Napalm381

Platinum Member
Oct 10, 1999
2,724
0
0
The Cato Institute had an interesting commentary on the situation today.


<< Skyrocketing wholesale electricity prices and the daily threat of brownouts and blackouts in California have cast a pall over the regulatory enterprise.

California Gov. Gray Davis, like most pundits and the press, blamed deregulation for the crisis in his recent &quot;State of the State&quot; address. He warned that the California meltdown is a harbinger of things to come, not only in national electricity markets but in industries throughout the economy if we continue our mad rush toward laissez faire.

But the California power crisis is not an example of what happens when businessmen are running important industries. It's a story of what happens when politicians try to manage competition and impose their vision of a market.

If &quot;deregulation&quot; means less - not more - political control over an industry, then the California electricity industry has not been &quot;deregulated.&quot;

First, the state forced the electricity companies to sell their power plants to independent investors and become power distributors.

Second, the state assumed total day-to-day control of the utilities' power grid to make sure they couldn't abuse their market power.

Third, the state required new owners of the divested power plants to sell their juice to a state-managed &quot;power pool.&quot; The price of that power is set by a daily spot market run by - you guessed it - the state. Electricity companies that wanted to compete for your business had to buy their electricity from this pool, and the price charged them was equal to the highest price received by any electricity generator in the daily state-managed spot market.

Fourth, regardless of what they pay for power in the wholesale market, no company can charge a consumer more than 6.5 cents per kilowatt hour. That price can't change until the company has paid off its share of the bailout the state gave the electricity companies in order to accept this new regulatory scheme.

Now, what kind of &quot;deregulation&quot; imposes rigid government dictates on how industries should organize themselves? What sort of deregulation keeps fixed prices on retail providers? What kind of &quot;deregulation&quot; requires retailers to buy power through a state-run central exchange? And what brand of &quot;deregulation&quot; forbids retailers from buying electricity more than one day ahead?

Real deregulation would have meant turning the old power companies loose to build what they want, charge what they want, and run the grid as they wished while simultaneously decriminalizing competition and removing barriers to market entry. State regulators, however, went in the opposite direction.

If this is the portrait of a free market, then it's a portrait painted by Salvador Dali, not Adam Smith.

But is this new regulatory regime the cause of the fivefold increase in California electricity costs? Hardly. While it did make things worse, the primary culprit is the high price of natural gas. Since November, the spot price of natural gas in Southern California has risen 600 percent over the 1998-99 average. And because 90 percent of the marginal cost of natural gas-fired electricity is fuel cost, the marginal cost of electricity would have to spike from 3 cents per kilowatt hour to above 15 cents per kilowatt hour to cover costs. That is what's happened at the wholesale level.

The bottom line: Because the state is so heavily reliant upon natural gas during periods of peak demand, Californians would be facing the same unpleasant combination of high electricity prices and blackouts even if the old regulatory rules were still in place.

The situation, however, was made worse by California's long-term hostility to new power plants. Since 1996, electricity demand in California grew by 12 percent while supply grew by 1 percent. Every time you turned around over the past two decades California state regulators were discouraging new construction, arguing that renewable energy would pick up the slack, that &quot;negawatts&quot; - activist jargon for subsidized energy conservation - was preferable to &quot;megawatts,&quot; that minimizing new air emissions was more important than generating new electricity, and in general facilitating the transformation of the NIMBY (&quot;Not-In-My-Back-Yard&quot forces into a unified BANANA army (&quot;Build-Absolutely-Nothing-Anywhere-Near-Anybody&quot.

Gov. Davis' vow to do whatever it takes to build new generating capacity in California is a belated acknowledgment that the Naderites have held the state hostage for too long. But his threats to seize control of power plants and throw company managers in jail guarantees that few private investors will risk entering the market.

Decontrolling retail prices might save the utilities from bankruptcy. But the trajectory of wholesale electricity prices is a function of the trajectory of wholesale natural gas prices. Building new capacity will help, but only a bit. This is one &quot;crisis&quot; that politicians are going to have to ride out.
>>

 

Aquaman

Lifer
Dec 17, 1999
25,054
13
0
California's 2 biggest power utilities get 60% of the power that British Columbia Canada exports. We (British Colimbians) were supposed to get a $125 energy rebate because this year they made 1 billion in revenue selling to other markets. Now that is in doubt because these 2 companies will be defering payment of over $300,000,000 to PowerEx (the BC power export company).

Cheers,
Aquaman
 

rahvin

Elite Member
Oct 10, 1999
8,475
1
0
<<I was informed today that if the California utilities that have been receiving all of Oregon/Washington's surplus power can't repay the debt, it gets paid for by those of us who live here somehow. I don't know details, but if that is the case, it is most definitely suck. >>

The taxpayers ALWAYS pay in the end. Repeat that to yourself many many times when you support public polices that you think don't effect you.

<<Unfortunately these companies will be kept afloat. The governor feels strongly about it (sigh ). If they were to go bankrupt, I think that would be great and really teach the extorting power suppliers a lesson. BofA would be hit also, but who cares?.>>

Repeat to yourself: &quot;The taxpayers will pay in the end&quot;. The power companies going out of business will only teach the taxpayers a lesson, no one else. The power distributers cannot be blamed for pursuing the maximum profit in a capitalisitc society. This is not a communistic country and they are entitled to pursue profit. Price fixing is illegal and if it has truely happened (which I don't believe it has) then the california power regulators or distributers could sue. The only lawsuits you will see as a result of this will be against the state of california.

Given time and the high market costs, powerplants would be constructed out of state, but I doubt Cali can afford to pay 30cents/kwh for the 5 years it will take to build offsite power generation facilities. Davies plan to buy power with state coffers is an attempt to coverup the true cost of power, it would solve nothing. California cannot repurchase out-of-state power generation facilities unless the new independent companies are willing to sell (they have no power of condemantion outside of the state). Apparently someone was so pissed they killed themselves driving a truck into your capital building.
 

ride525

Golden Member
Oct 14, 1999
1,379
0
0


<< Unfortunately these companies will be kept afloat. The governor feels strongly about it (sigh ). If they were to go bankrupt, I think that would be great and really teach the extorting power suppliers a lesson. BofA would be hit also, but who cares?. >>

Actually it is the two Utilities that are going bankrupt....not the power suppliers....the power suppliers are making TONS of money on this... Power suppliers like Calpine, Enron, Reliant Energy...
 

Riskhk

Senior member
Mar 4, 2000
469
0
0
hey why dont your shut the fsck up...if the tree huggers let the electric companies built a power plant we wont be in this situation
 

stonerdave

Golden Member
Jul 26, 2000
1,110
0
0
Yeah, ride525's's right. I saw them talking about the much, much larger profits these suppliers are making on nightline a while ago.

link
 

rahvin

Elite Member
Oct 10, 1999
8,475
1
0
<<Yeah, ride525's's right. I saw them talking about the much, much larger profits these suppliers are making on nightline a while ago.>>

And I'm guessing this new american attitude that making a profit is illegal has something to do with that statement eh? It's called supply and demand. Cali deregulated supply and not demand. Let the utilities charge market rates and I bet ya people start conserving power and stop protesting the construction of new power plants after they get those $1000 electrical bills.
 

Raspewtin

Diamond Member
Nov 16, 1999
3,634
0
0


<< And I'm guessing this new american attitude that making a profit is illegal has something to do with that statement eh? It's called supply and demand. Cali deregulated supply and not demand. Let the utilities charge market rates and I bet ya people start conserving power and stop protesting the construction of new power plants after they get those $1000 electrical bills. >>



This isn't a wonderful little free market at work. This is market manipulation. Power supplies in California could very easily be seized by the government sooner or later. The governor has threatened this. Then who's crying.



<< The power distributers cannot be blamed for pursuing the maximum profit in a capitalisitc society. >>



Wrong again. They can be blamed for limiting supply and manipulating the market, and price fixing.



<< Davies plan to buy power with state coffers is an attempt to coverup the true cost of power, it would solve nothing >>



Wrong (assuming I interpreted you English correctly). Please read about the Davis plan's with long-term contracts. How you got from long-term contracts to a coverup is beyond me.



<< The only lawsuits you will see as a result of this will be against the state of california. >>



To borrow a phrase from you, [repeat to yourself: &quot;I cannot read the future&quot;

Don't you think it's odd that California has not built power plants for a long time, has had undersupply for a long time, and magically, and purely randomly, that simultaneous with deregulation that shortages occur, peaking out right after the state of the state address? Think about it.


[edited] corrected errors pointed out to me.
 

ride525

Golden Member
Oct 14, 1999
1,379
0
0


<< true, but a lot of these power suppliers haven't been paid yet by these utilities. >>

Actually they have been paid.....many, many times what power cost a year ago.....The two Utilities in California have had to borrow over $10 BILLION (yep, not a misprint) to pay the difference in what they have to pay for power and what they can sell it for.

I think until yesterday's announcement by Southern Califiornia Edison (that there was a future power bill that they weren't going to be able to pay immediately) that the payments to the power suppliers were current.

 

Raspewtin

Diamond Member
Nov 16, 1999
3,634
0
0


<< I think until yesterday's announcement by Southern Califiornia Edison, that there was a future power bill that they weren't going to be able to pay immediately, that the payments to the power suppliers were current. >>



I didn't know this. Thanks for correcting me. I had assumed some of the debt was directly to suppliers, but I guess it's primarily to creditors.
 

Mill

Lifer
Oct 10, 1999
28,558
3
81
Dammit I said that I was staying away...but. Red HTF can you say that it was anymore the governor's fault than the legislature? What about the new Dem. Governor not doing sh!t about it until it was too late?


*Edit*

That will be the last damn thing I will say until I handle my own problems with life.

 

OS

Lifer
Oct 11, 1999
15,581
1
76


<< it was the damn Republican Governor that caused this mess. >>



Yeah, this is more or less true. My power engineering prof said the other day, something like &quot;pete wilson is sitting somewhere knowing how badly he fvcked up California's power.&quot;
 

OS

Lifer
Oct 11, 1999
15,581
1
76


<< What about the new Dem. Governor not doing sh!t about it until it was too late? >>



Didn't he get in when the damage was basically done and everything was on it's way down?
 

Mill

Lifer
Oct 10, 1999
28,558
3
81
Damn I am gonna make another post. LOL

Anyways, I don't see how the Governor can really have THAT much control. California must be one of those rare Governor Dictatorships. Wouldn't the legislature and the people have some say in the matter? Well I am not sure when the Dem. Governor was sworn in, but he has sat on his ass until things have gotten really bad. Just now he and the legislature are making any overtures at REALLY helping the situation. I don't think rolling blackouts are much help though. That is just my biased little outlook on the situation. Feel free to flame away.
 

charrison

Lifer
Oct 13, 1999
17,033
1
81
red,

How did the governor cause a natural gas shortage, which caused the prices of electricty to go up?
 

Aquaman

Lifer
Dec 17, 1999
25,054
13
0
Natural Gas is being burned to generate electricity......... thus a high demand for natural gas &amp; which causes the price of natural gas to raise. So it's a vicous cycle ....... you need more electricity but to get it you have to buy more natural gas to generate it and all the prices go up.

Cheers,
Aquaman
 

Aquaman

Lifer
Dec 17, 1999
25,054
13
0
Being Canadian I don't know but I was watching a show about the power shortage in California &amp; they said that when they deregulated the power utilities they did not take into consideration the economy would grow 3 times and the demand for power would also increase.

Cheers,
Aquaman
 

rahvin

Elite Member
Oct 10, 1999
8,475
1
0
<<This isn't a wonderful little free market at work. This is market manipulation. Power supplies in California could very easily be seized by the government sooner or later. The governor has threatened this. Then who's crying.>>

Who is going to seize it? Eh? California has no power of condemnation on any powerplant outside it's state, period. The federal government? The federal power of condemnation is RARELY used, and if they did use it, who do you think will pay the MARKET rate for the power plant they are seizing?

<<The power distributers cannot be blamed for pursuing the maximum profit in a capitalisitc society.
Wrong again. They can be blamed for limiting supply and manipulating the market, and price fixing.>>

Wrong again. Price fixing is illegal, if it has occured there is legal remedy. Frankly no one has launched a lawsuit yet so I would say that it is highly unlikely that it has occured.

<<Davies plan to buy power with state coffers is an attempt to coverup the true cost of power, it would solve nothing
Wrong (assuming I interpreted you English correctly). Please read about the Davis plan's with long-term contracts. How you got from long-term contracts to a coverup is beyond me.>>

Wrong, look at the contract. The state negotiates and buys the power, then the utillities pay no more than what they charge consumers. If the state can't negotiate a contract for the 7-9cents/kwh that the utility charges, the STATE will eat the difference. Davies is pulling a typical political stunt to hide the cost to the tax payers (I can't tell you how many times I've seen crap like this).

<<Don't you think it's odd that California has not built power plants for a long time, has had undersupply for a long time, and magically, and purely randomly, that simultaneous with deregulation that shortages occur, peaking out right after the state of the state address? Think about it.>>

No I don't, with a typical growth rate in California exceeding 8% and no power plant construction in 10+ years I would say that the evidence speaks for itself. Over the past 20 years excess power supplies in California have been decreasing. The federal DOE guidlines are for an excess supply of 25% above peak rates to buffer any excess demand or disasters. 20 years ago california had excess of 25%, by neglecting to construct new power plants that excess has decreased to less than 8% up till last year. With the extremely hot summer in both northern and southern cali, power excess fell below 5% last summer. Because of this emergency power situation a couple of the utilities took powerplants offline during the low usage time of year (read winter) to perform ROUTINE maintence so the power plants DON'T shut down during the next summer for emergency maitenance. Their actions are COMPLETELY justified and have been confirmed by the indepenent regulators as necessary to avoid a disaster during the summer.

Frankly conspiricy theories DON'T fly. Deregulation of supply side during the WORST power shortage in Cali history is the reason for the current crisis.

<<Hey I have a great idea asswipe, why don't we build a Nuclear Plant in your backyard. That way when an earthguake hits only your worthless ass will be Radiated. On second thought, Radiation isn't particular and I'm sure most of Irvine isn't populated with Limbaughism spewing morons like you.>>

Personally I wouldn't care, for one, nuclear power plants are earthquake proof. I know how safe they are and in fact given the choice between nuclear and any fossil fuel plant I would prefer to have nuclear.
 

MuffD

Diamond Member
May 31, 2000
6,027
0
0
Dude, with myself being in San Diego I heard it on the news today.
This would really suck!! Then I couldn't get on to...Anandtech=p
 

rahvin

Elite Member
Oct 10, 1999
8,475
1
0
Latest news from CNN:

&quot;The governor made no mention of making utilities pay for the power, which could cost taxpayers tens of millions of dollars over the next few days.

Davis called on the California Legislature to authorize a longer-term plan to buy power and provide it to the cash-strapped utilities.

If such legislation isn't adopted, the governor said, several power suppliers have threatened to call in their debts on California's two largest utilities, Southern California Edison and Pacific Gas and Electric Co., which could force them into bankruptcy.

The two utilities have seen wholesale power prices skyrocket in the aftermath of a 1996 deregulation law that bars them from passing the costs on to consumers. That leaves them billions of dollars in debt and without the credit to keep buying power on the spot market.&quot;

Can we say Taxpayers getting the shaft. He's buying power and giving it to the power companies. State picks up the whole tab people.
 
sale-70-410-exam    | Exam-200-125-pdf    | we-sale-70-410-exam    | hot-sale-70-410-exam    | Latest-exam-700-603-Dumps    | Dumps-98-363-exams-date    | Certs-200-125-date    | Dumps-300-075-exams-date    | hot-sale-book-C8010-726-book    | Hot-Sale-200-310-Exam    | Exam-Description-200-310-dumps?    | hot-sale-book-200-125-book    | Latest-Updated-300-209-Exam    | Dumps-210-260-exams-date    | Download-200-125-Exam-PDF    | Exam-Description-300-101-dumps    | Certs-300-101-date    | Hot-Sale-300-075-Exam    | Latest-exam-200-125-Dumps    | Exam-Description-200-125-dumps    | Latest-Updated-300-075-Exam    | hot-sale-book-210-260-book    | Dumps-200-901-exams-date    | Certs-200-901-date    | Latest-exam-1Z0-062-Dumps    | Hot-Sale-1Z0-062-Exam    | Certs-CSSLP-date    | 100%-Pass-70-383-Exams    | Latest-JN0-360-real-exam-questions    | 100%-Pass-4A0-100-Real-Exam-Questions    | Dumps-300-135-exams-date    | Passed-200-105-Tech-Exams    | Latest-Updated-200-310-Exam    | Download-300-070-Exam-PDF    | Hot-Sale-JN0-360-Exam    | 100%-Pass-JN0-360-Exams    | 100%-Pass-JN0-360-Real-Exam-Questions    | Dumps-JN0-360-exams-date    | Exam-Description-1Z0-876-dumps    | Latest-exam-1Z0-876-Dumps    | Dumps-HPE0-Y53-exams-date    | 2017-Latest-HPE0-Y53-Exam    | 100%-Pass-HPE0-Y53-Real-Exam-Questions    | Pass-4A0-100-Exam    | Latest-4A0-100-Questions    | Dumps-98-365-exams-date    | 2017-Latest-98-365-Exam    | 100%-Pass-VCS-254-Exams    | 2017-Latest-VCS-273-Exam    | Dumps-200-355-exams-date    | 2017-Latest-300-320-Exam    | Pass-300-101-Exam    | 100%-Pass-300-115-Exams    |
http://www.portvapes.co.uk/    | http://www.portvapes.co.uk/    |