Stephani Stephenson on thu 21 dec 00
The problems in California are complex. The situation involves both
electricity and natural gas .Here is the gist of it .
1.ELECTRICITY
The current rate crisis this year in San Diego area was brought on by
deregulation of the power industry. San Diego was one of the first to
try deregulation. Several other parts of the state are soon to follow,
and other states will be voting on the issue, so do pay attention to
what is happening here.
With deregulation, local and regional power companies have to purchase
power in the open market, though how open the market is questionable.
Some of the energy utilities, like SDGE, did not make very wise energy
purchasing decisions. They did not enter into long term contracts
which would have allowed them to purchase power at a set price for a
set amount of time, i.e they did not obtain a good price they could lock
into . Instead they were forced to basically do a lot of day trading,
and weren=92t able to get the cheap stuff.They are paying VERY dearly
for the megawatts. There are all kinds of accusations of price gouging
and collusion among the energy providers .
It is hard to know really what is going on, but last summer,
electricity rates here went from 4 cents per KWH to 29 cents per KWH ,
and rates have not come back down. Needless to say, EVERYONE feels the
bite of an increase like this. There has been temporary relief in the
form of a credit on our power bills, but the arrangement can be
rescinded and we may have to pay it all anyway. The utilities now
claim, because they cannot pass on the full cost of the increase to the
consumer that they too are on the brink of bankruptcy.
On a regional level, California energy needs outstrip the ability it has
to produce energy. California is a huge consumer of power. Therefore
it must purchase power from other sources, primarily the Pacific
Northwest and Canada, areas with good hydroelectric resources.
Hydroelectric is the cheapest form of power on the market.
Right now the northern regions do not have a great surplus , A,
because it is winter and they have increased demand, and B, they have
lower water levels in reservoirs, i.e. not as much potential turbine
turning at the dams. The Northwest periodically has dry seasons which
lower the reservoirs. They also have crucial issues with regard to the
salmon runs and water levels. Naturally, the region wants to take care
of its own energy needs first. Even if they have some surplus, they
are likely to sell electricity to states like California , again, AT A
PREMIUM PRICE. As someone who has lived in these areas most of my life,
cannot say I blame them.
2. NATURAL GAS.
They say natural gas prices are about to increase tenfold. They have
already increased 200%- 300% this year. They say this is a supply
problem , not a demand problem, i.e. the problem isn=92t that we are usin=
g
more than the pipes can deliver, the pipes just aren=92t full. .This is
also an area where the lawsuits are flying, claiming companies are
artificially controlling the supply to jack up the price. These claims
would appear to have merit.
Another part of the problem is that many power generating plants BURN
NATURAL GAS TO PRODUCE ELECTRICITY. So higher natural gas prices serve
to jack up the price of electricity and so on and so on.
Last year the gas bill at the studio was $400 dollars a month for our
kilns. This year it is $900 a month, and that is with a lighter firing
schedule. Obviously if it jumps to $ 9,000 a month we are out of
business, THIS MONTH, just like the brick company, there is just no way
around it.
3. POWER
There have not been any new power producing plants coming on line in
California, I think in the last 10 years, and there are no new ones
under construction. They say it takes 6-10 years to get a power plant
online from start to finish, largely due to siting, review and
regulations.
As you can see, it is complex. The entire western United States is on a
power grid and the interests of private enterprise ; state , local ,
federal governments; power companies and the individual are often
conflicting. The relationships will get testier. Deregulation , a new
experiment, seems to have accelerated a problem which was already in
motion. It would not seem that it is a good idea at this point.
I also think crises like this bring up the issue of energy
conservation on a large scale. We DO need to cut down on usage. Our
western United States IS periodically prone to drought, and resources
are NOT infinite, though I have heard the babble that they are. So
consumption and increasing population in energy dependent areas are
also part of the picture . Environmentally and economically , I think
most people want a balance and come down somewhere in the middle of
the =93drill it all, mine it all, cut it all, deregulate it all=94
viewpoint and the =93don=92t touch anything, clamp down on everything=94
viewpoint.
Having said that, I must disagree with those who posted saying that the
current problem is the result of environmentalists and environmentalism
.. I think this is a VERY simplistic and not quite accurate view of the
situation.
Stephani Stephenson
Leucadia CA
ferenc jakab on fri 22 dec 00
Having said that, I must disagree with those who posted saying that the
current problem is the result of environmentalists and environmentalism
... I think this is a VERY simplistic and not quite accurate view of the
situation.
Stephani Stephenson
Leucadia CA
Stephanie,
Thank you, very clear and lucid analysis. In the early 1980s, the State of
Victoria wanted to increase electricity capacity and investigated the
possibilities of alternative power. Their own studies showed that installing
the then relatively primitive solar technology on every domestic dwelling in
Melbourne (State capital) would supply more power at a cheaper cost than a
new brown coal fired power station.
In the end they opted for a new power station. More political kudos in a
troglodyte, mega engineering project.
Feri.
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