Casey Carol on fri 22 dec 00
Then, the designers of a "de-regulated" industry
managed to screw it up
even more. First, they forced electric service
companies to divest
themselves of electric generation capabilities. So,
the "public"
utilites
have to buy all of their power. Then, the politicians
put a cap on the
amount that could be charged to the public for use.
The service
utilities
have to purchase power at market rates and then resell
that power to
the
public at controlled rates. The utilities have been
hemoraghing money.
The market rates for power that were wholesaled $75 to
$125 per
megawatt
hr. last year are costing the utilities $1500 to $5000
to purchase this
year with much of the profit going to brokers, not the
generators. It
is
the same electricity coming from the same plants,
including
hydroelectric
projects that were installed years ago.
Actually, the utilities had invested in building and
maintaining power plants and had outstanding debt from
that, called "stranded costs." As regulated utilities,
these costs were factored in over years, not foisted
on customers all at once. Regulated investor-owned
utilities wanted to dump these costs onto consumers.
It was a big bone of contention. When it became
apparent that they weren't going to be permitted to do
so, they they either sold them to bigger power
companies who had the capital to buy them and maintain
them or split themselves into power generation, power
providers, or power broker segments.
--- "Wesley C. Rolley" wrote:
> >I'm hoping someone on the list has more knowlege
> and information on all this
> >to share.
>
> June,
>
> I agree with whoever (Mel?) said that this is too
> complex for simple
> solutions. The lack of intelligent management of
> these resources at either
> the state or national level is one of the reasons
> that I joined the Green
> Party. The answers that blame "the crazy
> environmentalists" are just as
> simplistic as the "solutions" that got us into this
> mess in the first
> place. However, I do follow it all closely and can
> give everyone some
> factual information. It was also covered very well
> on ABC's Nightline news
> program last night.
>
> To start with, there is a relatively high demand for
> energy service right
> now. However, it is not as high as it was last
> summer when electric demand
> was high for air conditioning. In fact, the demand
> in the summer of 2000
> was not as high as the peak demand in the summer of
> 1999. So, demand is
> only PART of the problem.
>
> Electric use is closely related to other natural
> resource considerations.
> One of the largest uses of Natural Gas in California
> is to build up enough
> steam to generate electricity. If we did not have
> an electri use problem,
> there would not be a natural gas problem. This is
> also connected to the
> distribution of water in California. During one
> recent period of electric
> power constraint, the pumps that carry water from N.
> California to S.
> California were shut down for two hours. This
> provided enough additional
> electric power for 500,000 homes (big pumps).
>
> Then, the designers of a "de-regulated" industry
> managed to screw it up
> even more. First, they forced electric service
> companies to divest
> themselves of electric generation capabilities. So,
> the "public" utilites
> have to buy all of their power. Then, the
> politicians put a cap on the
> amount that could be charged to the public for use.
> The service utilities
> have to purchase power at market rates and then
> resell that power to the
> public at controlled rates. The utilities have been
> hemoraghing money.
> The market rates for power that were wholesaled $75
> to $125 per megawatt
> hr. last year are costing the utilities $1500 to
> $5000 to purchase this
> year with much of the profit going to brokers, not
> the generators. It is
> the same electricity coming from the same plants,
> including hydroelectric
> projects that were installed years ago.
>
> More complexities with water. California could
> generate more power from
> some hydro electric plants. However, the same water
> is used for irrigation
> and as drinking water supplies for the state. With
> rainfall at less than
> 60% of normal in most of Northern California this
> year, it would be
> irresponsible to increase the drain on reservoirs
> just to satisfy electric
> demand. Therefore, some hydro-electric plants are
> not running at capacity.
> The result is that the demand for power is met by
> burning more natural
> gas, driving up demand there also.
>
> During last summer's peak, demand was met by
> deferring maintenance at some
> plants. These have been offline this fall to
> perform that maintenance.
> One of the affected plants was the Diablo Canyon
> Nuculear Generation plant.
> This plant is back online now, but while it was
> down for normal
> maintenance, the demand was met by burning more
> natural gas at the time
> when normal home demand for natural gas for heating
> was very high.
>
> Some things are clear.
>
> - More power generation capacity is required. This
> will primarily come
> from burning fossil fuels, especially natural gas
> (coal produces acid rain,
> nuculear is bad, and the federal government is
> blowing up dams, not
> building new ones). Therefore, the demand for
> natural gas will continue to
> be a problem every winter for a long time.
>
> - Deregulation that controls one side of the
> equation and leaves the other
> completely un-constrained is a formula for failure.
> At a minimum, it will
> take 5 years for new facilities to go through the
> planning process, be
> constructed, and to go online. This is an ongoing
> problem for California,
> and, I think for most of the Western US. Solving
> this problem requires
> more political willpower than most politicians have.
>
> - The linkage between electric, natural gas and
> water is complex and not
> fully understood by any governmental agency. I
> like where I live now, but
> there is some valid logic in the idea that much work
> is now dealing with
> information product rather than manufactured
> product. It would be much
> better if those workers lived where resources were
> plentiful and we moved
> their work product around rather than having them
> all live in Silicon
> Valley and moving the resources around. California
> has just gone through a
> period of heavier than average winter precipitation.
> This year may just be
> the start of another dry cycle and that will hit
> everyone harder and
> require us to pump more water, using the electricity
> that could support
> half a million homes.
>
> - We need more investment in renewable energy
> sources, such as solar and
> wind turbine generation. With the rise in the cost
> of other energy
> sources, solar becomes more attractive. In
> particular, it produces peak
> output during those hot summer afternoons when
> demand it highest in this
> state. One Green Party member ran for office not
> far from here with a
> platform that included mandating that all new
> construction include some
> provision for utilizing solar power for heating
> water or generating
> electricity. She did not win, but the issue was
> picked up by the winning
> candidate. In my small subdivision of our town,
> there are home owner
> association ules which preculde having visible solar
> panels on any
> building. Such rules need to be replaced by common
> sense. An increased
> market for solar will drive prices down.
>
> Wes
>
>
>
>
>
> Wes Rolley
>
> "Happiness is to be fully engaged in the activity
> that you believe in and,
> if you are very good at it, well that's a bonus." --
> Henry Moore
>
> http://www.refpub.com
>
>
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