Will George W. Bush help California

Great Debates
1

This from today’s L.A. Daily News.

California is getting squeezed by the deregulation(or at least the way it happened here) of utilities. San Diego has already seen it’s energy bills increase 200-300% in 4 years. Southern California Edison is asking to raise energy prices by 30%. PG&E and Edison have lost 9 billion dollars. Gov. Davis says he may allow a 10% hike.

Analysts say even if Edison gets it’s 30% hike, it’s still likely to go bankrupt. The companies cannot pay ‘market value’ for the power.(this has been said to be due to their own short-sightedness, but still)

I think this is going to seriously hurt a lot of folks. If my power bills double…I don’t even want to think about it. Needless to to say, if business’s have to pay out a lot more for power, they will raise prices for their services.

So California is looking to the Fed’s for help. My question is ‘What could G.W. do, and is he inclined to do it’?

Any thoughts?

2

Say it with me, everyone…

Nuclear fusion! Nuclear fusion! Nuclear fusion!

(No, I don’t think the Bush Admin will bring about it’s invention, but as a SoCal resident, I can recognize that it’s needed)

3

Spoof…

Did you see this article posted on Drudge?

Fussion

I was thinking the same thing about fussion when I saw your post. I’ve been waiting for them to break down this barrier ever since those two guys claimed they created cold fussion in Time magazine. (10 years ago?)

It’s going to really change the world when it comes through. Then the issue becomes whether or not we share the technology:)

…or at least for how much…:):):slight_smile:

4

Fusion? Well maybe in the LONG run. But in California there is a train wreck goin on as we read/type/speak. The whole energy situation will be a tremndous drag on the California, the entire West and ultimately the US economy. There are plenty of “bad guys” in this situation, but ultimately the blame should probably go to the California Legislature. Which ultimately means the people of California will pay. Is that fair, maybe not, but after all they are our elected officials.

5

And in California, one of the bad features of term limits is that the legislators who pushed through deregulation back in 1996 are almost all gone from now anyway. The only people you can seek vengeance upon is a bunch of legislators who had nothing to do with implementing this horrible plan. That also includes Pete Wilson, one of California’s worst governors ever, yet very shrewd politically and managed to stay in office despite economic failings and budget crises by shifting blame for the state’s problem to illegal immigration.

But I digress.
Deregulation was passed in the California Legislature by almost unanimous votes in both houses, so it will be hard for the voters to blame anyone for the present crisis, with the exception of Governor Gray Davis, whom I imagine will be able to withstand this crisis through no fault of his own.

6

I just don’t get it. And apparantly, neither do residents of CA.

California doesn’t want more nuclear plants. They don’t want more coal plants. They don’t want more gas plants, but are getting them reluctantly and with so many emissions controls on them that the cost per kW-hr is outrageous. It does not matter if coal and nuclear plants meet or exceed 100% of all Federal, State, County, City, and Homes Association laws and regualtions. The Greens will file literally billions of dollars in nuisance suits to stop planning and construction.

No more hydro power is realistically available, and the Greens want to tear down the dams that California does have. Wind, solar, geothermal are a joke - a sad, tragic joke, with respect to supplying any serious amount of energy to CA. The Greens big hope was that prices would increase, people in CA would start conserving, and prices would drop again. When human nature prevented this from happening, the Democratic spin machine blames deregulation.

CA wanted to continue to buy power from the North and from Utah, Nevada, and Arizona. Far better that those evil plants stay out of the state, and the CA utility consumer pays an inflated price for their power. Just like Germany’s effort to stop using coal, instead buying their power from Poland, where it wil be generated by, guess what? Coal plants. Of lower efficiency and poorer environmental controls than the existing German ones, so overall they are actually hurting the environment more. :rolleyes:

I have no sympathy for CA - it got itself into this mess. You can’t have your cake and eat it too. The power costs what it costs, and no amount of price controls is going to change that. No power producer will sell power at a loss in CA for an extended period of time. I’ve even heard minority “activists” on the news claim that the Federal Government should force other States to sell power to CA at a loss, citing a violation of the Civil Rights Act (WTF??? Talk about nonsequiters!). What can Bush do? Nothing, except for getting Congress to grant some sort of emergency legislative immunity from nuisance lawsuits. The problem was caused by Californians, and must be solved by them.

And the solution is simple. CA residents can either:

  1. Buckle down, pay their bills, start conserving to lower the bills, and thank the Greens. Or,

  2. Build a couple nuke plants, or a couple new coal plants, especially to balance out the SF area.

And hey - don’t get me wrong. Read my past energy threads, where I point out again and again that conservation is a key element in our energy future, if not the key element. And if Californians don’t mind $600 a month electric bills 3 years from now, based on their current average household consumption, that’s great. More power to them. But until the average Californian decides to either start seriously conserving, or to stand up to the Greens in their own State, this situation will continue. Oh sure, that big gas plant they’re building will help some when it comes online, but it’s just a stopgap measure. And just think what happens if all the nuke plants shut down.

7

There’s still plenty of coal to be mined in Wyoming. Perhaps the new interior secretary could be convinced to open up the state to supply CA’s needs.

8

My dear Squink, what on Earth are you talking about? Wyoming is already the number 1 coal producing State. The problem is not supply, it’s the fact that California will not build plants to burn it. There is no need to “open up the State” either, Wyoming is quite happy to sell millions of tons of coal to anyone who desires it - especially to States west of itself, where the rail lines are not so overloaded.

9

California had to sell off it’s power plants to move to a deregulated market form. Meaning we are now at the mercy of out-of-state vendors, who seem to want to rake us over the coals. I do not believe that they are being asked to sell power at a loss. "Fair market value’ is phrase that has lost quite a bit of meaning over the years.

10

I realize that, and in fact I worked on some assessments of energy supply for CA. You might ask yourself 1) what the CA utilities did with the money they recieved, and 2) what is the real profit margin of the companies who bought the CA plants, and 3) not all CA plants had to be sold to “outside” utilities, only some, and 4) multistate entities owning plants in various States is not new for the rest of the nation - it worked just fine for AEP, Southern Company, Duke, Dominion, Orion, Constellation, and TXU - one wonders why CA cannot make it work.

I have seen the “town meetings” on TV here. Where “community activists” get up in churches and urge civil disobedience by having everyone either refuse flat-out to pay their bills, or to pay the “same exact amount as the same month last year”, regardless of consumption and weather differences. :rolleyes: Regardless of whether this is a widespread happening or not (and I doubt seriously that it is) it sure as hell once again portrays CA residents as irrational liberals who equate utilities as “civil rights” - and this is actually going on to a small extent here in KC, where minority church leaders are considering a lawsuit to mandate that utilities be supplied year-round to inner-city residents who cannot or else refuse to pay their bills. Who would pay for their bills? Well, I guess I would. :rolleyes:

My company is working with two of the companies that purchased some CA plants, so I have to be careful here as to what I say. But I will say this - these companies are not raking CA over the coals. CA is having to face for the first time the real economics of supply and demand, and this coupled with bad weather conditions and an extremely low excess capacity (and a reduction in excess capacity in other neighboring States, from which CA buys power) is pimp-slapping starry-eyed CA residents back into reality.

Shut the Greens up and build the damn plants and transmission lines; build new lines to continue to buy from NV, UT, and AZ; or buckle down and conserve. These are the choices.

11

OK, first things first:

  1. The companies that bought the CA plants are all publicly-owned and traded companies. Their corporate reports are open to the public. If they were squeezing the hell out of CA and it’s residents, I would imagine in typical CA fashion there would be protest marches, rioting, and Propositions dotting every ballot in the State.

  2. Your OP was “What can the Feds do about it?” Well, I answered that - nothing, short of stopping frivilous and nuisance lawsuits and blocking actions from environmentalists. Tell me - what do you think they can do about it? Or is the question really, what should they do about it?

12

The FERC has the jurisdiction and the responsibility to maintain “just and reasonable” rates. The FERC has already determined that wholesale rates in California are not “just and reasonable”. What they failed to find was any specific instances of activity by power producers to do anything wrong. There is absolutely no doubt that power producers were using the existing market structure to make larege profits. However, this highlights a flaw in the market design: the inability of utilities to purchase forward, the single market clearing price, the design of the real-time as a market, when any reasonable system would have cost based rates on the spot market. What is not clear is if the FERC has the power to order rebates on unjust and unreasonable wholesale power prices when there is the players were acting within the rules. But whomever is to blame (everybody), Anthracite is correct in that the ultimate folly was the idea that you can continually consume electricity without building the plants to generate it. But there is more to the story then simple supply and demand, the high prices are also a result of an incredibly flawed market structure.

13

EL DIDDLY’S SUREFIRE GUARAN-DAMN-TEED SOLUTION TO FIGGER OUT THE “POWER CRISIS”…

We find out what people really want. Do they want to power their TVs, ovens, computers, vacuum cleaners, and vibrators? Or do they want to save an environment whose fragility is a matter of great debate?

I think, given the notion that humans are stupid and self-centered as a rule, the former is the case.

Ergo… BUILD THE DAMN POWER PLANTS!

:smiley:

14

Hey, I’m with you, Spoofe. We got endless acres of god forsaken scrub brush where the construction of anything would improve the overall asthetic. But I don’t think it’s gonna happen.

15

Bless you anthracite - makes me wish in my next life to come back as a lesbian. :slight_smile:

One of the ignored voices back in 1995 when California started down this road was the voice of the old-line utility employees that warned Cassandra-like of all of California’s energy problems - and that the then regulatory system wasn’t broken.

To be sure, Californians were paying higher costs per kilowatt hour than elsewhere but that was a result of the shortage of generation in state at that time and the existence of mandated non-utility generators passing along high prices under the rubric of “avoided costs”.

But now the genie is out of the bottle and isn’t likely to be put back in - although the current state, Fed and FERC interventions seem just that.

But these interventions may do more harm than good. They will inhibit the building of new plants - especially when you can build them in a friendlier state. Anthracite is correct - the greens will oppose any and all new California plants as well as the reconditioning and re-licensing of existing plants. Moreover, energy generators and marketers will be wary of offering long term fixed contracts to a state that views generator profit as evil.

This all seems so obvious now but back then almost all believed in the brave new world of generation deregulation. Most outside of California still believe - that the higher prices through shortages can’t happen elsewhere.

I’m not so convinced. New England is already short, New York and the Midwest can move to short with a few key generation shutdowns. Areas with a surplus can see shortages with transmission constraints.

And new peakers aren’t always the answer. Peaking plants are built to take advantage of high cost demand - not baseload. And how many baseload plants (or even mid size) are being built (or planned) throughout the country now?

16

In addition to the supply problems mentioned by several posters is the way California’s utilities have to purchase power. Under the current system, sllers must quote pricing for electricity with the CPEX setting the price (highest bidder). They then must set pricing for emergency/same day purchases (higher).

I think the fact that these sellers are all posting record profits and surging stock proces is a little more than telling.

In addition, I find it hard to feel sorry for SoCal or PG&E. Their lobbyist worked on the deregulation legislation, in addition to their having seats on CPEX, FERC and the PUC.

17

The utilities do not have seats on the PUC or the FERC. They are appointed government officials.

Whether you, or anybody, feels sorry for the utilities or not is not really the issue. The issue is the rating agencies downgrade the utilities, banks will refuse to give PGE and SCE the cash to make subsized electricity purchases on behalf of their customers, and generators will refuse to sell to California with given the limited prospect they will ever get paid. When the cash dries up how will the utilities procure electricity for their customers? The banks and rating agencies made it abundantly clear that the recent PUC draft resolution for a minimal rate increase does little too assuage their concerns.

18

Hey got a link to that draft order, Im curios of how much they’re going to charging us? Personally I wouldn’t care if both companies went bankrupt, it highlights the fallacy of self regulation.

19

http://www.cpuc.ca.gov/PUBLISHED/AGENDA_DECISION/4298.htm

And since you are so in favor of bankruptcy here is a nice article to help sort out what that will mean

http://www.latimes.com/business/reports/power/lat_util010103.htm

Basically do you deal with the Devil you know or the Devil you don’t know?

20

Next door to my home town they want to build a new natural gas electric plant. (They don’t all have to be coal fired, Anthracite!)

However, my home town of Downey CA, is protesting since it is close to them. Personally, I like the idea of having a power plant next door, but the city is paying a consultant several hundred thousand dollars to fight the thing. Don’t people know what is going on?

I think it interesting that the city of Los Angeles is sitting pretty through this whole thing. They have their own utility, the DWP, and are selling their excess electricity and making a bundle. (Of course all that money will go to pay offf lawsuits from the Rampart scandal…)