California electrical shortage audio

don - thank you, *Thank You*, THANK YOU!!! :>)

Djjd, I would like to add another group of folks to your list that deserve some blame as well. Not that you really need many more, but I think one group of folks should get the finger pointed at them. I am talking about us. We are all partly responsible for the power shortfalls occurring in Ca. In our zeal to deregulate the electric utility industry, we overlooked the fact that if utilities are not lawfully mandated to ensure that sufficient power does and will exist it may not. Simply believing that if the demand is there, the desire of utilities to make money will ensure that supply will match it is flawed. Utilities found that more money can be made, with lower capital investment and greater profit margins simply by operating distribution and supply, rather than generation. Quite a few smaller companies simply wish to be in the “wires” business, selling or closing generating facilities while they can still recoup their capital investments through the present regulatory structure by passing it along to customers. A lot of companies simply don’t wish to take the risk that the fluctuating natural gas and oil prices may have on their return, and simply aren’t taking the plunge into huge capital investments that base load generating facilities require. Because of the political climate, companies are not building large nuclear facilities, and probably won’t for quite a few years to come. The deregulation of the utility industry hasn’t struck the country as hard as it has in Ca., but IMHO it’s coming.

I said that we, us, Joe and Jane Blow, should partly accept the responsibility because I believe we didn’t do our homework when we allowed our elected officials to pass laws permitting deregulation. Many people surely believed the hype that it would result in lower electric rates. When? In 10 years? 20? Doesn’t do many people in Ca. and the pacific northwest much good now. Did deregulation of the airline industry in the United States result in lower fares and safer travel? My opinion would be no to both. Anti-trust laws did in Ma Bell, but has phone service improved; have rates lowered; can you get anyone to come to your house to fix the service your dog chewed through without paying a premium for it? Stand by for Microsoft. It will truly surprise me if the breakup promotes competition, improves the computer industry, or makes anything cheaper. Don’t get me wrong. I love capitalistic free enterprise. I just don’t believe that we as consumers should chew on whatever our elected officials serve up. Climbing down off the soap box.

My opinion, for what it’s worth.

Massvm: I then have been using the term "Brown out" incorrectly to describe the situation where the power drops for only a small portion of a second. This is what I am experiencing at this time (if the APC unit is accurate in testing for this). It appears that we are just having fluctuations in my area (approx. one every 30 seconds or so) instead of a constant reduction of either voltage or amps. I really don't know the difference between the two other than that "amps" can make or break you (I have been shocked by both low and high amperage lines with the same stated voltage and the difference was quite apparent). An electrician told us a couple of years ago that we had problems with low amperage in our building which was why the light bulbs were only lasting a couple of weeks (we also went through a computer fan every 6 to 9 months or so during this period as the motors burned out). Since then the electric company replaced the power transformer that feeds our building and now things seem to be back to normal (as far as light bulbs, anyway). I am a bit concerned about this issue as I have a lot of money (for me anyway) invested in my current system, that I am actually satisfied with and wish to keep long term.

wow, but for chriskh, i certainly am proud of the company i keep. the diversity of backgrounds and depth of knowledge displayed by a-goners astounds me more every day. bravo don! bravo massm!

A few comments on the state of power supplies in California from energy land: Texas. While all of the comments made above have some merit. The genesis of the existing power shortages has nothing to do with macro-level economic or energy policy. The State of California and its citizens got into this mess by:

- Making a decision to refuse pemitting of new or expansion of existing power generation capacity, relying on merchant power generation elsewhere to fuel their economy.
-Declining ro make use of existing risk management tools and long term power supply contracts in favor of power purchasing and allocation by a state agency operating in the "spot" market. This makes it infeasible for any private power generator to finance a plant to supply California with power because they have no long term client commitment. Additionally it exposes the power agency to price volatility that no sane business man would accept.
-Implementing price controls on power that limit the price that can be charged by "lines & wires" companies to end users. This has three major effects, first at current market prices exceeding $1000/ megawatt, No one wants to send power to California for the $250/ megawatt maximum cost. Second the lines & wires company lose $750/ megawatt on everything they sell, losing $3 for every 1$ of revenue so that now PG&E and SoCal Edison are insolvent and have negative net worth in the billions. Third, artificially cheap power due to price controls ( users paying 25% of actual cost) increases quantity demanded, which makes the price go up,which makes utilities lose more money, which makes the power generation companies, more reluctant to sell power to them, etc. etc.

The oil business, drilling on public land, etc have very little to do with this problem. Virtually all the generation capacity developed in the U.S in the last 10 years has been in natural gas fired plants. We do not have a shortage of natural gas. However, we cannot radically increase supply, build pipelines to carry it, and build generating plants to turn it into electric power nearly as fast as the idiot politicians and bureaucrats in California can increase demand, restrain supply, and simultaneously attempt to violate the laws of economics and physics.

At the moment major power suppliers are providing the energy in California for free. Neither the utilities or state have funds to pay for it but the bill will come due and the citizens will pay.

This problem is not the result of macroeconomic forces or evil energy companies conspiring against us. Its stupid is as stupid does.