[EAS]Utility Deregulation

pjk peter.kindlmann at yale.edu
Sat Dec 23 16:35:00 EST 2000

Subject:   Utility Deregulation

The new brave world of deregulated power prices is not quite
working out as projected. Instead of going down under competitive
circumstances, prices have jumped sharply higher in California. 


Electricity Shortage in California
1) "Power plant blues: Silicon Valley is high on tech, low on watts"
-- _Sacramento Bee_
2) "Calif faces second power crisis this year" -- Excite News
3) "Electricity Deregulation Was Doomed From Start" -- _Los Angeles Times_
4) "Energy crunch hits poor, middle class" -- MSNBC
5) "Electroshock in California" -- Money.com
6) Federal Energy Regulation Commission
7) California Energy Commission
8) Electricity Deregulation -- Public Citizen
9) California Independent System Operator [.pdf]

Much to the dismay of Californians, two large utility companies,
Pacific Gas and Electric Company and Southern California Edison
Company, have been granted consumer rate increases for the price of
electricity. This rate hike will affect over ten million California
residents who have already endured more than 30 power alerts since
June including threats of state-wide rolling blackouts. The
deregulation of power prices in California has led to soaring
wholesale costs for electricity and frozen customer prices, creating
$8 million in combined losses for these two companies. The price for
power in the West skyrocketed to $1,400 per megawatt hour, as
compared to $35 per megawatt hour at this time last year. Meanwhile,
US Department of Energy Secretary Bill Richardson extended an
emergency order which forces marketers and generators with access
power to provide electricity to California. Richardson blamed the
power shortage on the booming technology industry which has caused
electricity use in California to rise thirteen percent and energy use
throughout the US to increase by fourteen percent in the past year.
Although the consumer price increases have not been determined,
Pacific Gas and Electric Co. has suggested a seventeen percent
increase, which would raise the average monthly electricity bill in
California from $54 to $63.

The _Sacramento Bee_ blames Silicon Valley for California's current
power shortage, while Excite News offers a four-year timeline
chronicling the state's troubled electricity situation. An editorial
from the _Los Angeles Times_ considers the failures of California's
power deregulation, which was signed into law in 1996. MSNBC looks at
the effects of the rising costs of energy on middle and lower class
Americans during the holiday season, while an article published
earlier this month by Money.com gives an excellent overview of the
ways in which deregulation has hindered power companies and
consumers. The Federal Energy Regulation Commission regulates
transmission and prices for many of the major power resources in the
US, and the California Energy Commission is California's main energy
policy and planning agency. Public Citizen, a program that
investigates mass energy and the environment, gives frequently
updated information about electricity deregulation. The California
Independent System Operator (CA-ISO) provides daily market updates on
the price of power.

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