Re: [OT]: Involuntary outages may start at 7am PST

["Kevin Oberman" <oberman () es net>]

> From: "Kavi, Prabhu" <prabhu_kavi () tenornetworks com>
> Date: Wed, 24 Jan 2001 11:06:07 -0500
> Sender: owner-nanog () merit edu
>
>
> Uh, PG&E does buy power at the market.  They are simply
> not allowed to sell power at the market price, which is
> the root cause of the problem.
>
> Deregulation tends to work when both sides are fully
> deregulated (buying and selling).  Crimping the 
> creation of new power plants and being forced to sell
> essentially unlimited amounts of power at a nearly 
> fixed price caused this mess.  Blame the environmentalists
> and politicians, not PG&E.

No, blame PG&E (and So. Cal. Edison), at least in part.

PG&E made a bet that energy prices would not increase dramatically
before 2002. PG&E proposed the price freeze with the notion that
competition among suppliers would bring down prices and they would
continue to sell at the old rates, raking in excellent profits.

PG&E lost, big time, when the poorly designed electrical market in the
western states ended up charging massively increased prices which PG&E
and they were locked into their freeze commitment.

Once again, the freeze was proposed by PG&E. They made their bed.

It is, of course, vastly more complicated than this. The deal also
included bonds to pay off existing capital debts and a requirement
that PG&E get out of the power generation business. (PG&E proposed
these, too.) At the time it looked like a super-sweetheart  deal for
the power companies. Time has shown otherwise. But they knew what they
were doing and they lost.

Speaking only for myself,

R. Kevin Oberman, Network Engineer
E-mail: oberman () home com                     Phone: +1 510 486-8634