|
North American Network Operators Group Date Prev | Date Next | Date Index | Thread Index | Author Index | Historical Re: Summary: Bay Area Power (2000-06-14)
In message <[email protected]>, [email protected] writes: > >I was under the impression that these power shortages were the >result of less over-engineering on the part of power companies due >to deregulation but maybe this isn't such a new situation after all? > > There was an interesting article in the May 11 Wall Street Journal about how deregulation has led to this situation. I quote: Deregulation, now under way in 24 states, upsets that structure and allows new players -- some affiliated with utilities, some not -- to build power plants and sell electricity. Prices are set by competitive markets; risks are borne by investors, not ratepayers. At the same time, utilities are surrendering control of long-haul transmission lines to new nonprofit operators whose job it is to ensure fair access to the grid -- the multistate system of high-voltage lines. The result: a national electricity system that is vulnerable to disruptions caused by equipment breakdowns and human error as newly established regional grid operators assume responsibility for much larger areas than those formerly overseen by individual local utilities. For big energy users, who expected deregulation to bring lower prices, not lower reliability, it has been a worrisome experience. Briefly, established power companies were worried that decreasing prices would prevent them from earning money on their investment; new players held off until they could figure out what markets would be most profitable. The transmission system is in bad shape, too -- San Francisco is specifically identified as having poor connections to the larger power grid. There's a lot more in the article, including notes about how incomplete deregulation has contributed. If you subscribe, you can find it at http://interactive.wsj.com/archive/retrieve.cgi?id=SB957998459784551619.djm |