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North American Network Operators Group Date Prev | Date Next | Date Index | Thread Index | Author Index | Historical Re: [OT]: Involuntary outages may start at 7am PST
> From: "Kavi, Prabhu" <[email protected]> > Date: Wed, 24 Jan 2001 11:06:07 -0500 > Sender: [email protected] > > > 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: [email protected] Phone: +1 510 486-8634
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