I have highlighted the key paragraph. The interstate PIPES are NOT deregulated. Without the infrastructure to monitor said, you have a manipulated market waiting to happen. Hats-off to Siliconvalley.com for some REAL journalism finally.

Agency actions invited power disaster

Critics from within Federal Energy Regulatory Commission ignored

BY ERIC NALDER AND MARK GLADSTONE Mercury News

The federal agency charged with ensuring the stability of the nation's power system gave California the go-ahead to deregulate its electric utilities despite critical flaws evident to its own experts. And once deregulation was under way in 1998, the agency did little to police the state's market, even though it has a legal obligation to ensure that prices are ``just and reasonable.''

Far from being the innocent bystander that top federal officials portray, the Federal Energy Regulatory Commission has played a central role in California's deregulation disaster, weighing in more than 80 separate times with orders approving, revising or rejecting parts of the plan.

To examine the role this small agency has played in California's deregulation, the Mercury News reviewed hundreds of documents and interviewed energy experts and FERC employees, some of whom talked publicly for the first time.

The review found that FERC -- eager to promote deregulation and reluctant to cross California politicians, generating companies and utilities pushing the state's groundbreaking plan -- ignored detailed criticism from one of the nation's top deregulation experts and its own staff members, including its chief economist.

More important, the review reveals the most critical mistake federal regulators made in ushering in electricity deregulation: They set the stage for a new energy-trading market every bit as complicated as Wall Street but failed to monitor it. With California ceding much of its regulatory role, FERC had the critical responsibility to stop market abuses, but it failed to hire enough experts, obtain the data or install the computers needed to keep the market honest.

Subpoenas rare

In contrast to the Securities and Exchange Commission, which frequently takes aggressive action to enforce stock-market rules, FERC almost never uses subpoenas in staff investigations to acquire data on electricity trading that could include evidence of anti-competitive practices that boost prices.

Curtis Hébert Jr., a confident 38-year-old Mississippi lawyer who became FERC's chairman in January, dismisses claims that the agency does not gather enough data on prices or investigate the energy industry thoroughly.

``We do have enough resources, and we are handling it in a way that's appropriate,'' he said of the agency's role in California's crisis. An ardent supporter of free markets, he said FERC's primary job is to create a competitive market for electricity and keep the lights on. Low prices will follow, he promised.

But James Hoecker, FERC's chairman when California implemented its plan, has become more critical of the decisions the agency made under his leadership and now says FERC should have more aggressively scrutinized the plan rather than moving it along.

``I would very much have liked for the commission to be more prepared for California,'' he said.

While the state, utilities and energy companies share blame for California's failed plan, FERC had a unique responsibility under a 66-year-old federal law to make sure the state's new market would lead to ``just and reasonable'' wholesale electricity prices. Neither Congress nor the courts, however, have made clear what that means in a deregulated market.

For decades, FERC's responsibility to monitor prices was much simpler. The agency set rates for wholesale electricity using a formula based on generating costs plus a fair profit.

But the agency took steps to change its role in the early 1980s, when it helped set into motion the forces that would lead to California's deregulation. In 1982, two years after President Reagan's election, a FERC lawyer named Robert Angyal wrote an internal memo assuring commissioners that the ambiguity of ``just and reasonable'' gave them ample room to experiment with free-market sales of electricity.

``We thought we were the good guys then,'' said Steve Greenleaf, who joined the agency in 1986 as a regulatory specialist. Greenleaf, who now works for California's power grid operator, said recent events ``certainly make me go back and consider what we did.''

What he and others did was clear a path for the deregulation bandwagon. FERC commissioners, generating companies, utilities and politicians -- both Democrats and Republicans -- all argued that competition could both reduce rates and boost profits, just as it had for natural gas, airlines and other markets.

In 1992, Congress passed a law encouraging open access. FERC took the next key step when Chairwoman Betsy Moler, a free-market Democrat, sat down at her kitchen table one morning to begin drafting Order 888, named after the agency's address in Washington, D.C.

The order, finalized in April 1996, encouraged the emergence of free markets by requiring utilities to open their transmission lines to competing power companies, but it did little to prepare the agency to monitor the markets and make sure companies competed fairly.

Daniel Fessler, a former University of California-Davis law professor appointed to the state Public Utilities Commission by Republican Gov. Pete Wilson, drafted California's deregulation plan in the mid-'90s. In a brief and reluctant interview -- the first he has granted since the energy crisis began -- Fessler said that he consulted with FERC officials while he worked on the plan and testified several times before the commission.

``Our dialogue was extremely public,'' he said.

But FERC officials say the agency took a hands-off approach, despite conducting hearings and receiving thousands of documents.

Hoecker, who took over for Moler in June 1997, said the agency viewed California's plan as an experiment that raised questions that could not be answered until it was in place. ``Fundamentally, the commission took the stance that no one had experience in the United States anyway with this comprehensive restructuring,'' he said.

At several crucial junctures, the agency's commissioners passed on the chance to explore the advice of critics, both academic and in-house, that could have helped shape California's plan.

One of the nation's top experts on electricity deregulation, Bill Hogan of Harvard University, witnessed how commissioners let a detailed critique of California's plan slip by them at FERC's summer 1996 hearings.

San Diego Gas & Electric, the state's third-largest investor-owned utility, had hired Hogan to analyze the plan, which the utility opposed. His 71-page report offers a blueprint for some of what eventually would go wrong.

Flaws in the plan

Hogan did not predict the disaster -- nobody did -- but he criticized key aspects of the plan: a market structure that made it possible for companies to boost prices, and a complex power auction that opened the door for gaming.

At a hearing, the San Diego utility's chairman presented Hogan's paper to the commission. San Diego's opposition was the last major obstacle the plan faced, and the utility says it came under pressure to get in line so California could meet a start-up date of January 1998.

State lawmakers and other energy executives told San Diego to get on board if it wanted to have a ``meaningful role'' when the Legislature wrote the final plan, said Bill Reed, chief regulatory officer for the utility's parent company.

``I believed, naively as it turned out, that FERC would exercise the ultimate judgment as to what needed to be done,'' Reed said. ``Unfortunately, FERC has taken deference to an extreme that I never considered.''

The San Diego utility withdrew Hogan's report, and the commissioners signed off on the deregulation plan.

``San Diego stopped talking,'' Hogan said. ``I wasn't invited to speak.''

After the San Diego utility dropped its opposition, Steve Peace, a loquacious Democrat from San Diego, led legislators on 18 days of hearings to craft the final details of California's plan.

The Legislature passed the bill unanimously, and Wilson signed it Sept. 23, 1996, hailing it as ``a major step in our efforts to guarantee lower rates.''

To a degree that few seemed to grasp at the time, it was an unprecedented transfer of power from the state to the federal government. Prior to the bill's passage, state regulators had control over most of the power generated in California, setting prices and making sure enough electricity was available. Now much of the power is generated by private companies -- not state-regulated utilities -- and only FERC has the authority to step in when wholesale prices climb.

FERC also continued to rule on each additional step in the state's complicated deregulation plan as it was implemented. Again, the agency missed chances to overhaul the plan, this time based on flaws pointed out by its own experts.

Rube Goldberg

FERC's chief economist, Richard O'Neill, openly called the California plan a Rube Goldberg contraption in conversations with colleagues and California officials, according to sources inside and outside the agency.

Carolyn Berry, a FERC economist who has since left the agency, also reviewed the plan. She, too, saw flaws -- and worried especially that the odd market structure might encourage companies to manipulate prices.

``There was great resistance on the part of many people at the commission to undo the process that California sent in,'' Berry said. ``There was a reluctance to start pulling at the threads for fear that the whole package might fall apart.''

The flaws the two cited, including some of the same ones Hogan flagged, are now widely acknowledged as contributing to the collapse of California's scheme.

The deep concerns of the staff members, however, were never impressed on the commissioners. FERC does not foster a culture of internal debate, insiders say.

Hoecker said the agency made few changes in the plan because ``the commission was too highly deferential'' to California's industry leaders and politicians.

In addition, he said, the agency simply did not have the clout to stop a plan hurtling along on a political fast track.

The agency, like others in Washington, is highly political and, acutely aware of what industry leaders want, often delivers. As far back as 1960, a presidential commission labeled the agency's predecessor ``a virtual Chamber of Commerce for the oil and gas companies.''

Corporate executives have considerable sway over the agency, to the point of helping the White House decide who is appointed to the five-member commission and who becomes chairman.

And there is an active revolving door. Hoecker was an industry lawyer before he was a commissioner, and now he is again. Former Chairwoman Moler consulted for Enron and other energy companies after leaving the agency, and now she is a utility executive.

Industry leaders wanted deregulation, and they pressed hard for California's plan, which they thought would open the door for unfettered markets nationwide.

Several other factors kept FERC from playing a stronger oversight role. While the California plan was being put into effect, many FERC officials were focused on a $12.7 million plan to reorganize their staff and upgrade computers. Hoecker was so proud of the result, he spent $100,000 to have a historian write a book about it.

But key employees say they were distracted by the reorganization for months. More important, a half-dozen employees who were versed in deregulation issues left, leaving FERC handicapped in its ability to police the new market it had created.

Some staff members sought a single, larger enforcement division resembling the one at the Securities and Exchange Commission, where 900 people, half of the agency, handle market investigations and enforcement. But FERC decided to keep its enforcement split between two offices that had a total of about 75 employees at the time -- a fraction of its 1,200 employees.

Warning came soon

The agency was confronted with its first clear warning of the coming disaster soon after California's deregulation took effect.

On a hot day in July 1998, three months after the market opened, energy traders whose names state officials have refused to release decided to test whether the new market could be manipulated. Although electricity had been trading well below $100 a megawatt-hour, they offered a megawatt-hour at $9,999 -- the highest number the traders thought the computer system would accept, they later told regulators.

Desperate for power to keep the grid from crashing, the Independent System Operator -- which monitors the system and buys some power -- paid it. The ISO then made an emergency request for a price cap, and FERC granted it.

Worried that federal regulators were not alert to the potential for market shenanigans, the grid operator repeatedly warned FERC that trouble was ahead. The ISO's market surveillance director, Anjali Sheffrin, was so concerned that she visited the agency twice in the fall of 1999 to try to explain to FERC officials that California's fledgling market needed the protection. ``I don't think they had any thought of what the potential was,'' Sheffrin said.

But at least one FERC economist did.

Ron Rattey, one of the agency's most experienced analysts, made a presentation to his colleagues in March 2000, shortly before the California crisis began. He noted an increase in price spikes nationwide from 1997 through 1999. Among other factors, he blamed regulatory policies and market abuses.

His conclusion: ``We should expect another tumultuous summer in 2000.''

-------------------------------------------------------------------------------- Contact Eric Nalder at enalder@sjmercury.com

http://www.siliconvalley.com/docs/news/svtop/1ferc060301.htm



-- Anonymous, June 03, 2001

Answers

verrrrry INTERRRRRESTING. So back in 1998, it was the FEDS who set up California for the fall?

And JUST WHO WAS IN CHARGE OF THE FEDERAL ADMINISTRATION AT THE TIME?

.........why mah goodness, it was that thar..... nice Clinstone feller weren't it?

xxxxxxxxxxxxxxxxxxxxxxxxxxx

The federal agency charged with ensuring the stability of the nation's power system gave California the go-ahead to deregulate its electric utilities despite critical flaws evident to its own experts. And once deregulation was under way in 1998, the agency did little to police the state's market, even though it has a legal obligation to ensure that prices are ``just and reasonable.''

Far from being the innocent bystander that top federal officials portray, the Federal Energy Regulatory Commission has played a central role in California's deregulation disaster, weighing in more than 80 separate times with orders approving, revising or rejecting parts of the plan.

-- Anonymous, June 03, 2001

Y yes it wur Clinstone. Now before you run-off into the night, a few points.

First one should be obvious. No President can follow every department and their goings ons. This goes for Dumbo as well as the rest of them thru history. Not an excuse, just the way it is. Especially in a complex issue like this. One involving areas without history or precedence. And definitely not news worthy to many Americans. The Prez relies on industry and hopefully qualified people inside the many branches of Government to do thier job professionally. He also understood this to be basically a State's issue my guess.

It should also be obvious many Democrats, and Republicans(this thing was passed with zero nay votes in 1996)supported the Deregulation scheme as it was proposed. Indicating still further we either gots lots of dummies running things, or some folks were taking advantage using a bait and switch type of con job. I would side with both these potential reasons and a pile more.

None of this really matters NOW however. I do not view this as a Political issue(at least I am trying). It is a Health and Safety issue at the minimum. We have a major state in turmoil. We also have a President who has been very public at saying TOO BADD. He has gone out of his way in fact, to broadcast 2-bad.

Anyway you cut-it, the Bush Administration is extremely negligent on this problem. No I do not think it takes a Lefty to know certain a Clinton Administration would definitely NOT be telling California to Fuck-Off. This is my beef with the Bush Administration.

Does not matter for a pile of beans WHO or WHAT caused, is causing, or might cause the mess, NOW, it really doesn't. We got a major problem and the Bushies have said, we WILL NOT help even if the law says we must or could. The answers are BS Rhetoric which provide zero today and pipe dreams in years down the road. What about NOW Mr. Bush?

Why is Bush not helping? ideology? Is that it? Petty Political BS? Getting back at what is perceived to be the land of the Fruitloops? You know what? YES it is really that simple and that ridiculous.

When was the last time we saw not only a State Government suing the Feds, but countless cities and counties all simultaneously? When was the last time you saw two major utilities go belly-up? I mean we got a very serious issue here and Bush is waving Rhetoric? What, does he expect? Californians to buy that they need more of the same?

Are all these growing number of authorities just WHINERS? Just wanting FREE energy? Hell the very reason this Crap Plan flew in the first place was because Californians were paying some of the highest rates in the country. Well now they are paying rates which could bankrupt the state and many who do business there. Gone from bad to shitsville pronto. Something is majorly wrong and it ain't cause of decades of bo-bos. Yes they are major factors and contributors. But rates do not just ballon out-of-control, with very little evidence shortages matching increases, in 6 months.

Even the FERC has found fraud. NOBODY but the blind think this is all NORMAL, or freemarket bs. We have a screwed-up interstate transmission grid, period. This falls entirely under Federal Control, or lack of as it is. The pipes are controlled. Without a watchdog, the FERC, you end-up with a California and much of the West now.

I find it surreal this is even debated frankly.

Impose the law. Let the situation settle. Give everyone some breathing room. Give the longer term solutions time to develop in a balanced, prudent manner.

I think this issue speaks volumes about the Bush Administration. I think at the minimum they are very naive. I think they are really about little else but helping their buddies profit illegally my take. In my book they are very Anti-American. Left/Right/White/Green it don't matter, they tell all to fuck-off.

I hope more articles like the above surface. I hope the full truth be known. If it is, Bush is a one-term duck as sure as the sun will shine tomorrow.

Charlie, you are as wrong on this as North was on Y2k. I know you think otherwise, but maybe you might want to rethink yourself. Currently you look the part of a stupid Dittohead.

-- Anonymous, June 04, 2001

Anyway you cut-it, the Bush Administration is extremely negligent on this problem. No I do not think it takes a Lefty to know certain a Clinton Administration would definitely NOT be telling California to Fuck-Off. This is my beef with the Bush Administration.

Does not matter for a pile of beans WHO or WHAT caused, is causing, or might cause the mess, NOW, it really doesn't. We got a major problem and the Bushies have said, we WILL NOT help even if the law says we must or could. The answers are BS Rhetoric which provide zero today and pipe dreams in years down the road. What about NOW Mr. Bush?

Damn, I see nobody pulled your finger for that brain fart you had.... rather messy logic as usual eyeroller, doc, whomever you wanna be this week..... Clinton basically told california to fuck off for the last 3 years moron. Still don't get it, do you? Let's pass the buck and point fingers since clinton was asleep at the wheel for 8 years and got us to this point. 150 days is hardly enough time to solve a problem of this magnitude and I have yet to see ANY solutions offered up by Bushes critics, but some people just like the sound of their own voice so they just sit back and bitch and whine, right Doc?

-- Anonymous, June 04, 2001

150 days is hardly enough time to solve a problem of this magnitude and I have yet to see ANY solutions offered up by Bushes critics,

Course you haven't seen shit. How could you with your head up your butt?

Now go do at least SOME research and I will think about conversing with you. Till then, take your whiny "the gumbit didn't do squat for eight years", and stick it.

Here is what YOU need to understand about this situation. The Bush response is NOT acceptable. We simply cannot have the chief administrative official of the land say TOO BADD. That is if we actually want a civilized and JUST, and Free society.

I know you are unable to see it, but this ONE issue indicates we have complete novices running the country. The China deal should have indicated this to you, but apparently you missed the "fish on the deck" responses Dubya had on that one.

Here are some more "clues" for the "clueless". What type of President will sign trade deals with Communists, while at the same time tell 30 MILLION AMERICANS, I will not enforce the law of the land? A guy being sued multiple times to do as much?

Same guy who will send 43 MILLION dollars of OUR money to a shithole country to help support Bin Laden and the murderers of innocent women and children? The same folks who place truck bombs which kill hundreds of US Soldiers while they sleep? or US Embassies?

What type of President? an unelected turd from a former CIA turd is who was thrown out once he was seen to be the lying dolt he was.

-- Anonymous, June 04, 2001

A few comments on FERC etal.

1) The true mistake was thinking that the Electrical grid was equivalent to the phone system. WRONG

2) If you write “KICKME” on the back of your jacket, then put it on and walk around why should you have a beef when someone kicks you? Obviously California thinks it’s entitled.

3) “Hell the very reason this Crap Plan flew in the first place was because Californians were paying some of the highest rates in the country." No not even close. Look at what they pay in the North East, NY, etc. The reason the plan flew was because large consumers (i.e. manufacturers) of electricity wanted price breaks. The thought was deregulation would lead to this and also give the average consumer a price break too. For a lot of reasons, many technical, it didn’t work out that the way.

4) "We have a screwed-up interstate transmission grid, period. This falls entirely under Federal Control, or lack of as it is. The pipes are controlled. Without a watchdog, the FERC, you end-up with a California and much of the West now." Not really, One of the main problems in CA is certain transmission bottle necks. One around LA and one in San Francisco. These would not fall (in general) under FERC’s rules though you might make the case that since they have some lines that cross state boundaries all of the lines fall under their rules. And anyway, it's not the grid that is screwed up, rather the number, type, and location of plants. One reason LAWP is doing OK is because they didn't join the deregulation plan. But not because they have their own plants but because they have long term contracts with producers. The power flows over the lines that you think are all screwd up.

5) "Charlie, you are as wrong on this as North was on Y2k. I know you think otherwise, but maybe you might want to rethink yourself. Currently you look the part of a stupid Dittohead." First Dittohead means you enjoy the show, not that you agree with everything Rush says. Second I think YOU are as wrong on this as North was on Y2K. And I know a heck of a lot more about it then either you or Charlie

-- Anonymous, June 04, 2001

Engineer, please don't confuse him with any facts that get in the way of his smearing and diatribes against GWB. Shallow minds can only handle so much at any one given time.

-- Anonymous, June 04, 2001

What a CROCK of shit. As Engineer pointed out but didn't say, CALIFORNIA WANTED A FREE LUNCH ON THE REST OF THE USA.

Grey Davis did nothing about the problem but now wants to assign blame as a method of starting his Davis 2004 run. Time after time, Davis' bs has been exposed and then it gets re-run by this eye-roller poster as "fact".

LET CALIFORNIA PAY. With an average home price ACROSS THE STATE of $265,000 they can MORE THAN AFFORD IT.

-- Anonymous, June 04, 2001

Doom,

You have significantly underestimated the size of the problem and its affect upon both you and the rest of the country.

Multiply your power bill by a conservative five. Imagine your company having to multiply its power bill by a factor of ten. Then imagine that your company must close its doors unexpectedly for one day out of five. Imagine that you do not know which day your company will close until you are already at work. Then imagine trying to return home over highways with no stop lights and no functional gasoline stations. It is 105F outside nd the hot winds are blowing over the mountain passes. One out of every twenty(?) Americans live in California.

How many people will your company terminate? Can your company even survive under these circumstances? What will your cusomers do? Their customers? How much free time will you have? Since your power bill now consumes 10 times as much of your paycheck as before, what will you do without? If YOU are still comfortable, how about your neighbors? How can you continue to live under these circumstances? Where will you go?

Sorry if this scenario sounds a bit Infomagic. Though the impacts are only imagined, the statistics are very real. Californians alone will not suffer.

-- Anonymous, June 04, 2001

3) “Hell the very reason this Crap Plan flew in the first place was because Californians were paying some of the highest rates in the country." No not even close. Look at what they pay in the North East, NY, etc. The reason the plan flew was because large consumers (i.e. manufacturers) of electricity wanted price breaks. The thought was deregulation would lead to this and also give the average consumer a price break too. For a lot of reasons, many technical, it didn’t work out that the way.

No YOU are wrong, here is the 1999 per KiloWattHour figs...Average Revenue per Kilowatthour by Class of Ownership, Census Division, and State, 1999 And your data? where is that located?

By the way, New York is the highest. Rest of NE is lower.

In the Industrial area, California, paid 50% more than New York did on average in 1999. Now wouldn't YOU want to find a better way? A cheaper alternative? Are you claiming this hunt for alternatives, by itself, caused this mess?

4) "We have a screwed-up interstate transmission grid, period. This falls entirely under Federal Control, or lack of as it is. The pipes are controlled. Without a watchdog, the FERC, you end-up with a California and much of the West now." Not really, One of the main problems in CA is certain transmission bottle necks. One around LA and one in San Francisco. These would not fall (in general) under FERC’s rules though you might make the case that since they have some lines that cross state boundaries all of the lines fall under their rules. And anyway, it's not the grid that is screwed up, rather the number, type, and location of plants. One reason LAWP is doing OK is because they didn't join the deregulation plan. But not because they have their own plants but because they have long term contracts with producers. The power flows over the lines that you think are all screwd up.

So DWP can do it, why not the rest? You stared the problem straight in the face and still missed it. Guess what? When I say the lines are screwed up, what I mean is SOME are CONTROLLING the flows. Has little to do with the nuts and bolts of wires etc. Has to do with Jurisdictional control. Has to do with Monopoly control(or the more current hip term Market Power).

Here is a detailed webpage explaining all this...CALIFORN IA'S ELECTRICITY OPTIONS AND CHALLENGES REPORT TO GOVERNOR GRAY DAVIS

Over the past twenty years California has transformed its electric system from one that was integrated and highly regulated to one that is unbundled and increasingly subject to competitive markets and federal oversight. Although the state retains regulatory control over utility distribution systems, the FERC regulates the transmission system operations and transmission rates. The FERC also regulates the terms and conditions of most power trades in California because most are now wholesale transactions rather than retail transactions which would be subject to state regulatory oversight. In addition, power sales and transmission are controlled mainly by two private, nonprofit organizations that have no duty to serve California's public.

Under California's new system, California power purchasers so far this summer(2000) have paid much more for power than in the past and the system has been more vulnerable to supply shortages than ever before.

And I know a heck of a lot more about it then either you or Charlie. Apparently you do not.

I also find it very strange you and a Dan the Powerman remain rather silent on this issue. Yes I can understand both of you spend little time around these parts anymore, but it still seems a bit odd for this issue. I also find it odd you choose to belittle me and offer nothing more than "what you think you know". For which I have shown your "assumptions" are basically wrong and does not come close to addressing the deeper issues. So basically you are yet another dittohead spewing what you think you know or heard someplace.

You have made the mistake many do, ignored MANY different sources, and concluded they are mere uninformed whiners. A bunch of whining babies is it? They made their bed now sleep in it? is that it?

You give us Nothing. You present nothing. You offer zero solutions. You choose to lean forward and bad-mouth me. Not a SHRED of personal experience. Not a shred of insider gossip, zero.

-- Anonymous, June 05, 2001

Try that link again: 50% more than New York did on average in 1999

Scroll down, hit the links, do the comparisons.

-- Anonymous, June 05, 2001

BTW Eng,

In formulating any response please do rethink your "opinion" of the LA Department of Power.

Not necessary to get into my life story but you are MILES from the truth on that one, trust me.

I will also go on record as saying the LADWP is probably the finest, most decent, and honest organization I have ever dealt with. There is a reason they chose to stay out of this mess, they know what they are doing and who they serve.

-- Anonymous, June 05, 2001

not to leave anyone out, this:

What a CROCK of shit. As Engineer pointed out but didn't say, CALIFORNIA WANTED A FREE LUNCH ON THE REST OF THE USA.

You will need to explain this one. Not that you can, but do try. Free lunch from whom? How is enforcing fair and reasonable rates by law, asking America to fund a free lunch? Do you even know what the rates are? This ain't just a little higher, we are talking highway robbery higher, get it? Grey Davis did nothing about the problem but now wants to assign blame as a method of starting his Davis 2004 run. Time after time, Davis' bs has been exposed and then it gets re-run by this eye-roller poster as "fact".

First off it is GrAy Davis. Next, up till October2000 with at least SOME FERC oversight and controls, the problems were being managed. Not perfectly, but the attention was allowing formation of fixes and longer term solutions. This is ongoing despite an FERC which has now gone on Va-ca(at least this is what Dubya wants everyone to think).

Currently the biggest issue is outright theft from 30 Million Americans who happen to live in California and use electricity operated in a monopolistic manner with the blessings of GW Bush. The issue is Federal Jurisdiction, not State. Not that YOU will understand this, but there it is a FACT.

If the posts are inaccurate, post the facts loudmouth. Let the reader decide, not YOU. Where is your data? Where is eyeroller wrong?

LET CALIFORNIA PAY. With an average home price ACROSS THE STATE of $265,000 they can MORE THAN AFFORD IT.

Ahh "across the state", no, but you go ahead and give a guy in Lancaster $265,000 for his double-wide/house. I doubt he and Mrs would complain too much.

"They can afford it", fucking hillarious. Ya bud, the higher the price of the home equals less strain on trying to even pay the mortgage. Which translates into piles of dough to pay astronomical energy bills. Is your brain even ON? What backass logic is it running on? Geesh and how old are you? and you made it this far without being run over by a random truck? Hahaha too funny.

Not that you could possibly care, but this affects ALL energy users not just Joe Yuppie living in Carmel. We are talking an economy too big to have a president just say fuck-you. I claim the prez is too corrupt, and far too stupid to even want to understand this. You have a right to disagree.

-- Doomzies be dem (Cleanup Squad@HateQUACKS.com), June 04, 2001.

---------------------------------------------------------------------- ----------

-- Anonymous, June 05, 2001

Funny, but years ago, in a similar situation with NYC facing out and out bankruptcy after DECADES of spending everyone else's money on "social programs", the President of the USA announced he would not be in favor of a program that involved the Fed. Gov. bailing out NYC.

That lead to the famous NY News line about "Pres tells NYC to get lost" or some such thing. IMMEDIATELY, the Wall St. dealmakers began an alliance to BAIL OUT NYC and they were able to do even better. They turned the entire City around and stabilized the financing. Then they put the City on sound fiscal basis.

THAT cost President Ford NYC and a lot more support.

THAT IS WHAT CALIFORNIA HAS TO DO........NOW. AND NOT WAIT FOR ANY "BAILOUT".

As for the "people"......I'm certain that Nevada and other states will be more than happy to welcome both companies and individuals who see the wisdom of LEAVING A POORLY MANAGED POLITICAL VENUE.

-- Anonymous, June 05, 2001

Look again Doc. New Hampshire is higher then NY (and CA) All across the board. And most of NE is higher then CA. Which is exactly what I said. Don’t just look at the first column look at all of them. Look at each state, not the area averages. Also I included NY and NJ (as well as PA) when I said North East.

The other thing you fail to take into account is how much electricity has to be used.

When many of the houses in the Pacific Northwest were built in the 1940’s and 50’s power was so cheap they weren’t insulated much, (if at all). A person could easily afford to heat their (poorly insulated) house by electricity, even if they used 10 times as much as people in other places. At one time the cheapest electricity in the country was in Boulder City just down the road from you. They didn’t quite give it away for free but it was close.

Sorry but it almost all has to do with “the nuts and bolts of wires etc.” The reason that the lines can be (Has controlled to do with Jurisdictional control. Has to do with Monopoly control) “controlled”, to use your words, definitely has something to do with the limited number of them. You can only put a certain number of amps down any line. If the power grows beyond the lines limits you have build a new line. You seem to feel that it’s just a matter of politics. Sorry but they made a LOT of poor engineering decisions. And a lot of that had to do with NIMBY and BANANA. There are also bottlenecks other places that limit how much power can be shipped.

It is obvious that YOU don’t understand the problem. If the lines can only take so much and if there is only so much that can be generated while the demand goes up then you either build more, use less, or you have a problem. California has a problem.

Does that mean that the system isn’t being gamed? No, of course not. But if it’s being gamed under the rules that the CA politicians set up why is that a surprise? If you give someone a hammer and tell them the rules say you can be hit with it if you do something stupid why should anyone give you sympathy when you get hit?

I (personel opinion) think it was obvious years ago that the system could be legally ginned for the benefit of the traders. CA pols collectively stuck their heads in the sand and did nothing to fix it. The only reason they are noticing it now is because the draught in the Pacific North West has limited some of their imports. If there wasn’t any draught they could probably slip by, but only for a while. Sooner or later their not doing anything would catch up with them. It was just sooner rather then later.

Why should Dan and I speak out about this? No offense, but you sound like Paula waiting for an “insider” that will reveal all of the Y2K secrets. Problem is there aren’t any secrets to reveal. It isn’t a big conspiracy. If you look at the places that are having problems (not just CA) it pretty obvious that the places (like TX) that saw what was coming and built plants and lines aren’t having problems. Others, that waited for someone else to solve it, are.

Gary had lots of different sources too. It isn’t just the number of sources, it’s how good they are and how they are interpreted.

Also I’m not belittling you (i.e. you personally) just your ideas about what is going on in CA.

As for offering solutions. The solution is obvious. Build more plants, build more lines (and/or upgrade some existing lines), make stuff (reasonably) more efficient. It’s not magic, it’s engineering.

Sorry but I’m not wrong about LAWP. Again read what I said, not what you THINK I said. LAWP did not opt into CA’s deregulation plan. They had (and still have) long range power contracts with out of state producers. Part of the states deregulation plan mandated getting rid of these contracts. They thought that it would be cheaper to go out on the spot market. ( It would have had there been all the surpluses they thought were out there.) LAWP kept theirs. Hence they are doing OK. What do you object to that?

Read the article (registration required) below. Read it twice. The second time substitute the word electricity for gas and transmission line for pipeline. Same problem more or less, same solution, more or less.

http://www.nytimes.com/2001/06/05/business/05GAS.html

-- Anonymous, June 05, 2001

Here us what you said: "No not even close. Look at what they pay in the North East, NY, etc. " Well California paid a whopping BUCK per kilowatt less than NY "overall" in 1999. As the other figs show, Californians were paying considerably more for industrial uses than NY in 1999.

We can spilt hairs till whenever. Point is IT IS CLOSE. Compared to other western states California is way higher. NY compared to other NE areas is PAR. What drove this California Dereg plan amongst the public and their naive representatives, was a desire to have more competitive rates. NY is NY, everything is as high as the buildings there.

Now beyond a mysterious flurry of downtime for maintenance, I doubt you can produce any real data showing a spike in demand. Your nuts and bolts thing is helpful, but I think without looking at the GAMING aspect, you are probably missing most of the picture.

I also think complicating this issue is the natural gas issue. Look how great the GAMING, oops, I mean deregulation of that system has been. No suprise really once you understand who these crooks are pushing this Dereg BS are. I would put Enron in the front of the bus.

Take a gander at this: Stretching the Electricity Rules fo Fun and Profit.

I also think you will not look at the plan as it sits. The FERC was to play a central part in this. See here is the bottom-line. Sure technically we have some unusual conditions. Sure demand is up, but nothing spectacular or even unforseen. Obviously new plants need to be built and are. Sure the lines need to be expanded etc etc. However, little of this situation can explain a system which has gone haywire in about a year, maybe two(shall we split hairs again?).

What has changed is the guys sitting in the WhiteHouse. These folks will not even implement suggestions from their own people at the FERC. Namely better computers and protocols for monitoring transmission. Gee I wonder why? Do you doubt who is behind this Bush Administration?

The whole Price Cap noise is so lame I find myself busting out laughing most of the time. One would think the discussion is over the marketplace for lamp shades. Never gets beyond this Simpleton psuedo- Free Market crap. Not even about that. About penalizing illegal aliens on welfare and fruitcakes by these dingbats. Price cap noise is pure baloney and absolutely no question the FERC has to act to stabilize this.

As to the DWP, well last I checked a few years back, they OWNED them shares of electricity. Those out-of-state operations, which contribute probably a grand total of 10% of their generation, are partnerships. The DWP are part owners. Your description of their operations is highly misleading to say the least. It is NOT what PG&E and Edison are doing by a long shot.

Here is what YOU said: "One reason LAWP is doing OK is because they didn't join the deregulation plan. But not because they have their own plants but because they have long term contracts with producers. The power flows over the lines that you think are all screwd up".

You now have spent two posts trying to convince ME of something YOU apparently do not believe, that the lines are screwed up technically, or not, take your choice. The reason DWP did not join the Deregulation "party" is because it is a CITY operation, not Private. You infer they had a choice on par with a PG&E. And again, DWP is a Producer, a partner, not a "what ya got today" type of customer you again infer is the case.

I am not even going to get into the problems with PG&E and Edison at length. There is a pile of documentation to indicate insiders at both of these companies wanted out with bags of cash in tow. Like they cared one ioda what the power situation would look like even 5 years down the road? This was not their concern. Their concern was converting bricks into quick cash. Their influence is huge, make no mistake. If Californians are to blame, start with these two, not Joe Consumer.

I will leave you with a final link. I hope it sheds further light on who exactly is involved here. What I hope you will see is a BUSINESS MODEL. A well conceived operation which takes advantage of situations. Which promises pie-in-the-sky, and never delivers except to themselves and the lucky few who inhabit the inner circle. Left holding the bag is always the well meaning ratepayers. They take the risk, they pay for the clean-up. The do-gooders laugh all the way to their next yacht. To be expected I guess, this is what Capitalism is really all about. Free Market? to a Capitalist? This is the last thing these people want, it tends to put a crimp in their advantage.

Enr on in India

-- Anonymous, June 06, 2001

BTW I did not read the NY Times article. Doc don't do registration to read news stories two-step drills. Call it bizarre(trish does), but my own personal beef(protest-non-click thrus) with some who think they can play games on the internet.

Also have a beef with publications who do not archive news stories. Like they will fold if they allocate 10k for an old news story? What if in ten years some HS kid needs that story for a school project?

Debunker is still up and will remain up as long as this boy is breathing. If I get the time I may redo some things to make it more useful, but the content stays. Why shouldn't it? So what if only five people a day use it now? If those five find value, it is worth it in my book. I expect as much, other should also.

I really have a major personal issue with this stuff, sorry.

If you think the NY Times article vital, maybe cut/paste some of it for me.

-- Anonymous, June 06, 2001

Calif ornia not alone in energy quagmire: Montana also is confronting hard times after deregulation

In northwestern Montana, Columbia Falls Aluminum Co. is paying 600 workers to stay home this year so it can sell its power -- provided cheap by the federal Bonneville Power Administration -- on the open market. So far, the company has earned $384 million through such deals, which are raising eyebrows in Congress.

Your tax dollars at work!

-- Anonymous, June 10, 2001

Knock Knock any Enron Memes still here?

Any wonder this place died? Who the hell has the time to "chat" with people who are nothing but stooges for the Ken Lay's of this world?

BTW, don't look now but Dubya will probably be impeached over this issue. Then again, what do *I* know, right?

-- Anonymous, December 11, 2001

Thanks for confirming that you are a total and complete asshole, DP.

-- Anonymous, December 12, 2001