From fork-admin@xent.com Thu Sep 26 11:04:29 2002 Return-Path: Delivered-To: yyyy@localhost.example.com Received: from localhost (jalapeno [127.0.0.1]) by jmason.org (Postfix) with ESMTP id DB70116F03 for ; Thu, 26 Sep 2002 11:04:27 +0100 (IST) Received: from jalapeno [127.0.0.1] by localhost with IMAP (fetchmail-5.9.0) for jm@localhost (single-drop); Thu, 26 Sep 2002 11:04:27 +0100 (IST) Received: from xent.com ([64.161.22.236]) by dogma.slashnull.org (8.11.6/8.11.6) with ESMTP id g8PL1BC13774 for ; Wed, 25 Sep 2002 22:01:12 +0100 Received: from lair.xent.com (localhost [127.0.0.1]) by xent.com (Postfix) with ESMTP id CD62F2940A5; Wed, 25 Sep 2002 13:57:08 -0700 (PDT) Delivered-To: fork@example.com Received: from barry.mail.mindspring.net (barry.mail.mindspring.net [207.69.200.25]) by xent.com (Postfix) with ESMTP id 8C11429409A for ; Wed, 25 Sep 2002 13:54:33 -0700 (PDT) Received: from user-119ac86.biz.mindspring.com ([66.149.49.6]) by barry.mail.mindspring.net with esmtp (Exim 3.33 #1) id 17uI1g-00011d-00 for fork@xent.com; Wed, 25 Sep 2002 15:40:48 -0400 MIME-Version: 1.0 X-Sender: rahettinga@pop.earthlink.net Message-Id: To: fork@example.com From: "R. A. Hettinga" Subject: California needs intelligent energy deregulation Content-Type: text/plain; charset="us-ascii" Sender: fork-admin@xent.com Errors-To: fork-admin@xent.com X-Beenthere: fork@example.com X-Mailman-Version: 2.0.11 Precedence: bulk List-Help: List-Post: List-Subscribe: , List-Id: Friends of Rohit Khare List-Unsubscribe: , List-Archive: Date: Wed, 25 Sep 2002 15:39:40 -0400 X-Spam-Status: No, hits=-1.9 required=5.0 tests=AWL,HOME_EMPLOYMENT,KNOWN_MAILING_LIST, SIGNATURE_SHORT_DENSE version=2.50-cvs X-Spam-Level: --- begin forwarded text Status: RO Date: Wed, 25 Sep 2002 13:57:15 -0400 To: Digital Bearer Settlement List From: "R. A. Hettinga" Subject: California needs intelligent energy deregulation Sender: http://www.siliconvalley.com/mld/siliconvalley/4144696.htm?template=contentModules/printstory.jsp Posted on Tue, Sep. 24, 2002 Dan Gillmor: State needs intelligent energy deregulation By Dan Gillmor Mercury News Technology Columnist The facts were trade and government secrets at the time. But the energy industry failed the smell test in 2000 and 2001 as it tried to justify soaring wholesale electricity and natural-gas prices in California. Now, as investigators and regulators unravel the reasons for a financial and fiscal mess we'll be cleaning up for decades, we're learning what everyone suspected. Market games helped engineer the price spikes. The latest manipulation was highlighted in Monday's finding by a federal administrative law judge, who said a dominant natural-gas company squeezed supplies in order to squeeze customers. His ruling came a few days after California's Public Utilities Commission reported that electricity generators mysteriously failed to use available capacity during the crunch, also driving up prices. And don't forget the sleazy games by energy traders who gleefully worked the system, in schemes best summed up by an Enron insider's boast in a memorandum made public in May, that ``Enron gets paid for moving energy to relieve congestion without actually moving any energy or relieving any congestion.'' How much of this was illegal, as opposed to simply amoral, remains to be seen. Unfortunately, California's response -- confusion, lawsuits and policy tweaks -- hasn't been sufficient. More unfortunately, even if the state suddenly did all the right things -- including a hard-nosed program designed to free ourselves from the gougers' grips -- we would need a willing federal partner. But it's foolish to think that the Bush administration would do much to help one of its least favorite states, or do anything that conflicts with its love of traditional, non-renewable energy sources. If the lawsuits against various energy companies and traders bear any fruit, the best we can expect is to pay off some of the massive debts the state amassed to prevent a total collapse in early 2001. That's a reasonable approach, but don't expect miracles. State policies are moving the wrong way on utility regulation, meanwhile. Instead of relentlessly pursuing smart deregulation -- still a good idea if it gives customers genuine choices -- state laws and regulations ``put the utilities back in the business of buying energy for captive customers,'' notes V. John White, executive director of the Sacramento-based Center for Energy Efficiency and Renewable Technologies (www.ceert.org). It's tempting to call for an outright state takeover of the utilities -- tempting but a bad idea. When there's genuine competition, as we could achieve in electricity generation, the private sector tends to do a better job. Instead of abandoning deregulation, California should find a way to inject real competition into the market. We do need to recognize that the current system of delivering electricity defies privatization, at least under current conditions. Smart regulation is essential. But the best response to gouging is to use less of what the gougers control. There are two ways: conservation and replacement. We need more of both. The best recent step is a new state law that slowly but surely ratchets up the use of electricity from renewables. By 2017, California's utilities will have to get 20 percent of their power from solar and other renewable sources. Several power companies are expected to do this even sooner. But this law has an element of old-line thinking, the captive-customer model we need to be getting away from, not sustaining. Lip service to newer ideas isn't enough. The state should be removing barriers to micro-generation systems, small generators that can run on a variety of fuels and provide decentralized, harder-to-disrupt electricity to homes and businesses. This technology is coming along fast. State policies are not keeping pace. Investing to save energy is increasingly the smartest move of all. California should be doing more to encourage this, whether through tax incentives or outright grants in low-income households. California hasn't done badly on conservation in a general sense, and energy customers did react to last year's soaring rates and blackouts by cutting back, but it's lunacy to wait for the next crisis when we can do something to avoid it altogether. Maybe this is all pointless. The Bush administration's energy policies, so grossly tilted toward the unholy trinity of oil, coal and nuclear, are making us all more vulnerable. Never mind what might happen if the coming war in Iraq goes badly. It's pointless to hope for a sane federal policy -- a crash program to drastically speed the inevitable transition to a hydrogen-based energy system. But the largest state, one of the world's major economies in its own right, does have some clout. We can hit the rip-off artists where it hurts, and protect ourselves from even more serious disruptions. Maybe next year. -- ----------------- R. A. Hettinga The Internet Bearer Underwriting Corporation 44 Farquhar Street, Boston, MA 02131 USA "... however it may deserve respect for its usefulness and antiquity, [predicting the end of the world] has not been found agreeable to experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire' --- end forwarded text -- ----------------- R. A. Hettinga The Internet Bearer Underwriting Corporation 44 Farquhar Street, Boston, MA 02131 USA "... however it may deserve respect for its usefulness and antiquity, [predicting the end of the world] has not been found agreeable to experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'