[30421] in North American Network Operators' Group
Re: California electric power on the ragged edge
daemon@ATHENA.MIT.EDU (William Allen Simpson)
Fri Aug 4 06:41:35 2000
Message-ID: <398A9D4C.13538F0@greendragon.com>
Date: Fri, 04 Aug 2000 06:39:20 -0400
From: William Allen Simpson <wsimpson@greendragon.com>
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I sent a half hour at IETF or so learning some of this from Phil Karn,
an old friend who lives in San Diego.
The capacity of the transmission lines into southern Cal is the
limiting factor. There's power out there (in various places), but
no incentive for PG&E to carry it. It's virtually impossible for
a "competitor" to add capacity, as right of way for power lines is
even worse than for fiber.
The cost of power is passed right to the customer. There's no
incentive for PG&E to find lower cost power; thus, the bid price
is either very low (at night, maybe not even covering the cost of
production), or at the peak allowed (50 cents per kilowatt hour),
in an obvious step function. (Such a high price would cause riots
in the heartland states.)
In short, the microeconomist's wetdream (demand bidding) simply
doesn't work without hundreds of competitors, cost containment on
the distributor and a low barrier to entry, none of which apply.
Meanwhile, Phil has added another 16 solar panels and more batteries,
and is selling power back to the grid. Buy low, sell high! PG&E is
not happy, and wants to change the rules for microgenerators -- the
very thing that could add competition!
(Phil already had solar panels and batteries for his EV1. See his web
pages at http://people.qualcomm.com/karn/pv/pv.html. Barriers to
entry without such a motivation might be higher.)
WSimpson@UMich.edu
Key fingerprint = 17 40 5E 67 15 6F 31 26 DD 0D B9 9B 6A 15 2C 32
