[33799] in North American Network Operators' Group
Re: [OT]: Involuntary outages may start at 7am PST
daemon@ATHENA.MIT.EDU (Kevin Oberman)
Wed Jan 24 13:05:57 2001
Message-Id: <200101241803.f0OI3Xc20467@ptavv.es.net>
To: "Kavi, Prabhu" <prabhu_kavi@tenornetworks.com>
Cc: Nathan Stratton <nathan@robotics.net>,
Sean Donelan <sean@donelan.com>, nanog@merit.edu
In-reply-to: Your message of "Wed, 24 Jan 2001 11:06:07 EST."
<6B190B34070BD411ACA000B0D0214E567588A2@newman.tenornet.com>
Date: Wed, 24 Jan 2001 10:03:32 -0800
From: "Kevin Oberman" <oberman@es.net>
Errors-To: owner-nanog-outgoing@merit.edu
> From: "Kavi, Prabhu" <prabhu_kavi@tenornetworks.com>
> Date: Wed, 24 Jan 2001 11:06:07 -0500
> Sender: owner-nanog@merit.edu
>
>
> 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: oberman@home.com Phone: +1 510 486-8634
