Will state make power-system change akin to #Enron debacle? RSS Feed

Will state make power-system change akin to Enron debacle?

There aren’t too many folks in and around the state Capitol who were there 22 years ago, when the building’s denizens committed one of California history’s most horrendous errors.

The Legislature unanimously passed — and then-Gov. Pete Wilson signed — a misnamed, misbegotten “deregulation” of the state’s electric power system.

Utility executives, political leaders and even consumer groups all promoted the plan, promising that it would be a win-win for everyone.

But some of it was pure political hokum — such as giving power customers a much-ballyhooed rate cut that actually was financed with a bond issue those same consumers would repay, with interest, through their bills.

Most importantly, it turned out to be a monumental failure.

It opened the door to market manipulation by Enron and some other big energy players, drove one major utility (Pacific Gas and Electric) into bankruptcy, almost sent another (Southern California Edison) into insolvency, caused blackouts and wound up costing California consumers many billions of dollars.

This brief excursion into not-so-distant history is important because the current crop of Capitol politicians, including Gov. Jerry Brown, is pushing another big reconfiguration of California’s electric power system.

Newly drafted legislation would integrate California’s grid with those of other Western states and perhaps cede operational authority from a politically accountable agency, the California Independent System Operator (CAISO) to a new regional agency dominated by the power industry.

CAISO was created after the deregulation debacle to provide more accountability, but it’s the only regional operator organized that way. All others in the country are industry-dominated, as federal law prefers.

Assembly Bill 813, which passed the Assembly more than a year ago, has been stripped of its previous content behind closed doors and now contains the new scheme.

The plan seems to have broad support from both the traditional power suppliers and so-called “green-power” generators.

Backers have formed two front groups to push for its passage, arguing that integration would give California an outlet for its excess solar and wind power.

“Evolving California’s grid operator from a single state to a western region will lower rates, create jobs, and will allow for a cleaner grid by increasing the amount of wind and solar we can responsibly manage,” Sarah Webster, vice president of San Francisco-based Pattern Energy, said in a statement on behalf of one group.

It’s also touted as making it easier for California to wean itself from carbon-based power, because the state could draw on juice from other states to back up relatively unreliable green sources. That, apparently, is why Brown, a fervent advocate for reducing greenhouse gases, is a strong backer.

So what’s wrong with all of that?

Read full article at The Mercury News