• Energy companies seized on loopholes and local shortages to charge prices hundreds of times higher than normal.
Loopholes. That makes me laugh. The morons in the Davis (mal-)administration demanded "price caps", and imposed "must sell" and "maintenance" regulations on in-state generators, and now act surprised when the victims found ways around their stupid rules. These companies are in business for one reason: To make money. They would be foolish not to take advantage of "local shortages", brought about by the NIMBYs and BANANAs in Kali.
• Suppliers withheld power from the state's primary market, and sometimes idled power plants to induce shortages and boost prices.
As you said, the main reason these plants shut down at the peak of the crisis was that they had reached their emission limits. Reliant Energy and the $1900 per MW. NOx credits went from less than 10 cents per pound, to over $3! And the PUC would not let the generators recoup that cost, so they just shut down. In another thread, the manager of the AES Alimitos plant near Seal beach said, "the company was not able to successfully juggle competing pressures from the AQMD and the state's power-grid operator." The plant had just been fined a record $17 million by the AQMD for continuing to operate beyond their emission limits, AT THE REQUEST OF THE CAL-ISO!
In other cases, the Cal-ISO ordered them to shut down out of pure incompetence. Where is the thread on the plant that the union guys charged that the management "ordered them to shut down to create a shortage". San Diego, wasn't it? It turned out that the Cal-ISO told them to shut down.
And having worked in plant maintenance, I can tell you that there is always a huge stack of maintenance items which are put into work when there is an unplanned outage, like a steam tube rupture.
And speaking of that, it can take weeks to repair one of those things. First, you have to cool the plant down, then purge the boiler, then open it up and build scaffolding from the bottom up to the pendants - possible 100' high or more. You have to install ventillation and lighting, and only then can you actually repair the tube leak. Then the whole process is reversed.
Thirdly, the geniuses at the Cal-ISO issued impossible regulations. From Calif ISO: Noticeable Rise In Generators' Non-Compliance
Generators Wary About New Market RequirementsDays after the Aug. 2 [2001] incident, the ISO sent a notice to market participants setting forth new operational guidelines. One of the guidelines is simply unworkable for operators of a certain kind of large power plant, said Reliant's Wheatley.
The requirement is to power, or "ramp up", a plant 10 minutes before it is scheduled to provide electricity, then "ramp down" 10 minutes after it is scheduled to stop. That isn't possible for combined-cycle plants, which use waste heat from natural gas turbines to produce steam for conventional steam turbines, Wheatley said.
"You can't just flip the switch on a combined cycle plant, the way you can with a peaker. It takes a half-hour to bring one of these plants up," said Wheatley.
• Gas companies manipulated supplies and prices, driving up the cost of a main ingredient of electricity.
FERC has already looked into this and found nothing to that story. But that doesn't seem to bother the WSJ.
• Enron played a much bigger role than previously believed in California's energy market. Its trading strategies overwhelmed regulators and drove up prices.
At the peak of the crisis, Enron supplied a maximum of 4% of Kali's electricity needs. Tell me how such a small-time player could be responsible for what happened. And if they were making so much money, how could they have gone bankrupt, eh?
From The Enron Blame Game
Since corporate ruthlessness usually reflects the vigor with which a company pursues profits, it would appear that Enron was actually not ruthless enough. For instance, records pried from the governor's office by legal action reveal that during last year's crisis Enron was charging less for electricity than the market average and significantly less than Davis's own L.A. Department of Water & Power, under the direction of the governor's "electricity czar," David Freeman.Even were Enron overcharging, it was scarcely a major player in California's market. According to the governor's office, Enron only supplied about 4 percent of the state's electricity needs. Davis's relentless campaign to lay all or even some of California's electricity troubles at Enron's doorstep is ludicrous on its face.
I'm thinking of cancelling my WSJ subscription over this article, and the other hit piece on Enron. Clearly Al Hunt as taken over their shop.
However, the item you posted that I liked the best was toward the end about Ernon being such a small player and yet being the focus of all the blame.
Davis's relentless campaign to lay all or even some of California's electricity troubles at Enron's doorstep is ludicrous on its face.
If one takes a look at all the examples and disects them, yes there are elements of price gouging. Sometimes they are gouging because of government regulation imposing huge fines. Sometimes by are because government actions regarding pipeline regulation. Sometimes they are because of government caused panic buying. But usually, the examples don't add up to the huge $8 billion dollar claim that keeps coming out of Gov Davis office.
In my opinion, if California paid an $8 billion penalty in the California energy crisis; probably $1 or 2 billion was due to California air regulations,$2 or 4 billion was due to very high natural gas prices, maybe $200 to $400 million was due to price gouging, and the rest was due to ISO/DWR/PX incompetence & panic buying. In summary, if Davis is right about the $8 billion, most of it was under the control of the folks he appointed or who were controlled by those he appointed.
Sometimes I read something that just makes me mad. Today I got my latest issue of Clearing Up, an electric energy trade journal. Well it turns out that the Bonneville Power Administration had to spend about $1.5 billion (yes with a B) last year on power purchases because of Fishery requirements imposed on the operation of the Columbia River System.
Click here for article for one week only
BPA made it official last week: the agency spent close to $1.5 billion on power purchases last year. Bonneville hydraulic engineer Roger Schiewe told the Power Planning Council Wednesday that the agency had to buy power at market in order to maintain reservoir levels mandated by the current biological opinion. Without those constraints, Schiewe said the system could have generated about 1000 aMW more a month over the winter. With power prices averaging nearly $300/MWh through the spring, the agency spent big-time. The same amount of power would only have cost $106 million the year before.
OK, so California is screaming about its $8 billion in refunds, because power costs were unjustly high. Well, the $1.5 billion is a lot of money for BPA's customers. I don't think people either understand or want to believe the high cost that various air pollution, save the fish, and other kinds of environmental regulation are in terms of higher electric power bills! Again, I would wager that a big chuck of the California complaints about high power cost can be traced to various kinds of enivornmental regulations.