Dear
HCN,
Paul Larmer makes two fundamental errors in
the second paragraph of his article (HCN,
1/29/01: Power on the loose). California deregulation
didn’t “require” that power companies sell off their power
generation; it just made it attractive to do so in the short term,
and shortsighted utilities did just that. However, other utilities,
notably Los Angeles and Sacramento, did not and are not seeing the
kinds of problems that areas served by Southern California Edison
and PG&E are experiencing.
Secondly, I
haven’t seen much credible evidence that deregulation had a
“chilling” effect on new plant construction. The recent edition of
RMISolutions, the quarterly publication of the
Rocky Mountain Institute, lists that one as Myth #4. RMI states
that contrary to the myth, California added 6,046 MW of generating
capacity during the 1990s, much of it in smaller, more efficient
plants.
The problem is less one of available
power than it is one of available capital at the two largest
restructured utilities, SCE and PG&E, who chose to become
consumers themselves and are unable to buy power as they hover
close to bankruptcy.
Relying on a market-based
pricing structure of supply and demand instead of a regulated price
structure has made energy producers leery of selling to the two
utilities because they are afraid of not getting paid, not because
they don’t have the power.
The myths and
half-truths swirling around the California energy “crisis” are
becoming legion and it doesn’t help to have such a respected
regional publication as High Country News adding
to them.
On a more positive note, Ed Marston’s
excellent essay on his tenure as president of the board of DMEA was
delightful. It is heartening to hear of a utility co-op resisting
the forces of its peers to fight change and instead embracing the
realities of a changed energy landscape. Supporting efficiency,
solar energy and the need for change will serve them well in the
long run.
Mr. Marston might want to consider just
how DMEA’s board’s decisions might be portrayed by someone wanting
to make them look bad. They might be considered as “kowtowing” to
the environmentalists to the detriment of the large power
producers.
Companies like Tri-State could cry
that such change is having a “chilling” effect on their ability to
provide low-cost power. Regardless of whether it is true or not,
such tactics play well politically and with the media, as recent
events in California have shown.
Thomas W. Elliot
Guffey,
Colorado
This article appeared in the print edition of the magazine with the headline Myths of the California energy ‘crisis’.
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