Watts Up? New, Unanticipated Factors Meant Schwarzenegger Barely Weathered Perfect Energy Storm, on Pajamas Media.
WEATHERING what may have been California’s worst ever heat wave, Governor Arnold Schwarzenegger survived the very issue that began his recalled predecessor’s downward spiral. In doing so, the governor grappled with issues that may afflict the rest of the nation. It was a perfect energy storm. And it may prove not to be uncommon.
Democratic Governor Gray Davis was flying high five years ago when rolling blackouts hit California, kicking him into a tailspin from which he never recovered. Those blackouts, later shown to have been partly manipulated by Enron and other power generators, occurred when electric power demand from the state’s regulated utilities was 41,000 megawatts. This past week Schwarzenegger narrowly managed to avert blackouts with the peak power demand at 52,000 megawatts.
He was helped because the Enron-style market manipulation, which led to billions in fines, was a thing of the past. But Schwarzenegger nearly crashed as well. The conditions for another tailspin were omnipresent. The demand for electric power was suddenly much higher than it was just last summer. And far higher than forecast when he came into office after ousting Davis in the Golden State’s raucous recall election of 2003.
Just after Schwarzenegger was elected in October 2003, the management agency of California’s electric power grid, the California Independent System Operator, delivered a five-year forecast of the state’s power needs …
Read 
| Comments (0) |
How long will it be before journalists and pundits come to admit it was Davis and Freeman who set up the rules that were the main and primary cause for 2000 energy crises and not Enron’s deminimus market manipulations? If David and Freeman had not insisted on some of the stupidist rules imaginable, the $30billion damage would have likely only been $3billion. At least Schwazenegger isn’t operating from a socialist point of view of fear and mistrust.
Enron was notorious for market manipulation, Ken Lay was going to prison for the rest of his life when he died of a heart attack.
Lets see how the temps are in August. Maybe AS’s guardian angels will call for a cooling off period or PA’s little devils will stir up trouble.
Bill,
I’m trying very hard to resist “correcting the record” on the Western power crisis, the level of Enron’s impact (Ann: Lay and Skilling were not on trial for energy issues, but plain vanilla misrepresenting the financial state of the firm to investors), and whether energy was even a deciding factor in Davis’ recall.
This is from Wikipedia, not the definitive resource, but anyway:
“On April 14, 2003, the California Field Poll reported that Davis had a record-low job approval rating of just 24%, the lowest ever recorded in the 55 years of the poll. Voters cited disapproval of the state’s record $34.6 billion budget shortfall, growing unemployment, and dubious campaign contributor connections.”
I’d add ‘arrogance in the face of incompetence,’ but the Field Poll people didn’t ask me.
Where’s energy? The debt from the crisis did not add to the state’s budget deficit, but was on a separate tab we’re still paying thru utility bills.
Energy wasn’t even a factor in the 2002 election (mostly because the Republicans in the primary failed to nominate Mayor Bradley of LA, who was willing and able to make it a campaign issue), let alone in the recall.
Arnold got elected because he was popular and vibrant; Davis lost because he was unpopular and kind of slimy, even though he had won re-election against a weak opponent. (BTW, I voted against recall as a bald-faced political move by sore losers who wanted another chance).
Are we better off in the long run? Jury’s still out.
The crisis was a complicated story, in which nearly everyone was culpable and many made worse by their actions/inactions. I agreen with Tom T that the whole thing could have gotten settled at a far lower cost, in August 2000. Yeah, some power traders took advantage of the state, so did LADWP. Isn’t it odd that some entities ended up having to pay Enron millions to settle contract disputes?
I’ve personally tried to accept all the blame and apologized so we can all move on. I’m not interested in revisionist history; that only suits somebody’s agenda, not the public interest.
Also, what we had last week was not even close to a crisis; I’d call it a kitchen fire that was successfully contained by the fire department.
The wholesale/high-voltage system performed admirably; California consumers responded to the call for conservation quickly and effectively; nobody tried to gouge prices; and even though a whole lot of transformers blew out at the local level, the utilities amazingly had enough spares in the warehouses to restore service as quickly as could be expected.
I think people in St Louis and NY are still without power.
Still much work to be done, for sure, but no, we are not in a crisis.
ao’d
1. Enron and other power generators were repeatedly cited for gaming the California power market.
2. Gray Davis was also responsible for the 2001 California power crisis for failing to move quickly.
3. The 2001 California power crisis sent Gray Davis into a polling tailspin from which he never recovered. This is well known among political professionals and pollsters. I covered all that contemporaneously and don’t particularly care what somebody wrote on Wikipedia.
4. Ex-LA Mayor Riordan, not Bradley, was going to go after Davis on the power crisis in the 2002 election. That is a major reason why Davis nuked Riordan in the Republican primary with $10 million of negative TV ads.
5. The Republican left standing, Bill Simon, tried fitfully to make the electric power crisis an issue against Davis but was crippled in that. Why? Because he supported the electric power deregulation scheme that backfired so spectacularly.
6. It was Republican Governor Pete Wilson who presided over the set-up of the system that failed in 2000 and 2001. While Davis bears a substantial amount of responsibility, his energy advisor David Freeman came on board after the crisis was underway.
Oh, and did we have a crisis last week? Let’s put it this way. Team Arnold sweated its way through it.
No one anticipated the peak electric power demand that emerged in this extreme weather event.
That, and not revisionism about the 2001 crisis, is what the column is about.
I wonder why all the energy forecasters were so far off. They know about global warming, they know about all the electronic gizmos we jam into our homes and offices.
Everyone should read the State’s Energy Action Plan II on the California Energy Commission web page to gain a glimpse at the future. Energy efficiency and demand response are the top priority–not building new generation.
It was interesting that in the early days of the recent 12-day heat wave, customers were advised to set their thermostats at 78 degrees. About 6-8 days in, the message was changed and customers were asked to set their thermostats at 82 degrees. With dynamic pricing (time-of-use) becoming the norm in several years, people are either going to pay through the nose for air conditioning between noon and 7 p.m. or, perhaps, dramatically increase the thermostat setting.
Conservation is a good thing, but California cannot support population growth and a vibrant economy on conservation alone. And, a greater reliance on natural gas for to fire new generation will be difficult given transmission capacity and supply issues. Renewables will continue to be a growing segment of California load, but have their own issues–environmental, cost-benefit ratio, etc.
People should also take a look at SB 1368, which would prohibit load serving entities; e.g., PG&E and LADWP, from entering into long-term contracts for coal-fired generation capacity in Nevada and Utah unless the coal-fired plant can be designed and operated to equal or better the emissions from a natural-gas fired plant. Removing options for increasing capacity at this time is difficult to grasp.
It seems to me that the clouds for the perfect energy storm are gathering on the horizon and the plan is to force Californians and the California economy to settle for less.
You’re right, Riodan. Mea culpa.
I do not understand why there is not more work on new power generation.
There is work, but it’s not happening very quickly.