Woes

While some may argue that California’s energy woes offer a prime reason for placing the electric competition genie firmly back in its bottle, a recent case study by a global consulting group asserts that California’s energy difficulties mask the fact that other power markets in the United States are not only surviving, but thriving, with the PJM market serving as the perfect example.

While other aspects of California’s year-old energy woes have settled into well-defined trench warfare that centers on supply, demand and price issues in Sacramento and Washington, D.C., the state’s two largest investor-owned utilities limp along, pulled by the ebb and flow of politics and the courts with no clear path for restoring their financial independence, although Gov. Gray Davis wants the state to exit its current electricity buying role by the end of next year.

As the debate over President Bush’s energy plan continues to unfold, ways in which to bolster the nation’s sagging power transmission infrastructure are getting increased scrutiny. The White House energy blueprint has helped to bring the issue front and center by proposing to give the Federal Energy Regulatory Commission (FERC) eminent domain authority over transmission siting.

As the debate over President Bush’s energy plan continues to unfold, ways in which to bolster the nation’s sagging power transmission infrastructure are getting increased scrutiny. The White House energy blueprint has helped to bring the issue front and center by proposing to give the Federal Energy Regulatory Commission (FERC) eminent domain authority over transmission siting.

With little or no air-conditioning related demand on the horizon and amid a quickly eroding year-on-year storage deficit, natural gas futures slumped to new 9-month lows Monday as traders pressed the market’s downside yet again. After opening lower, the June contract was hit with a steady procession of commercial and speculative selling that took the market down to a previous low at $4.10 just before the closing bell. Unable to rebound, June closed just off that level at $4.113, down 17.3 cents for the day.

California’s well documented difficulties related to electric restructuring and a sluggish response from consumers to retail electric competition in key parts of the country have not deterred most U.S. electric utilities from continuing to pursue competitive retail plans. The situation has not kept several states from moving forward with restructuring efforts, according to an industry analysis by Chartwell in its new publication, Competition in the Energy Industry, 2001, which was unveiled last week.

California’s energy woes have taken on the look and feel of a political campaign with the state’s beleaguered governor running a re-election campaign more than 18 months before voters go to the polls. However, if Hollywood were doing a movie on the continuing drama, none of the principal actors — except the governor — would be delivering predictable lines to the camera.

California’s well documented difficulties related to electric restructuring and a sluggish response from consumers to retail electric competition in key parts of the country have not deterred most U.S. electric utilities from continuing to pursue competitive retail plans. Nor has it kept several states from moving forward with restructuring efforts, according to an industry analysis by Chartwell included in its new publication, Competition in the Energy Industry, 2001.

While one part of California’s regulatory structure was giving an expedited okay to 95 more megawatts of power to come on line in late summer, California Public Utilities Commission President Loretta Lynch Thursday was taking a slower, more detailed approach to determine how to spread the 3-cent/kW rate increase that was approved last month for the state’s two largest investor-owned utilities. In separate action, Moody’s Investor Service removed Southern California Edison Co. from further possible downgrades because the deal it struck with the governor last Monday.