California: Power grid probe turns to engineer - (Perot Systems may have shared info for a fee )

The San Francisco Chronicle ^ | Sunday, June 16, 2002 | Mark Martin, Chronicle Sacramento Bureau

[Ernest_at_the_Beach]

Sacramento -- At the dawn of California's ill-fated experiment with electricity deregulation, a brilliant Bay Area electrical engineer working for Perot Systems warned energy officials and consumer groups that the state's new power market could be easily exploited.

As attention swirls in Sacramento about a possible appearance by former presidential candidate Ross Perot before a legislative panel, state Senate investigators looking into Perot Systems' role in the California energy crisis say they are eager to question Paul Gribik.

[Ernest_at_the_Beach]

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[Ernest_at_the_Beach]

Notice that John Robinson has turned on a new function - the ability to add keywords after the initial article is posted. Go here for additional details and discussion:

General Interest
Topic: Focus Software

[okie01]

"Designed by lengthy negotiations involving the Legislature, state regulators, utilities and market participants, California's new power market was a hybrid of what the various competing interests wanted and unlike any other deregulated market in the world."

"Designed" by politicians and regulators to do what every market "designed" by politicians and regulators has done: fail.

[Ernest_at_the_Beach]

I guess every smart generation has to prove it again!

[Carry_Okie]

The melodrama in the article about what a genius this character Gribik is and how only he knew how it all worked... stinks of a hatchet job. Of course he leaves out heavy Slave Party leadership in the whole design of the system. Typical Chronicle; they've got to think we're stupid.

"Even then, you could tell there were going to be problems," said Woychik. "And Paul was absolutely on our side. He wanted to make sure things got fixed."

Woychik is from TURN? IIRC, they are as responsible for the undercapacity in power generation in this State as anybody (with the notable exception of the NRDC). I know we've got whale sharks, and dog fish, is there such a thing as a pig shark?

[lewislynn]

the same engineer was delivering the same message to a different audience: energy companies looking to maximize their profits in the flawed market.

The market isn't flawed, it's the phony Wilson/Brulte deregulation legislation that's flawed opening the door for the unethical low lifes in the energy business to rape the unsuspecting consumer.

[Ernest_at_the_Beach]

a pig shark?

Why not!!!

[Ernest_at_the_Beach]

You are still singing the same tune.

I guess you believe that a perfect market could have been devised,
that the designer's in California just screwed it up!

[Carry_Okie]

Wilson didn't draft that legislation. You are forgetting Steve Peace. The Legislature passed it unanimously.

[monkeyshine]

California: Power grid probe turns to engineer

Hopefully they don't mean this engineer.

[Nick Danger]

"Designed" by politicians and regulators to do what every market "designed" by politicians and regulators has done: fail.

Exactly. This article, and apparently some of the politicians, would have us believe that Mr. Gribik was out selling some insider knowledge of computer technology or software that gave would-be cheaters a leg up. I don't read that at all.

What I see is an economist or engineer watching lawyers at work, and spotting all the places where the lawyers -- who are always totally oblivious to the incentives for future behavior that their tidy little laws set up -- created systems that could be gamed. He then told other people how to game the laws.

Hey, if it hadn't been him, it would have somebody else. Lawyers should never be allowed to design systems that involve the movement of money or other resources. Their training simply does not equip them for it. Everything they know is wrong, and this will always become apparent as soon as their system is turned on and begins to run. They will have left economic incentives all over the place that invite people, and even pay them, to do untoward things. And the lawyers will not have seen it coming; something about legal training blinds them to these effects.

The lawyers should make a deal with the engineers. The engineers won't try cases, and the lawyers won't design systems.

[lewislynn]

You are forgetting Steve Peace.

Show me where Steve Peace's name appears on the legislation.

The Legislature passed it unanimously.

Of course they did, it was everything the liberals wanted. A part of "the legislature" was the Republican controlled assembly. The bill was authored by and introduced by (then) Assembly Speaker Jim Brulte.

Wilson says idea was right

"Blame, hell," said Pete Wilson. "I take credit for having been the driving force to launch deregulation."

......

"I will not pretend to you that (the legislation) was a perfect, free-market mechanism. It wasn't. I knew that at the time. I signed it knowing that," said Wilson. "I thought whatever flaws would emerge ... they would be addressed by our successors."

>

What if we had never deregulated?

“You’d still have a supply shortage and you wouldn’t have a (retail) rate cap,(price controls) so prices would have skyrocketed,” said Sen. Jim Brulte, R-Rancho Cucamonga, the author of the 1996 law.

[marron]

State Sen. Joe Dunn, D-Orange County, called the presentation a step-by- step guide to manipulating the power grid to make money.

Oh, horrors! They're making money again. Someone make them stop it!

#1. The power companies are being accused of working within the system the legislature designed.

#2. The are being accused of working within a badly designed system, without breaking any laws, and somehow managing to make money.

#3. There would have been no system to exploit were there not a shortage of generating capacity. There is no getting around this. Getting approval to build a generating station in California is nightmarishly difficult. Building a pipeline anywhere in the lower 48, likewise. The shortage of generating capacity is the result of bad policy, on the federal, state, and local levels. It is the result of ignorance of the most basic principles of economics on the part of California's citizens, who cannot bring themselves to believe that you need to build energy infrastructure if you want to have energy.

You want to encourage the construction of power plants. You want an oversupply, because you want your suppliers to compete with one another, and you want extra capacity to absorb temporary glitches in the system.

This is the fundamental flaw of democracy. If 51% of our fellows cannot figure out where electricity comes from, but insist on controlling the power industry, we all get to enjoy the blackouts together.

[marron]

"I will not pretend to you that (the legislation) was a perfect, free-market mechanism. It wasn't. I knew that at the time. I signed it knowing that," said Wilson.

No system of "de-regulation with a price cap" could ever have worked. It was guaranteed to fail, and anyone with the slightest grasp of economics must have seen this.

But, again, it doesn't matter how perfect a system you design if you aren't going to build any power plants. Pass all the laws you want to, but at some point you have to go out and break ground and actually build something.

[Ernest_at_the_Beach]

This is the fundamental flaw of democracy. If 51% of our fellows cannot figure out where electricity comes from, but insist on controlling the power industry, we all get to enjoy the blackouts together.

Our legislature is gonna get right on this basic flaw and pass a law to keep it from happening!

LOL!!

[Quila]

Damn, you beat me. The goverment set up a system, and the companies worked legally within it. That those who designed the system apparently hadn't taken ECON 101 isn't the fault of the suppliers.

[randita]

That those who designed the system apparently hadn't taken ECON 101 isn't the fault of the suppliers.

Right on. They're taking a hatchet to this Gribik guy for daring to voice publicly what any 13 year old with a basic understanding of supply and demand easily grasps. CA left the hen house door wide open--heck, they took the door totally off the hen house.

[Quila]

CA left the hen house door wide open--heck, they took the door totally off the hen house.

Don't forget the "FOXES WELCOME" sign.

[Robert357]

The board was later disbanded by Gov. Gray Davis in December 2000 as the state faced rolling blackouts and surging energy prices.

Two very big points here. First, the board was disbanded partially on the basis of FERC instructions, if I remember correctly. Second, after Davis 'took over' nothing was fixed. The problem is being laid at Davis feet once again.

Earth to Gov. Davis, it is your fault, because you should have known, and you did nothing! Simons start point out to reports the question, when did you know, when should have you known, and why did you do nothing, so they can start acking these questions of Davis.