California:Panel told of unneeded overpriced power buys

The Orange County Register ^ | May 22, 2002 | JOHN HOWARD

[Ernest_at_the_Beach]

SACRAMENTO -- Determined to avoid blackouts, California's own electricity grid managers ordered power they didn't need and forced the state to pay top dollar for excess energy that was sold later at a loss, according to the head of the Legislature's probe into energy market price fixing.

[Ernest_at_the_Beach]

Here is the sidebar:

_____________________________________________________________________________________________________

What the ISO and DWR do

Who manages what

The two main agencies involved in power purchases are the Independent System Operator and the state Department of Water Resources.

Here are their duties:

The nonprofit ISO was set up by the 1996 law deregulating the wholesale electricity market. Headquartered near Sacramento, its staff manages about 80 percent of the state's electrical grid, and has purchased power in emergencies to prevent outages.

The head of the ISO, Terry Winters, answers to a five-member board that is appointed by Gov. Gray Davis.

The DWR buys energy for the state's three major utilities under a January 2001 emergency order signed by Davis. The DWR determines how much power it needs to satisfy the utilities' customers and determines how much money it must have to make the purchases, with the money coming from customers' rates. The utilities lacked the credit to buy power on their own. The DWR has been run since 1999 by Thomas Hannigan, who ultimately answers to Davis.

[Ernest_at_the_Beach]

Calpowercrisis:

To find all articles tagged or indexed using Calpowercrisis, click below:
	click here >>>	Calpowercrisis	<<< click here
(To view all FR Bump Lists, click here)

[Robert357]

While, I am sure that Sen Dunn is partisan, at least he seems to be showing some restraint by calling for the chips to fall where they may on all potential players in the California market including the Cal-ISO. Most democrats only want to chant Enron, Enron, Enron. Dunn is casting as broad a net as possible, and seems to be saying let the investigation lead to who many have every done bad things. I find that refreshing from a Democrat.

[d14truth]

"Grid managers said the purchasing practice was proper, and rejected Dunn's request for the resignation of ISO chief Terry Winter from his $550,000-a-year job. Winter reports to the ISO's five- member board of directors, appointed by Gov. Gray Davis to run the nonprofit grid."

NON-PROFIT is right!!!

[Ernest_at_the_Beach]

$550,000-a-year job

I want a job like that when I grow up!

[Carry_Okie]

Determined to avoid blackouts, California's own electricity grid managers ordered power they didn't need and forced the state to pay top dollar for excess energy that was sold later at a loss, according to the head of the Legislature's probe into energy market price fixing.

"OK, is this something you have done in the past?" the unidentified CERS woman persisted.

"Yes," said Jim McIntosh, ISO's grid operations manager. "Many times."

ROTFLMAO!!! And this is supposed to be just stupidity on the part of Bray Davis? Nothing happens in this State without his say-so.

[NormsRevenge]

DUMP DAVI$



GO SIMON

[Ernest_at_the_Beach]

The head of the ISO, Terry Winters, answers to a five-member board that is appointed by Gov. Gray Davis.

The entire board answers to Davis!

And here we have :

The DWR has been run since 1999 by Thomas Hannigan, who ultimately answers to Davis.

[Robert357]

I just read another article in the Sac Bee about the Cal Iso conspiring with the DWR to game the power system prices. I guess, that Boxer and Feinstein should ask Ashcroft at Justice and FERC to go after Cal ISO.

SAC BEE Article

[snopercod]

Crossposting my response to the other clone thread

[snopercod]

This is what happens when bureaucrats are put in the position of "managing" markets - a thing that they are not trained for or capable of. Nobody is.

In this case, they paniced over the thought of blackouts and the resultant headlines of old folks on respirators dying because of their incompetence.

They ordered more power than they needed. I would have done the same if I were in their shoes.

[Carry_Okie]

In this case, they paniced over the thought of blackouts and the resultant headlines of old folks on respirators dying because of their incompetence.

Is that a conclusion based upon evidence?

[Carry_Okie]

"We do already, we don't need these resources to balance our schedule. In fact, this will cause us to be over our schedule," said Chris Smith, an official with DWR's California Energy Resources Scheduling office, or CERS.

Panic? CYA? Deliberately buy too much at a price too high, and then sell it back at a loss? If I knew it was too much, I wouldn't do it without written instructions. Where's the memo from Davis telling them to do it?

[snopercod]

Is that a conclusion based upon evidence?

No, it is my personal opinion based upon my first-hand knowledge of how human beings act in a bureaucracy.

[Carry_Okie]

No, it is my personal opinion based upon my first-hand knowledge of how human beings act in a bureaucracy.

I have plenty of bureaucratic experience and have even worked for Southern California Gas. You are forgetting that this is California, and how it has changed. Mine is an opinion based upon my personal knowledge of the standard mechanics for how environmentalists try to manipulate the market to reduce consumption:

To reduce consumption, make it more expensive. That's about as far as most of these creeps go in their understanding of economics. The lawyers and complicit business types cash in while they are at it and use the money to do "good" things like creating jobs for those dead end liberal arts types that they can put to good use and the few colluding professionals who will sell out their industry for a local monopoly. It's OK because the righteous deserve the money and the evil capitalists don't. For example, here in Santa Cruz the County passed an ordinance mandating fire sprinklers upon the argument that it would make houses less affordable and slow development (the margin was $15-25K per house, no insurance reduction (insuring water damage is more expensive than fires)). Similarly, County PRIVATE road standards mandate an 18' wide driveway with ONE FOOT of baserock and asphalt (if you saw the topography here you would know what that meant). It's especially funny given that our County road is 12' of 3/4" of screens on dirt. It doesn't hurt that the largest industrial entity in the County is the quarry, asphalt plant, and road construction company either (the largest in the Bay Area), but then I guess that there is no other reason given that one of the County Supervisors is an owner of that company (which also owns several TV stations) and did not recuse himself when approving the bids on a style of road "maintenance" that consists of building miles of outrageously expensive retaining walls on FEMA money. They want licensed engineers approving culverts and continuously observing compaction (at $80/hr for drinking coffee) and demand an EIR for a fence. Then there are the necessary geologists, biologists, Native American spiritual sites, and have I talked about the archaeologists? Anything over 50 years old is a site!

Make it more expensive, cash in, and feed the sheep. It's the RICOnut mantra. I have seen it so many times that it's a surprise when it isn't the case. Bryson, Peace, and Davis know it so well that you should be surprised if they don't do it. They have no compunctions about crashing the State economy while they are at it. They and their friends will do fine milking the system off their indentured constituents and make all kinds of lovely justifications about how things are "better" now.

[lewislynn]

The nonprofit ISO was set up by the 1996 law deregulating the wholesale electricity market.

That, in one sentence sums up what is/was the root of the convoluted mess.

[Ernest_at_the_Beach]

That is ugly!