RE: Re: Re: energy experts

[Lisa & Ian Murray]

Have you rattled Gray Davis' teeth Gene?

 

Governor's Office Governor Gray Davis State Capitol Building Sacramento, CA 95814 Fax: 916-445-4633 [EMAIL PROTECTED]

-----Original Message-----
From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED]]On Behalf Of Eugene Coyle
Sent: Tuesday, January 09, 2001 7:05 PM
To: [EMAIL PROTECTED]
Subject: [PEN-L:6804] Re: Re: energy experts

I read the LA Times article that Jim forwarded.  I almost want to laugh at these neo-classical economists who have made money advising that deregulation is a good idea now crying that nobody listens to them.  People did listen to them and that's why we are in this mess.  And their ideas for getting out of it are pathetic.

    Here's a quote from one of them, Borenstein of UC Berkeley, from the Sacrmento Bee of a few days ago:
 

                        "The solution is real-time pricing and long-term
                        contracts. They're a boring solution but they'll
                        work," he said.

And one of the others, Frank Wolak of Stanford, has been repeating and repeating that long-term contracts would have avoided this whole thing.  It is possible that long contracts would have disguised this but would have done no more but lock us into overpaying for electricity -- but at a level where the outrage wouldn't have fed a shot at fixing this.

Gene Coyle
 

Margaret Coleman wrote:

I think the energy crisis has been exacerbated by a few things: 1) those large
companies which have refused to sink any more capital into new plants until
they could get "super" profits in a de-regulated market.  2) the shortage of
natural gas.  3) our insatiable appetite for electricity.  (Can anyone explain
to me how this shortage of natural gas came about?)
Aside from that, there has already been a shortage in poorer neighborhoods for
years.  A year and a half ago, Washington Heights lost power in New York -- Con
Ed claimed they took just as good care of 'poor' neighborhoods (read non-white)
as wealthy ones, but the records proved otherwise.  Then this last summer,
there were a few power outgages in DC, but mysteriously, they lasted the
longest in southeaast and pg county.  I was just shocked as I sat around in my
hot, candle lit apartment, thinking about how the blacker the neighborhood, the
longer the outage.  maggie coleman

Jim Devine wrote:

> Tuesday, January 9, 2001 / L.A. TIMES (for more, see:
> http://www.latimes.com/news/state/20010109/t000002285.html )
>
> Energy Experts Are Talking, but Who's Plugged In?
>
> Electricity: Academics say they've warned of a power crisis for years. Now
> some are media darlings, but state officials dismiss the professors as
> unrealistic.
>
> By JOHN M. GLIONNA, Times Staff Writer
>
> <ellipsis>
>
> But in the end, the economists ask, who's really listening [to these energy
> experts]?
>
> "It's frustrating," said Stanford's Wolak. "The evidence is out there--the
> reports advocating things that could have been done long ago to keep costs
> down. But with politicians, it has to blow up in their face. They're not
> taking advantage of a resource. We don't have all the answers, but we've
> been thinking about this much longer than they have."
>
> In a 1997 report for the California Energy Commission, Borenstein and other
> researchers predicted that electricity prices would soar in a deregulated
> market unless the power plant owners were broken up into numerous small
> firms. Otherwise, the report concluded, a few bigger companies could
> collectively mandate higher prices.
>
> "Policymakers said our findings were ridiculous," Borenstein said. "We were
> called alarmists."
>
> In recent meetings with politicians, Borenstein and others have suggested
> establishing a real-time pricing system in which electricity prices would
> rise during peak hours to encourage conservation. They also advocate that
> utilities form long-term purchase contracts with power plant owners to
> avoid having to resort to the volatile spot market.
>
> "The politicians nod and say, 'Good idea. Now I understand what I have to
> do.' But nobody's done a thing," Borenstein said. "The politicians are
> making trade-offs."
>
> Not so fast, say policymakers.
>
> "It's easy for academics to say higher prices are good for conservation,
> but we don't live in any hypothetical classroom or ivory tower," said an
> aide to a legislator close to the crisis, who spoke on the condition that
> he not be named. "They don't have to sell their ideas to real people. We
> live in a different world."
>
> John Roza, an aide to Sen. Steve Peace (D-Chula Vista), chief negotiator of
> deregulation law, said not even academics are all-knowing.
>
> "Economists have always complained their counsel isn't heeded--that if
> someone would only listen to them, things would happen," he said. "Their
> concept of conserving power has people turning down their air conditioners
> on the hottest day of the year. Economists have a very impoverished
> understanding of human behavior."
>
> <ellipsis>
>
> What's most interesting about this article is that it really doesn't say
> much more than the above about what policies UC-Berkeley's Energy Institute
> energy experts recommend. They want to have peak rate pricing, too.
>
> Jim Devine [EMAIL PROTECTED] &  http://bellarmine.lmu.edu/~jdevine