Energy consumption, Electric utilities, Supply & demand, Power resources, Microeconomics, Prices, Government policy, Electric power, Energy demand management, Electricity, and Electric power consumption
In the mid-1990s, California was the first U.S. state to fundamentally change the way in which its electricity supply was regulated. In order to achieve competition on the electricity market, production and transportation were separated and electricity exchanges were set up. Following the introduction of the reforms, electricity prices initially fell somewhat for most consumers. This was considered a success of deregulation. In the summer of 2000 and again in the following winter, however, wholesale prices on the electricity exchange rose drastically. In mid-January 2001, electricity demand out-stripped available capacities, so that the power supply of many consumers had to be cut. In addition to the conceptional problems of deregulaion, a series of other factors also contributed to this development, such as under-estimating economic growth, the increase in electricity consumption in the second half of the 1990s, the elaborate and time-consuming approval procedures for power stations and insufficient incentives to save electricity. In Europe, the starting position is more advantageous than it was in California, but here, too, deregulation of the electricity supply could contribute to reducing capacity reserves and thereby to endangering the security of the power supply.
Multinational Monitor. Jun2001, Vol. 22 Issue 6, p9. 12p. 1 Black and White Photograph.
Electric power failures, Electric utilities, Deregulation, Prices, and Electricity
Contends that the electric power failures in California were not due to an energy shortage but have been staged for massive electricity price increases by the state's electric power utilities and oil and gas companies. Deregulation of the electric utilities in the state; How the United States Federal Electrical Regulatory Commission colluded with Southern California Edison to stop a clean power generation initiative; Views of consumer and environmental groups on the energy shortage.
Markets, Power resources, Prices, Electric power failures, and Electricity
The importance of the role of the Federal Energy Regulatory Commission (FERC) is illustrated by the situation in California. Wholesale electricity prices in California rose sharply in May 2000 and have remained high. California also saw disruptions in service this winter and spring. GAO reviewed FERC's outage study and two other studies that examined possible exercise of market power in California's electricity industry. GAO found that FERC's study was not thorough enough to support its conclusion that audited generators were not physically withholding electricity to influence prices. FERC's study largely focused on determining whether or not the outages were caused by actual physical problems, such as leaks in cooling tubes that required maintenance or repairs. Two other studies GAO examined found evidence that electricity generators exercised market power to boost electricity prices in California. These studies sought broader evidence of the exercise of market power in the entire market by comparing wholesale electricity prices to the estimated costs of producing electricity. In doing so, they found that prices were higher than would be expected if the generators were acting competitively. None of the studies was thorough enough to determine the precise extent to which market power versus other factors has caused high electricity prices in California since May 2000. A thorough study of market power would combine the market-wide approach of the other two studies with a quantification of the extent to which outages, or other supply disruptions, were caused by factors other than generators' attempts to drive up prices. Such factors may include the operating and maintenance history of existing power plants, constraints on the number of hours certain plants can be run, and financial problems of utilities, which led to suspension of payments to some generators. This testimony summarized a June report (GAO-01-857). [ABSTRACT FROM AUTHOR]
Prices, Power resources, Supply & demand, Electric power failures, and Electricity
Wholesale electricity prices in California rose sharply in May 2000 and have remained high. In addition, there were disruptions in service--blackouts--this winter and spring. The California Independent System Operator, the state agency in charge of balancing electricity supply with demand, expects high prices and service disruptions to continue and perhaps worsen this summer. In response to concerns about high prices and generator outages in California, the Federal Energy Regulatory Commission (FERC) undertook a study, released in February 2001, to determine whether outages were being used to withhold power and drive up prices of electricity in California. Other studies of the electricity market in California have been conducted by economists and industry experts. One study, conducted by three economists from Stanford University, the University of California at Berkeley, and the University of California Energy Institute examined whether market prices of electricity in California in 1998 and 1999 were higher than competitive levels. A second, similar study by two economists--one from the Massachusetts Institute of Technology and one from a private consulting firm--examined the California market during 2000. This report reviews the FERC study, as well as the two studies on the California electricity market to determine (1) how the methodologies and results of the three studies compare and (2) if FERC's study was thorough enough to support its conclusions that audited companies did not physically withhold electricity supplies to influence prices. GAO found that FERC's study used a very different methodological approach from the approach used by the other two studies and reached different conclusions. FERC's study performed an audit of specific generating plants and companies that experienced outages to determine if audited companies were incurring outages in an effort to drive up prices, while the other two studies compared market prices with estimates of the costs of producing electricity. GAO further found that FERC's study was not thorough enough to support its conclusion that audited companies were not withholding electricity supply to influence prices. [ABSTRACT FROM AUTHOR]
Energy industries, Gas industry, Electric utilities, Prices, Rates, Natural gas, and Electricity
Presents news concerning the energy industries in the United States, compiled as of July 2001. Discussions during the GasMart/Power2001 congress in Tampa Bay, Florida, on the impact of the convergence of natural gas companies and electric utilities on the industry; Results of a study by the Natural Gas Supply Association on the correlation between natural gas prices and electricity prices in California.
Electric utilities, Hospitals, Deregulation, Prices, Medical care societies, and Electricity
Focuses on the impact of electric power deregulation on the hospitals in California. Increase in the electric rates in California; Rate increase approved by the California Public Utilities Commission for hospitals; Plan of the California Healthcare Association to seek the exemption of hospitals from blackouts. INSET: Two California hospitals gird for power blackouts.
Reports on the efforts of the United States Federal Energy Regulatory Commission to ease the price hike in California's deregulated electricity market as of December 18, 2000. Benchmark price suggested by the commission; Impact of high electricity prices in the whole-sale power market on the state's utilities; Accusations against the commission; Results of the commission's efforts.
Electric utilities, Deregulation, Prices, and Electricity
Focuses on the proposed changes in the California's deregulated electricity market by the Federal Energy Regulatory Commission (FERC) to push down high electricity prices. Elements in the pricing plan of the FERC; Explanations from James Hoecker, FERC chairman, of the proposed changes; Actions being undertaken by the agency in eliminating a requirement for investor-owned utilities.