Energy Crisis Insider

Editor’s Note: EcoWorld continues its work with the John Hulls, John Joss and the Pt. Reyes Light to expose inside information about the California energy crisis as well as elucidate a workable framework for a national solution: The Pt. Reyes Light National Energy Plan.

Our articles on the California Energy Crisis have triggered communications from power-industry insiders, informed sources we call Deep Volt and Passing Gas. In addition to providing technical and expert information, they brought the following to the LIGHT’s attention:

Deep Volt claims that PG&E filed for Federal Ch. XI bankruptcy protection from creditors due to concern that asset transfers to the parent company made ‘legal’ by AB 1890 (the deregulation bill) might crumble under legal scrutiny. There was the suggestion, for example, that acquisitions by the ‘parent’ made with ratepayers’ revenue sources might be sold to discharge the debts of the utility ‘subsidiary.’ Could the Ch. XI filing take precedence over any shareholder or other legal action that might put those parent’s assets back on the table? The mess is reminiscent of the egregious asset-transfer manipulations, now banned by numerous federal laws, dating back to the 1864-1869 Union Pacific/Credit Mobilier scandals, and the 1920s Insull/Utility Trust manipulations that significantly caused the Great Depression.

Deep Volt also reports PG&E’s contempt for the Davis Administration and Davis’ appointment of a “totally inexperienced political hack” as PUC head. But they were surprised at similar Federal-level incompetence, given newly appointed DoE Secretary Abrahams’ lack of energy expertise. Apparently PG&E, whose ‘parent’ owns pipeline facilities, never believed that FERC would let things get so out of hand, and that an increase to the ‘realistic’ market rates PG&E anticipated when they sued to get California rate caps removed would merely have made PG&E, its parent and their suppliers more money. PG&E never envisioned that Houston’s oil-boom mentality of over a century would go unchecked, with prices reaching more than 30 times production costs.

Passing Gas claims that gas-pipeline operators have played a game of ‘Simon Says’ on pipeline ‘capacity,’ to energize the effective economics of scarcity. Ask them if their pipelines into California are at contractual or physical capacity. Why? How could they claim that their pipelines are operating at full physical capacity during lower winter demand, while blaming lack of capacity as a reason for rolling blackouts?

Passing Gas also wonders why the Wyoming/CA natural gas facilities got FERC (the Federal Energy Regulatory Commission, which refuses to use its authority to cap the rates!) approval just three weeks after the company applied? Could it relate to Governor Gray Davis locking California into paying for expensive gas-fired plants that will burn expensive gas? Why is Wyoming gas acceptable now, while the Alberta pipeline, proposed over two years ago, was lobbied against and blocked by Houston’s energy industry?

There is undoubtedly more to come . . .

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