mcgees.org

If you visit mcgees.org in the coming days and find it not responding, it just may be that my hosting company, DreamHost, has been hit by a rolling blackout  The company (and, relevantly, their servers) are based in Huntington Park, which is serviced by Southern California Edison (SCE) [1].  California’s deceptive and ill-considered Assembly Bill 1890 has caught up with us.

Curious how California ended up in this pickle in the first place?  An undated report by the California Public Utilities Commission (from internal evidence, written some time between 1 August and 31 October 2000) sheds some useful light.  A couple of key passages:

Currently, the law requires that California electric utilities, which serve the vast majority of California customers, purchase all of their power through the ISO and the PX [at spot prices]. However, individual (usually large) customers and marketers may purchase power outside the PX by signing “bilateral” contracts with marketers or generators [for much lower prices]. The ISO’s centralized system still directs the flow of electricity, but prices and service conditions are established by private contract.

The Federal Power Act requires that electric rates be “just and reasonable.” Traditionally this has meant “cost based” rates in which investments in new or refurbished power plants were amortized over a long period of time, and profits were set at a reasonable level. Under the new market structure, wholesale prices for electricity are not necessarily based on costs. The FERC now permits power plant owners to sell wholesale power at “market-based rates,” with very little evidence to support those rates as just and reasonable. It appears that the FERC’s assumption-that the market will discipline wholesale prices-is not a reasonable one at this time in California.

SCE stock has seen better days.  So has its credit rating.  I suppose this is par for the course after defaulting on $596 million of debt.

My thoughts are with all Californians who have health- and life-critical energy needs.  Also: California drivers, please remember that an intersection with a traffic signal blackout is to be treated as a four-way stop (priority passes clockwise, i.e., the person on your right goes before you do.)  A political debacle is one thing; it would be far worse if there were deaths as a result.

Wed, 17 Jan 2001 23:34:39 -0600
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