Arizonans pwned by California

[Kopji]

PHOENIX - A federal agency says Southern California Edison can go ahead with a request to bypass Arizona's denial of an interstate transmission line project...

If Edison gets the override it will be the first granted under a 2005 law allowing federal permits to be granted for power projects denied by states.
The Arizona Corporation Commission rejected Edison's application to build the Arizona portion of a 230-mile line between Phoenix and Palm Springs, Calif. a year ago.

http://www.azcentral.com/business/articles/2008/05/30/20080530biz-PowerCorridor-30.html

The short version of this story is that Arizona denied this power line connecting Phoenix to Palm Springs because it will raise the energy prices for lower earning Arizonans. The Federal government, using a recent law, overrode this decision which will benefit their political cronies in California.

"States rights" is only a battle cry for things like abortion rights or same sex marriage, not problems like California's need to build more power plants. Oh yeah, and John McCain sucks!

[Beerina]

Neither state nor the Federal government has any business telling private utilities, as electric companies should be, how to operate. If the Arizona power wants to sell to California customers, so be it.

Of course, that's all messed up hand over fist, so one shouldn't be surprised that three governments at two levels are fighting over who gets to wield the power of telling other people what to do, for their own benefit.


The story you quoted has one whopping sentence more than what you pasted! :)


So it doesn't get into details about how each state's utilities are incestuously intertwined with the local governments, nor what this power corridor and the connection between the two cities is about.

[Kopji]

Click whirr chugga chugga clink.
Wow, I started this a week ago. I can post! I felt a little guilty, thinking I broke the forum or something.

If you understand the regulatory environment of the power companies you are way smarter than I am. I have terrible difficultly reading government explanations.

I'm still doing some homework on this one. I don't understand why AZ thinks that the Arizona prices will go up. Calif would be purchasing excess capacity from Arizona. So Cal Ed has stated they think AZ prices would go down, and well darn it, that makes sense.

The media flavored story goes something like: those rich snooty liberal Californians don't want power plants in their own backyard because they pollute too much, but polluting Arizona is just fine.

So there are probably some hidden costs like cleanup and stuff, but that should be included in the energy costs or we are just being stupid hicks.

I'm trying to find out what problem the creation of the Arizona Corporation Commission was supposed to solve. Their charter says something like 'to make sure there is fair competition'. Uh huh. They were associated with some internal corruption a couple years a go, I'll see if I can find more.

On the fairness issues: Palo Verde nuke plant is owned by a consortium of power companies from about 5 states, including California. So Cal Edison owns about 15%.

There seems to already be a power line running to California, this new one would parallel that.

Maybe we just think that Palm Springs sucks.

[shadron]

I don't understand why AZ thinks that the Arizona prices will go up. Calif would be purchasing excess capacity from Arizona. So Cal Ed has stated they think AZ prices would go down, and well darn it, that makes sense.

It goes something like this: in Colorado we had low natural gas prices because a lot of it is produced in he area. About three years ago a new pipeline was constructed to whisk that low-priced gas off to New York so the winter shiverings there could be quieted. Since they are used to paying much more for the equivalent heating fuel, our choices were to pony up the difference or have it *all* sent to New York. There you are, capitalism at work.

[Kopji]

Ok that does sounds like a similar situation. Please forgive my thinking out loud here, I'm trying to understand.

If "all" the Colorado gas were really sent to New York, wouldn't the more plentiful supply in NY drive prices lower in NY? The reason for sending the gas to NY in the first place (higher fuel prices) would not really hold up if Colorado sent all the gas. Evil NY Gas Co Inc could cut prices just to spite Colorado Gas Jerks Inc, or maintain market share. Colorado then decreases their prices to compete, but must also absorb the added shipping costs.

Colorado Jerk's gas would become more scarce in CO so prices would rise, but they can't rise to NY prices because NY costs are already dropping due to the Colorado gas entry into their wonderful new market. Hopefully, Colorado Gas Jerks would then need to worry about competition from other regional CO gas companies who now see an opportunity to sell in Colorado because it is not worth selling in NY anymore.

Bloated Colorado Jerks is exposed to the higher costs of supplying gas to NY, while more lean competition takes over their old markets in CO.

I wonder what would happen if everyone just said "ok go ahead, sell all your gas and see what happens"? :)

maybe Colorado Jerks is taken over by New York Evil Gas, becoming Evil New York Jerks Gas Co.

Maybe I don't understand economics well enough, but I would think that free market forces would balance out how much could come from Colorado and what would be 'too much'. 'Colorado Gas Jerks Inc' would still need to maintain their local customers because it is ultimately profitable to do so.

Now, I can see where a regulatory environment can wreck all kinds of havoc with my naive little scenario. It is not beyond my imagination to think that somehow, Colorado residents are subsidizing New York's gas supply through taxes or bonds. If the Colorado public is leasing their land to Colorado Jerks Inc, and the gas is worth more in New York, Colorado should be getting a bigger cut from their leases.

Ow my head hurts.

[Magyar]

I think where your thinking breaks down is that
Colorado Jerks and NY Evil Gas are the same people - is not the exact same then subsidiary's and if not, then thanks to your friends at Enron (remember those woderfull folks?) end their cronies in Bushco completely deregulated the energy trade, so back deals and colusion are the order of the day.

YES, I know you're going to ask me for evidence, so here it is


http://www.citizen.org/cmep/about/articles.cfm?ID=643

[Puppycow]

In the large picture, free trade is a good thing. It benefits more people in the long run than protectionism benefits in the short run. The Arizona government trying to quash this was practicing protectionism.

Arizona may one day be the center of a solar power industry that supplies over half the US's electricity needs. This would bring lots of jobs to Arizona. High power lines will be needed to distribute this electricity to other parts of the country.

A Solar Grand Plan (http://www.sciam.com/article.cfm?id=a-solar-grand-plan)
A massive switch from coal, oil, natural gas and nuclear power plants to solar power plants could supply 69 percent of the U.S.’s electricity and 35 percent of its total energy by 2050.
A vast area of photovoltaic cells would have to be erected in the Southwest. Excess daytime energy would be stored as compressed air in underground caverns to be tapped during nighttime hours.
Large solar concentrator power plants would be built as well.
A new direct-current power transmission backbone would deliver solar electricity across the country.
But $420 billion in subsidies from 2011 to 2050 would be required to fund the infrastructure and make it cost-competitive.

[learner]

scuse the ignorance, what does pwned mean?

[Fnord]

"Pwned" is a leetspeak slang term, derived from the word "own", that implies domination or humiliation of a rival, used primarily in the Internet gaming culture to taunt an opponent who has just been soundly defeated.

Wikipedia is your friend! (http://en.wikipedia.org/wiki/Pwn)

[Kopji]

Actually, I think I might be in the running for starting the most boring thread ever. :D

("pwned" seemed appropriate for a political topic like this since it is so much like a game.)

I think that I understand the extremes fairly well - lazier faire Capitalism on one end and Government regulated monopoly or complete ownership on the other. I tend to look for a moderate position if I can, and in this case that is where the complexity seems to flourish. (and a moderate position is not necessarily right, but I need to be convinced when it is not...)

The basic issue is not who owns the plants, but that electricity is thought of as a commodity like air or water. Is the electricity delivery that is undergoing deregulation.

Some of what we label 'dangers of deregulation' seem to be a result of not deregulating enough, or not in the right way or at the right time. The Enron problem seemed more like that. The silly government cronies created a business opportunity to rape California, and so someone did. If not Enron then some other company would have.

From my homework reading this week, if anyone is interested:

Understanding Energy Congestion and Deregulated Electricity Markets
http://www.nyri.info/docs/2007-04-28-congestion-document.htm
http://www.opensecrets.org/news/issues/electricity/index.php

"Energy congestion" was a new term to me and worth a google.


The Energy Policy Act of 2005

Shareholder owned electric groups:
http://www.eei.org/

http://www.eei.org/industry_issues/electricity_policy/federal_legislation/implications_of_policy_act.pdf

...Section 1221, creating new section 216 of the FPA. The Department of
Energy (DOE) must identify such corridors, which may include any geographic area experiencing electric transmission capacity constraints or congestion, within one year of enactment and every three years thereafter. Holders of a FERC siting permit may exercise eminent domain authority in federal court.

These provisions represent a careful balancing of federal and state interests. Many observers hope that the mere threat of federal involvement will help expedite state siting matters.
pg 1

...A significant portion of the Electricity title is intended to assure that wholesale competition is conducted fairly. However, the title retains for the states the ultimate decision whether to continue traditional regulation of sales to end-use electric customers or allow retail competition for electricity, and it refrains from mandating regional solutions for wholesale markets. Many of these provisions are a direct response to the Western energy market problems of a few years ago and the Enron debacle as well as a reflection of the strong state interest in electric regulation issues.
pg 2-3

...All in all, the market and competitive provisions of this Act clarify and expand FERC’s authority to assure that markets operate fairly without imposing new, mandatory intrusions on state authorities.
pg 4

The part I bolded is the source of Arizona's powerline issue. The Evil Edison electric company had an observation that I thought was interesting, it is rendered in blue. To this thinking, Arizona would make a politically easy example for other states who might be thinking similar protectionist thoughts. A longstanding complaint I've had about McCain is that he should be in Washington keeping us from being this very kind of example, I don't care if it is for the greater good or not. So I'll stand by my 'sucks to have him as a congressman' comment. :D

To Magar's earlier comment, I work for a large private company, and how private companies work is different than public shareholder held ones. I found the eei synopsis helpful in understanding their pov.

Beerina's first comment is easy enough to understand, but if the answer is that everyone is in it for themselves, why not me too? If my political power is at the state level and they keep my energy costs down, then that seems good on the surface. The fly in the ointment is when part of my retirement investment portfolio is in public shareholder energy companies, so I take money from my own earnings by keeping energy companies out. Ah, complexity.

More simple and immediate: if the private company I work for has plants in California that supply materials to our plants in Arizona - it is not good if the lights go out in our plants in California. (And this actually happened). A 'private company' with little political power kind of response to this problem of "why are the lights out today?" is to put the plants in one place rather than in different states with different regulatory environments.

[Puppycow]

"Pwned" is a leetspeak slang term, derived from the word "own", that implies domination or humiliation of a rival, used primarily in the Internet gaming culture to taunt an opponent who has just been soundly defeated.

Wikipedia is your friend! (http://en.wikipedia.org/wiki/Pwn)

You can also use Google to quickly look up the definition of any word. Just search "define pwned" or "define x" and the first hit or two will be the dictionary definition of the word. I think it was originally a typo as p and o are right next to each other on the keyboard.

[learner]

thanks to you all for the info re; Pwned

[Beerina]

It goes something like this: in Colorado we had low natural gas prices because a lot of it is produced in he area. About three years ago a new pipeline was constructed to whisk that low-priced gas off to New York so the winter shiverings there could be quieted. Since they are used to paying much more for the equivalent heating fuel, our choices were to pony up the difference or have it *all* sent to New York. There you are, capitalism at work.

Correct.

If you don't like it, build your own gas company and sell exclusively to Coloradans. Of course, you could probably profit more by sending to New York, too. I'm sure you won't.

Yes, I'm sure you won't.


Oh, wait. You don't want to be bothered. You want to use the force of government to make people serve you.

Oh yeahhhhhhhhhhhhhhhhhhhhhhh. I forgot about that tendency of the human mind, a very animalistic one, like a dog seeing a dog with leg of lamb, and he tries to sneak up to grab it while the other dog isn't looking.

Of course, the dog could go kill his own lamb, or raise lambs himself. But evolution doesn't work that way, does it? No, evolutionarily, it's far easier to just get skilled at taking other people's stuff, by sneak or by baring larger fangs, and attacking and killing if necessary.

Humans can realize this, and fight against it. But again evolution rears its ugly head with the evolution of "ethics" that tell you that, hey, it's all right. Because a bunch of you have banded together to demand others serve you, that's a Good Thing, and your intelligent mind is soothed about taking that which you did not earn by baring your collective fangs.