LCG Completes Analysis for California Energy Commission
To Predict Results
of State's Deregulation Process
The future of California's electricity industry is
spelled
out in a report bearing the title "Modeling Competitive Energy Market
in California: Analysis of Restructuring." The report weighs only 13
ounces but those 13
ounces carry a lot of weight. The report was prepared by LCG Consulting
of Los
Altos, Calif., for the California Energy Commission using proprietary
software.
It takes a look at what will likely be the consequences of electric
deregulation in the state under a number of different scenarios. What
will
become of the state's investor-owned utilities, its municipal utilities
and
cooperatives, the regional transmission grid? It's all there.
Not only is it all there, it's there in dollars, in
megawatts, in tons of pollutants.
Detailed examples are given, under a variety of
circumstances, for almost every conceivable measurable aspect of the operation
of the electric infrastructure. And it is detailed, addressing not only a broad
picture of how California interacts with the entire western region known as the
Western System Coordinating Council (WSCC) but such minutiae as hourly flows
through different segments of the WSCC transmission grid, especially those
under the control of an independent system operator, hourly market clearing
prices for a power exchange and hourly price duration curves for the several
zones in California.
Even--perhaps especially--the non-technical eye is caught by
graphic and tabular presentation of information that can best be characterized
as astonishing. To learn, for example, that in peak demand hours the increased
production of electricity will at some point result in precipitous increases in
the market price of electricity is due to shortage of energy from economically
efficient units or due to unscheduled outages of base load plants. The reader
who studies tables of generation costs and revenues will likely be surprised
that not all electricity costs the same; all three of the state's
investor-owned utilities have power plants that are more than twice as costly
as others. These, and scores of other facts, are food for the questioning mind.
The massive outages that affected the western
third of the United States on July 2 and August 10 are still fresh in
most minds. This study sheds no
light on their causes but it does tell us what the mysterious "Western
Grid" is. It turns out to be, for example, one hundred thousand miles
of
transmission lines (enough wire to reach halfway to the moon). Reading
that,
the reader becomes a little more tolerant of the tree trimmers who
missed a
tree in Wyoming that caused the first outage, or the tree in Oregon
that caused
the second.
The report is a "must read" for someone
involved in electric restructuring in the West, and it is certainly
"essential reading" for anyone associated with the utilities or
regulatory bodies or other stakeholders in the process.
