The California Energy Crisis
The Energy Crisis
Peak demand is up to 36,000 megawatts. On May
30, the ISO controlled units that were offline finally dropped below 10,000
megawatts. The Palo Verde nuclear reactor has restarted.
Although reactor 3 of San Onofre had been serviced
early, a fire there has delayed it restart, at its 1,100 megawatt power.
It will not restart until June. (The oldest reactor, number 1, has been
permanently shut down.)
The Qualifying Facilities are small generators not
listed in the ISO outage page. On May 30 they had 900 megawatts out,
although that can change rapidly.
More than 11,000 megawatts production from nuclear,
hydroelectric and coal are still owned by PG&E and Edison.
electricity usage growth has been 15% from 1990-2000.
California has not built a new power plant in the
last ten years. Some new ones are now under construction. Part
of the reason is that residents do not want power plants or power lines
in their residential or business areas.
California is now finding some 3,000 megawatts a
day from out of state.
Some 40% of the state's capacity comes from facilities
more than 30 years of age, making them prone to equipment problems (Time.com).
The rolling blackouts have been mainly in Northern
California because Southern California has enough power, but there is not
sufficient power lines to carry more power to Northern California.
Despite President Bush's call to forgo environmental
restrictions, they only affect one plant, and the restrictions are federal.
There is also much reluctance to sell to the California
utilities, which have been forgoing payments.
The three stages of alert are Stage 1: at 7% of reserves,
Stage 2: at 5% of reserves, and Stage 3: at 1.5% of reserves.
The rolling blackouts start at Stage 3, since an
overload could shut down the entire grid, even extending beyond California.
At Stage 2, a plan to limit power to firms or schools
that have agreed to have power cut in return for lower electricity has
now been discontinued because of the commercial disruptions it was causing.
In recent days, conservation has lowered demand by
as much as 1,000 megawatts.
The main link between Southern and Northern California,
Path 15, can only carry 3,000 megawatts to the North. It consists
of two lines run at 500 kilovolts.
The state has contracts for 1,800 megawatts of power
from the Pacific Northwest this summer, which is probably all that it will
get, compared to the 3,000 to 5,000 megawatts that it usually gets.
The Sierra snowpack is only 60% of average this year
to feed our own hydroelectric power plants.
Currently, there are 13,000 megawatts out of production,
and an additional 3,000 megawatts of alternate energy sources not present
due to their not getting paid.
Governor Davis proposed his own rate increase, which
will be tiered, and average 26.5%. He asks for conservation to reduce
the load 10%.
There are 1,000,000 extra refrigerators in California,
using as much power as 200,000 households.
On April 6, Pacific Gas and Electric filed for Chapter
11 bankruptcy. It is the biggest utility in U.S. history to seek
bankruptcy protection, and the third largest company.
PG&E supplies from 14,000 to 22,000 megawatts.
In 1999, electricity cost the state $7.4 billion,
in 2000, $32 billion, and in 2001 it will be $65 billion, according to
George Brown of the PUC (LA Times, April 9). During that time the
demand only increased 2% to 4%. The state's natural gas transportation
costs rose 3,200% in one year.
The state had been spending $46 million a day on
energy purchases, and that has increased to $73 million a day since the
Pacific Gas and Electric bankruptcy filing and the shortage of Northwest
California gets 60% of its power from "native load"
generated or controlled by utilities in California at about 5.5 cents/kwh.
The other 40% are bought on the wholesale market,
at over 25 cents/kwh. (LA Times, March 6, P. Navarro op-ed.)
A study (LA Times April 21) estimates that each undelivered
megawatt-hour of electricity causes $16,000 of lost economic output.
The California economy could be out as much as $16 billion this summer,
with Silicon Valley and the Bay Area the hardest hit.
Blackouts are back! On May 7, about 100,000
users were blacked out for an hour starting at 4:45 pm, since it was a
hot day. Also, some industries on the lower rate "interruptible"
plan came back on line later in the day. 12,500 megawatts were unavailable.
34,000 were Edison customers, 54,000 PG&E, and 8,600 SDG&E.
On May 8, rolling blackouts were present for two
hours, affecting 300,000 users. This was due to record high inland
temperatures for this date.
Still out are Diablo Canyon unit 2 (planned, 1100
megawatts) and San Onofre unit 3 (unplanned, 1100 megawatts).
By July 1 there will be only 1698 megawatts of new
power, and by Sept. 1 only 3669 new megawatts.
CALISO will have a risk of outages at 40,000 megawatts,
which occured on 34 days last summer, and depends on the weather.
April conservation was 2900 megawatts, or about 7.5%
of the CALISO total.
Francisco Federal Reserve Bank estimated that Californians will be
paying an EXTRA $750 this year for the power crisis. Only part, $250,
is extra in our direct electricity bills (bringing the total to $900),
$200 extra for natural gas (bringing the total to $450), and $300
for indirect costs from power-related surcharges and price hikes.
The increases are equal to 1.5% of the median household income.
The state assembly on May 7 approved $13.4 billion
Spot prices for electricity are $510/megawatt-hour
(51 cents/kwh), and on May 8 the state is short 2,000 megawatts.
Businesses in office buildings have little reason
to conserve as CPUC Rule 18 prohibits landlords from using submeters to
assess energy costs to tenants. The leases contain the power costs.
Office electricity use is: indoor lighting 39%; office equipment and water
pumps 22%; cooling 18%; ventilation 12%; outdoor lighting 6%; and heating
Tuesday, May 8, prices rose to $500 per megawatt
hour, from $350 to $400 before the heat on Monday. Blackouts were
avoided Wednesday by paying $1,900 per megawatt hour, over 50 times
the rate a year ago.
In the first quarter of the year, the following was
paid for electricity in California: 1999, $1.2 billion; 2000, $1.8
billion; 2001, $10.3 billion.
Standby power to TV, VCR and other appliances is
almost 10% of residential use, according to Alan Meier of LBNL at Berkeley
(LA Times, May 31). This can cost $100 per year per residence.
The biggest drains, at about 10 watts, are compact audio systems, security
systems, internet terminals, and cable boxes. Maximum standby drain
from such items can be 20 to 30 watts. Surge suppressor are good
for possible interruptions, and can allow you to turn off appliances unless
they will lose their settings.
Between 1990 and now, total residential use has risen
17.6% from 68,000 gigawatt hours to 80,000 gigawatt hours.
Dynegy had revenues of $14.2 billion in the first
quarter of 2001, compared to $5.3 billion in the first quarter a year ago.
Enron revenues increased to $50.1 billion from $13 billion during the same
While the administration says that they are not going
to do anything about the California energy crises, that is only partly
true. Those making money off of the energy crises with energy or
oil stocks are Karl Rove, the top presidential advisor and chief political
strategist; Condoleezza Rice, the National Security Advisor; Lewis Libby,
the Vice President's Chief of Staff; Karen Hughes, the president's counselor;
Clay Johnson, the president's personnel chief; and Nicholas Calio, the
White House director of legislative affairs (LA Times, June 2).
On hot summer afternoons, air conditioning can consume
16,000 megawatts, or 30% of the electricity used (LA Times, June 3).
Half of all homes have air conditioners, and 60%
of all new construction.
On average, from May through September, an air conditioner
uses 360 kwh/month.
A typical whole house unit is rated at 3 ton, with
each ton equal to 12,000 BTU.
Air conditioners of 10-12 years old have SEER energy
efficiency ratings of 6 to 8, while new high efficiency models have SEERS
of 12. Room air conditioners are up to 70% more efficient.
The price of natural gas and electricity is dropping
(LA Times, Wednesday, June 6).
Electricity is down to $110 per megawatt hour at
daytime Tuesday and $20 per megawatt hour at night, as opposed to $500
to $800 per megawatt hour last month, as reported by the Automated Power
Exchange that handles less than 10% of the state's market.
California was spending less than $50 million per
day for power purchases. Reasons for the decline are:
California used 11% less energy in May than a year
Also there was mild weather, increased hydroelectric
generation and lower natural gas prices.
It also may be a result of the FERC order for caps
at Stage I.
Natural gas is 16% cheaper for June for SC Gas Co.,
and 38% cheaper for PG&E Co.
At Topock, Arizona, the price fell to $7.85/million
BTU last Friday, the lowest since mid-November.
This is due to increased storage, a nationwide drop
in fuel costs, and more shippers since the El Paso contract on the pipeline
expired. It is also due to a decline in markups, which are under
investigation by FERC.
The Residential Equivalent of 1,000 megawatts of
The LA times continues to equate 1,000 megawatts
to 750,000 households. When peak usage is at 36,000 megawatts, and
the California population is at 34 million, 1,000 megawatts equates
to 1 million persons, through all household, commercial and industrial
usages. Occasionally they qualify that to saying that the ratio depends
on the season and temperature.
Average household use in California in 1999 was 548
kwh/month of 720 hours or an average of 0.8 kilowatts/household, rather
than 1.3 kw/household as they calculate. The US average per household
in 1999 was 866 kwh/month.
Total electricity sales in California in 1999 were
235 million megawatt-hours to 13 million customers. 75.3 million
megawatt-hours of that was to 11.4 million residential customers.
That averages to 8,600 megawatts for residential use, and 0.75 kilowatts
per residential customer. The ratio of residential to all usage is
75.3/235 = 32%, consistent with the national average.
How can the average usage per person be 1 kilowatt
and the average residential usage be 0.75 kilowatts per residential customer,
yet the ratio of residential to total usage be 0.32? If there are
2.3 people per residence, then the ratio is 0.75/(2.3x1) = 0.33.
The correct usage of 1,000 megawatts is1,000
megawatts x (1000 kilowatts/megawatt) / (0.75 kilowatts/residence) = 1.3
How to Judge the Cost of Electricity at Peak Times
If an average manufacturing employee in California
is earning $50,000 a year for 2,000 hours work, that is $25 per hour.
That worker on average is using 1 kilowatt of electricity.
At a peak price of $1,000 per megawatt hour, say, which is $1 per kwh,
that is only 4% of the $25 per hour in salary or other support for the
worker. It is silly to idle a worker for such a small fraction of
their salary, and the state is right still paying such a high peak price.
Of course it is far cheaper and more successful if we only conserve 10%
to avoid such price squeezing.
To judge the cost of cooking dinner even at a peak
time, my grill runs at 850 watts for 15 minutes, using less than a quarter
kilowatt hour, or 25 cents to cook dinner at even $1 per kwh. Under the
new PUC rate scheme, even at the highest bracket of 25 cents/kwh, that
would cost only 6 cents. Similarly, microwaves run from 650 to 1,000 watts,
and my toaster oven runs at 500 watts for a half hour to cook which again
uses a quarter of a kwh.
Of course I am not in any way justifying the high
prices, but just making an argument to keep the power on if possible, until
the problem is solved. Also, I am not running major mechanical appliances
during peak times.
How the Cost of Natural Gas Contributes to the Cost
With natural gas running up to $15 per million BTU,
the energy producers claim that that is the principal reason that they
must charge such a high price.
By the units
page we find that 1 million BTU is equivalent to 300 kwh at 100%
efficient conversion. If electric energy plants are run at 50% efficiency,
that $15 for a million BTU will produce 150 kwh of usable electricity giving
1500 cents/150 kwh or 10 cents/kwh, or $100/ megawatt hour. So any
charges much above $100/megawatt hour are NOT due to the cost of the natural
The $100/megawatt hour from the natural gas is well covered by the new
S. C. Edison average PUC approved rate of $148 per megawatt hour.