The Federal Energy Regulatory Commission (FERC) held the California Technical Conference on wholesale Power Market Design at the State Building in San Francisco on Thursday, November 6, 2003 from 10 a.m. to 5 p.m.
The conference was one of the best conferences I have attended because the best minds spoke on technical issues which are haunting the Regulatory Agencies, Power Brokers, Technical Experts who were responsible for the Energy Fiasco in the early 2000 and later.
Since this conference was held in San Francisco it attracted the best minds and judging from the turn out there was NOT a single seat vacant in the rather large state of the art auditorium. Over 300 participants made sure they were early and took their seats promptly to listen to the experts. The organizers made sure those who did not have a seat in the main auditorium were accommodated in an over flow room.
The opening remarks made by Pat Wood Chairman of FERC and those made by Michael Peevey President, of California Public Utilities Commission (CPUC) sat the tone.
FERC has had a problem to set guidelines that it can govern and has failed again and again. FERC has the ability to talk the talk but it cannot walk the walk. The reason is simple because corporations who have huge amounts of money can influence any governmental agency especially a Federal Agency like FERC, which has no clear-cut policy on Energy Issues or the clout and person power to enforce the rules.
FERC for example a long time ago could have set aside money to repair, replace and upgrade the transmission lines. The transmission lines are vital to any flow of energy and if they are in order and up and running the cliché we hear" congestion management "would be moot. FERC as I say does not have the ability to do anything beyond - talk.
Here is California the CPUC has tried its best to work with California Independent Systems Operator (CAISO) and has also failed because CPUC cannot do much to monitor CAISO who monitor the GRID but really cannot control the transmission lines which come under the control of the entities like Pacific Gas and Electric, San Diego Gas and Electric Company, Southern California Edison, and a host of small and medium size Energy Companies who all tie into the GRID.
Philippe Auclair, Manager, Market and Regulatory Affair, Mirant Americas Inc. made some pertinent remarks about the current way of doing business in the power brokering and had some thought provoking ideas about "auctions" and " allocations". These were just ideas but anything new in this business where millions of dollars a day leading to billions a month can make many hearts throb and lead to violent heart attacks. Power Brokers behind the scene are the ones who control the Energy Companies and often as is the rule they make big bucks by billing the ratepayers. One may use auctions or allocations to broker the deals and follow the power but ultimately it is the ratepayer who has to shell out the money.
CPUC Commissioner Lynch in her remarks reminds everyone that in California we think it very necessary to permit the lay person to dialog. This conference made no room for Public Comment. Perhaps one has to remember and keep in mind that the ratepayer surely is the one that deserves consideration. That GREED and MONEY take second place to Customer Satisfaction and Participation in matters such as Energy Issues, which affect the core of everyday life.
James Caldwell, Policy Director American Wind Energy Association was perhaps the only one who tried his best to address the technical nuances and bring it down to the person who could fathom the inconsistencies of this rather convoluted business of crafty crooks who are in the business of confusing and making money. FERC and CPUC Commissioners heard him loud and clear but one could see there is nothing one can do in this business except to make small changes and regulate the business of Energy Consumption, which is suffering from acute constipation of vision and progressive action.
Congestion Management is now a science that has been created by those who built our aging Transmission Lines and those who operate them because the parties choose not to repair, maintain, and replace the Transmission Lines. There are areas where many Transmission Lines are down. In other areas there are leaks. In yet other areas greater risks are taken every day leading to shut down of sub-stations and minor and major black outs.
The experts can talk all they may and use technical language and verbosity; the bottom line is that we do not have the equipment to deliver. We need a huge 18" pipe to deliver millions of gallons of water and we have a 1" hose pipe and that is all we can make do with at the moment. Of course I am making this analogy but our Transmission Lines are old built decades ago and simply cannot withstand the demand of today's current consumption of power and even higher demand in the future.
Power brokering is not for the tame and faint of heart. Making sure one has Firm Transmission Rights is easily said then done. Who makes the decision and who exploits Congestion Revenue Rights? What is Load Serving Entity and who are at their mercy? Who really cares about the customer or the ratepayer? Do we have the right technology for an antiquated operational system? Does our software reflect some harmony where various systems and agencies can interface and talk the same lingo? The deeper one looks at the facts you see a maze of confusion that can be resolved only by Standards that are difficult to implement. Simply put the left hand does not know what the right hand is doing. Added to this the State and Federal Regulatory Agencies lack a vision to fix the Energy System and do not talk to one another except when there is a crisis.
The Black Outs we experienced in California in the 2000 and the huge Black Out experienced some months ago on the East Coast have tell tale signs that lead us in many directions. Some of us know where to look out for the leading causes. Some of us know how to fix the deficiencies. Others have the experience to come out with innovative solutions. However two fundamental factors are lacking: we do not have the vision and leadership and secondly no one wants to spend the money to replace and maintain the aging infrastructure. We call ourselves a Super Power but do not have the power to control and maintain the GRID, which makes it all possible.
The FERC conference set the right tone and charged those in some positions to make decisions to work harder and attain standards. The present economy is on the rebound and we have over come obstacles before and can meet the Nation's Energy Demands by innovative Power Brokering and Technical expertise.
This conference made a start. There was static in the air and that has not happened in a long, long time. Kudos to the organizers.
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