Electricity is Irresistable to Politicians

This interview appeared on the Wall Street Journal’s Opinion Journal. The interview rambles along but there is much truth in the opening sentence.

A Life in Energy and (Therefore) Politics
The CEO of America’s third-largest utility on competing in an electricity market built on political fads and lobbyists.
By JOSEPH RAGO

‘Prostitution, horse racing, gambling and electricity are irresistible to politicians,” says John Rowe, the CEO of the Chicago-based utility Exelon.

He’ll give you an example of what he means: In 2009, Exelon began work on an urban solar-power project on a blighted field in Chicago’s West Pullman neighborhood, in part at the request of then-White House Chief of Staff Rahm Emanuel. “Whatever it is, it’s not a scandal,” says Mr. Rowe, who explains that his company was promised (and applied for) an Energy Department loan guarantee that it ultimately did not receive. …

Texas’ Stranded Costs Raise Rates

RechargeTexas.com has a report showing the cost to consumers to deregulate Texas electricity is $6.5 billion in stranded costs. My contention is this cost never really existed except in the minds of the utilities. Since deregulation the generation plants have been flipped at least once and sometimes more for values in excess of what the utilities claimed they would lose under deregulation. The ratepayers are the ones who were stranded.

The ReChargeTexas.com report:

Consumers can expect to pay higher electric bills over the next decade largely because of decisions this year by the Texas Supreme Court. Two major utilities — CenterPoint Energy, which serves the Greater Houston area, and American Electric Power Texas Central Company in South Texas — earlier had called upon the state’s high court to overturn regulatory rulings relating to the companies’ requests for “stranded costs” reimbursements. The Texas Public Utility Commission had approved more than $3.5 billion of these…

Cap and Trade Comes to a California Electric Bill Near You

California will become the first state to initiate cap and trade according to this article:

California OKs Cap-and-Trade
Other states are watching to see how well program works
By Kevin Spak,  Newser Staff
California became the first state in the nation to adopt its own cap-and-trade system yesterday, as its Air Resources Board voted unanimously to approve the regulations. The vote came after a grueling eight-hour meeting filled with the opinions of angry union members, disapproving industry representatives, and miscellaneous plan supporters, the LA Times reports. After the board finally held the…

Texas Builds Transmission Lines for Wind Power with Contentions

The Texas Tribune has this article about building transmission lines from around Sweetwater to the Dallas-Fort Worth area. This is to bring the stranded windpower generation capacity to where it is needed. As you read the article there is the classic not in my backyard as the lines pass through ranches. Also the consumers are paying $5 per month for many years. The construction is a high priority with the work being done 7 days a week.

Despite Lingering Concerns, Wind Power Transmission Lines Go Up
By Kate Galbraith            The Texas Tribune
SWEETWATER — Enormous transmission towers stand beside a West Texas country road, waiting for electric wires to be strung through them. Nearby, the task of threading wires through the steel towers is already under way, as men in hardhats shift equipment into position.

“We’re going to work 12 hours a day through Thanksgiving,” said Pat Hogan, a consultant with McCurley Enterprises, a company helping with the construction. The only real break comes around mid-afternoon on Sundays when, he said, “you can get your clothes cleaned or go to the grocery store.” …

MISO & SPP Cost Allocation Rehearing Orders

Statement of Commissioner John R. Norris on MISO & SPP Cost Allocation Rehearing Orders

“As I have said on numerous occasions, disputes over cost allocation, in my view, have been the primary impediment to building needed new transmission infrastructure in many areas of the country. Today, we take action on rehearing in two important dockets concerning the allocation of costs for new transmission projects. Today’s orders affirm two decisions the Commission issued last year on cost allocation proposals submitted by the Midwest Independent Transmission System Operator, Inc. (MISO) and the Southwest Power Pool, Inc. (SPP). …

This is the monopoly process in action with consumers footing the bill. For example further down in the statement:

“…That principle requires that cost allocations reflect both the costs actually caused by customers who are assigned a share of them, and the benefits that customers who share in the costs receive from the facilities they support. …”