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. …”

US Solar Market Feeling Effect of Supplier Shakeout

The US solar market continues to reel from the failure of US based panel manufacturers. Besides the headline company there are several others that have closed under the pressure from Chinese manufacturers. Between the lower cost labor and rare earth resources Chinese suppliers are driving the market.

When the economics of solar are looked at the efficiency is not there for the dollars expended. If it were not for government subsidies the market would not exist at all except for the companies or people who do not measure costs in money alone. But the marketplace can help increase the efficiency by continuing to chase out the inefficient products as better ones are made. The question is when will this reach a critical point. It appears to be many years away.

Comparative advantage will be one deciding factor on where the manufacturing will take place. At this time the US does not have any advantage over other countries.