Rates Climbing Natural Gas Shortages, Deregulation Promise A Chilly Winter Ahead

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Rates Climbing Natural Gas Shortages, Deregulation Promise A Chilly Winter Ahead

Source: The Press Democrat Santa Rosa, CA Publication date: 2000-11-17 Arrival time: 2000-11-18

According to the Old Farmer's Almanac, Northern California should expect heavy rainfall, but higher than normal temperatures during the first months of winter. For the sake of family budgets, let's hope the prediction is accurate. If not, all signs point to a long, expensive winter.

On Wednesday, Pacific Gas and Electric Co. warned consumers that natural gas prices could rise by as much as 50 percent next month.

The state's Independent System Operator, which controls the power grid, blames the price hike on a growing population; price competition from Midwestern states that draw energy from the same source; and, a warmer-than-normal summer which meant utility companies drew down natural gas reserves to meet electric demands.

Already, the power grid is showing signs of strain. The ISO declared a stage-two power emergency on Monday, Tuesday and Wednesday because energy reserves dropped below 5 percent as people turned up the heat during the unseasonable cold snap.

Officials blamed the emergency on power plants being shut down for routine maintenance. But, as the last two summers have proven, higher energy demands seems to trigger emergencies whenever the weather is extreme.

We can't expect rate reduction relief from government. Earlier this week the Federal Energy Regulatory Commission refused Gov. Gray Davis' request for strict electricity rate controls. Instead, the commission proposed a "soft cap" of $150 per megawatt -- a price that is six times higher than last year.

Nor does the industry promise relief. As California moves toward deregulation, PG&E has gone to court seeking permission to increase rates to reflect the company's costs of purchasing power.

Californians are left with three choices: 1) Support development of new energy sources; 2) enact strong conservation measures; or 3) accept higher energy bills as the price we pay for living in a growing, technologically expanding world.

A likely scenario combines all three choices. With new offshore oil drilling, hydro-dams and nuclear power plants politically unfeasible, alternative sources should be aggressively pursued.

Consumers must permanently re-learn the conservation lessons of the 1970s, expect to pay more, and hope that the Old Farmer's Almanac prognostication of a mild winter is true.

http://cnniw.yellowbrix.com/pages/cnniw/Story.nsp?story_id=15865556&ID=cnniw&scategory=Utilities%3AElectricity

-- Martin Thompson (mthom1927@aol.com), November 19, 2000


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