The Coming N.Y. Blackouts

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THE COMING N.Y. BLACKOUTS: CALIFORNIA'S CURRENT CRISIS IS OUR FUTURE Friday,January 12,2001 By WILLIAM TUCKER

TAKE a long look at the electric-power shortages and price-hikes hitting California. New York could be facing the same thing by next summer. California Gov. Gray Davis says the disaster there is the result of a "colossal and dangerous failure in deregulation." Don't believe a word of it. The problem is the state's failure to understand the laws of supply and demand.

Supply and demand is 90 percent of economics. Demand goes up, prices go up, and vice versa. Supply goes up, prices come down, and vice versa. Supply goes up while demand goes down, things get pretty cheap. Supply goes down while demand goes up - well, you've got California today.

In an ordinary market, prices keep supply and demand in balance. High electrical prices encourage power producers to build more capacity while prodding consumers to save energy.

Unfortunately, there is no free market for electricity - particularly on the East and West Coasts, where government intervention is the hallmark of liberal politics. Instead of letting the electrical market sort itself out, state regulators labor night and day to reconcile two mutually opposing elements of liberal orthodoxy - consumerism and environmentalism.

Consumerism says we shouldn't have to pay much for electricity. "Electricity is a necessity of life," intones Gov. Davis. Consumers shouldn't pay more than they can afford. As a result, public utilities commissions (every state has one) keep rates unrealistically low. This encourages people to consume more electricity.

Environmentalism, on the other hand, says nobody should ever build a power plant anywhere (not on Planet Earth at least). In California, environmentalists are opposing coal, nuclear, oil, natural gas, hydroelectric cams and windmills (which might kill condors). In New York, the Natural Resources Defense Council is delaying the New York State Power Authority's effort to site 10 desperately needed natural gas turbines around the city.

"Sure, gas turbines are clean energy - the cleanest energy around," says NRDC analyst Nathanael Greene. "But these plants haven't been through the proper permitting process."

California hasn't built a major new power plant of any kind in more than 10 years. Neither has New York. As a result, California now imports 20 percent of its electricity from out of state - which is why they're at the mercy of the interstate market.

New York City is on the verge. The city has only 8,000 megawatts of generating capacity within its boundaries. Last summer, we peaked at 11,000 megawatts. We're already living off our transmission lines.

California made its big mistake by deregulating only halfway. The legislature freed up wholesale prices, but froze retail rates for business and homeowners. When wholesale prices jumped from $30 per kilowatt-hour to $3,000, the utilities lost $11 billion in a few months. Hydroelectric dams in Oregon and Washington are now pumping power south at a time when it usually flows north.

Brownouts and blackouts could occur at any moment. California's energy policy is basically "Pray for good weather."

Will New York City follow the same path? "We just dodged the bullet last summer because of cool weather," says Mike Petralia of the State Power Authority. "If we have five days in a row of 90-degree weather, we're going to be in trouble." One brownout did hit Washington Heights last year.

Environmentalists say conservation is a better strategy - yet they run for cover when it comes to raising prices, the only incentive that makes people conserve. Both NRDC's New York and California offices say they "have no position" on electric rates. Meanwhile, they oppose every form of energy generation - but always in favor of something on the far distant horizon.

While opposing nuclear power in the 1970s, they favored coal. When the Clinton administration cracked down on coal, they favored burning natural gas (although they never much like drilling for it).

New York state now produces a third of its energy with natural gas - a fuel that 20 years ago was regarded as too valuable to waste on electricity. NRDC's San Francisco office suggests "solar, wind, and geothermal energy."

Start prospecting for that geyser in your back yard. You may be needing it next summer.

http://www.nypost.com/postopinion/opedcolumnists/21100.htm

-- Martin Thompson (mthom1927@aol.com), January 13, 2001

Answers

Does anyone remember the name of the nuclear plant the New Yorkers demolished, I believe, on Long Island?

-- David Williams (DAVIDWILL@prodigy.net), January 13, 2001.

The plant was built in an area known as Shoreham and was called the Shoreham facility.

Believe it was a 5-7 BILLION dollar fiasco - construction completed, partial testing done - then Whoopsie - Houston we've got a problem! - NO plan for evac. of the 6-7 million total population that live in the 4 counties on Long Island. Major meltdown in ability to "fire up" the plant, followed by years of litigation, finger pointing. The cost was initially shoved on the rate base (read that those who were unluckly to be 'served' by (then) LILCO - Long Island Lighting Company).

Haven't followed the latest, believe there was more litigation, some rate relief, a new power entity called LIPA (Long Island Power Authority) - NY State may have something to do with that just as they do with the LIRR (Long Island RailRoad).

Long, sad story. One more death knell tolled for the nuclear power industry.

-- FormerAndGlad (NoLongerA@LongIslander.com), January 13, 2001.


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