CalPx is the quasi-governmental agency in California who holds the power auctions(among other duties)as part of the Deregulation scheme adopted in 1996. Auctions which now have all but come to an end. These auctions produced stratospheric prices rarely seen in history. Results which sent California(and parts of the West)into crisis.

On CalPx's management team is a fellow named John E. Flory. Flory is Vice President of Strategic Planning and Business Development for CalPx. Flory is important because of a couple of reasons. One, he like most of the management team of CalPx understands the wholesale electrical(or should). Two, Flory is involved with aspects of CalPx which focus and are dependent upon an integral understanding of the markets, players, and regulations involved. He is an industry insider.

Flory's background is Utility industry consulting. Prior to his work with CalPx Flory worked for the firm...TCA. On their website are articles. Articles which are meant to be read by trade people. Amongst these articles is a PDF named....Transmission Markets, Stretching the Rules for Fun and Profit Nothing sinister here, just a view of the situation rarely seen and never reported to the public.

Most of the information in this article is technical in nature and will amount to mush(this is written for insiders not laypeople). However there is enough which is understandable I think, and recommend a read. You will not get this information, the insights, from any other place, short of knowing an insider willing to be candid. The news media will not give it to you. The Politicians will not give it to you, and frankly, they don't even know what you will after a good read of this article.

This article identifies the core problems which lay as the real "blame facotrs" of why Deregulation(as it was written in California)is flawed, IMHO.

Central to this, is the mostly Self Policing nature of the Power Industry. The Federal body which claims to oversee the industry is the FERC. In a nutshell, the system, the grids, the processes can and are manipulated routinely and the California scheme does little to address this and in many ways encourages such practice(that is my opinion). Most if not all of these practices are routine and almost impossible to trace or hold anyone accountable. These are KNOWNS by insiders. This also makes placing blame next to impossible.

The California Deregulation Day-to-Day Auction scheme greased the skids for manipulation. I hold the opinion this was NOT done by accident as the information I am uncovering shows many knew and discuss articles with names one would associate with TeleMarketers or similar. One could say some are just using the system present and there is little wrong with this. Fine and true, we agree to disagree.

If deregulation is flawed, this information uncovers largely the why. It also suggests regulatory power has to rest in NON-Insiders. This is not the case today. You cannot have delivery schemes controlled by a select few who know of the regulatroy defects and use these to their own advantage and hope to come anywhere close to a free market. This IS NOT a free market and apparently they like it this way.

-- (doc_paulie@hotmail.com), February 17, 2001

Answers

Deregulation in California is flawed. It's led to the credit rating of two the companies deteriorating so badly that natural gas suppliers are afraid to sell gas to the nearly bankrupt utilities to distribute to their customers.

The only thing that matters now is, will California run out of natural gas in the next few weeks? And, will the two days of rolling blackouts last month be just a small sample of what will happen in June when air- conditioning use causes power demand to surge?

California's best hope now is to repeal the part of 'deregulation' that prohibits long-term power contracts. Long-term contracts are one important step California can take to maximize reliabiliy of supplies at a much lower cost.

In the longer term, California will remain unduly vulnerable to power crunches until it has enough capacity to supply all of its own electricity needs without having to import any from other states. If there's someone or something to blame for the California power crisis, it would be whoever allowed the state to become a net importer of electricity.

-- (just@another.opinion), February 18, 2001.

Good find Doc. This whole story is pretty short on good-guys. Another angle maybe is that term limits have left the California legislature berift of juniors and seniors and the lower classmen aren't sharp enough to see a curve ball coming.

-- Carlos (riffraff@cybertime.net), February 18, 2001.