The Cost of Natural Gas [was Re: The Cost of California Liberalism]

Raymond D. Mereniuk Raymond at fbn.bc.ca
Tue Dec 26 23:22:43 PST 2000


Tim May <tcmay at got.net> wrote
 
> Lost on your typically smug Canadian analysis has been any objective 
> analysis of markets for power. Do you know, for example, that 
> California as a state is a _net exporter_ of power to the Northwest 
> and especially to Western Canada at certain times of the year? In the 
> fall and winter, in fact, when hydroelectric generation rates in BC 
> and Washington are reduced.

I don't know where you get your information but I doubt your 
statements.  California is a net exporter of power is suspect, lets 
see the details here.  BC never imports power!  You must travel 
around this place and then you will understand, every major water 
way is blocked and producing power.  Couple this with the low 
population and you have low demand.  

The Bonneville Power Authority (BPA) is required to return 
downstream benefits to BC but this has nothing to do with our 
requirements.  It is payment for the water management services 
supplied to their power generation system.  Any power returned to 
BC is probably promptly exported.

On this angle you are wrong, BC is a net power exporter in both 
electrical and natural gas realms.
 
> In your kind of lingo, "British Columbia failed to build enough new plants."

BC has not built new power plants in a long time.  There is so much 
supply here that it was official policy to discourage any co-
generation or alternative electrical supply development. 
 
> Markets are not simple. Prices rise, prices fall. To claim that 
> California is now the primary cause of your higher heating costs, 
> boo-hoo, is childishly naive.

Yes markets are not simple which is probably the reason you fail to 
see the California component in the current situation.  The energy 
market doesn't lend itself to Economics 101.

> >If a power generating utility had built new power plants and
> >commited to a fuel supply (and the accompanying infrastructure) the
> >likelihood of unexpected prices increases would be much lower.
> 
> See above. Childishly naive.

Sorry, this is where you are showing your Childishly naive 
understanding of the energy business.  In the energy business 
(natural gas wise) if you commit to the supply and build 
infrastructure you get lower prices.  

I re-state my initial premise, Californians have a lot to learm about 
energy economics!  If you don't commit, you pay more!




Raymond D. Mereniuk
Raymond at fbn.bc.ca
History of a Telco, A Fairy Tale
http://www.fbn.bc.ca/telcohis.html





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