RE: Bill Richardson and California Electricity Problems.

[glen.vickers@exeloncorp.com]

I think this issue is of some interest to Radsafe

Utilities are starting to venture into a new world.  Relatively speaking,
they will no longer be protected by and in other ways not limited by state
utility commissions.  Some utilities have opted to get out of the generation
business either because they were afraid they could not meet the challenge
or they mayh have been forced by their dereg committments.  Those who are
staring competition in the face know about staff reductions, reduced outage
durations, and other cost cutting measures, all while improving the quality
of the site HP program.

When it is all said and done, the increase in capacity factor (reduced
outage duration) in US nuclear power plants is primarily driven by the
desire to survive economically.  Power plants only make money when the
turbine is spinning...  Some utility outages have reduced their duration as
much as 50% in the last two years.  Outages of reduced duration and staffing
mean the HP program must exercise better planning, have contingency plans in
place, and exercise near-perfect decision making.  There is no longer any
time to "MacGyver" a plan when something goes wrong, the action levels and
contingency plans have to already be there.  Rework costs too much money and
there is very little tolerance of error in the nuclear power community.

In the last couple of years, a couple of plants were sold for pennies on the
dollar.  It seems clear that there is money to be made by taking an
under-performing plant and bringing it up to where it was designed to be, so
used plant prices are on the increase.  I believe there is a plant now where
the state decided not to accept the original offer on the plant, and now
wants to auction it off among several utilities now that they see they can
make some money.

If you're looking for a challenging environment, now is the time to get into
nuclear power.  Who knows, I may or may not have a job in the future due to
some consolidation or lay off, but my daily list of things to do on my
Franklin planner runneth over and gives some twisted sort of meaning to my
existence.  I'm sure many of you could say the same thing.  We're asked to
be a little smarter and quicker each day.

Glen Vickers
glen.vickers@exeloncorp.com

> -----Original Message-----
> From:	pmeyer@BHZ.ch [SMTP:pmeyer@BHZ.ch]
> Sent:	Friday, December 15, 2000 6:47 AM
> To:	Multiple recipients of list
> Subject:	AW: Bill Richardson and California Electricity Problems.
> 
> Dear Radsafers
> 
> I am looking for a recent publications (preferably newspaper- or journal
> articles) dealing with the consequences of the electricity deregulation in
> the US, in particular for nuclear power  utilities.
> 
> I realize that this is not a true Radsafe issue, but since it came up in
> this newsgroup...
> 
> Thanks in advance for any hints, 
> 
> Patrick.
> 
> Patrick Meyer
> ------------------------------------------------------------
> Basler&Hofmann
> Consulting Engineers
> Forchstrasse 395
> CH-8029 Zürich
> Switzerland
> 
> email   pmeyer@bhz.ch
> phone	01-387 11 22
> direct	01-387 13 63
> fax	01-387 11 00
> 
> homepage http://www.bhz.ch
> 
> 
> 
> > ----------
> > Von: 	Sewell, Linda
> > Antwort an: 	radsafe@romulus.ehs.uiuc.edu
> > Gesendet: 	Donnerstag, 14. Dezember 2000 17:55 Uhr
> > An: 	Multiple recipients of list
> > Betreff: 	RE: Bill Richardson and California Electricity Problems.
> > 
> > Hi All,
> > 
> > I realize we are getting a bit off topic, but I thought I'd put my two
> > cents
> > worth in here.  I work for Pacific Gas and Electric at Diablo Canyon
> Power
> > Plant.  The magnitude of the problem, for PG&E at least, isn't really
> > spelled out in Richardson's remarks.  PG&E has borrowed over 4 BILLION
> > dollars in the past few months to enable us to provide power to our
> > customers.  We are borrowing at the rate of approximately 1 MILLION
> > dollars
> > per day right now.  As part of deregulation, both SCE and PG&E were
> > required
> > to sell at least 50% of our generating capacity.  For PG&E, we sold
> > everything except Diablo Canyon....there are some hydro exceptions
> there,
> > but that gets complicated.  Therefore, we must buy electricity for our
> > customers.  As part of the settlements to deal with stranded costs (I
> > don't
> > want to get into that argument) we have a fixed price reimbursement rate
> > that extends through 2001.  We are getting paid about 4 cents/KWhr, but
> we
> > are buying power at rates as high at 60 - 70 cents/KWhr.  The math
> doesn't
> > work here at all, at least not for PG&E.  Based on information we are
> > receiving, our biggest immediate concern is that we are getting close to
> > our
> > credit limit, so to speak.  When and if we can't borrow any more money
> to
> > buy power, I assume there will be sort of state or federal intervention.
> > There are already ballot propositions being proposed by various consumer
> > groups to essentially dismantle the deregulation process, so I'm sure
> > we'll
> > be debating this stuff in the courts and legislatures for years to come.
> > 
> > One thing of concern to me regarding this great experiment (in addition
> to
> > the health of my employer, PG&E) is if we were truly in a deregulated
> > market
> > as forecast for 2002, 60 cents/KWhr is an awful lot of money for the
> > consumer to pay for electricity.  With my very limited understanding of
> > all
> > this, one key part of fixing this "broken" system and still
> transitioning
> > to
> > a fully deregulated market, is more generation...and that won't happen
> in
> > two years.  It's sad during times like this to think about Rancho Seco
> > with
> > it's 800 MWatts of fully functional electricity in a partially
> dismantled
> > condition.  We sure like our power here in California, we just don't
> want
> > it
> > generated in our backyards.
> > 
> > I am now stepping off my soapbox and returning to Dosimetry duties.  
> > 
> > Needless to say, my employer hasn't reviewed any of this stuff....and
> all
> > the usual disclaimers apply.   
> > 
> > Happy Holidays everyone!!
> > 
> > Linda
> > 
> > Linda M. Sewell, CHP
> > Diablo Canyon Power Plant
> > MS 119/1/122
> > PO Box 56
> > Avila Beach,  CA  93424
> > 805.545.4315 (voice)
> > 805.545.2618 (fax)
> > mailto:lms1@pge.com
> > 
> >   
> > 
> > -----Original Message-----
> > From: glen.vickers@exeloncorp.com [mailto:glen.vickers@exeloncorp.com]
> > Sent: Thursday, December 14, 2000 6:46 AM
> > To: Multiple recipients of list
> > Subject: Bill Richardson and California Electriciy Problems.
> > 
> > 
> > [Vickers, Glen]  Read the article behind my shallow comments...
> > 
> >  
> > > Energy Secretary Richardson is causing others to subsidize energy
> prices
> > > in 
> > > California, when the rest of the country must pay their fair share.
> The
> > 
> > > utilities in the region got the short end of the deal when they were
> > > limited 
> > > to what they could charge the customer, but were denied the ability to
> 
> > > recover costs due to increases in wholesale prices.  
> > > 
> > > Is California the only state in which such ridiculous utility
> > legislation
> > > be 
> > > passed?  
> > > 
> > > Should state legislated stupidity on such a grand scale be a good case
> > for
> > > 
> > > the federal courts?
> > > 
> > > Will they meltdown the Northwest transmission lines like they did
> > before?
> > > 
> > > Where was the guiding wisdom of the Clinton administration during the
> > > dereg 
> > > process?
> > > 
> > > There are enough problems in the world, it's just really disappointing
> > > when 
> > > the state of California thought long and hard and made a concious
> > decision
> > > to 
> > > create a new one.  How many of us spend time at work fixing problems
> > > created 
> > > by others?
> > > 
> > > I really feel for those who work for the struggling utilities in
> > > California.  
> > > Hopefully they'll survive and I'm not just talking about their 4th qtr
> 
> > > earnings projections.  
> > > 
> > > Glen Vickers
> > > Nuclear Power HP
> > > 
> > > 
> > > 
> > [Vickers, Glen]  
> > 
> > > California Warns of Power Outages
> > > 
> > > By STEVE LAWRENCE
> > > .c The Associated Press
> > >   
> > > SACRAMENTO, Calif. (AP) - Energy Secretary Bill Richardson ordered
> > > Northwest 
> > > power suppliers to sell electricity to power-strapped California
> > utilities
> > > 
> > > Wednesday, a move that appeared to avert the immediate threat of
> rolling
> > 
> > > blackouts. 
> > > 
> > > The announcement came as state regulators warned rolling blackouts
> were 
> > > imminent due to power shortages within the state and an inability to
> buy
> > > more 
> > > electricity from the Northwest. 
> > > 
> > > The warning came from the Independent System Operator, keeper of
> > > California's 
> > > power grid. It said that electricity supplies were so perilously low
> > that
> > > it 
> > > might declare a Stage 3 power emergency for only the second time ever.
> > At 
> > > Stage 3, the grid can impose blackouts. 
> > > 
> > > Richardson said at a Washington, D.C., news conference he was using
> > > emergency 
> > > powers to force wholesalers to sell power to California at a price he
> > > deemed 
> > > fair. He said he would also request that two large Pacific Northwest
> > power
> > > 
> > > generating associations send more power to California. 
> > > 
> > > ``Our objective is to keep the lights on in California through this
> > > emergency 
> > > situation,'' he said. ``We're dealing with a potentially very serious 
> > > situation here.'' 
> > > 
> > > California has been caught in a power crunch over the past several
> days,
> > > in 
> > > part because of cold weather in the Northwest - where California buys
> > much
> > > of 
> > > its power - and the shutdown of some generating plants for
> maintenance. 
> > > 
> > > Stephanie McCorkle, an ISO spokeswoman, said the threat of blackouts
> was
> > 
> > > delayed at least two hours Wednesday afternoon after the Bonneville
> > Power 
> > > Administration diverted 1,500 megawatts to California. 
> > > 
> > > But she said there was no guarantee that flow of electricity would
> > > continue 
> > > past mid-afternoon ``because the power is needed up there in the
> > > Northwest.'' 
> > > 
> > > ``We are literally on the phone hunting for megawatts,'' she said. 
> > > 
> > > California's two largest utilities, Pacific Gas and Electric and
> > Southern 
> > > California Edison, are near bankruptcy due to skyrocketing wholesale
> > power
> > > 
> > > costs, Gov. Gray Davis and Sen. Dianne Feinstein, D-Calif., said at a 
> > > Washington, D.C., news conference with Richardson. 
> > > 
> > > Davis and Feinstein asked federal regulators to set a regional price
> cap
> > > on 
> > > wholesale electricity to prevent the high prices that have plagued 
> > > California. On Friday, the Federal Energy Regulatory Commission lifted
> > > price 
> > > caps in California. 
> > > 
> > > Record wholesale power prices followed, and PG&E warned it was in
> > > financial 
> > > danger. 
> > > 
> > > The problem became especially acute when about a dozen suppliers began
> 
> > > demanding cash before selling power to California, Kellan Fluckiger,
> the
> > 
> > > ISO's chief operating officer, said Wednesday. 
> > > 
> > > ``The credit limits of utilities and what markets are willing to sell
> us
> > > have 
> > > been reached and surpassed in many cases,'' Fluckiger said. ``There
> are 
> > > questions about utility solvency. That has come to a head today.'' 
> > > 
> > > He said officials may have to interrupt power to as many as 4 million 
> > > customers Wednesday afternoon and early evening, when people come home
> > > from 
> > > work and power demand hits a peak. 
> > > 
> > > An unprecedented Stage 3 emergency was issued last Thursday, meaning
> > > reserves 
> > > had fallen below 1.5 percent. But the state fended off rolling outages
> > by 
> > > turning off two power-sucking water pumps. 
> > > 
> > > This time, Fluckiger said any blackouts would probably last about an
> > hour
> > > to 
> > > 90 minutes and occur mostly in Northern California. 
> > > 
> > > ``It's a fairly bleak picture,'' he said. ``This thing will not change
> > > unless 
> > > something is done to alleviate the credit situation.'' 
> > > 
> > > A Stage 2 alert was declared Wednesday afternoon, meaning power
> reserves
> > > fell 
> > > below 5 percent and large commercial customers could be asked to
> reduce
> > > power 
> > > consumption. A Stage 1 alert was declared Wednesday morning, meaning
> > power
> > > 
> > > reserves were below 7 percent and all power users are asked to
> conserve.
> > 
> > > 
> > > Stage 1 and Stage 2 emergencies have become routine this month, but
> last
> > 
> > > Thursday's Stage 3 was the only time the threat of blackouts loomed. 
> > > 
> > > Contributing to the problem is a shortage of water to power
> > hydroelectric 
> > > generators in the Northwest and California, Fluckiger said. 
> > > 
> > > ``We have reservoirs so low that we have people standing by them
> > watching
> > > the 
> > > situation to make sure it does not go below safe limits,'' he said. 
> > > 
> > > The power crunch over the past few months has been blamed in part on 
> > > electricity deregulation. California approved a phased-in deregulation
> > of
> > > the 
> > > electricity market in 1996 to try to lower prices for consumers
> through 
> > > competition, but so far it has led to higher energy prices. 
> > > 
> > > At the same time, wholesale power costs have been soaring, in large
> part
> > 
> > > because of skyrocketing prices for natural gas. Wall Street is worried
> > > about 
> > > utilities' financial health, and on Tuesday, a consumer group urged
> the
> > > state 
> > > to seize and run the strapped $20 billion electricity system. 
> > > 
> > > AP-NY-12-13-00 1906EST
> > > 
> > > Copyright 2000 The Associated Press. The information contained in the
> AP
> > > news 
> > > report may not be published, broadcast, rewritten or otherwise
> > distributed
> > > 
> > > without the prior written authority of The Associated Press.  All
> active
> > 
> > > hyperlinks have been inserted by AOL. 
> > 
> > 
> >
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