🚀 go-pugleaf

Tom Keener wrote:
> >> Who are the bozos bidding these prices? And what's to
> >> prevent them from bidding 100x what the prices are today?
> >
> >If a single generator bid 100x, their bid would be ignored,
> 
> Hang on. The generators are bidding sale prices? I thought the power
> retailers were bidding purchase prices. Anybody care to explain how
> this market really works?

This is really of historical interest (and of interest in other areas
where such an auction is still used) because the auctions are no longer
used to purchase power in California anyway.  After the collapse of the
power exchange due to non-payment by utilities, the DWP and ISO are now
neogotiation power purchases on a case-by-case basis.  

The way it used to work is that generators were bidding sale prices. 
(There were only a small number of power retailers of any significance
anyway.)  Over time the plan was to eventually allow retailers to
competitively negotiate their own power contracts (as the MUDs do
today).

> >What is bankrupting the state is the absurd policy of having the state
> >pay the costs rather than passing them on to consumers, who would then
> >be a hell of a lot more likely to conserve than they are now
> 
> My electric rate has almost tripled. Since I have been energy
> conservative since the 60's, the only way I could conserve a fraction
> of that would be to turn off my refrigerator and wash clothes by hand.
> Sure, many families could use a lot less than they do now, but 1/3?
> That's hardly realistic.

Who said anything about 1/3?  People would still see an overall price
increase -- that's inevitable given the tight supply and the general
increase in energy prices (oil and gas prices, even outside California,
are up 100-200% over the past few years) -- but there would be a lot
more conservation than there is now.  This would bring supply and demand
back into balance, would moderate prices in the wholesale market
(reducing the magnitude of the increase), and most importantly would
avoid senselessly bankrupting first the utilities and then the state. 
Once the limited pot of money to subsidize purchases runs out (which is
rapidly happening), consumers will be exposed to market prices anyway.