Wednesday, July 24, 2013

California Teaches Texas How To Keep The Lights On: National Geographic and I Explain

In 2000-2001, as Enron and others manipulated the California wholesale electricity market, Californians were price gouged and their lights flickered, as rolling blackouts rolled.  No matter the consequence, some market manipulators would literally withhold power in order to drive up prices or worse.

With the help of my friends Patrick Wood and Nora Brownell, who became members of the Federal Energy Regulatory Commission in June 2001, California stopped the manipulation of the market and also got busy building massive amounts of new generation and transmission as well as driving forward energy efficiency and demand response.  For example, since 2000, California built 15,000 megawatts of new gas-fired electricity generation and a similar amount of new renewable energy generation, as it is on track to have more than 30% of its generation to come from renewable energy by 2020.  California leads the nation in the solar boom and solar provides 1% of the state's entire electricity and even more at peak hours.

All that new capacity, efficiency and demand response is California's new power system, and it was stress tested on July 5th, when temperatures soared to 110 degrees.

As National Geographic describes, California's power system passed with flying colors its stress test, thanks to the new natural gas plants, hydro that supplied up to 6,000 megawatts at the peak hour, other renewable energy that generated 4,400 to 4,800 megawatts at peak, as well as energy efficiency and demand response.  California's power system kept the lights on, despite having 2 massive nuclear plants that total more than 2,000 megawatts crippled by botched repairs and now never to resume operations.  Congratulations to California for getting a lot right in its reforms of its electric system.

Unlike California, Texas pays too little attention to solar, energy efficiency, and demand response. Solar could easily supply 10% of Texas' power needs during peak hours, and demand response could also easily provide another 10% cushion.  But neither do in Texas. Texas also often has placed coal over natural gas for new power plants, a decision that makes no sense for the country's biggest natural gas producer, and that has led to massive litigation and then cancellation of planned coal generation projects.

Lastly, California like every other state in the Union, with the notable exception of Texas, has robust interstate transmission that allows imports of electricity.  Any state going it alone electrically would be much more vulnerable to supply disruptions, and so none do but for the Lone Star state.

Though Governor Perry would never believe it, California teaches Texas critical lessons about operating a power system!


  1. sadly, our own governor here in PA wants us to BE the new Texas! More specifically, with the number of compressor stations coming to Susquehanna County we could be the new DISH TEXAS with out the free Dish of course..I have learned there is nothing free in Gasland.

  2. It raises the question of whether TX should have either a capacity market or PPAs (like California's public utilities). How to get new generation built in restructured markets remains a work in progress.

    Eric T.

  3. But at what cost? Residential customers in Texas paid 11.6 cents per kWh (May 2013 EIA data). California residential customers paid 16.0 cents per kWh (38% higher).