Juice: the coming energy crisis and the future of power

: Thoughts on the Nature and Future of Electric Power

moderated by Michael Potts & Paul Gipe

Introduction

Summary

Expert Conclusions:

Below will be found excerpts from a consulting report written by William Marcus and Greg Ruszovan entitled "Cost Curve Analysis of the California Power Markets," of JBS Energy, Sacramento, California, September 29, 2000. Excerpting is by Paul Gipe, who explains:

This is a technical report by two economists on California's power crisis during the summer of 2000. Marcus is a prominent consulting economist who has persuasively argued that energy conservation has been consistently undervalued in most countries, at least for the 15 years I've known of his work. Here's a brief excerpt from their conclusion.

-- Paul Gipe

". . . We cannot explain the price explosion with reference to the failure to build power plants in California or the spike in gas prices. This problem is not caused by the usual suspects. . ."

". . . A significant price increase remains in Summer 2000 after controlling for both the level of demand and the level of gas prices. . . to more sinister practices (gaming of markets taken to a new level). The point that this analysis shows is that the summer 2000 prices cannot be dismissed as an expected market outcome. It needs further investigation."

". . . Distributed photovoltaic generation, with its relatively strong correlation with peak loads, (JBS Energy, 1996) could be particularly important in this regard. This finding that conservation not only benefits the conserver but everyone else should become the cornerstone of a new public goods imperative and the associated rate design policy."

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15 February 2001