Blackout Blackmail: Utilities Cry Shortage As Energy Glut Is Exposed

Last week, the traffic cop for the state’s electric grid, the California Independent System Operator (CAISO), issued its first “Flex Alert” of the summer in the face of rising temperatures. CAISO urged the public to turn off unneeded lights, do laundry off peak and set the thermostat high on June 20 and June 21 "to help avoid power outages" as consumption stressed the grid. 

Except the grid wasn't stressed. Not only was there no electron shortage, the system could have generated about 38 percent more electricity than needed that day, according to The Los Angeles Times.

Flex Alerts are only supposed to be issued when the threat to the system is real. In fact, the state has allowed utilties to build nearly three times the extra generating capacity required to meet emergencies. We are drowning in cheap natural gas easily delivered a day ahead to meet forecasted demand, and so much natural gas-fired power that we actually pay other states to take our solar power.

Just why CAISO cried wolf is still as opaque as the electricity market that it runs. Especially since Southern California Edison told The Los Angeles Times that it didn't notice any strain at all on the system in its neck of the woods.

Still, Edison warned customers to conserve electricity to “help stave off possible power outages” in the face of high temperatures. Perhaps it all boils down to preserving greenlighted natural gas power plants that we don't need, some of which regulators are rethinking

Another reason for utilities to fan fears of electricity shortages is to get the still-sidelined Aliso Canyon gas reserve reopened. The reserve that ratepayers finance is infamous for the biggest methane well blowout in US history.

Sempra, parent of SoCalGas, sent an email to stakeholders warning that the grid operator’s forecast meant more strain on the gas system and greater reliance on withdrawals from SoCalGas’s other three smaller natural gas reserves. But Sempra hinted that Aliso withdrawls might be needed, mentioning “protocols” worked out with regulators would “guide” them.

We don't need to reopen Aliso. That's been proven by independent experts. A consulting group hired by Los Angeles County determined that state directives ordering utilities to take gas directly from pipelines instead of storage are working to obviate the need

Utilities have cried wolf about possible blackouts without Aliso before. What’s really behind the utility scare tactics is simple. Sempra makes a pile of money off of Aliso Canyon, a rickety field of injection wells as old as a century.

Refineries and utilities like Edison pay to park gas bought cheap at Aliso that they can either use or resell, minimizing the cost of products or services while maximizing profits. Businesses can even pay the utility to loan them gas, while ratepayers pay tens of millions of dollars a year to maintain the field.

Sempra just invested $200 million in an equipment upgrade that allows SoCalGas to stuff even more cheap and ubiquitous natural gas into the field to generate additional commercial revenue. The PUC approved the pass-through for it to ratepayers. State rules could jeopardize that approval if the facility stays offline too long. 

Sempra has done very well by Jerry Brown. Favorable regulatory treatment has helped lift its stock 110 percent since he was elected Governor in 2010. His sister Kathleen Brown sits on Sempra’s board and has been paid generously for that work. Key Brown regulators have indicated they might let Aliso re-open without first knowing what caused the blowout.

California's utility-industrial complex relies on perpetuating our addiction to fossil fuels and Aliso is one symptom. The reserve is an unnecessary and dangerous relic of a fossil fuel system that Governor Jerry Brown purports to want to leave behind.

Much like the military-industrial complex that binds the military to makers of arms, major investor-owned utilities are bound to natural gas power plant builders like AES or NRG. Utilities' monopoly status means every new natural gas power plant is a cash cow, financed by ratepayers whether needed or not, much like our federal taxes finance the continued acquisition of deadly weapons when the ones we already have could finish off the world.  

Utilities want Aliso reopened lest the fossil fuel cookie begins to crumble, and Brown Administration regulators have shown they are happy to help them. 

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