Thursday, January 29, 2015
FAIRFIELD-SUISUN, CALIFORNIA
99 CENTS

Energy price manipulation continues

elias column sig

By
From page A13 | December 12, 2012 |

Anyone who thought manipulation of California energy prices ended with the criminal penalties assessed against executives of companies like Enron and Williams Energy after the state’s 2000-01 electricity crunch turns out to have been hopelessly naïve.

All the available evidence now suggests price-fixing continues not only in electric power, but that gasoline is also in play. Those who believe that isn’t important to every Californian just haven’t been watching. When companies talk about the difficulties some have conducting business economically here, they don’t just talk about the traditional right-wing bugaboos of regulations and taxes, but also electricity prices and the fact gasoline costs more here than almost anywhere else in America.

One recent example was Intel, the premium maker of computer chips and other electronic items. The company announced that it will build its next factory in Oregon largely because its electricity bill there will be as much as 60 percent lower than it would be here. Over a decade, that can represent more than $1 billion, plenty of motivation for any company in a location decision.

It’s easy and facile to say power prices here are high because of regulations. While it’s correct that rules on smog and renewable power cost electricity producers plenty, that’s only a part of the price picture. Manipulation is another. Sadly, it’s impossible to know the full extent of market and price manipulation, because authorities only know about the crooks they catch.

Make no mistake, though, the companies then-Gov. Gray Davis labeled “out-of-state buccaneers” a decade ago in the months of rolling blackouts and rising prices – and others like them – are still at work.

The latest to be caught was Florida’s Gila River Power, a subsidiary of Entegra Power Group, which in November admitted violating the anti-manipulation rule established in 2005 by Congress and the Federal Energy Regulatory Commission, paying a $2.5 million fine. That was far less than the firm made in selling power to California’s Independent System Operator from its 2,200-megawatt plant in the desert southwest of Phoenix.

At about the same time, California electricity officials reported that Wall Street behemoth JPMorgan Chase & Co. is blocking a power plant conversion project that would allow production of far more juice from two AES Corp. Huntington Beach generating stations it partially controls. Failing to allow the conversions, needed to preserve energy reliability while the San Onofre Nuclear Generating Station is shut down, could create shortages and drive up the price of power all over California next summer.

The move by Morgan came as the state ISO and the federal commission pursued separate charges that Morgan used improper wholesale trading methods to bilk California consumers of $73 million last year. As part of that case, FERC has suspended Morgan’s electricity trading operation for six months.

Things are not much different in gasoline, where steep price hikes occurred in September and October, allegedly because of shortages caused by a refinery fire and several maintenance shutdowns.

An independent Oregon consulting firm, McCullough Research, afterward examined thousands of oil company documents and discovered some refineries were not really shuttered when the companies claimed they were. In one charge, the McCullough report said Shell Oil’s Martinez plant – supposedly contributing to a gasoline shortage because it was down for maintenance for two weeks in May – actually operated for at least a week of that time. Nitrogen oxide emission documents indicate the refinery was back to normal at least that long.

Shell says it never claimed the entire facility was closed, but only most of it.

Similar environmental records indicated Chevron’s Richmond refinery, hit by a fire and explosion Aug. 6, did not shut down completely in May for maintenance, as the company reported it had.

McCullough also reported that the price spike was about 66 cents per gallon higher than what would be expected from oil price and gasoline inventory conditions. That led the Consumer Watchdog advocacy group to contend oil companies falsified information to help boost prices. Consumer Watchdog wants an investigation by state Attorney General Kamala Harris.

If the allegations are true, said Consumer Watchdog, “it is criminal conduct reminiscent of the Enron manipulation of the California energy market.”

No oil company ever paid a penalty when similar price fixing was alleged in the 1970s, ‘80s and ‘90s.

The bottom line is that if, as Thomas Jefferson is often reported to have said, “Eternal vigilance is the price of liberty,” then surely eternal vigilance also is the only way to prevent price gouging in the California operations of energy companies of many sorts.

Thomas Elias is a California author. Reach him at [email protected]

LEAVE A COMMENT

Discussion | No comments

The Daily Republic does not necessarily condone the comments here, nor does it review every post. Read our full policy

  • Recent Articles

  • Enter your email address to subscribe and receive notifications of new posts by email.

  • .

    Solano News

     
    1st release for birds with mysterious goo a success

    By Amy Maginnis-Honey | From Page: A1, 1 Comment | Gallery

     
    Council backs beer, wine sales for Vacaville store

    By Ryan McCarthy | From Page: A3

     
    Vacaville police seek help to find sex offender

    By Kevin W. Green | From Page: A3, 5 Comments | Gallery

     
    Sweep by sheriff’s team nets 4 arrests

    By Kevin W. Green | From Page: A3, 6 Comments

     
    Travis starts work on Functional Fitness Center

    By Ian Thompson | From Page: A3

     
    Boy Scouts to screen award-winning film

    By Ian Thompson | From Page: A3

     
    Church makes ready for health, wellness fair

    By Susan Hiland | From Page: A3

     
    4-H Annual Presentation Day returns in February

    By Susan Hiland | From Page: A3

    Vacaville SWAT team serves search warrant

    By Kevin W. Green | From Page: A3

     
    Real estate occupancy continues to climb

    By Kevin W. Green | From Page: A3, 1 Comment

    Fairfield police log: Jan. 27, 2015

    By Susan Hiland | From Page: A10, 1 Comment

     
    Suisun City police log: Jan. 27, 2015

    By Susan Hiland | From Page: A10, 2 Comments

    .

    US / World

     
    Air Force probing alleged ‘treason’ remark by general

    By The Associated Press | From Page: A1, 1 Comment | Gallery

    Expect tiny tuxes but no real puppy love at doggy weddings

    By The Associated Press | From Page: A2 | Gallery

     
    Large salmon release planned

    By The Associated Press | From Page: A4

    Violations mount for toxic recycler

    By The Associated Press | From Page: A4

     
    Quake rattles N. California coast

    By The Associated Press | From Page: A4

    Second arrest in student stabbing

    By The Associated Press | From Page: A4, 1 Comment

     
    Marshals track down missing treasure hunter

    By The Associated Press | From Page: A5

    ‘Drunk’ excuse falls flat in Vandy rape trial

    By The Associated Press | From Page: A5

     
    Attorney General nominee defends Obama immigration changes

    By The Associated Press | From Page: A5, 1 Comment | Gallery

    Police seek law to alter Google app

    By The Associated Press | From Page: A5, 1 Comment

     
    ISIS extends hostage deadline

    By The Associated Press | From Page: A6

    Euro coast guards scramble to locate Syrian ghost ship

    By The Associated Press | From Page: A6

     
    Chinese regulators go after online sale of fake goods

    By The Associated Press | From Page: A6

    Investigation stems from police-involved shooting outbreak

    By The Associated Press | From Page: A6

     
    Hezbollah missiles kill soldiers

    By New York Times | From Page: A6

    Tape: Scientist offers to build nuke bomb targeting New York

    By The Associated Press | From Page: A10 | Gallery

     
    .

    Opinion

    Don’t brush off bullying

    By Kelvin Wade | From Page: A7, 3 Comments

     
    Editorial Cartoon: Jan. 29, 2015

    By Daily Republic Syndicated Content | From Page: A7

    Just be honest and come forward

    By Letter to the Editor | From Page: A7, 1 Comment

     
    A truly misinformed writer

    By Letter to the Editor | From Page: A7, 37 Comments

     
    India now has 322 billion reasons to fix economy

    By William Pesek | From Page: A7

    .

    Living

    Today in History: Jan. 29, 2015

    By The Associated Press | From Page: A2

     
    Community Calendar: Jan. 29, 2015

    By Susan Hiland | From Page: A2

    Deadbeat boyfriend ruined my relationship with my granddaughter

    By Kathy Mitchell and Marcy Sugar | From Page: A9

     
    Horoscope Jan. 29, 2015

    By Holiday Mathis | From Page: A9

    .

    Entertainment

    TVGrid

    By Daily Republic Syndicated Content | From Page: B5

     
    Theater legend Joel Grey reveals that he is gay

    By The Associated Press | From Page: B5, 2 Comments

    Super Bowl advertisers aim not to offend

    By The Associated Press | From Page: B5

     
    .

    Sports

    Kings center DeMarcus Cousins hoping to make All-Star team

    By The Associated Press | From Page: B1

     
    Rodriguez wrestlers pull out 34-24 win over Wood

    By Brian Arnold | From Page: B1 | Gallery

     
    Solano men cruise past LMC for biggest win of season

    By Daily Republic staff | From Page: B2

    NFL players who started young show more thinking problems

    By The Associated Press | From Page: B2

     
    GM John Schneider has been architect of Seahawks’ success

    By The Associated Press | From Page: B2

    Patriots not dwelling on last Super Bowl loss in Arizona

    By The Associated Press | From Page: B2

     
    Woods returns to Phoenix with plenty of memories

    By The Associated Press | From Page: B2

    Tony Stewart acquires national sprint car series tour

    By The Associated Press | From Page: B2

     
    Head of NCAA enforcement: Academic misconduct on rise

    By The Associated Press | From Page: B3

    Chicago Cubs’ Ernie Banks statue moved downtown for tribute

    By The Associated Press | From Page: B3

     
    Kobe Bryant has surgery, expected to be out for 9 months

    By The Associated Press | From Page: B3

    Korda, Lewis, Munoz tied for lead at LPGA season opener

    By The Associated Press | From Page: B3

     
    This date in sports history for Jan. 29, 2015

    By The Associated Press | From Page: B4

     
    .

    Business

    .

    Obituaries

    .

    Comics

    Wizard of Id

    By Daily Republic Syndicated Content | From Page: A8

     
    Peanuts

    By Daily Republic Syndicated Content | From Page: A8

    For Better or Worse

    By Daily Republic Syndicated Content | From Page: A8

     
    Blondie

    By Daily Republic Syndicated Content | From Page: A8

    Zits

    By Daily Republic Syndicated Content | From Page: A8

     
    Rose is Rose

    By Daily Republic Syndicated Content | From Page: A8

    Baby Blues

    By Daily Republic Syndicated Content | From Page: A8

     
    Baldo

    By Daily Republic Syndicated Content | From Page: A8

    Get Fuzzy

    By Daily Republic Syndicated Content | From Page: A8

     
    Sally Forth

    By Daily Republic Syndicated Content | From Page: A8

    B.C.

    By Daily Republic Syndicated Content | From Page: A8

     
    Beetle Bailey

    By Daily Republic Syndicated Content | From Page: A8

    Frank and Ernest

    By Daily Republic Syndicated Content | From Page: A8

     
    Garfield

    By Daily Republic Syndicated Content | From Page: A8

    Dilbert

    By Daily Republic Syndicated Content | From Page: A8

     
    Pickles

    By Daily Republic Syndicated Content | From Page: A8

    Cryptoquote

    By Daily Republic Syndicated Content | From Page: A9

     
    Sudoku

    By Daily Republic Syndicated Content | From Page: A9

    Crossword

    By Daily Republic Syndicated Content | From Page: A9

     
    Bridge

    By Daily Republic Syndicated Content | From Page: A9

    Word Sleuth

    By Daily Republic Syndicated Content | From Page: A9