Monday, September 1, 2014
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 tdelias@aol.com.

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

.

Solano News

 
Highway 12 project nears completion

By Barry Eberling | From Page: A1, 3 Comments | Gallery

‘Snail mail’ still kinda cool

By Tony Wade | From Page: A2

 
Senior center schedules discussion on senior travel

By Susan Hiland | From Page: A3

Local government schedule meetings

By Susan Hiland | From Page: A3

 
 
Car club raises funds, supplies for SPCA

By Ian Thompson | From Page: A3

 
Democrats plan candidates meet, greet

By Glen Faison | From Page: A3, 1 Comment

 
Stand Up 2 Cancer Viewing party set in Vacaville

By Susan Hiland | From Page: A3

Goodwill opens Outlet Store in Fairfield

By Barry Eberling | From Page: A7, 2 Comments | Gallery

 
Premier post details of new lease

By Barry Eberling | From Page: A7

 
Il Fiorello to host jazz event

By Barry Eberling | From Page: A7, 1 Comment

 
New doctors join NorthBay

By Barry Eberling | From Page: A7

Small earthquakes shake Solano

By Glen Faison | From Page: A9, 1 Comment

 
.

Opinion

Is social media enlarging or stifling democracy?

By Cynthia M. Allen | From Page: A8

 
Compromise on Cordelia Road rail crossing costs

By Letter to the Editor | From Page: A8, 4 Comments

Justice for all

By Letter to the Editor | From Page: A8, 9 Comments

 
Good job, Susan Winlow

By Letter to the Editor | From Page: A8, 2 Comments

Editorial Cartoon: Sept. 1, 2014

By Daily Republic Syndicated Content | From Page: A8

 
 
Whopper of a tax dodge for Burger King

By Mike Kirchubel | From Page: A8, 26 Comments

.

Living

Community Calendar: Sept. 1, 2014

By Susan Hiland | From Page: A2

 
Today in History: Sept. 1, 2014

By The Associated Press | From Page: A2

Horoscopes: Sept. 1, 2014

By Holiday Mathis | From Page: B5

 
Is my husband right when he says men aren’t made for monogamy?

By Kathy Mitchell and Marcy Sugar | From Page: B5

 
Horoscopes: Sept. 2, 2014

By Holiday Mathis | From Page: B7

.

Entertainment

TVGrid

By Daily Republic Syndicated Content | From Page: A5

 
5 takeaways from a punch-less summer box office

By Jake Coyle | From Page: A11

Joan Rivers’ daughter: I’m keeping fingers crossed

By The Associated Press | From Page: A11

 
TVGrid

By Daily Republic Syndicated Content | From Page: A11

.

Sports

Kahne holds off Kenseth to win Atlanta shootout

By The Associated Press | From Page: B1

 
Wozniacki outlasts Sharapova, in US Open quarters

By The Associated Press | From Page: B1 | Gallery

Falcons looking to be defensive

By Paul Farmer | From Page: B1 | Gallery

 
Source: 49ers OL Boone agrees to new 2-yr deal

By The Associated Press | From Page: B1

 
49er Ray McDonald accused of domestic violence

By The Associated Press | From Page: B1, 1 Comment | Gallery

Sam clears waivers, meets with Fisher

By The Associated Press | From Page: B2

 
FC Kansas City wins NWSL title over Seattle, 2-1

By The Associated Press | From Page: B2

Raiders claim DE Mayowa off waivers

By The Associated Press | From Page: B2

 
Jensen waived after Jaguars awarded TE Shuler

By The Associated Press | From Page: B2

Otto wins Italian Open; Gallacher comes up short

By The Associated Press | From Page: B2

 
Weather for Monday, Sept. 1, 2014

By Daily Republic staff | From Page: B2

Henley takes a 1-shot lead at Deutsche Bank

By The Associated Press | From Page: B2

 
Dunn dealt to A’s, could be his last shot playoffs

By The Associated Press | From Page: B2

Fred Couples wins Champions Tour event

By The Associated Press | From Page: B2

 
A’s frustrated after 8-1 loss caps sweep by Angels

By The Associated Press | From Page: B2 | Gallery

Ernst wins LPGA’s Portland Classic in playoff

By The Associated Press | From Page: B2

 
Giants power past Brewers 15-5 for 3-game sweep

By The Associated Press | From Page: B2 | Gallery

Down at half, US beats Turkey in basketball worlds

By The Associated Press | From Page: B2

 
Source: Chiefs’ Smith agrees to 4-yr extension

By The Associated Press | From Page: B2

Tony Stewart’s return to race track ends early

By The Associated Press | From Page: B2

 
This date in sports history for Monday, Sept. 1, 2014

By The Associated Press | From Page: B3

 
.

Business

.

Obituaries

Laurie Danielson Bailey

By Nancy Green | From Page: A4, 2 Comments

 
Hazel Gertrude Wamsley

By Nancy Green | From Page: A4

Jerry Lee Trammell

By Nancy Green | From Page: A4, 6 Comments

 
.

Comics

B.C. Sept 1

By Daily Republic Syndicated Content | From Page: B4

 
Get Fuzzy Sept 1

By Daily Republic Syndicated Content | From Page: B4

Frank and Ernest Sept 1

By Daily Republic Syndicated Content | From Page: B4

 
Dilbert Sept 1

By Daily Republic Syndicated Content | From Page: B4

Zits Sept 1

By Daily Republic Syndicated Content | From Page: B4

 
Pickles Sept 1

By Daily Republic Syndicated Content | From Page: B4

Wizard of Id Sept 1

By Daily Republic Syndicated Content | From Page: B4

 
Garfield Sept 1

By Daily Republic Syndicated Content | From Page: B4, 1 Comment

Sally Forth Sept 1

By Daily Republic Syndicated Content | From Page: B4

 
For Better or Worse Sept 1

By Daily Republic Syndicated Content | From Page: B4

Baby Blues Sept 1

By Daily Republic Syndicated Content | From Page: B4

 
Peanuts Sept 1

By Daily Republic Syndicated Content | From Page: B4

Blondie Sept 1

By Daily Republic Syndicated Content | From Page: B4

 
Rose is Rose Sept 1

By Daily Republic Syndicated Content | From Page: B4

Baldo Sept 1

By Daily Republic Syndicated Content | From Page: B4

 
Beetle Bailey Sept 1

By Daily Republic Syndicated Content | From Page: B4

Cryptoquote Sept 1

By Daily Republic Syndicated Content | From Page: B5

 
Word Sleuth Sept 1

By Daily Republic Syndicated Content | From Page: B5

Sudoku Sept 1

By Daily Republic Syndicated Content | From Page: B5

 
Crossword Sept 1

By Daily Republic Syndicated Content | From Page: B5

Dilbert Sept 2

By Daily Republic Syndicated Content | From Page: B6

 
Wizard of Id Sept 2

By Daily Republic Syndicated Content | From Page: B6

For Better or Worse Sept 2

By Daily Republic Syndicated Content | From Page: B6

 
Sally Forth Sept 2

By Daily Republic Syndicated Content | From Page: B6

Peanuts Sept 2

By Daily Republic Syndicated Content | From Page: B6

 
Blondie Sept 2

By Daily Republic Syndicated Content | From Page: B6

Rose is Rose Sept 2

By Daily Republic Syndicated Content | From Page: B6

 
Get Fuzzy Sept 2

By Daily Republic Syndicated Content | From Page: B6

B.C. Sept 2

By Daily Republic Syndicated Content | From Page: B6

 
Baldo Sept 2

By Daily Republic Syndicated Content | From Page: B6

Garfield Sept 2

By Daily Republic Syndicated Content | From Page: B6

 
Frank and Ernest Sept 2

By Daily Republic Syndicated Content | From Page: B6

Zits Sept 2

By Daily Republic Syndicated Content | From Page: B6

 
Crossword Sept 2

By Daily Republic Syndicated Content | From Page: B7

Cryptoquote Sept 2

By Daily Republic Syndicated Content | From Page: B7

 
Sudoku Sept 2

By Daily Republic Syndicated Content | From Page: B7

Bridge Sept 2

By Daily Republic Syndicated Content | From Page: B7

 
Word Sleuth Sept 2

By Daily Republic Syndicated Content | From Page: B7