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Enron Mail |
Jeff --
Some thoughts - 1. Your key assumption seems to be that this Summer the energy supply manager (CDWR buying net short of utility) has enough "power" to sell the negawatts. I am not so sure. I belive that a more realistic assumption is that in most hours this Summer, CDWR will be buying energy from the ISO. 2. If my assumption is closer to reality, than CDWR will not be able to sell "excess" MWs and pay the customer. Even if you are right, CDWR buys at $80/Mwh (LT contracts delivered today) and sells at $300/Mwh = net benefit to deliver to customer of $220/Mwh [unless you are saying the $80/Mwh goes to retail rates and $300/Mwh to customer = which is what I say in #3]. 3. I think that we should just call a spade a spade. CDWR should give the customer for a negawatt $300/Mwh independent of how they manage their portfolio. The $ should be put into the general expense of power and collected through CPUC approved rates. Had the customer consumed, that Mwh would have cost CDWR at least $300/Mwh (and probably more given the increased load). The state and/or customers still spends the same $. The only argument that one could have is that the customer who conserves "costs" other customers $. But these other customers should not feel slighted. Again, CDWR was already going to pay the generators. Why not pay someone who has a real business in CA? 4. So let's compute the cost = 2000 MW x 80 hours [5x16] x $350/Mwh = $56MM for a one month, 2,000 MW on-peak curtailment. But the other benefit is (a) reliability, (b) less fossil fuel burned = cleaner environment, © sticking it too those damn greedy generators, and (d) probably lower overall prices and costs because lower demand. Jim
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