Monday, June 9, 2014

Part 2: CA utilities outfoxing Cap and Trade law

Hard to believe you can actually go to JAIL because you bought the wrong electricity.  A utility company supplying electricity to your home should be a very straight forward thing. And yet we see mangled and onerous laws in place to make sure CA'ians may MORE.

Part II of Calwatchdog.orgs report:

The way “resource shuffling” works is a municipal or private electric utility terminates its contract for “dirty” coal power from a power plant in Arizona, Nevada or Utah to comply with California’s green laws. The utility then signs a contract with a natural gas or solar power plant, or both, to buy cleaner power. But the natural gas and the coal power plants just swap contracts and ship the cheap coal power to California and the cleaner gas power to other customers.

In many cases it is legal to do so if the transaction involved 1) is in compliance with SB1368 of 2006; 2) is in compliance with the U.S. Environmental Protection Agency; or 3) “safe harbor” rules are followed for the early divestiture of a power resource allowed under the state’s cap-and-trade law.

The reason that California utilities are trying to trick CARB is that they must keep power rates low for their customers. Stanford economist Frank Wolak explains:

“Resource shuffling is the same thing as serving the interests of your shareholders or your customers, and therein lies the big problem and the challenge in trying to prohibit it. It’s analogous to telling utilities not to do what is least-cost to comply with the regulation.”

Energy reporter Debra Kahn says that definitively proving resource shuffling is difficult and hard to answer.
So, now we see "electricity laundering" is equivalent to "money laundering" with drugs.

Is this what we've come to? Doesn't anyone see the problem like I do?


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