May 29, 2022 Breaking News, Latest News, and Videos

California Energy Price Manipulation Continues On Two Fronts:

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 2000-2001 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. For 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 the other day 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.

But make no mistake, 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.

But 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 Atty. Gen. 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.

in News
Related Posts

Seller of Bel Air Mansion Furious After Property Flops at Auction

May 27, 2022

May 27, 2022

Mansion on Sarbonne Road in Bel Air fails to meet $50 million reserve price By Sam Catanzaro The seller of...

Environmental Review Begins for West Los Angeles Civic Center Redevelopment

May 27, 2022

May 27, 2022

The West LA Commons set to bring 926 units of housing and 36,569 square feet of retail to Santa Monica...

Is Santa Monica’s Most Expensive Property Still a Bargain?

May 27, 2022

May 27, 2022

22,640 square-foot property on market for $69 million By Dolores Quintana The most expensive property in Santa Monica has been...

Must-Watch ‘Disruptive’ Appliance Experience Store Opens in West Los Angeles, Hosts Grand Opening in June

May 27, 2022

May 27, 2022

Howard’s West Los Angeles Experience Center opening at 900 La Brea Boulevard  By Susan Payne West Los Angeles is home...

Marina Del Rey Family Searches for Missing 29-Year-Old Son With Autism

May 27, 2022

May 27, 2022

J​​eremy Hansbrough missigns cine May 16 By Sam Catanzaro A Marina del Rey family is searching for their 29-year-old son...

Santa Monica Pier to Feature High-Flying Waving American Flag on  Ferris Wheel During Memorial Day Weekend

May 26, 2022

May 26, 2022

Pacific Park on the Santa Monica Pier’s Ferris wheel will feature a high-flying 130-feet tall, animated waving American flag throughout...

Message From Santa Monica-Malibu Unified School District Superintendent Dr. Ben Drati

May 26, 2022

May 26, 2022

Dear Parents, Guardians, Staff and Community Members, Sadly, we have learned of another horrific school shooting, this time in the...

Three Juveniles in Hosptial Following Overdose in Santa Monica

May 26, 2022

May 26, 2022

Two females in critical but stable condition, third victim “alert and recovering” By Sam Catanzaro Three juveniles suffered an overdose...

John Adams Middle School Student Selected to Perform at Carnegie Hall

May 24, 2022

May 24, 2022

JAMS Student Grayson Fitzgerald named junior finalist for the 2022 middle school honors performance series at Carnegie Hall By Staff...

SMC Student Film “The War Within” Accepted into 2022 American Pavilion at Cannes

May 24, 2022

May 24, 2022

Three Santa Monica College Films Will Screen at In-Person Festival, including 2021 Best Student Film Winner “Broken Layers” and 2020’s...

Santa Monica City Council Looks to Shorten Meetings

May 24, 2022

May 24, 2022

Council to consider changes at Tuesday meeting By Dolores Quintana Santa Monica lawmakers are considering taking steps to shorten City...

Landmark Theater Official Closes on Pico

May 24, 2022

May 24, 2022

Pico Boulevard location closes Sunday By Sam Catanzaro The Landmark Theater on Pico Boulevard in Westwood has officially closed.  The...

Road Closures Expected During Demolition Of Parking Structure Three: Santa Monica Beat – May 23rd, 2022

May 23, 2022

May 23, 2022

Local news and culture in under 5 minutes.* Free Donuts At Randy’s Donuts For National Doughnut Day* Road Closures Expected...

Los Angeles Metro Sees 15.9 Percent Increase in Median Rent

May 20, 2022

May 20, 2022

Median rent of $2,258, according to recent report By Dolores Quintana The ongoing pandemic has exacerbated the issues of housing...

New Renderings for Frank Gehry Hotel Development in Santa Monica

May 20, 2022

May 20, 2022

Project would include hotel, apartments, retail and a museum By Dolores Quintana Slowly but surely, plans for a  Frank Gehry-designed...