The current Canadian government is headed by an Alberta Conservative and
(fauning) fan of GW Bush and Big Oil so it and the Alberta
(Conservative) government are committed to heed the US call to quintuple
the supply of tar sands oil for the US regardless of the cost to the
environment (it means a massive increase in CO2 emissions) or to
agriculture or the aboriginal population. (The tar sands have first
claim on the water even in periods of drought). This is just baby
Bush/Cheney in spades. B.C. is not directly involved but seeing that the
BC government is also essentially neocon, despite the recently adopted
green facade, one should really not expect any real attack on climate
change in BC -- yet -- despite the devastation in the forests with pine
beetle and other environmental disasters.
Paul P
Leigh Meyers wrote:
The word from Alberta... Water for tar sand is more important than
water for people or fish, or life as we know it.
Metering is a small price to pay for your water when your society is
addicted to hydrocarbons.
lcm
New plan gives oilsands its fill of water, even during a drought
Firms will be able to draw 50 bathtubs worth of water a second from
Athabasca River
Hanneke Brooymans, The Edmonton Journal
Published: Friday, March 02, 2007
http://www.canada.com/vancouversun/news/story.html?id=26ff0c63-514f-454c-b735-52449a2e1de4&k=83636
EDMONTON - Alberta Environment's new water management plan for the
Athabasca River makes some people "anxious" because it will still allow
oilsands companies to withdraw water during a serious drought.
The Athabasca River Water Management Framework comes after calls from
First Nations, environmentalists and a recent cabinet-appointed committee
for a plan to protect the needs of people and wildlife that rely on the
river.
On 3/4/07, Eugene Coyle <[EMAIL PROTECTED]> wrote:
On Mar 4, 2007, at 3:01 PM, paul phillips wrote:
Gene, why is installing these meters a "stupid madness"?
Paul,
I think the energy problem is how much is used, not when it is
used. It
would be good to constrain peak demand but the real target must be
energy
use. Although it is widely believed that peak demand is very
expensive, the
capital cost of peaking units is relatively low. And most of the energy
delivered on-peak is supplied by the much cheaper baseload coal,
nuclear and
hydro plants.
the following sentence in the article caught my eye:
The meters will allow Hydro to reward customers for using electricity
outside peak periods.
Though it seems intuitively obvious to people, and especially to
neo-classical economists, the real problem for an electric system is
not the
peak demand but to total energy consumption.
The meters spread the message: "Use all the energy you want, just
don't use
it on peak."
What will the peak price be? -- what will the meter tell the
customer the
price is on peak? If left to "the market" -- even the un-manipulated
market, the peak price will be the cost of of producing kWhs at the most
expensive unit running. Why should all the kWhs at that moment be so
priced, when most of the energy being used is produced at plants
where costs
are lower, much, much lower? Although I don't like the jargon, there
are
very large intra-marginal rents here.
There would be enormous windfall profits for those plants or units.
The
market theory tells us that the only way investment in those plants,
call
them baseload plants, will occur is if they do get these windfall
profits.
So we need the very high price on the peak to drive the investment in
baseload plants. Well that hasn't worked in California, or the USA,
so the
market gurus have fallen back to charging for both energy (the peak
price)
and capacity. How do you charge for capacity if the rates are based on
energy usage? Well, you make the customers pay a capacity charge.
They are
doing that in New York and the recipients of the money are very
grateful,
but it hasn't produced the investment needed. Another drawback to the
capacity charge is that it is and will be susceptible to cost
shifting --
off the large users and onto the smaller customers.
If, on the other hand, rates are to be regulated in the old-fashioned
way,
so that the utility earns a return on investment set by some official
body,
manipulation of future growth is surely going to occur. If the
regulator
adopts the running cost of the most expensive unit as the price on peak,
then profits during the peak period (day time) will be enormous as
before.
But the utility isn't entitled to those profits under the rate of return
constraint. The response will be to cut prices to very low levels
off-peak,
encouraging process industries to use cheap electricity and for the
demand
of those industries to grow. Easily manipulated sales growth.
This is not to say that growth in the peak ought not be constrained.
But
regulators ought to use a price not nearly as high as the running
cost of
the most expensive unit dispatched. Regulators can use judgement to
set the
price. And so the message can be "Costs and prices are higher during
the
day, cut your usage, and what you can't cut, shift to other times."
Spending $400 or $500 million on meters isn't necessary for that
message to
get out. A good public interest campaign can get it across.
Using "the market" for this problem, especially when using the market
means
spending $400 or $500 million facilitation is, in my judgement, stupid.
Gene
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