Tuesday, October 02, 2007

Arizona Energy Exports round 2

As expected, the second round in the fight over exporting electricity to California has arrived.

Arizona electricity customers could see higher prices and less available power, thanks to a U.S. Department of Energy decision Tuesday to help relieve California's congested power grid, state officials said.

The DOE declared 10 counties across Southern California and Arizona a critical corridor, a designation that allows federal regulators to approve power lines in the area even if the states reject them.

The decision could have a direct impact on Arizona because in May the state's Corporation Commission blocked Southern California Edison from doubling a power line that runs from Arizona to the Palm Springs, Calif., area.

We'll have to wait to see how this plays out. Note that just like trade between countries, you export from the low cost place to the high cost place.

Southern California Edison residential customers have paid 16.6 cents per kilowatt-hour of usage this year on average, compared with 8.9 cents per kilowatt-hour for SRP customers.

This tends to raise prices in the exporting area and lower them in the importing location.

My original post on the topic is here.



Anonymous Anonymous said...

Trade is fine, as long as externalities are considered. Check out Commissioner Pierce's statement explaining his vote against the line: http://www.azcc.gov/Divisions/Administration/About/Devers_2_Statement.pdf

October 16, 2007 at 11:53:00 AM MST  

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