On Power Outages and Privatisation. Remember Enron?

Back in 2011, the risk of fire at substations such as Penrose was identified as possibly leading to a “high-impact failure”. New Zealand Herald

Bomber Bradbury asks on his blog the Daily Blog why Aucklanders have to pay for their powergrid upgrades? He does so because John Key promised us that privatisation would make for good competition and lower prices while the “free” market would make for a good incentive to keep the grid going at competitive prices.

Today that same John Key announced that Aucklanders would have to pay more for a more reliable grid which begs the question why he as the prime minister doesn’t leave that to the people he sold our assets too? They after all are the  free market entrepreneurs who where going to have to compete for our hard earned cash with an excellent and well maintained electricity grid.

John Key while working at Merrill Lynch worked there at a very interesting time. He worked there when the bank was caught out in a bit of a scandal which saw three of John Key’s colleagues put in jail. They went to jail because of their connection to a little firm called Enron. They had helped Enron to conceal some rather large fraud. Enron was also involved in the manipulation of energy prices and I don’t mean sneaking in a dollar here and there in the invoices they send out to people of California.

The actually caused outages to frighten people into paying higher electricity prices. In fact they put up the energy prices more than a tenfold just before the big one!

So in order to give you a hint as to why John Key might, once again, not speak the truth I thought I’d bring to your attention the Enron collapse and their manipulation of the electricity grid In California including the power outages they used to start charging more money from their ignorant customers.

Now I’m not saying that Vector set the power house alight but isn’t it convenient that this “freak” accident occurred even though it was a known weakness in the system for along time?

The good news is that Enron collapsed under the weight of all the corruption and scandals. Could John Key be next?

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In one January 2001 telephone tape of an Enron trader the public utility identified as Bill Williams and a Las Vegas energy official identified only as Rich, an agreement was made to shut down a power plant providing energy to California. The shutdown was set for an afternoon of peak energy demand.

“This is going to be a word-of-mouth kind of thing,” Mr. Williams says on the tape. “We want you guys to get a little creative and come up with a reason to go down.” After agreeing to take the plant down, the Nevada official questioned the reason. “O.K., so we’re just coming down for some maintenance, like a forced outage type of thing?” Rich asks. “And that’s cool?”

Tapes Show Enron Arranged Plant Shutdown

In the midst of the California energy troubles in early 2001, when power plants were under a federal order to deliver a full output of electricity, the Enron Corporation arranged to take a plant off-line on the same day that California was hit by rolling blackouts, according to audiotapes of company traders released here on Thursday.

The tapes and memorandums were made public by a small public utility north of Seattle that is fighting Enron over a power contract. They also showed that Enron, as early as 1998, was creating artificial energy shortages and running up prices in Canada in advance of California’s larger experiment with deregulation.

The tapes provide new details of market manipulation during the California energy crisis that produced blackouts and billions of dollars of surcharges to homes and businesses on the West Coast in 2000 and 2001.

In one January 2001 telephone tape of an Enron trader the public utility identified as Bill Williams and a Las Vegas energy official identified only as Rich, an agreement was made to shut down a power plant providing energy to California. The shutdown was set for an afternoon of peak energy demand.

“This is going to be a word-of-mouth kind of thing,” Mr. Williams says on the tape. “We want you guys to get a little creative and come up with a reason to go down.” After agreeing to take the plant down, the Nevada official questioned the reason. “O.K., so we’re just coming down for some maintenance, like a forced outage type of thing?” Rich asks. “And that’s cool?”

“Hopefully,” Mr. Williams says, before both men laugh.

The next day, Jan. 17, 2001, as the plant was taken out of service, the State of California called a power emergency, and rolling blackouts hit up to a half-million consumers, according to daily logs of the western power grid.

Officials with the Snohomish County Public Utility District in Washington State, which released the tapes, said they believed Enron officials had taken similar measures with other power plants. This tape, they said, was proof of what was going on.

At the time, power plants in the greater West Coast grid were under a federal emergency order to keep their plants running.

A spokeswoman for Enron, Jennifer Lowney, would not comment on the tapes, citing a blanket policy of the energy trading company, which is operating under bankruptcy protection and facing multiple criminal and civil proceedings. “We continue to cooperate with all ongoing investigations,” she said.

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