Asymmetrical Information

Gosh, you should perhaps move to Texas. We still don't have any energy problems. Of course, we do a vastly better job of marginalizing Luddite Liberals than you folks in New York.

This crisis highlights another reason why businesses should not move into New York unless they absolutely have to. The Liberals have left that part of the country vulnerable to serious energy difficulties.

David, your schadenfreude doesn't become you. Could you please quit with the right-wing diatribes and just enjoy your air conditioning? Telling Mindles to move to Texas makes as much sense as telling an Iowa farmer to move to Barrow.

Bloomberg lied! He said the power would be on last night and that the NYSE would be open today. Bastard.

"right-wing diatribes?"

You don't have a logical leg to stand on. It's just a simple fact that New Yorkers failed to opt for nuclear power when they had the chance. Instead, they listened to the Liberal Luddies---and now are paying the price.

Also, why do we need to have Wall Street in New York? Why not move it to areas with less energy troubles? Did God say that the stock exchange had to be in New York? Where is that in some sort of holy book?

"It's just a simple fact that New Yorkers failed to opt for nuclear power when they had the chance."

um... 10 of the 21 power plants that stopped operating WERE nuclear. So that's obviously not the issue there.

“um... 10 of the 21 power plants that stopped operating WERE nuclear. So that's obviously not the issue there.”

And what about the other eleven? These are almost far more expensive to operate. How much did they jack up the price to consumers?

Does anybody have any specific information on the cost factors between nuclear and other energy sources? I take for granted, for instance, that coal generated energy is a lot more expensive (and dirtier), but just how much?

Just to clarify, New Jersey has lots of nuclear power, Long Island has the controversial Indian Point plant. Connecticut has one reactor with another planned, I believe.

"Just to clarify, New Jersey has lots of nuclear power, Long Island has the controversial Indian Point plant. Connecticut has one reactor with another planned, I believe."

But why not more? It is my understanding that less than half of your power plants are nuclear. What is so controversial about the Indian Point nuclear plant? Are these objections rational or merely the hysterical rantings of the Luddites?

Also, I did not make a mistake when asking why Wall Street can't be moved to "other areas" of the country? In today's world of instant communication, do we really need a major stock market to be situated in merely one location? Am I overlooking something? Isn’t Wall Street an outdated concept?

Not to be snarky about Texas vs New York (after all, two sets of sister battleships were named after both states), but the difference between the power situation in the two states virtually guarantees that Texas cities -- with the exception of El Paso -- are unlikely to have New York style blackouts, and it has nothing to due with nuclear vs conventional.

First, look at that national energy map. You see three pieces -- the Eastern Interconnection (which includes the areas hit distributed among four grids), the Western Interconnect (virtually everythin west of the Rockies, and -- by itself -- the ERCOT Interconnection: most of the state of Texas. Unlike other states, Texas's electricity is mostly outside the purview of the ICC -- because it does not cross state lines. That gives Texas local control of electrical regulation -- something that New York, and the Atlantic Seaboard will always lack. They will always have to play "Mother, May I?" with DC. (And I don't mean current.)

Additionally, Texas is friendlier to construction and industry than the Right Coast. The saying around here is that the Texas state bird is the construction crane. Additional power plants -- whatever the source of energy used -- can be put in much more easily than in the East. If someone wanted to put in a wind farm on the Gulf Coast you would not get the NIMBY (to say nothing of BANANA) attitudes seen offshore in New England.

Additionally the Texas energy deregulation was true deregulation -- supply and demand. That encouraged real competition, which resulted in a *lot* of plants being built in the 1990s. Fuel-efficient and low-polluting plants because you make more money on generating electricity that way. Soon an oversupply of electricity existed.

As a result a lot of plants were closed, and bulldozed. The oldest and least efficient, because that's what makes sense. Those cost the most to produce electricity from. And the next tier up are generally put in reserve, to be used in energy emergencies -- within Texas only because we cannot ship it out of state.

As demand increases, additional plants are built. Often overbuilding occurs, which closes the oldest, most polluting plants. Again. And people move to Texas because they can reliably get power, and that increases demand which leads to a new round of plant building.

So Texans get cheap electricity, Texas electric companies get good profits, and the Texas economy prospers. Could this happen in the Northeast.

I don't think so.

First, you have another layer of gummint regulation to deal with. That raises prices.

Next you have people that love the environment so much they want to drive the Texas state bird to extinction in their states.

Finally, you have too many people that think that profits are eee-vil. They would rather suffer through crappy supply (as with the rent-controled NYC housing supply) than see businesses, especially utilities, make money.

And it is not NY state alone. That attitude infects much of Michigan, Ohio, certainly Ontario and Quebec, New Jersey and Pennsylvania, too.

I don't think of this as schadenfreud, just the way things are. In fact, I wish it were not so. The more the NE and midwest prosper the better things are for Texas.

David, problems with the grid itself does not equal that more nuclear power would have solved the problem. Unless you have something different to tell us, that is.

David, the point is that Mindles cannot singlehandedly pick up Wall Street and move it to Houston. So when you tell him "Gosh, you should perhaps move to Texas," and you know his job is on Wall Street, it sounds pretty snarky.

Thanks for the informative commentary, Mark. I don't think of it as schadenfreude either.

My understanding is that the fragility of the grid has more to do with insufficiency of high-voltage transmission-line capacity than with insufficiency of generating capacity. But failure to build enough high-voltage lines, much like failure to build powerplants, is also due in considerable part to NIMBYism.

I was there in 1977. I was at work at law firm at 120 Broadway on the 26th floor. I stole the decorative candle from the office of a senior associate who is now a federal bankruptcy judge, lit it and led a bunch of folks down to the street. I walked home (Jane & Hudson) and up to my 9th floor appartment. There was water. I took a shower. It was about midnight by then, it was quiet, and I was exhausted. I went to sleep.

The next day I meet a couple of friends in Central Park. One of them had a car. We drove up to the south bronx to look at the scene. It was pretty quiet.

"My understanding is that the fragility of the grid has more to do with insufficiency of high-voltage transmission-line capacity than with insufficiency of generating capacity."

But why wasn't more money spent on these transmission lines? Might it be due to the fact that the monthly bills to consumers would have to be jacked up to astronomical and unbearable levels? Would not more nuclear energy make it financially easier to handle?

“David, the point is that Mindles cannot singlehandedly pick up Wall Street and move it to Houston. So when you tell him "Gosh, you should perhaps move to Texas," and you know his job is on Wall Street, it sounds pretty snarky.”

Yeah, you’re right. My hatred of George Steinbrenner and the New York Yankees sometimes gets the best of me. I then immaturely take it out on somebody living in New York. Hey, did I ever say that I’m perfect?

I'll bet you didn't know this. I live in W. PA near the Ohio line in the center of the state south of the affected areas. Today we are expereincing rolling blackouts and have been told to expect our power to be out for six hours while they transfer power to another grid temporarily. As you can see I am okay right now. But this shows how "thin" are power grid is. In the old days, before privatization, the grids were flush with power and we didn't have to steal from peter to pay paul we were able to share with peter. Why is it the Texas has it's own grid?

Yes, well, hatred of the Yankees can hardly be considered an imperfection...

By the way, David, contrary to the "power to cheap to meter" CW I seem to remember seeing numbers showing nuclear just as expensive as everything else. Cheaper inputs, but a bigger pile of capital. And that's without including waste disposal costs.

Google gives conflicting answers though.....

“By the way, David, contrary to the "power to cheap to meter" CW I seem to remember seeing numbers showing nuclear just as expensive as everything else. Cheaper inputs, but a bigger pile of capital. And that's without including waste disposal costs.”

My central point really has little to do with per se advocating nuclear power. Heck, I’m a total pragmatist. We should use peanut butter and jelly if that were a practical alternative.

I am far more concerned with the grief caused by the Luddites. These folks have dramatically added substantial costs to our monthly energy bills. There’s absolutely no sense of discussing anything else until the Luddites are marginalized. Also, we cannot overlook the NIMBY hypocrisy.

John S asks "Why is it that Texas has it's own grid?"

I suspect "because."

The nature of Texas is such that with three urban concentrations (Houston, DFW, and San Antonio) and geographical barriers on the borders (Piney Woods/Big Thicket on the east, relatively empty plains to the north, and desert/mountains to the west) any intercity power grid would first link the three big cities, then spread out. OTOH to the north and east of Texas the big cities grew on the rivers (which are typically borders) so those grids crossed state lines early on. Especially in the east, but also in the Mississippi River drainage basin. (OK is in the Mississppi drainage, but TX -- except for the Red River -- is not). So, west of the rockies you developed one network in Texas, one network in the NE, one in the middle Atlantic, one in the south, one in the Great Lakes region, and in the Mississippi river basin.

There tends to be overlap between all of those system -- except the Texas network, so they interconnected. Especially since most of these networks crossed state lines, and were already subject to interstate regulation on the federal level.

Texas meanwhile was going its own way. When the Texas network grew to the point where interconnection was feasable . . . unlike all of the other networks . . . they discovered that they would have to play by a new set of federal rules. That meant the power companies had to take an economic hit (did I mention that Texas is business-friendly), so they thought about it, and decided it wasn't worth it. So no interconnections were built.

Nowadays, there are some power generation companies in Texas that have built plants on the Red River (I believe) that can hook into either network. However, they are designed so that they cannot hook into both simultaneously -- only one or the other.

Just to clarify, New Jersey has lots of nuclear power, Long Island has the controversial Indian Point plant. Connecticut has one reactor with another planned, I believe.

Actually, Mindles, Indian Point is up in Westchester. You're probably thinking of the Shoreham plant on Long Island, which Lilco built and never operated, after cutting a deal with the Cuomo administration. (NY State bought the plant for $1, and absorbed the cost of decommissioning it, while allowing Lilco to charge LI customers higher rates.)

You're right about NJ's having lots of nuclear power; according to the Nuclear Energy Institute, "Nuclear energy supplies 51.1 percent of the electricity generated in New Jersey." There are four nuclear plants in NJ.

The same site says 50.4% of electricity generated in Connecticut comes from nukes; elsewhere on the site it says 45.1%. (Note the odd phrasing; I have no idea how the electricity generated in CT or NJ compares to the electricity consumed in those states.) CT has 4 nuclear plants, but two are closed: the ancient Connecticut Yankee plant (south of Hartford) and Millstone 1 near New London. The two operating are Millstone 2 and 3. (By "ancient", I mean "almost as old as I am"; it started operating in 1968, was shut down for decommissioning in 1996.)

New York's power generation is 28% nuclear (again, according to the NEI site) produced by 6 nuclear plants; Ohio has two nukes generating 11% of the power produced there; Michigan has 4 nukes generating 24% of its electricity. The country as a whole has about 100 nuclear plants producing 20% of electricity.

Canada is listed as having 14 nuclear plants. Judging from this Intl Nuclear Safety Center map, they are mostly in the area affected by the blackout. Maybe the nuclear plants are more problem than solution?

I was interested to learn that the nuclear plants have to shut down if they stop receiving outside power. I guess that's mainly a safety issue, but it just makes system-wide blackouts worse. (Also, I understand it can take 48 hours to restart nuclear plants, so they make restarting the grid slower, too.)

Maybe, in addition to looking at grid design and transmission line issues, the FERC could reassess these kinds of safety regulations to make the generation system more robust.

John S asks "Why is it that Texas has it's own grid?"

Mark L responded geography was a large factor.

Dunno about this. It might be right. I think a bigger or at least related factor was that Texas probably has always been one of the biggest, if not the biggest, consumers of electric power among all the states. As of 2000, Texas did consumer more (and a lot more at that) electric power than any other state: 10% of all power consumed in the U.S. was consumed in Texas. That exceeded the next largest state (California) by 44%. (Which if I'm reading my source right means California consumed about 7% of all U.S. power in 2000.)

I have been digging for an explanation of why Texas's ERCOT was one of the three U.S. regions formed as a response to the 1965 northeast blackout. (ERCOT = Electric Reliability Council of Texas.)
The best I've found so far is "Guide to Electric Power in Texas," 2003, at http://www.energy.uh.edu/documents/guide_electric_power_texas_2003.pdf .

I suspect another factor was indeed Texas legislators' desire to minimize regulation by the federal government. The less Texas utilities' provide power across state lines, the more its legislators get to call the shots in state.

I wish I had a better history. Plenty of experts criticized the size of the grid regions prior to the blackout, noting among other things the lack of a centralized control and transmission facilities that physically couldn't handle power "trades" the way Wall Street handles stock trades. I wonder if Texans listened to the engineers that said inter-connectivity may produce more reliability, but there are limits, and under certain conditions, over-connectivity will result, such that reliability is less. Plus, over-connectivity risks life and property. New York, Ohio, Pennsylvania, et al. blacked out this month it seems to me are fortunate that apparently no equipment was seriously damaged by the surges so as to shut down power for an extended time. (And extended shut-downs due then in turn lead to contaminated water, people not being able to get to medical care, spoiled food, loss of business, terror, etc.)

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