Developments in Market for Energy

The decision to terminate the successful Solar Two electric generating station for lack of funding underscores our flawed fiscal, energy and environmental priorities [“Edison’s Solar Power Project Called a Success but Will Be Shut Down,” Aug. 30].

The story reports that despite Solar Two’s unquestioned success generating and storing solar-powered electricity, the project must end after three years and $55 million.

Investments in clean energy sources still lag desperately behind taxpayer handouts to the nuclear, coal, oil and gas industries. The direct results are more pollution and a market distorted by subsidies to inefficient industries. In the tax bill recently passed by Congress, more than $600 million in new tax breaks are provided to the oil, coal and gas industries alone, and another $400 million to the nuclear industry.

Already, these industries get annually more than $1.3 billion in direct federal subsidies and tax breaks. The federal dollars underwriting dirty, inefficient power in the U.S. would pay for dozens of Solar Two stations--enough clean, renewable energy to power 400,000 homes.

DAVID E. WOOD, Policy Director

Center on Wisconsin Strategy

Madison, Wis.

*

“Power Rates Slow to Cool” [Aug. 29] neglects to mention that lower-than-expected electric energy prices obtained through the California Power Exchange’s competitive auctions have aided the state’s utilities in paying off their stranded debt at a much more rapid rate than expected.

That is why San Diego Gas & Electric customers are now in the competitive marketplace, which means higher prices during the hot summer months when electricity demand is highest. But SDG&E; customers will soon benefit from lower bills, as energy prices dramatically drop in the fall through spring months, for an overall annual reduction in energy costs.

For the Exchange’s first market year, energy prices averaged only 2.4 cents per kilowatt-hour. In fact, lower-than-expected Exchange market prices were one reason SDG&E; paid off its stranded debt in only 15 months.

The Exchange does not take credit for setting prices, whether they are higher or lower, but we do take credit for maintaining a trading marketplace that is open and competitive for all buyers and sellers of electricity. Without such a fair, competitive market, consumers would have cause to be concerned that they were paying prices negotiated between buyers and sellers, without any transparency or reference to a credible market price.

JOHN YURKANIN

Chief Operating Officer

California Power Exchange