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  • California: Summer Blackouts Might Be the New Normal // Northeastern Diesel Crisis Deepens // This Week in Utility History

California: Summer Blackouts Might Be the New Normal // Northeastern Diesel Crisis Deepens // This Week in Utility History

California: Summer Blackouts Might Be the New Normal

Two things surprised me this weekend: Canelo losing to Bivol and Michael Chandler flatlining Tony Ferguson with a front kick to the face. News that the California grid might face successive summers of blackouts, sadly, did not. Yet here we are.

Bloomberg reports that California energy officials worry for the Golden State's grid. "The state could be short about 1,700 megawatts this summer--enough power for about 1.3 million homes--and that gap may widen to about 1,800 megawatts by 2025...These forecasts don’t include other factors such as extreme regional heatwaves or wildfires that can take down power lines," the officials said.

That last sentence is vital: these capacity shortfalls have nothing to do with climate change, heatwaves, or wildfires, though Gavin Newsom would love for you to believe that's the case.

Instead, the so-called "energy transition" has brought the state to the brink.

Mark Rothleder, chief operating officer of the California Independent System Operator, which oversees California's grid, said that the state's biggest challenge comes in the late summer and early fall when solar output drops off at night but demand from AC units stays the same.

Luckily, California's got a solution: encourage everyone to use less energy.

To make up for the failures of electricity re-regulation and the renewables experiment, California wants to make the grid's reliability everyone else's responsibility.

But Reuters reports that the officials "also projected annual electricity rate increases of between 4% and 9% between now and 2025."

So, you might not even need to be told by a weird squiggly creature not to keep the lights on at night because you won't be able to afford to anyway.

Northeastern Diesel Crisis Deepens

The world economy runs on diesel. If you're shipping by truck or train, or running farms or factories, you need diesel. So when diesel prices go up, inflation presses hot on its heels.

"Last week," Javier Blas writes, "East coast inventories of diesel plunged to the lowest seasonal level since government records started more than 30 years ago. The shortage caused a crisis in the diesel market, sending wholesale and retail diesel prices to an all-time high. Diesel is today more expensive in America than it was in 2008 when the price of crude oil surged to nearly $150 a barrel compared with little more than $100 currently."

So, why are the diesel tankers in New York Harbor empty?

Here's the rundown according to Blas:

  • The Global: "Around the world, diesel is in short supply as demand has surged well above pre-Covid levels, spurred by a boom in freight. The Russian invasion of Ukraine has tightened flows further, as Washington has banned imports of Russian petroleum. At the same time, the U.S. has become the barrel provider of last resort for many Latin American countries, with exports of gasoline, diesel and jet-fuel running at unusually high levels."

  • The Regional: "In the past 15 years, the number of refineries on the U.S. East coast has halved to just seven. The closures have reduced the region’s oil processing capacity to just 818,000 barrels per day, down from 1.64 million barrels per day in 2009. Regional oil demand, however, is stronger."

  • The Result: Refiners are processing to make diesel over gas to take advantage of the high prices brought about to tight supply. While that might alleviate the crisis in the near-term, it could have a negative effective on gas prices going forward.

This Week in Utility History: The New Deal, the TVA, and the Downfall of Samuel Insull's Empire

The 1930s were tough all over and especially turbulent for the American electrical utility industry. Electrical World's May 6, 1933 issue touches on all the conflicts surrounding the industry at once.

  • Distaste for the New Deal. It's no secret big business and FDR didn't get along. That was especially true for electric utilities. When FDR was governor of New York, he failed to break the iron grip of major utilities like Consolidated Edison. So, when he took the presidency he went after the lightning giants. This excerpt from a forceful, poetic commentary entitled "Frightened Into Activity" shows that the animosity was mutual: "There is something tragic in the pitifully eager struggle to adjust itself to the desperate turn that the much-heralded new deal appears to have quite definitely taken. To plan the expansion of trade and the financing of new business with the dollar a shadowy symbol of nothingness instead of the one sure reality in a world of illusion requires more than normal fortitude."

  • The TVA. The Tennessee Valley Authority was meant to be a "yardstick" and a "birch rod" for utilities--a measurement against their practices and an enforcer of discipline via competition. That's how FDR saw it. Senator George Norris of Nebraska (the only state with a fully public power sector and a unicameral legislature), who resented private utilities for their indifference to rural poverty and electricity, was one of FDR's New Dealers in Congress pushing for the construction of the TVA. In this issue, the fight centers around Norris's Senate bill in favor of public ownership and development of the TVA and a Muscle Shoals power plant.

  • Insull on the Way Down. Samuel Insull got his start working for Thomas Edison. Then he struck out on his own. Insull's impact on the utility industry is still felt today--he encouraged the other utility presidents to push for regulated monopoly status. And they won it. But by the time the Great Depression rolled around, his pyramid of holding companies came apart. This issue catches Insull in the lurch, as it details the attempts of Insull & Son to handle its bankruptcy by selling off some of its holdings and assets to various utilities on the East Coast during Insull's Chicago court cases.

Conversation Starters

  • France has neglected its nuclear fleet and now it's paying the price. France's nuclear power production dropped to its lowest level in almost two years in April. The decline occurred as Électricité de France juggled long-term inspection-and maintenance-related halts to the operation of many of its reactors.

  • The G7 countries have committed to banning Russian oil. Today is Victory for Day Russia--the G7's decision arrives in time to muffle Russian enthusiasm for its war in Ukraine.

  • UK natural gas prices rose as wind energy dropped off last week.

Word of the Day

Renewable Fuel Standard


The U.S. Environmental Protection Agency implements the Renewable Fuel Standard (RFS) program in consultation with the U.S. Department of Agriculture and the U.S. Department of Energy. The RFS requires transportation fuel sold in the United States to contain a minimum volume of renewable fuels and for these fuels to be blended into transportation fuel in increasing amounts each year. (source)

Crom's Blessing

Nikola Tesla's Wardenclyffe Laboratory.