January 2001 – Perennial offers a new line of products and services to customers including Emergency Beacons, Uninterruptible Power Systems (UPS), Whole-house Surge Suppression Systems and LED Lighting System.
February 2001 – Learning from the California power crisis
By now I am sure that every-one is aware of what is happening with California’s power market. For weeks, a day hasn’t gone by where a newspaper or television news report has not included a story about the potential for lights going out in California. Although we all realize that millions of people have been left without power through rounds of rolling blackouts, I am not sure that everyone fully understands the reasons for this power crisis. I’m led to believe this is true, as the question we in the electric industry are asked most often these days is, could this happen in Nebraska?
Before we can answer that question, we must look at the history of California, and learn from its mistakes. California’s power crisis is rooted in its long struggle to cope with the effects of deregulating its electricity market, which became effective in 1998. For many years California has had higher electricity costs than the rest of the nation, and in the mid-1990s, large customers wanted a break in their energy bills and thought competition could lower their rates. With deregulation, the idea was to require utilities to buy power on the open market at lower, competitive costs, and pass those savings on to consumers. To ensure customers protection from possible escalating electricity prices, deregulation reduced residential rates by 10 percent and froze the new rates until March 2002 for most customers. Sounds like a plan. What happened?
When deregulation was approved, California had a sufficient amount of electricity and the cost of wholesale power was lower than the retail ‘rate cap’. Since then however, for several reasons the price for wholesale power has skyrocketed, fivefold to be exact. As you might have guessed the price of natural gas, which is used to generate a majority of the electricity in the state, has risen severely. At the same time, the Pacific Northwest and Northern California, heavily dependent on hydroelectric power, have had little rain and snow, further stressing the availability of power supply. Also, much of the electricity used in California is produced and imported from other states, where supply has also been tight. In short, for months two investor owned utilities, Pacific Gas and Electric Co. in the north, and Southern California Edison Co. in the south, serving 25 million people, have been paying dramatically higher costs for wholesale electricity then they are recovering from customers.
For all of 2000, PG&E’s excess electricity costs totaled $6.6 billion, while Southern Cal Ed put its total at $4.5 billion. In mid January 2001, PG&E had just $500 million in cash left and faced bills of $1 billion due n February. Southern Cal Ed said it would run out of cash February 2, and could not pay $596 million in bills due. This prompted Standard & Poor’s to downgrade the credit ratings of the utilities to junk-bond status, and of course, threatened them into involuntary bankruptcy.
As California struggles with coming up with solutions for this energy crisis, through observation we can assess the probability of this ever happening in Nebraska. We must first recognize that the contrasts between both states are stark. As I previously noted, California imports much of its power. Nebraska actually exports surplus power. Natural gas is burned to produce the bulk of the power in California, whereas Nebraska burns low cost coal to make a majority of its electricity. California has some of the highest electric rates in the nation. Nebraska’s rates are among the lowest in the country. California has for-profit investor owned utilities. Nebraska is the only state in the nation where all of its electric utilities are owned by the public.
But most importantly, California moved quickly into deregulation, which obviously has contributed greatly to their energy crisis. Nebraska has taken a wait and see approach. Our state legislature has passed legislation that adopted a “condition-certain” policy to address its own unique conditions with respect to retail competition. In other words, Nebraska should not deregulate until certain conditions have been met. One of the conditions is that there should be a viable market for wholesale power, which clearly didn’t exist in California at the time it deregulated.
A step-by-step public process to assess retail competition has been put into place in this state, and it provides a framework for assuring benefits and protections for all Nebraska consumers. Its probably wise to never say never, but our approach to making changes to the electric industry in Nebraska thus far has been sensible, and our situation is so different from California’s, that chances are we won’t be making the news in this regard.
June 2001 – Perennial and Mainstay Communications partner to bring broadband high-speed internet access to area
For several months leaders from Perennial and Mainstay Communications, have been working together to bring a much needed, highly anticipated service to York and surrounding areas. The service is high-speed internet access, and their intentions are to make it available to everyone.
The two consumer owned utilities, share a common goal, which is to help their customers get the services they need and deserve, at a fair price. Currently broadband high-speed internet access such as DSL or Cable, is only available in certain areas. And that is not expected to change soon. I’m sure it has a lot to do with economics.
For generations, large investor-owned companies have been reluctant to expand their services into sparsely populated rural areas. It was true with electricity over sixty years ago, and it still holds true today with valuable services like high-speed internet access. We understand that all businesses need these services, and we will do whatever we can to help them get the tools they need to stay competitive.
I know this new service won’t impact rural families here like rural electrification did in 1938, but it has given me a new appreciation for what it must have been like for farming operations then, to operate without modern technology. Like electricity then, high-speed internet access has the potential to open up new doors of opportunity and help level the playing field.
High-speed internet access, has also been getting the attention of Congressman Tom Osborne, a member of the House Agriculture Committee. Recently Osborne spoke in Geneva, NE, and told how he is focusing on efforts to bring high-speed internet access to rural communities. Osborne said, “We need this, if we want to land new start-up business and create new high-tech jobs. We need to try to create some jobs that will keep young people here.”
Mainstay Communications of Henderson, (formerly Henderson Telephone Company), owns and maintains all of the equipment necessary for this new service. Perennial will support this effort by doing some customer billing, and by offering a storefront in York, for customers to come and see live demonstrations and sign up for service. The companies will be offering 3 levels of internet service. Dial-up access, which will roll out the week of April 16th, is an unlimited service available to anyone who can currently call York toll-free. Unlimited high-speed wireless, is also available in limited areas. This is a “line-of-site” technology and antennas are currently located in York and Bradshaw with a service radius of approximately 4 miles. This area will expand as more customers request service. Later this summer, satellite internet service will be available in areas where dial-up or line of site wireless would not be practical. Neither of the wireless services require telephone service.
August 2001 – 340 customers attend Perennial’s first annual customer appreciation day.
December 2001 – Perennial offers Agricultural Surge Protection products.
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