Electricity

CA Moves To Drop Cheap Hydropower

The state gets more attractive every day

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What this means is that all energy is "fungible": all forms of energy are interchangeable in use but not in price.  Stated differently, the availability of the lowest priced source of clean energy, hydropower, holds down the price inflation of all other forms of energy (e.g., natural gas, nuclear, geothermal, wind, and solar).  Take away the lowest priced product of anything — a commodity, a manufactured good or a service — and there will be price inflation due to lack of a cheaper competitor.

This is precisely what California is intending to do with its pending joint plan with Oregon, the U.S. government and billionaire Warren Buffett to demolish four dams and hydropower stations. But currently there is a dry spell in Oregon and local farmers and ranchers are opposed to demolishing the dams, as reported  April 19 in the Wall Street Journal.