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Copyright 2001
Pepperdine University
The George L. Graziadio School of Business & Management

400 Corporate Pointe
Culver City, CA 90230
The opinions expressed are those of the authors and do not necessarily reflect the university.

 

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Spring 2001 GBR Quiz
CALIFORNIA'S ELECTRICITY CRISIS

How well do you understand the causes, consequences and proposed responses to help keep the lights on this summer?

1. De-regulation of electricity was supposed to make it less-expensive by encouraging multiple suppliers (generators) to compete with each other for the right to sell their product. Instead, California has experienced relatively little competition among a limited number of suppliers. Which of the following have been blamed for this:
A)  Inaccurate projections of demand and of the growth of the economy
B)  NIMBY
C)  An involved and slow permitting process for new plants
D)  All of the above

2. Additional generating capacity is currently being built in California to help balance demand for electricity with additional supply. Which of the following types of power is predominant among the new plants being built?
A)  Wind
B)  Solar
C)  Hydro-electric
D)  Natural gas turbines

3. FERC (the Federal Energy Regulatory Commission) is charged with which of the following responsibilities? The responsibility to:
A)  Ensure just and reasonable electricity rates nationwide
B)  Ensure that companies that produce energy receive a fair return on their investment
C)  Be sure that energy companies do not break environmental laws
D)  Oversee nuclear power plants and be certain that all safety regulations are met.

4. Southern California Edison and PG & E have each incurred large amounts of debt this past year, largely because:
A)  Their experiments with unregulated businesses outside of California have been very expensive, although they should pay off in the future.
B)  The de-regulation law does not allow them to pass through the unanticipated higher costs of wholesale electricity to their retail customers.
C)  The costs of their nuclear plants have gone up dramatically due to increased environmental regulations this past year.
D)  All of the above

5. FERC has been frequently criticized by California public officials and utility companies during this electricity de-regulation crisis. What is it that they think FERC should be doing to help that it is not?
A)  Require federal hydro-electric plants in the West to sell all of their power to California
B)  Require the re-regulation of California's electricity market
C)  Cap the wholesale price of electricity
D)  All of the above

6. The primary role of the ISO (Independent System Operator) is to:
A)  Be certain that there is a match between input and output on the electricity grid in the state.
B)  Approve applications for new power plants in the state.
C)  Mediate between the state officials and the utility companies over the price of electricity.
D)  None of the above

7. There is a major emphasis now on conservation of electricity in California, especially this summer. If you want to conserve, which of the following light sources would be the most efficient lights to use (other things being equal, e.g., wattage, amount of time turned on, etc.)?
A)  incandescent bulbs
B)  halogen bulbs
C)  florescent bulbs
D)  There is no significant difference

8. After air conditioners, which of the following appliances or activities uses the most electricity in a typical home.
A)  Lighting
B)  Heating
C)  The refrigerator
D)  Electronic equipment (e.g., computers, television, stereo equipment)

9. It is estimated that we could save enough electricity in California to serve 200,000 homes if :
A)  Everyone would quit drinking coffee until the crisis is past -- thus saving the electricity required to brew it and keep it hot.
B)  All of the second refrigerators and freezers that people keep in their garages were turned off.
C)  The state reverted back to standard time for this summer instead of staying on daylight savings time
D)  Everyone would hand-water yards rather than use automatic timers.

10. The Governor's conservation program will give customers of the state's investor-owned utilities a 20% rebate on their electricity bills if they:
A)  Agree to forego air-conditioning this summer
B)  Cut their consumption of electricity 20% from last year's usage during the period of June1 through September 30.
C)  Don't use more than a specified minimum amount of electricity during peak hours
D)  Provide part of their own power, either through their own generators or by installing solar panels

  

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The Graziadio School of Business and Management
400 Corporate Pointe, Culver City, CA 90230