Subject:
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California Power "Deregulation"
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Newsgroups:
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lugnet.off-topic.debate
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Date:
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Sun, 7 Jan 2001 18:53:09 GMT
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Viewed:
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85 times
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The media in the US are touting the situation in CA as a "failure of
deregulation".
http://www.dljdirect.com/cgi/inet/qndigest.trn?research_cde=REU&key_nmb=N06196073&trn_key_nmb=RTR010106000091&selection=all_news_sources
But is it really?
Let's review:
Utilities used to produce their own power. But building plants to keep up
with demand got hard for them. So some thought to open the wholesale market
("deregulate" it) to encourage others to build plants or supply juice.
But retail rates remain regulated at low levels.
Now, all of a sudden, the failure to allow any plants to build has come home
to roost, and demand outstrips supply until the price goes up. But the
utilities cannot pass the costs on to the consumers (who are the source of
demand). Is it any surprise that there are power shortages, and that
utilities are all of a sudden about to go bankrupt?
In what way was this deregulation? In what way did the markets fail? The
markets are working fine in the wholesale marketplace. There is lots of
power available, for a price. Just not a price the utilities can afford to
pay any more. They're heroes, actually, for blowing their cash reserves
trying to keep this charade going, to the point of bankrupting themselves.
(although if I were a stockholder I'd be arguing that they should have
pointed out the folly of this plan years ago)
If anyone should be taken to task, it is, as usual, government. But don't
worry, the CPUC will pin this on anyone but themselves.
The drumbeat now is that the CPUC should take over the utilities as
"deregulation" is a "failure". That would be about as smart as giving the
doctor who tried to relieve your headaches by drilling holes in your skull
charge of your treatment for a brain tumor.
++Lar
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Message has 2 Replies:
 | | Re: California Power "Deregulation"
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| Hm, this is starting to sound a bit like what happened to the power company in New Hampshire. They started to build a nuke plant which Massachusetts kept from opening (one strategy was to refuse to create an evacuation plan). The power company was (...) (23 years ago, 8-Jan-01, to lugnet.off-topic.debate)
| | | Re: California Power "Deregulation"
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| (...) <snip> What's really fun about all this is that my power bill in WA is going way up because our power companies want to sell our power to CA. They're calling it a "shortage," however. There are all sorts of advertisements on the radio and TV (...) (23 years ago, 8-Jan-01, to lugnet.off-topic.debate)
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