IPPs and Merchant Energy Co.s Message Board

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Strategies & Market Trends : IPPs and Merchant Energy Co.s

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To: Quincy who wrote (212)	9/25/2002 8:09:07 PM
From: Oeconomicus	of 3358

The nature of electricity generation and its ease of manipulation makes it nearly impossible to allow market forces to keep prices in balance without proper government oversight. Bull. Electric utilities have historically been regulated simply because they were a "natural monopoly." The only part of the electricity business that remains a natural monopoly is the delivery of it to residential and some business consumers, and that's only because of the huge amounts of capital it would take to duplicate the networks of power lines. Generation is a highly competitive business. If it were a monopoly, or if the market were easily manipulated as you say, then all the stocks listed below would making new highs due to declining interest rates (based on fat dividends), not down 50-90%. As for California, some unethical traders and gas pipeline operators may have unfairly or illegally exploited the situation, but the root cause was a poorly designed deregulation scheme. Now, the California pols are exploiting a situation of their own making to get votes and retain their own power. California voters put them in office to begin with, so ultimately, they are responsible. JMO, Bob

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