The consumer will only be forced to pay 40 cents for a while- -if governments get out of the way and allow markets to work. If power generators are reaping 1000% profits, other companies will quickly be circling like hawks. New electric power sources will pop up. And the price will drop to the 3-7 cent range. If governments will do what is needed to help that happen, like allow the plants to be built.
Here in Silicon Valley the San Jose City Council voted down a new power plant in its city limits- -in spite of the power crisis. Fortunately, the state and not the city has the final word and that plant may get built yet. In another city (I don't remember the name), a company wants to build a peaker plant near a working class neighborhood. The usual liberal suspects have crawled out of the woodwork screaming about economic racism, apparently a variant of NIMBY. If attitudes like these persist, we can just turn out the lights and leave the state.
Remember the oil crisis in the '70s? Oil shot up to $30 a barrel. Some years later, it was less than a third of that. What happened? That high price inspired the hunt for oil and for new techniques to get more out of existing wells. The North Sea came on line, then the North Slope, and many other new oil fields, and the price of oil plummeted.
For a decade, OPEC was a hollowed-out hulk; only recently has it regained anything like its previous power, and it is being much more circumspect this time, not wanting to re-inspire the moves that destroyed it before. |
