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Strategies & Market Trends : Rande Is . . . HOME

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To: Rande Is who wrote (49915)3/29/2001 6:37:31 PM
From: Silver_Bullet  Read Replies (2) of 57584
 
<Electricity Shortage -- >

Actually the culprit to this whole fiasco is Deregulation...Electricity, much like water is a neccesity of communities and something that the government must oversee the provision of... This is one reason we pay taxes. Now, I do think that we as a society waste energy on the whole but this is beside the point.

Deregulation has now made electricty in california not a public service but a for profit business. This won't work because to government can not regulate when to build more infrastructure such as power plants like they can, and currently do with water / wastewater plants, which is also a needed public service for all citizens...Of course unless you'd rather drink dirty water. Most companies won't build extra capacity because it's bad for the bottom line... It's plain a simple a business decision and why not just keep the same size infrastructure and when the demand goes up just charge more money and make more PROFIT!

Water and Wastewater treatment is still a regulated service. There are laws by the EPA that requires a community to be in the planning stages of building more capacity at 80% utilization. The community has to be in the building stage at the 90% capacity mark or fines of many thousands of dollars a day can be imposed. This ensures that as long as there is water there is always enough capacity to treat it. It takes many years to build these electricity generating and water treatment facilites so this california problem could go on for awhile.

As we have seen with the electricty shortage in CA deregulation allowed companies to not build the necessary infrastructure prior to it's need and now there are huge increases in prices and at the same time no guarantee that the electricity will even be there.

I heard just recently that Ohio and New york are less than 4 years away from the same problem. Infact companies in ohio are now calling in to see what the price of electricity is for the day to see if it's even worth opening the doors.

The need for electricity, much like the need for water is a guarantee and the only way to ensure the cheapest generation or treatment is to let the govenment keep tabs on the whole process.

FT
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