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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: yard_man who wrote (101902)5/13/2001 11:39:43 PM
From: LLCF  Read Replies (2) of 436258
 
<RE 1: CA was never a free market -- true -- but why did you draw this conclusion and what do you mean by free? >

Because price charged to the end user was regulated/capped, whatever... so when wholesale prices moved up the utils got killed as you know. This is what Flat's has been squaking about for months...

Thanks for your excellent summation:

<Many would count as failure simply the inability of those providing electricity to residential customers to raise prices above costs to ensure a continued profit -- sounds good on it's face, except for what I just mentioned -- competition does over time move prices towards marginal costs -- perhaps it was working in california and if those suppliers to the ultimate end-users had been able to pass along costs (again, this is not something always assured in free markets -- though this was precluded by regs) prices would move toward marginal costs of supply -- But a very important question is: How quickly would prices move towards the marginal cost of supply -- 1 year, 2 years or 5 years? In the interim a lot of people could be in deep sh&t. Right?>

Right time will tell...and what is acceptable? What is better 10 years down the road? Also, what we will never know is how bad would the problem be right now if none of this were ever enacted. Would there be more plants now on the drawing board or less? What would be the result in the long term. The whole argument with Flats came out of her insistance [which she has since backpeddled on] that deregulation is 'bad', and her wild claims about who was responsible for electicity shortages.

DAK
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