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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: LLCF who wrote (103055)5/17/2001 5:55:18 PM
From: yard_man  Read Replies (3) of 436258
 
>>1.) That it is clear that 'greedy traders' are not the root cause of the California debacle.<<

Not being the root cause is certainly correct, but that doesn't mean they don't take advantage when they see it either, DAK. Remmember this advantage was gained through the de-regulation (read "re-regulation") process.

Practically speaking, de-regulation, as in let anyone charge whatever they want, and provide service only to those that they want is a no-go.

It cannot work.

De-regulation will be "re-regulation." What you may not know or understand is that many of the areas currently considering "de-reg" have fairly efficient (again, within physical constraints) wholesale markets for electricity.

What we are talking about is letting the rest of the customers (retail customers) choose their supplier -- this is somewhat misleading in that they will stay attached to the same distribution lines -- physical flows of power will be approx the same. Only difference will be who is responsible to make sure their gen "follows" that load -- in many instances it amounts to a financial swap. There may be some efficiencies to be gained in some locales -- but such gains are marginal.

Under regulation folks have taken 2 things for granted:

1) reliability and
2) guaranteed availability, i.e. a provider of last resort

since they were served by only one company. No-one wants to give these up. So continued regulation of some form is a given.

It may be that more efficiencies could actually be gained under the old (current in some states) rate of return regulation by just giving customers information concerning the real-time costs of production and the means to act on that information ... (for all the blast of the idiocy in CA -- rates that are differentiated based on usage as compared to a baseline was really a best "quick" option to deal with the problem. One could argue that their allocation of costs favors farmers too much.)

>>3.) That there has been underinvestment in the sector for some time... during which it WAS regulated.<<

Don't over-generalize here -- in some areas there has been over-investment, in some under, some obvious and some just the result of really good work where folks were "thrown for a loop" by circumstances beyond their control.
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