Clown-Free Zone... sorry, no clowns allowed Message Board

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Pastimes : Clown-Free Zone... sorry, no clowns allowed

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To: portage who wrote (105510)	5/30/2001 12:05:15 PM
From: yard_man	Read Replies (2) of 436258

>>.testing it by moving prices from $1 per kwh to $5,000 per kwh to $9,999 per kwh in the blink of an eye << Need to recheck your numbers there ('normal prices' are in the cents/kWh, even in California), but I'm not sure if price caps would work -- at some point you would have to relax them or go permanently back to regulated prices -- but if you are to relax again, who will invest capital on that promise? Either guarantee a small "almost riskless" return under regulation (really not as bad as some think) or the oppty to squeeze enormous profits. Either way they'll overshoot and wind up building too much capacity. I like free markets, but they (Ca) never intended to go there, there also may be some real fundamental impediments to getting there, and the transition is so very important. California is just a demosntration of how not to do it. That's all. We experience volatility, too, but it hasn't crippled us in the midwest ... Under normal economic circumstances California's mistakes would have been self-correcting and not a huge deal, but the timing is simply awful with the contraction in hi-tech and other problems.

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