Hi Maurice. I must say that I agree with some of what you say, and I was a supporter of airline and trucking deregulation among others.
I do however believe that electricity is different. I just read that Washington Post article that Snowshoe posted, and would say it's a pretty good synopsis, though it left out all details of the manipulations of power plant shutdowns and gas supply restrictions in California this past year. Those had a huge impact on the problem, though were not fully responsible. The system that the politicians set up was clearly flawed. By the way, a lot of the anger and squawking from Californians is due to the fact that the whole dereg. scheme was set up rather quickly and clandestinely by the conservative ex-governor on prodding from big industry, with clueless buy-in by a bipartisan legislature that didn't really understand energy complexities, and very little consumer input. So there's a strike against your representative government (actually, one representing those giving the biggest campaign contributions).
The interesting point I've been pondering was also mentioned in the article : reliability vs. cost efficiency. What became clear during the "crisis" was that it is not in the interest of the generators and marketers (many from out of state) to upgrade or improve the infrastructure beyond a certain point. A shortage of supply works in their favor : they can then charge much more per unit, while controlling most of the supply. This also encourages the artificial shutdowns of plants just when they're needed the most. Then they take the money out of state and invest it elsewhere. If they overbuild, they've paid a lot for new facilities, and get lower rates per unit to boot. But this is bad for the state, which would continually be in crisis mode during any demand spikes where supply becomes restricted.
Sorry, but as much as govt can screw things up, it is a necessary safety valve in something as critical as energy provision, IMO. How to do so is the tough question. I'm not an unfettered free market type - imperfect regulations are often (though often not) better than none for society overall. I'll take fettered free markets. If markets could be generally free of manipulation, and companies voluntarily imposed consumer and environmental protections, I might see it differently. It has never worked that way in practice, hence we have the FAA, SEC, etc.
The entries to the market are not so quick or easy as you say, and as real time pricing isn't available, substitutes are hit and miss. California already has high levels of conservation, being the second lowest per capita user in the States, and has improved even more so lately. Currently, we have about 45,000 mw capacity, and today's demand is projected around 33,000 mw. Like I said, only a shortage on extremely hot days statewide, but it hasn't happened at all this summer.
Many good links have been posted on other threads, but I've not saved most of them.
By the way, I can't wait to visit New Zealand some day. From what I've seen and heard, it's as spectacularly scenic as California, and the people I've met from there seem to be good sorts :). |
