How stupid people read something and come to idiotic conclusion has little to do with reality. Like CA, idiots call what occured under Davis in CA government as deregulation.
What went wrong in California?
To call the product of the 1995-96 regulatory and legislative
process "deregulation" flies in the face of all generally recognized
and accepted definitions of the term. Indeed, as a result of the
implementation of AB 1890, and California Public Utility
Commission rulings and orders, the regulatory "overburden" of
the electricity market in California arguably increased dramatically
through the creation of the California Power Exchange (PX)
through which the utilities were compelled to buy and sell their
electricity, as well as the rules adopted within the PX regarding
the "one price clears all" pricing method, and the calculation of
the Competition Transition Charge (CTC) designed to
compensate utilities for their "stranded costs." The net effect of
the legislation and rules was to create a monopoly power
exchange, and, worse, force the bulk of the California electricity
market into a "day ahead" spot market, instead of allowing the
market to choose its own venue of exchange, and terms of
commerce. The CPUC went even further in attempts to "micro
manage" in last year's actions to effectively forbid the use of
commonly used financial instruments such as direct contracts,
forward contracts, futures and options, with the sole exception
being that of the use of the Power Exchange's "block forwards."
The result of that disastrous combination of policies is evident
today, as California faces the most serious threat to its electricity
marketplace ever. At this time, under AB 1X passed in January,
the state of California, through the Department of Water
Resources (DWR), is the sole legal buyer and seller of electricity.
While the DWR supplanted the now-defunct PX because the
utilities had become "insolvent," the net effect is that the
California electricity market remains a government monopoly.
caltax.org |
