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To: J. M. Blackburn who wrote (11496)	1/7/2001 11:53:50 AM
From: Kirk ©	Respond to of 42834

Nice post. Deregulation has worked well for semiconductors and consumers of them. Still, you have wild swings in prices as capacity follows demand and the capacity always gets built to exceed demand until the next demand cycle exhausts the capacity. With energy in CA, The PROBLEM is the environmental laws and "Not in my back yard" where Companies like Cisco want to build in California but they don't want the power plant built near their new campus even though it is needed to support their plant and the people that will work there. We've had no plants built and yet people and jobs continue to pour into the State. We need zero growth laws until we have infrastructure in place otherwise those of us that live here get asked over and over to sacrafice so we can squeeze more sardines into the tin our grandparents were born in (yes, I am a rare 3rd generation San Franciscan). Kirk out

To: J. M. Blackburn who wrote (11496)	1/7/2001 8:46:36 PM
From: Bill Shepherd	Read Replies (1) \| Respond to of 42834

Very interesting discussion re: California energy problems. Some random thoughts: 1) The primary architect of the current California deregulation effort: Senator Steve Peace, of San Diego. His political capitol will probably sink to zero! 2) Why on earth would the large energy transmitters (PGE, Southern Cal Edison) enter into an environment where their revenues are capped (the rates for which they sell power) when their expenditures are unlimited (the potential costs for buying power.? Call me crazy, but their shareholders should be asking some serious questions. Talk about not protecting shareholder interests!! 3) Why did the architects (See #1) of this mess not foresee the potential for sudden "supply imbalances" and rapid escalation of prices? Especially in an environment where the power plants were sold to out-of-state owners and/or California MUST go out-of-state to meet its peak demand needs. 4) Strict pollution control issues in California are taking generating capacity off-line---where high-polluting plants find it more profitable to sell their "rights" to pollute than to actually produce electricity. 5) It is very expensive to build and operate "peaking" plants -- that are often needed only to meet the spikes in electrical demand each afternoon. 6) Although some say that electricity is a commodity, and thus, free market pricing should be used; unlike oranges, coffee, or beef; consumers of electricity cannot handily switch to alternative products or forego electricity until the high prices subside. Yes, they can cut back, but only so much. 7) It scares me that the politicians that created this mess are now scrambling to quickly "solve" it. This is a highly complex industry...much too complex for politicians to master (IMHO). 8) I was in Las Vegas a few weeks ago...and they don't seem to be cutting back on electricity consumption...even slightly. Nice to know that the silicon valley (and all of California) is under threat of rolling blackouts, but the casinos in Vegas are shining brightly! Regards, Bill Shepherd