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To: wonk who wrote (1858)	1/24/2001 3:07:08 AM
From: axial	Respond to of 46821

Hi, wireless; "2. The issue in CA with electricity, or anywhere in the US for that matter, or in telecom or any other Industry traditionally regulated, is not an issue of Regulation v. No Regulation. Rather it is an issue of Poor Regulation versus Sound Regulation." That is the crux of the matter. That, and this fact: in the presence of sound regulation, debt could have been floated to build capacity for projected needs. In this scenario, there is no requirement for the right "market conditions" to stimulate building. I'm sure many will disagree, but I fail to see why states, provinces, municipalities and countries can all support infrastructure costs and regulation for highways and sewers, while throwing power generation and distribution to "market forces". Market forces are reactive, not predictive. It's a feedback mechanism that is unreliable - no, guaranteed to fail - as energy prices and economic cycles go through their historic dance: recession, energy glut; economic expansion, energy shortage. While this is only partly relevant to the problems in California, it speaks to the underlying debate: the role of regulation in infrastructure. Coming full circle, in a vital area of national interest, the power grid, it's no contest: IMO, it has to be regulated: soundly regulated. Regards, Jim

To: wonk who wrote (1858)	1/24/2001 9:45:52 AM
From: Hawkmoon	Read Replies (1) \| Respond to of 46821

To quick to lay the blame on"regulation" which stigmatizes a legitimate but flawed attempt to introduce market mechanisms Come on... trying to manage all power supplies through the spot market is great if nothing suddenly goes awry, like NG prices spiking through the roof, or all of your power comes from relatively stable sources like Nuclear or Hydro. And if these utilities had the ability to issue more debt to pay for buying power elsewhere, are you still telling me they couldn't have floated a bond issue to build more capacity? I'll tell you straight out that the events that have converged all at the same are extraordinary and hard to anticipate. But it has not been a secret about the maintenance headaches of California's aging power plants (40 years), going down for unscheduled work after a tough summer, and becoming more dependent on energy imported from other states where they have no regulatory control. What have the ratepayers of California done wrong? Wanting their cake and eat it too... They want economic growth, cheap power, but no new utilities in their state (or only after the most excruciating environmenal impact paperwork). But we know you cannot base sound economic growth on unstable sources of energy. And despite it's attractiveness as a clean fuel, natural gas is unstable with regard to supply, transport, and storage given its inherent volatility. All it would take is one major pipeline rupture and gas supplies would effectively be cut off. But coal, hydro, or nuclear don't face such problems. So where I blame the california rate payer is for their naieve in NIMBY and their "anywhere but here" attitude. Now my relatives in Oregon, Washington, and Idaho are finding THEIR power rates going up because California was so dependent on importing foriegn power to tide them over. And thanks... I'd almost forgotten about AZNT. What a joke that was. Regards, Ron