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Pastimes : The California Energy Crisis - Information & Forum -- Ignore unavailable to you. Want to Upgrade?

To: Don Knowlton who wrote (269)	5/4/2001 9:53:16 PM
From: Zeuspaul	Read Replies (3) \| Respond to of 1715

What quid pro quo did the pols get from the entities that lobbied them in 1996 as payment for creating the law that led to this mess? The word deregulation has its own legs. Everyone knows that a regulated market in our great system just doesn't cut it...Econ 101. Politicians, industry and the public all nodded their heads in the same direction...it was an easy sell. Building the nation on regulated power over the last century was just a fluke. What you are seeing is the results of a deregulated market. You can argue the warts but it is the closest thing to a deregulated market for juice in the US. It was the free market that got us where we are today. Wholesale power has been deregulated. Even more so in California as the utilities were forced to sell their power generating facilities and shun long term contracts in the name of competition. PA is not experiencing the California crisis because their market is not as free as California's. Their utilities were not forced to sell their plants and they were allowed to have long term contracts. But that's not free market juice. If you want market juice look to California for a better example. If the politicians had had the wisdom to let the retail rates float.....(the deregulation plans I have seen use an approach similar to California...Texas freezes retail rates for three years followed by a cut.. users in PA who left the utility for lower juice went back to the utility of last resort and the utility is losing money on them as they have to buy high and sell low.)....the problem could be worse. The market was working...wholesale prices were deregulated but retail prices were kept artificially high. Had the retail price been allowed to float they would have floated lower. Would that have been a signal to the generators to increase supply? Would that have been a signal to the end users to decrease demand? Most likely we would be worse off today if retail prices had not been frozen. What happened when the supply and demand curves changed direction? The best example is San Diego as their wholesale and retail prices were deregulated. Has San Diego been spared the realities of market juice?...hardly. They cut back on the demand side but did the prices fall? Did more juice come on line? There is no question the politicians are incompetent to handle this crisis. They are easy pick'ns...great scape goats. Even Davis doesn't blame the market...He's too smart for that...because EVERYBODY knows that deregulation is the way to go. The band wagon is on the wrong track. Which utility is the most successful utility in CA? Regulated LADWP...that's got to tell you something. Zeuspaul