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

To: Raymond Duray who wrote (453)	6/12/2001 12:53:00 PM
From: gamesmistress	Read Replies (1) \| Respond to of 1715

"Have you stopped beating your wife, Senator?" :-) That is the political equivalent to your question, "Is it a good thing that the Texas cabal sends thousands of otherwise viable businesses and households into bankruptcy for the sake of outsized profits? The answer is Yes or No.....Choose One. <smile>" Sorry, my answer won't be yes or no, since I don't necessarily agree with your premise of a "Texas cabal" in existence, never mind it doing all the dirty work here, presumably snickering gleefully while they're doing it too....even the people interviewed in the PBS special you cited (which has great info, thanks) do not reduce the CA situation to such simplistic terms. The CA Attorney General and Deputy Governor who do use such hyperbole are running for office. Are you? :-) Looks like SoCalEd is going to follow PG&E into bankruptcy now. Davis will have to do without their financial contributions now. :-/ I agree with you about their lousy management, and I also think the power generators exploited the system, but don't forget who set up that system - the CA state government. IMO they are at least as responsible for this fiasco, if not more, because they did not understand the implications of what they were doing and so when things started going wrong did not really understand how to fix it. As for going back to regulation and providing power at a fair price, the utilities, or MUDs, or whatever manages power distribution, would be better off building new power plants or buying back the old ones. You can't manage prices if you can't control costs.

To: Raymond Duray who wrote (453)	6/12/2001 1:05:27 PM
From: GVTucker	Read Replies (1) \| Respond to of 1715

Raymond, RE: Is it a good thing that the Texas cabal sends thousands of otherwise viable businesses and households into bankruptcy for the sake of outsized profits? The answer is Yes or No.....Choose One. First of all, you need to define "Texas cabal". If you're referring to companies like Enron, then I would strongly disagree that they are making outsized profits. Look at the historical quarterly profits for Enron, and you'll see what I'm talking about. I can provide specific examples if you'd like. The reason why Enron is not making outsized profits is because they're having part of the same problems that the CA utilities are having. The base product, natural gas, is up sharply in price. Thus, you have to look at the producer of the natural gas to find the firm that is making the outsized profits, as you term it. The best example of this is Burlington Resources. They have 250 mmcf/day, or 13% of their production, exposed to the California market. And their profits are sharply higher right now than they were a year ago. Two or three years ago they were losing money. But if Burlington Resources started to charge below market rates for their product, they would be doing their shareholders a disservice. Natural gas exploration and production has been a horrid business for public companies for a very long time. Look at a long term chart of Burlington Resources to get an indication. If there wasn't the prospect for 'outsized profits', no one would have an incentive to drill for natural gas in the first place. The simplest solution is the best. The people of California need to market prices for their power. From there, markets will adjust.

To: Raymond Duray who wrote (453)	6/12/2001 6:56:15 PM
From: Hawkmoon	Read Replies (3) \| Respond to of 1715

The government gave away $28 Billion to the bozoes in the utilities who created monstrously inapropriate "investments" and had the chutzpah to suggest that the consumer had to pay for lousy executive decisions. I'm not familiar with all the specifics, but one has to ask to what degree those "inapropriate investments" were actually the state government driving up the costs beyond profitability through their regulatory power. Why would the state feel the responsibility for reimbursing the costs of these abandoned nuclear plants, unless PG&E and others were threatening to sue them because the state had driven up those costs with post-facto regulatory changes and legal harassment. And as for "chutzpah", it's interesting that PG&E is in bankruptcy as a result of the lousy executive decisions on the part of Governor Davis as well as that bill preventing the use of long-term contracts to mitigate price spikes. Were the utilities, a relatively low profit business, so guilty of "collusion", you'd wouldn't have several of them either in bankruptcy, or teetering on the verge of such. Hawk