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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Yorikke who wrote (4106)	6/17/2001 6:21:05 PM
From: Hawkmoon	Read Replies (1) \| Respond to of 33421

Yorikke, We have a "chicken or egg" scenario of causality here. Some folks, like RD, would claim that this was all a preorchestrated attempt by the utilities to coerce the government to take control of the distribution grid in California. But then some would claim that certain politicial ideologues long for the power and control that comes with being the final arbiter of customer pricing for power (on the backs of the entire tax-base) to each and every voter is an incredible leverage they wish to possess. And certain unions desire this because it's easier to reap concessions for even higher wages from politicians than private corporations. And certainly corporations probably fear govt control over their ability to contract for, and receive power (controlling corporate interests is always good for a few votes at the ballot box as well as a ready source of political donations). So now we see the state has taken the grid in exchange for permitting PG&E to go bankrupt, and has the primary responsibility for managing, operating, and maintaining the costliest part of power delivery. And the story that the public will hear is how "those nasty utilities raped the public", and not how the taxpayer has suddenly found themselves financially and physically responsible for billions more in annual expenditures managing (and eventually replacing) the grid. But some of us are left to wonder why operating, maintaining, and managing the grid was so unprofitable in the first place? We wonder why government regulators would consistently refuse to hike rates in California to properly reflect costs of production, and providing for at least a 6-10% profit margin to the utilities for their efforts? We wonder why regulations made managing the power grid so outrageously expensive and unprofitable? (and since the utes were willing to given up the grid without much of a fight, obviously it was unprofitable). We wonder how, without the profit incentive involved in the economic equation, people will ever be able to rely upon having uninteruppted power available to them?? Distribution is the weakest link, and now it's in the hands of a bunch of salaried political appointees who work on "flex time" and never answer their phones, let alone their emails. What I perceive are folks on both sides boasting about how they screw the other side and got exactly what they wanted. They'll be boasting about how their actions have increased their own power base, or profitability picture. And since we know politicians don't worry about profitability, we have to ask why they are seeking to increase their power in the arena of power distribution? Call me a cynic.... :0) But fortunately, I don't live in California. Hawk