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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: Maurice Winn who wrote (7469)	8/21/2001 11:15:03 AM
From: portage	Read Replies (1) \| Respond to of 74559

Wrong, Maurice. FERC was totally hands off, and they'd been handed the ball on overseeing the situation with the restructured system. Sure the potential for trouble was there with frozen retail rates, but it wasn't a real shortage that caused the problem. The capped retail rates were a short term tradeoff for prior years of windfall to PG&E and others who raked it in while prices were low. Their CEO even stated at the time of the bill passage that they'd take all the upside risk, as they would benefit from the downside prices with higher allowable rates. Now he's whining and suing to get back the money he lost in this foolish bet. That's after he took the early years' windfalls out of state to ream people elsewhere, then ring-fenced the parent corp. when the iron got hot. No easy entry to the market or freely available substitutes are available, so manipulation was easy and profitable. That's why regulatory oversight will continue to be necessary even with a deregulated market. Even Pat Wood the new FERC head agrees. His predecessor Hebert cost this state billions with his ideological twiddling. Please read up a bit more on the situation. Excessively cheap prices ? Ten times what was being charged elsewhere on the wholesale level - they just want to pass this along ? This was a highly manipulated situation, where your pat answers don't strictly apply. You're behind on the story. There's plenty from Severin Borenstein, the Mercury News, and others on how it was jimmied, and FERC's finally putting El Paso Gas' feet to the fire now that they've got the smoking guns. The others followed up by gaming the spot market to squeeze the prices by artificially limiting supply. The real flake in California was Petey Wilson. Give him the Prozac. But I've followed and discussed this thing enough to weary of rehashing the story, so I'll leave it to you to catch up if you want to.