Jim,

>>Evan,
>>
>>>I used to find Denis Miller bright and insightful with his humor. Over the last year or so he has started to become...um... less insightful and more of an uninformed whiner. He did not understand that the California energy crisis was caused by deregulated power plants gouging the consumers. He thought that environmentalists were preventing the building of new plants.
>>
>>Humor generally needs to have an element of truth in it in order to be funny.
>>
>>I presume you can connect the dots... <g>
>
>Hmmm. . .
>
>I suspect that the 'environmentalists' provided an ideal excuse for the generators to stop building.
>
>But I also suspect that the generating companies were very much out to make their balance sheets look as attractive as possible too - especially with deregulation and the fast-paced (at the time) stock market - so anything that could put more cash on the bottom line (ie no capital expenses 'reducing' profit) the better thay looked. Building more generating capacity sure wouldn't help that!
>
>I saw a guy from one of the Texas power companies in a news clip. When told that it sure looked like they were gouging the consumers he curtly replied (paraphrasing) 'We definitely are not gouging. People are still buying from us, aren't they?'. Like people can just stop using electricity, or have a choice as to who they buy it from (on a day-by-day basis)!?!?!?
>
>I also find it real hard to believe that power usage has been increasing "dramatically" over the last 15 years. After all, lots of manufacturing closed shop in CA, shutting outright or moving offshore/Mexico.
>The media says that PCs are the cause. I've really got to wonder about that when I look at my hookup that has two power bars of 5 plugs each fully loaded out of a single wall plug. If I plugged even 5 of almost anything else into a single plug I'd blow the fuse for sure.
>
>The unfortunate thing is that no matter how this plays out the GREEDY power companies win regardless.
>By holding up planning/building more generation capacity they get to 'fast-track' (read ignore the environmental impact) new plants.
>And even if price controls stay, the pricing will be much much higher than is otherwise warranted. In other words, they created a power shortage (mainly by not even spending $ to keep existing plants in good repair, let alone building more) and then reap the benefits of "supply and demand". A supply they control in total.
>
>I think the oil companies did a very similar thing. In their case there were lots of mergers over the last 2-3 years. They found themselves owning refineries that used to compete with each other in countless locales. Each of these competing refineries might have been operating at an average 35-70% capacity.
>It made business sense to close nearby (each other) refineries. Now the single refinery could operate at 70-100% capacity. But that left no room at all for peaks and greatly extended the impact of shut downs necessitated by maintenance/failures.
>Made for a much better looking bottom line but also for an inability to meet peak demand (which could last over several weeks or more). Again the lack of supply was self-induced, yet they come out big winners regardless.
>
>I think that the free enterprise system is great BUT it does rely on a modicum of INTEGRITY to operate correctly.
>
>Cheers
>JimN

Sure.. You definitely need integrity. The facts of the matter are known. The so-called deregulation was nothing of the sort. Retail prices were not repeat NOT allowed to rise & fall with the market but wholesale prices were - hence the huge disparity.

In a truly free market the retail prices would have gone up & down. They did not for political reasons.

What most folks don't realize is that the majority of the 'extra' expenses have come from the fines that have been imposed by the State of California on the energy that has been produced in California! not that which has been produced in Texas or anywhere else.

IOW, the regulators have created the problem and want to blame someone else for it. That a company wants to have a good bottom line is, well, what business is actually all about - not creating jobs as some think.

Let me ask a real basic economic question: When airlines need to sell more seats do they raise or lower prices?

They lower them to gain marketshare.

In the energy market if prices are fixed - as they once were in the airline industry - you don't get more capacity (growth).

The real simple answer is to totally deregulate both wholesale and retail energy prices. What would happen? Prices would spike and then plummet as various producers now were in competition with each other to get their product to market for a lower price.

Government regulations are just plain stupid IMO.

And, yes, e need laws against fraud and so forth but they're already on the books. We just need to enforce them.

Energy capacities were not created at all during the last ten years in California. NONE at all were built. Zip, zero, nada.. But the population doubled. Now.. What's the reason they didn't build plants? Well, start with the regulatory process for starters. Then, if you're a producer why produce energy at a loss. You are in business to make a profit, right?

It's just that simple.

Government produces nothing at all. Nothing. All governments do is redistribute wealth. You make it, they take it and give it to someone else. Sometimes that's a good thing, and sometimes it's not.

This all boils down to socialism vs capitalism and socialits type thinkers are never going to abandon the government-first mentality. They are under the false illusion that fewer eyes and brains (a select governmental few) are better then more eyes and brains (the market). They are fundamentally in error in their observations and thought processes. Socialism has never worked anywhere it has been tried. Never. OTOH, look to Irelend that has recently had a virtual explosion in their economy by lowering taxes and taking the free market approach.

Hmm.. Let's see.. What works?

Duh.. <g>