Electric Utility Deregulation

PLATO · May 4, 2003, 02:35

I was reading the magazine that comes with my electric bill today and their was an article that caught my eye.

Apparently just the idea of US Congress passing sweeping deregulation in the Electric Industry caused several states to actually pass deregulation bills. Most notably is California. The article blamed all the problems that California experienced on this action. It even suggested that this may have contributed to the Enron collapse. The article states that similar legislation is being considered again in Congress.

So... What do you know about this? and How do you feel about it?

Imran Siddiqui · May 4, 2003, 03:10

Oh oh... wait for MtG to rip this apart

.

I think the problem was that it was called deregulation in California, but it really wasn't. Partial deregulation won't get you anywhere.

MRT144 · May 4, 2003, 03:15

and having 2 companies run the show doesnt either.

Donegeal · May 4, 2003, 03:38

Deregulating public utilities would be like deregulating the military.

Bad idea.

Starchild · May 4, 2003, 05:40

Deregulating public utilities is a good idea. Sitting here in the UK I can choose between dozens of providers based on who offers me the cheapest kilowatt per hour rate or on how they generate the electricity (renewable methods, etc).

CerberusIV · May 4, 2003, 05:52

Deregulating public utilities is a crap idea. I am trying to get a new electricity supply installed in a building at work. Before deregulation it was all Yorkshire Electricity. Now I have to deal with YEDL to run a new cable from the street to the building. They did but the new meter cabinet wasn't ready so they capped off the cable and left it. Then Npower came to fit the meter and would not because the mains cable wasn't connected to a cut-off box in the meter cabinet and our electrician hadn't done the internal wiring properly.

YEDL say that their computer shows the job has been completed so they can't come back. Everybody says it is someone else's responsibility. No-one will give a clear list of what needs to be done in what order. In the middle of all this someone else actually turned up to read the meter that hadn't been installed!

I just want to pay the money and have the work done but that concept is too difficult for these morons.

Thatcher and the idiots who privatised electricity in the UK should be hanged for their stupidity. Oh, and don't even mention the endless stream of reps calling at the door and the mountains of junk mail trying to persuade me to switch supplier. That must cost a fortune to do and the electricity user ends up paying for it in the end.

Asher · May 4, 2003, 05:54

It's working out fine now in Alberta.

We even have more choices on where we get our energy from. Companies are trying to gain marketshare, so they offer plans like where all your electrical energy comes from solar & wind power rather than coal...

Donegeal · May 4, 2003, 06:54

So then what is next? Deregulated water? The basic needs of the people should be regulated to prevent corporations from having power over the people.

Skanky Burns · May 4, 2003, 07:01

Regulated industries just means that the government has power over people - and a monopoly of power too. Since "government" and "trust" don't really belong in the same sentence, I'm sure you can figure out why deregulation is a good idea.

Donegeal · May 4, 2003, 07:16

No... Regulated industries means that the government has power over the industries. And (I'm going to disagree with you again) the people have power over the government.

Besides, just look what happened when the eletric utility was deregulated...
I'm sure you can figure out why regulation is a good idea.

Skanky Burns · May 4, 2003, 07:33

In America it caused problems perhaps, but in other countries (such as Australia or Canada) it has done nothing but reduce prices for the public while increasing choice.

Donegeal · May 4, 2003, 07:37

yeah... I was going to add that but I can't edit posts from work....

Willem · May 4, 2003, 07:44

Quote:

Originally posted by Asher
It's working out fine now in Alberta.

We even have more choices on where we get our energy from. Companies are trying to gain marketshare, so they offer plans like where all your electrical energy comes from solar & wind power rather than coal...

What's the cost per kilowatt hour there now, and how stable is the price? There were a lot of problems here in Ontario last summer with prices suddenly skyrocketing when everyone's air conditioners kicked in. They had to import hydro from the US at ridiculous prices. The government stepped in and set a cap of 4.3 cents/kilowatt hour, but it's now costing us a fortune to maintain that rate.

Willem · May 4, 2003, 07:51

Quote:

Originally posted by Skanky Burns
... but in other countries (such as Australia or Canada) it has done nothing but reduce prices for the public while increasing choice.

That's not the case in Ontario, Canada. Prices went through the roof shortly after deregulation was put in place. The government had to step in and set a rate cap because the people were livid when their hydro bills suddenly started skyrocketing. It turned out to be an absolute fiasco and will probably cost the Tories the next election.

Starchild · May 4, 2003, 07:55

Quote:

Originally posted by donegeal
So then what is next? Deregulated water? The basic needs of the people should be regulated to prevent corporations from having power over the people.

My water's deregulated.

Kidicious · May 4, 2003, 10:58

Quote:

Originally posted by donegeal
So then what is next? Deregulated water? The basic needs of the people should be regulated to prevent corporations from having power over the people.

hehe, they have actually deregulated water is some parts of the world. The consequences were even worse.

Sava · May 4, 2003, 11:15

Regulation = accountability for corporations

It's funny how most abuses of the system comes from areas that have been "de-regulated".

Starchild · May 4, 2003, 11:36

In my happy deregulated power market, I have the choice of going with a provider who only generates electricity using by using renewable resources such as wind, solar, or tidal. I can sleep soundly knowing that I'm not adding a single molecule of carbon dioxide to the air. If they change their policies, I can switch providers to one that meets my ethical requirements.

How many of you guys with government power utilities can say that?

Sava · May 4, 2003, 11:44

I live in a country where the cheap nature of fossil fuel power makes it the most dominant form of energy. I don't really want a choice. I think there should be one power company, either regulated heavily by the government, or controlled by the government that provides clean, cheap energy. But instead we have a multitude of greedy companies that would burn people alive if it produced cheaper energy.

Starchild · May 4, 2003, 11:55

Odd, I don't see anyone being burnt for power over here. I may have to look a bit hard the next time I pass by the wind farm.

Kidicious · May 4, 2003, 12:02

Quote:

Originally posted by Starchild
In my happy deregulated power market, I have the choice of going with a provider who only generates electricity using by using renewable resources such as wind, solar, or tidal. I can sleep soundly knowing that I'm not adding a single molecule of carbon dioxide to the air. If they change their policies, I can switch providers to one that meets my ethical requirements.

How many of you guys with government power utilities can say that?

I think the biggest problem is that even though consumers have a choice there are producers that end up with market power because of their large market share. That's where the inefficiencies and higher prices come in.

Sava · May 4, 2003, 12:06

Quote:

Originally posted by Starchild
Odd, I don't see anyone being burnt for power over here. I may have to look a bit hard the next time I pass by the wind farm.

De-regulation can work if the corporate culture is one of integrity, honesty, and fairness. Unfortunately, none of these values are present in corporate America.

MichaeltheGreat · May 4, 2003, 12:58

Starchild, honey, not many people have the luxury of freezing their balls off half the year in a low population density wasteland where there's lots of water going downhill, big tides, and constant winds from the north-friggin' pole. Canada has a unique situation with respect to electrical power demands and generation options. It is not comparable physically or economically to anywhere else in the world.

Plato - I worked in the midst of the Cali restructuring Scheißsturm throughout most of the 90's, doing consulting work related to strategic planning for public agencies, powerplant siting, land-use and environmental requirements for independent power producers, and a whole bunch of rate, feasibility and operations analysis. I'll post more about this later, but the "Enron collapse" had nothing to do with Cali, except perhaps their approach to the Cali market was symptomatic of their basic stupidity outside their core gas pipeline business.

More later.

St Leo · May 4, 2003, 13:11

In America it caused problems perhaps, but in other countries (such as Australia or Canada) it has done nothing but reduce prices for the public while increasing choice.

LOL. It's not working out at all in Canada. When one corporation raises the rate, all others will raise the rate too in order to make more money because they know that competition is bad for them and they don't want to undercut the other at all because that would be bad for their margins.

OTOH, when the government raises the rates, it gets voted out in the next election. Utilities should be government owned.

Odin · May 4, 2003, 13:14

This is bad, we all know what happened to gas prices when Oil Companies were deregulated, they shot up.

Odin · May 4, 2003, 13:16

Shoot, St. Leo beat me to the point.

MichaeltheGreat · May 4, 2003, 13:37

Quote:

Originally posted by Odin
This is bad, we all know what happened to gas prices when Oil Companies were deregulated, they shot up.

Are you referring to natural gas, or gasoline? And when were oil companies regulated in the US?

Edit - BTW, if you're referring to natural gas prices, interstate natural gas went through the dereg process in the mid-80's, and transitional issues were pretty much cleaned up by the early -90's. "Retail" natural gas, i.e. local distribution companies, are still primarily regulated, with some non-core customer classes for those customers large enough to (theoretically) participate in the deregulated interstate market.

In the core customer classes nationwide, the gas price component of the rates has gone down, although there have been increases in non-gas price components (inflation in maintenance and personnel costs, etc.)

In the deregulated marketplace, natural gas prices have been at least 20% less than the previous regulated prices in more than 90% of the trading months since deregulation, and they've been at least 50% less for over a third of the trading months since deregulation. There have been two pricing crises in ten to fifteen years of deregulation - a speculative bubble due to the Iraq war and situation in Venezuela (oil prices have a loosely linked effect on gas prices) and the winter of 2001 demand spike. Despite those two, if you average out the prices on a yearly basis, natural gas prices on the wholesale market have been less every year of deregulation than they were under the previous regulatory scheme.

Az · May 4, 2003, 13:44

Quote:

In my happy deregulated power market, I have the choice of going with a provider who only generates electricity using by using renewable resources such as wind, solar, or tidal. I can sleep soundly knowing that I'm not adding a single molecule of carbon dioxide to the air. If they change their policies, I can switch providers to one that meets my ethical requirements.

How many of you guys with government power utilities can say that?

I can't say that. I don't even want to say that. I own a car damnit.

Agathon · May 4, 2003, 13:45

Well it doesn't work. It was tried in New Zealand and the most spectacular failure was that the core of our biggest city went without power for six weeks.

Other than that, prices went up.

Kidicious · May 4, 2003, 13:48

Quote:

Originally posted by Agathon
Well it doesn't work. It was tried in New Zealand and the most spectacular failure was that the core of our biggest city went without power for six weeks.

Other than that, prices went up.

Wow! I didn't here about that one.