The “California Energy Crisis” has nothing to due with deregulation
. I know this because deregulation never occurred in California. The two primary energy companies in California are forbidden to retail
their product more than a certain a amount of money. The amount they pay wholesale
for power sources exceeds the amount they can charge. This brings us to the wonderfully astute comment by Mr. Option:
Perhaps if the privately held California power generators would volunteer to raise their prices only to cover the exact increase in fuel oil costs...?
The reason they won't volunteer to do that is that it's become illegal to raise prices. They are prohibited by regulation from doing so.
So for anyone out there who can balance a checkbook: What happens when outlays
? You loose money that's what. Which brings us to our second astute observation from Mr. Option:
"The only possible way the 'private' power generation companies can fail to get rich is by doing what they're supposed to... which is, provide ample, cheap, environmentally sound generating capacity."
So since private power generation companies are, in fact, failing miserably to get rich
, they must be doing what they're supposed to do. Not only are they failing to get rich they're downright broke. Their bonds have, as of March 2001, now reached junk status, which is a very bad thing
. Said bonds have been a staple of pensions in the region for decades, now they're worthless. Suppliers refuse to sell them any petroleum
because the suppliers have no faith in the utilities to recompense them, and justifiably. The Feds
might have to step in and bail them out, and we know exactly how bad that ends up. (Anyone remember the S&L bailout
? That worked like a charm.)
It's even simpler than supply-and-demand. (Which is good since most politicians seam incapable of grasping that concept.) It's just revenue and cost. Spend more than you make, and you run out of money. That easy.
The Government of California has succeeded again in screwing things up like only governments can do. God save the people of California.