Deregulation of Utilities in California
In 1996, the California Legislature unanimously approved legislation to deregulate electricity. The legislation promised competition and at least 20% lower electricity rates by 2002. Today, however, many agree that the deregulation of California was a disaster. There are disagreements on whom or what is to blame for the current situation and how to solve the problems. There are some who blame the utility companies for the deregulations current situation. Harvey Wasserman believes that the problems were started due to the mismanagement and greed of the corporations. "The roots of this unnatural disaster lie in the corporate boardrooms of the utility companies now on the brink of bankruptcy. It was their mismanagement and greed that led directly to some of the greatest miscalculations in the US business history." (Wasserman 11) He points out that the utility companies had once made "their own bad investments in obsolete generators, mainly nuclear power plants." (Wasserman 11) According to Wasserman, the utility companies were "Tired of having their rates regulated by the state's ninety-year old Public Utility Commission. What they wanted was to cash out of those bad investments, keep their big customers and make
" (Coy and Palimeri 48) They say that the problem may also be attributed to the transmission grid. " To them "this suggests a flawed market design" ("Beyond the Pool" 60) There are also some who point out the problems is not being caused by deregulation, but by a number of other problems. According to Peter Coy and Christopher Palimeri the problems can be attributes to problems with the Generating plants, the transmission grids, the distribution networks and the consumers. " ("Power Lines" 3) "Unfortunately, Governor Gray Davis and the California legislature have chosen to ignore the lesson of Sacramento and to "solve" the crisis by throwing more billions in public money at the utilities. Sacramento had "Municipal ownership and conservation" that "which after closing down its one nuclear reactor in 1989, prices held steady, invested heavily in wind and solar power and promoted energy efficiency through programs like subsidized buyouts of old, energy-guzzling home refrigerators. They say the problem with the generating plants is that construction "had tailed off in the past decade because of environmental concerns, poor estimates of demand, and uncertainty about deregulation. " (Coy and Palimeri 48)There are other groups who state that there is no problem with the California utilities industry. California, in particular, is critically short of power. " ("Power Lines" 3) They Believe that the Governor should be "using public money and eminent domain to buy the assets of these rouge utilities out of bankruptcy and turn them over to direct public control" ("Power Lines" 3) Trying to follow Britain's deregulation model is what others see as blame for the crisis. They are also demanding a higher quality of power for computers and sophisticated industrial equipment that can't handle spikes and dips in the flow of the current. They say the problem when "California tried to copy Britain" was "setting free the wholesale market for power while keeping prices fixed in the retail market. " ("Beyond the Pool" 60) In a Properly deregulated market "wholesale supply would lead to high retail prices, which would curb demand and provide incentives for new capacity. From blaming Britain to the governor and consumers of California there is no agreement to the cause of solution of the problem. Pete Wilson, said consumers benefited from the rate cut and the chance to buy power from the new suppliers, although most have elected not to switch providers. Among these are some California utilities, environmental groups and businesses.
Common topics in this essay:
Coy Palimeri,
Harvey Wasserman,
Utility Commission,
Beyond Pool,
Switched Ota,
Power Lines,
California Legislature,
Christopher Palimeri,
Sacramento Municipal,
Believe Governor,
wasserman 11,
coy palimeri,
utility companies,
coy palimeri 48,
palimeri 48,
beyond pool 60,
retail market,
power lines,
beyond pool,
lines 3,
pool 60,
power lines 3,
generating plants,
|
Acceptance Essays
