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Yes. I mean, for those reasons, PG&E is already a highly-regulated natural monopoly; they just happen to bundle in the more normal generation market with the na
by azernik 8y ago
Yes. I mean, for those reasons, PG&E is already a highly-regulated natural monopoly; they just happen to bundle in the more normal generation market with the naturally-monopolist grid market. (Which is part of what makes their lobbying work so problematic, since they're so regulated that they're almost a government branch themselves.)
Splitting the company into a 1) a government or quasi-government enterprise to handle the parts not suitable to the market, and 2) a much-less-regulated company handling the more market-amenable activities, could give the system as a whole a lot more of the efficiencies of a market system.
- njarboe 8y agoAnd if you don't do it right things can get all screwed up in a hurry. California tried to do this with some really bad rules (power companies must by power in an unregulated spot market but sell into a regulated market for some number of years) in 2000 and ended up with the bankruptcy of PG&E, rolling blackouts, $40 billion lost by the state of California due to manipulated inflated prices, and the only successful recall of a California Governor in history. [1] for the gory details. [1] https://en.wikipedia.org/wiki/California_electricity_crisis https://en.wikipedia.org/wiki/California_electricity_crisis
- azernik 8y agoYeah, designing a market is hard and needs professional economists involved, not just politicians riddled with conflicts of interest and taking all their information from lobbyists.