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The real question is whether a monopoly utility company should be a private for-profit effort. Like what's the benefit here. You can't rely on the usual surviva

The real question is whether a monopoly utility company should be a private for-profit effort. Like what's the benefit here. You can't rely on the usual survival-of-the-fittest quality proposition because those are monopolies.

drawkbox 7y ago
This point was raised many times in the last rolling blackout gamed events in California nearly two decades ago. > S. David Freeman, who was appointed Chair of the California Power Authority in the midst of the crisis, made the following statements about Enron's involvement in testimony submitted before the Subcommittee on Consumer Affairs, Foreign Commerce and Tourism of the Senate Committee on Commerce, Science and Transportation on May 15, 2002: [1] > "There is one fundamental lesson we must learn from this experience: electricity is really different from everything else. It cannot be stored, it cannot be seen, and we cannot do without it, which makes opportunities to take advantage of a deregulated market endless. It is a public good that must be protected from private abuse. If Murphy's Law were written for a market approach to electricity, then the law would state 'any system that can be gamed, will be gamed, and at the worst possible time.' And a market approach for electricity is inherently gameable. Never again can we allow private interests to create artificial or even real shortages and to be in control. [1] > "Enron stood for secrecy and a lack of responsibility. In electric power, we must have openness and companies that are responsible for keeping the lights on. We need to go back to companies that own power plants with clear responsibilities for selling real power under long-term contracts. There is no place for companies like Enron that own the equivalent of an electronic telephone book and game the system to extract an unnecessary middleman’s profits. Companies with power plants can compete for contracts to provide the bulk of our power at reasonable prices that reflect costs. People say that Governor Davis has been vindicated by the Enron confession."[1] Hopefully stored battery energy on households can help prevent rolling blackouts impact, but until then any company running a crucial service needed for survival should be under heavy scrutiny, and switched to state/public run if they feel the need to game it. In the Enron triggered emergencies, they were 'overscheduling' on purpose and 'megawatt laundering' [2] > "There is a single connection between northern and southern California's power grids. I heard that Enron traders purposely overbooked that line, then caused others to need it. Next, by California's free-market rules, Enron was allowed to price-gouge at will." [2] [1] https://en.wikipedia.org/wiki/California_electricity_crisis#Involvement_of_Enron https://en.wikipedia.org/wiki/California_electricity_crisis#... [2] https://en.wikipedia.org/wiki/California_electricity_crisis#Market_manipulation https://en.wikipedia.org/wiki/California_electricity_crisis#...
baq 7y ago
Especially if most of the profit is correlated with amount of carbon emitted.
rayiner 7y ago
The benefit is that for profit companies have incentives for quality that public entities do not. In New York, at least ConEd gets you reliable power. The New York subway by contrast is literally struggling to hit 70% on time performance. It’s a simple calculation. Would you want your local (almost certainly public) transit operator to take over your electric service? I’d suspect in the vast majority of places, the answer would be no.
- TazeTSchnitzel 7y ago
  > The New York subway by contrast is literally struggling to hit 70% on time performance. Because politicians cut its budget while requiring 24/7 operation, not because the subway operator doesn't have ~profit motive~
  - chachachoney 7y ago
    >> Because politicians cut its budget while requiring 24/7 operation, not because the subway operator doesn't have ~profit motive~ The MTA's dysfunction and inefficiency scale to accomodate whatever budget they are given and this will continue until city and state politicians are actually held accountable for its performance.
  - beerandt 7y ago
    Why would you think public utilities are any less beholden to politics than public transport? If anything, utilities are almost always monopolies, transport at least has some competition.
  - harryh 7y ago
    The MTA is currently in the process of spending 5 billion dollars on ~70 elevators. The inefficiency (and, frankly, corruption) of the agency is staggering. The organization's problems have very very little to do with budget constraints.
    - throw0101a 7y ago
      And yet Berlin, Paris, and Copenhagen are all able to build similar infrastructure for much less: * https://www.vox.com/policy-and-politics/2017/1/1/14112776/new-york-second-avenue-subway-phase-2 https://www.vox.com/policy-and-politics/2017/1/1/14112776/ne... Chicago seems to be doing okay, or at least much better than NYC: * https://www.nytimes.com/2018/10/18/nyregion/chicago-l-train-mta-subway.html https://www.nytimes.com/2018/10/18/nyregion/chicago-l-train-... The problems of the MTA are unique to the MTA itself (AFAICT), and should not necessarily be extrapolated to other places.

drawkbox 7y ago

This point was raised many times in the last rolling blackout gamed events in California nearly two decades ago. > S. David Freeman, who was appointed Chair of the California Power Authority in the midst of the crisis, made the following statements about Enron's involvement in testimony submitted before the Subcommittee on Consumer Affairs, Foreign Commerce and Tourism of the Senate Committee on Commerce, Science and Transportation on May 15, 2002: [1] > "There is one fundamental lesson we must learn from this experience: electricity is really different from everything else. It cannot be stored, it cannot be seen, and we cannot do without it, which makes opportunities to take advantage of a deregulated market endless. It is a public good that must be protected from private abuse. If Murphy's Law were written for a market approach to electricity, then the law would state 'any system that can be gamed, will be gamed, and at the worst possible time.' And a market approach for electricity is inherently gameable. Never again can we allow private interests to create artificial or even real shortages and to be in control. [1] > "Enron stood for secrecy and a lack of responsibility. In electric power, we must have openness and companies that are responsible for keeping the lights on. We need to go back to companies that own power plants with clear responsibilities for selling real power under long-term contracts. There is no place for companies like Enron that own the equivalent of an electronic telephone book and game the system to extract an unnecessary middleman’s profits. Companies with power plants can compete for contracts to provide the bulk of our power at reasonable prices that reflect costs. People say that Governor Davis has been vindicated by the Enron confession."[1] Hopefully stored battery energy on households can help prevent rolling blackouts impact, but until then any company running a crucial service needed for survival should be under heavy scrutiny, and switched to state/public run if they feel the need to game it. In the Enron triggered emergencies, they were 'overscheduling' on purpose and 'megawatt laundering' [2] > "There is a single connection between northern and southern California's power grids. I heard that Enron traders purposely overbooked that line, then caused others to need it. Next, by California's free-market rules, Enron was allowed to price-gouge at will." [2] [1] https://en.wikipedia.org/wiki/California_electricity_crisis#Involvement_of_Enron https://en.wikipedia.org/wiki/California_electricity_crisis#... [2] https://en.wikipedia.org/wiki/California_electricity_crisis#Market_manipulation https://en.wikipedia.org/wiki/California_electricity_crisis#...

baq 7y ago

Especially if most of the profit is correlated with amount of carbon emitted.

rayiner 7y ago

The benefit is that for profit companies have incentives for quality that public entities do not. In New York, at least ConEd gets you reliable power. The New York subway by contrast is literally struggling to hit 70% on time performance. It’s a simple calculation. Would you want your local (almost certainly public) transit operator to take over your electric service? I’d suspect in the vast majority of places, the answer would be no.

TazeTSchnitzel 7y ago
> The New York subway by contrast is literally struggling to hit 70% on time performance. Because politicians cut its budget while requiring 24/7 operation, not because the subway operator doesn't have ~profit motive~
- chachachoney 7y ago
  >> Because politicians cut its budget while requiring 24/7 operation, not because the subway operator doesn't have ~profit motive~ The MTA's dysfunction and inefficiency scale to accomodate whatever budget they are given and this will continue until city and state politicians are actually held accountable for its performance.
- beerandt 7y ago
  Why would you think public utilities are any less beholden to politics than public transport? If anything, utilities are almost always monopolies, transport at least has some competition.
- harryh 7y ago
  The MTA is currently in the process of spending 5 billion dollars on ~70 elevators. The inefficiency (and, frankly, corruption) of the agency is staggering. The organization's problems have very very little to do with budget constraints.
  - throw0101a 7y ago
    And yet Berlin, Paris, and Copenhagen are all able to build similar infrastructure for much less: * https://www.vox.com/policy-and-politics/2017/1/1/14112776/new-york-second-avenue-subway-phase-2 https://www.vox.com/policy-and-politics/2017/1/1/14112776/ne... Chicago seems to be doing okay, or at least much better than NYC: * https://www.nytimes.com/2018/10/18/nyregion/chicago-l-train-mta-subway.html https://www.nytimes.com/2018/10/18/nyregion/chicago-l-train-... The problems of the MTA are unique to the MTA itself (AFAICT), and should not necessarily be extrapolated to other places.