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Well the electric grid falls in that category of service, like the military where the market is potentially a bad solution. So in this regard. The electric comp

Well the electric grid falls in that category of service, like the military where the market is potentially a bad solution. So in this regard. The electric company was able to be negligent to their personal benefit of 1.8 billion dollars of unfunded liability it created. And then they call bankruptcy and that's the end of that chapter.

refurb 6y ago
That’s a massive stretch for “socialize the losses”. By that logic any time a business fails and it impacts a lot of people the losses have “been socialized”. And CA is far from a free market. The PUC has PG&E on a short leash and the results have been a disaster. Edit: Replying - No, bankruptcy is actually the exact opposite of socializing losses.
- fwsgonzo 6y ago
  How do you think the bankrupt utility will start up again? Hint: Socialized costs.
  - refurb 6y ago
    Another energy company will likely buy them. How is that socializing costs? People throw that term around without actually knowing what it means
- ceejayoz 6y ago
  California was the first state to try deregulation of the energy market. https://en.wikipedia.org/wiki/2000–01_California_electricity_crisis#Effects_of_partial_deregulation https://en.wikipedia.org/wiki/2000–01_California_electricity...
  - refurb 6y ago
    Yeah and the regulations put in place around the market were terrible.
Sebb767 6y ago
Calling that personal benefit when they were hit by a massive surge in supply pricing is shifting the blame a bit, no? Realistically, since the creditors are probably private and the customers, which would otherwise face the loss, are the community, it's actually somewhat the reverse - privatized losses to the benefit of the community (which would otherwise need to pay off the surge in electricity pricing).
- fredophile 6y ago
  > Calling that personal benefit when they were hit by a massive surge in supply pricing is shifting the blame a bit, no? How is it not personal benefit? This company was essentially acting in the same role as an insurance company for retail customers. They charge a fixed fee for electricity that is above the average price of electricity. When electricity costs less than they charge they make money. When it costs more they lose money. They should have maintained cash reserves from profitable times to handle unprofitable ones. In an extreme situation like the current one in Texas they could seek a loan or already have lines of credit in place to cover any shortfall from their cash reserves. The profit they made went somewhere and it obviously didn't go into a rainy day fund.
  - lawnchair_larry 6y ago
    As a 501(c)(12), they provided services at cost to all “customers” (members), as legally required.
  - ldng 6y ago
    It is incredible that such a fund is not mandatory
- ansible 6y ago
  But they were benefiting. They have had years of not winterizing their systems, which helped them earn quarter after quarter of profits. Those profits were paid to executives and shareholders, who will not help make up the shortfall now.
  - 6y ago

refurb 6y ago

That’s a massive stretch for “socialize the losses”. By that logic any time a business fails and it impacts a lot of people the losses have “been socialized”. And CA is far from a free market. The PUC has PG&E on a short leash and the results have been a disaster. Edit: Replying - No, bankruptcy is actually the exact opposite of socializing losses.

fwsgonzo 6y ago
How do you think the bankrupt utility will start up again? Hint: Socialized costs.
- refurb 6y ago
  Another energy company will likely buy them. How is that socializing costs? People throw that term around without actually knowing what it means
ceejayoz 6y ago
California was the first state to try deregulation of the energy market. https://en.wikipedia.org/wiki/2000–01_California_electricity_crisis#Effects_of_partial_deregulation https://en.wikipedia.org/wiki/2000–01_California_electricity...
- refurb 6y ago
  Yeah and the regulations put in place around the market were terrible.

Sebb767 6y ago

Calling that personal benefit when they were hit by a massive surge in supply pricing is shifting the blame a bit, no? Realistically, since the creditors are probably private and the customers, which would otherwise face the loss, are the community, it's actually somewhat the reverse - privatized losses to the benefit of the community (which would otherwise need to pay off the surge in electricity pricing).

fredophile 6y ago
> Calling that personal benefit when they were hit by a massive surge in supply pricing is shifting the blame a bit, no? How is it not personal benefit? This company was essentially acting in the same role as an insurance company for retail customers. They charge a fixed fee for electricity that is above the average price of electricity. When electricity costs less than they charge they make money. When it costs more they lose money. They should have maintained cash reserves from profitable times to handle unprofitable ones. In an extreme situation like the current one in Texas they could seek a loan or already have lines of credit in place to cover any shortfall from their cash reserves. The profit they made went somewhere and it obviously didn't go into a rainy day fund.
- lawnchair_larry 6y ago
  As a 501(c)(12), they provided services at cost to all “customers” (members), as legally required.
- ldng 6y ago
  It is incredible that such a fund is not mandatory
ansible 6y ago
But they were benefiting. They have had years of not winterizing their systems, which helped them earn quarter after quarter of profits. Those profits were paid to executives and shareholders, who will not help make up the shortfall now.
- 6y ago