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So your issue with California deregulation was that the generation market wasn't deregulated enough? Interesting idea I guess. Doesn't do much to support your c

So your issue with California deregulation was that the generation market wasn't deregulated enough? Interesting idea I guess. Doesn't do much to support your claim of brownouts or grid collapse under publicly-owned monopolies though.

lazide 4y ago
The California de-regulation enabled Enron while preventing everyone else from defending themselves from Enron. It simultaneously capped the price electricity could be sold at within the state, while requiring consuming utilities to pay spot price for electricity when they needed it. Enron took advantage of this to buy up all available generation capacity during specific (short) times, fraudulently export it, then resell it back to the state as non-domestic capacity (and hence not covered by the price caps) at insane markups to the consuming utilities when the time came. Because the regulator (CPUC) forbid utilities from taking out futures contracts, the utilities had no choice but to pay these insane markups, or go dark. While this was happening, the regulator also was tarpitting new electrical generation approvals. This crisis was only possible because the regulator literally: 1) turned a blind eye to reports that Enron was playing games until it threatened the Govenors position and had been causing massive brownouts and blackouts across the state. The Govenor did end up getting recalled, largely because of this crisis. 2) Set market prices through caps and quotas. 3) Mandated risky 'at the moment' purchases of capacity instead of what every other sane commodity market does, which is futures. 4) Blocked creation of new supply for a long period of time, while demand was increasing. And that was AFTER 'deregulation'. Which really just loosened the rules enough to make it hard to point the finger at anyone without a LOT of digging. To quote wikipedia [https://en.wikipedia.org/wiki/2000%E2%80%9301_California_electricity_crisis https://en.wikipedia.org/wiki/2000%E2%80%9301_California_ele...] "According to the Federal Energy Regulatory Commission (FERC), the crisis was possible because of legislation instituted in 1996 by the California Legislature (AB 1890) and Governor Pete Wilson that deregulated some aspects of the energy industry. Enron took advantage of this partial deregulation and was involved in economic withholding and inflated price bidding in California's spot markets.[9]" So yes, they basically lined up the states utilities and begged for them to be shot - and then when the utilities tried to do something to stop it, handcuffed them. Then acted surprised they got shot.

lazide 4y ago

The California de-regulation enabled Enron while preventing everyone else from defending themselves from Enron. It simultaneously capped the price electricity could be sold at within the state, while requiring consuming utilities to pay spot price for electricity when they needed it. Enron took advantage of this to buy up all available generation capacity during specific (short) times, fraudulently export it, then resell it back to the state as non-domestic capacity (and hence not covered by the price caps) at insane markups to the consuming utilities when the time came. Because the regulator (CPUC) forbid utilities from taking out futures contracts, the utilities had no choice but to pay these insane markups, or go dark. While this was happening, the regulator also was tarpitting new electrical generation approvals. This crisis was only possible because the regulator literally: 1) turned a blind eye to reports that Enron was playing games until it threatened the Govenors position and had been causing massive brownouts and blackouts across the state. The Govenor did end up getting recalled, largely because of this crisis. 2) Set market prices through caps and quotas. 3) Mandated risky 'at the moment' purchases of capacity instead of what every other sane commodity market does, which is futures. 4) Blocked creation of new supply for a long period of time, while demand was increasing. And that was AFTER 'deregulation'. Which really just loosened the rules enough to make it hard to point the finger at anyone without a LOT of digging. To quote wikipedia [https://en.wikipedia.org/wiki/2000%E2%80%9301_California_electricity_crisis https://en.wikipedia.org/wiki/2000%E2%80%9301_California_ele...] "According to the Federal Energy Regulatory Commission (FERC), the crisis was possible because of legislation instituted in 1996 by the California Legislature (AB 1890) and Governor Pete Wilson that deregulated some aspects of the energy industry. Enron took advantage of this partial deregulation and was involved in economic withholding and inflated price bidding in California's spot markets.[9]" So yes, they basically lined up the states utilities and begged for them to be shot - and then when the utilities tried to do something to stop it, handcuffed them. Then acted surprised they got shot.