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"Too big to fail" spills from finance to utilities

• shapefrog 3y ago
  I suspect you will find "too big to fail" in the utilities sector pre-dates by a couple of decades.
  • jampekka 3y ago
    That's why they weren't run as a market.
• troupo 3y ago
  In case of utilities that is literally true. You don't just fail an electricity provider, or a waste treatment facility, or...
  • avar 3y ago
    The company can go bankrupt without an interruption in service, it just means that as the company defaults its assets will be sold off, or perhaps nationalized as the state buys it for cheap. "Too big to fail" is just a euphemism for "privatized gains, socialized losses".
  • doikor 3y ago
    Here in Finland we do (and did). Last winter we had a couple go bankrupt as they did some bad gambles with the spot/futures market (basically not buying enough futures to cover their fixed price contracts and once the spot prices went up massively they ran out of money) This is mainly because by law the local grid operator and actual electricity providers have to be different companies. The grid operators must/should not go bankrupt but electricity providers can and do. There is a whole process about what happens if the company your are buying your electricity from goes bankrupt. Basically you automatically get a new spot price contract with some designated local "default company" and obviously you are free to make new contract with anyone you want at that moment if you don't like that option. The local grid operators are highly regulated (as they should be as natural monopolies) and basically make their customers pay costs + a small margin and thus can't really go bankrupt.