Comment Re:Nothing to do with deregulation (Score 3, Interesting) 1074
Regarding the rolling blackouts in California, they had more to do with Enron witholding power than with deregulation.
The blackouts in CA were a direct result of a poorly designed market. In the politicians rush to be the first deregulated state, they let a PhD economist set things up so that the big three utility companies had to sell off most of their generating assets. They also forced them to buy most of their power in the short-term market instead of letting them procure longer-term power supplies. They did this in order to make sure the market had liquidity - but it came at the expense of reliability.
It came down to how much CA was willing to pay to keep the lights on. And boy did they pay through the nose. I should know, I'm not only directly involved with power markets in CA, I'm also a ratepayer. Ouch!
The blackouts in CA were a direct result of a poorly designed market. In the politicians rush to be the first deregulated state, they let a PhD economist set things up so that the big three utility companies had to sell off most of their generating assets. They also forced them to buy most of their power in the short-term market instead of letting them procure longer-term power supplies. They did this in order to make sure the market had liquidity - but it came at the expense of reliability.
It came down to how much CA was willing to pay to keep the lights on. And boy did they pay through the nose. I should know, I'm not only directly involved with power markets in CA, I'm also a ratepayer. Ouch!
