| 1 |
On Wed, Mar 21, 2001 at 01:57:31PM +0100, Philippe Namias wrote: |
| 2 |
|
| 3 |
> Here in France we don't have any electricity/gas problem as it's a state |
| 4 |
> company. They have the monopole so there is no choice here but i only paid |
| 5 |
> 42$ by month for electricity. |
| 6 |
|
| 7 |
In principle and practice, there is nothing wrong with electricity being |
| 8 |
provided by private companies. The problem in California was due to poor |
| 9 |
government regulations. Here's my understanding of what went wrong: |
| 10 |
|
| 11 |
The state of California passed a law that the electric companies can charge no |
| 12 |
more than X dollars per kW (no exceptions). Of course, this seems like a good |
| 13 |
idea because it appears to protect consumers. But then, the cost of |
| 14 |
*producing* the electricity rose to above this amount. This happened because |
| 15 |
it is nearly impossible to build a new power plant in California due to |
| 16 |
environmental regulations. So even though California uses more power every |
| 17 |
year, they were unable to expand their production capacity to meet demand. It |
| 18 |
gets worse. |
| 19 |
|
| 20 |
Due to the price limit on electricity, the utilities couldn't pass the |
| 21 |
additional expense to the Californian consumer. By law, they had to charge X |
| 22 |
dollars per kW, which meant that they were *losing* money. So, they tried to |
| 23 |
borrow money to to maintain their power supplies and even attempt to build new |
| 24 |
ones, but no one would lend them money (since the loan people knew that the |
| 25 |
utilities were in a no-win situation). So, by law, California was forced to |
| 26 |
buy tons of gas and electricity from neighboring states, dramatically raising |
| 27 |
the cost of electricity and gas in the southwest. |
| 28 |
|
| 29 |
Again, there's no problem with private utilities. Competition will keep the |
| 30 |
price low, usually much lower than government-run utilities. The problem is |
| 31 |
when the government sets up impossible-to-follow rules for the utilities |
| 32 |
without understanding the consequences. Then, the utilties are forced to do |
| 33 |
stupid things (by law) and things like this happen. |
| 34 |
|
| 35 |
It's as if I asked you to create new ebuilds, but I insisted that you couldn't |
| 36 |
use your hands because you might get a repetive stress injury. To the |
| 37 |
uninformed, this sounds like a good rule (protecting you from harm), but in |
| 38 |
practice it means you need to type with your toes! |
| 39 |
|
| 40 |
Best Regards, |
| 41 |
|
| 42 |
-- |
| 43 |
Daniel Robbins <drobbins@g.o> |
| 44 |
President/CEO http://www.gentoo.org |
| 45 |
Gentoo Technologies, Inc. |
Archives