Arnold Kling  

California Energy Regulation

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Lynne Kiesling bemoans electricity regulation policy in California.


[The original deregulation effort] was much more about freeing up restrictions on trade in wholesale electricity markets, although it did a pathetic job of that, requiring buyers and sellers to use the government-created faux market that was the Power Exchange, mandating that they engage only in day-ahead and day-of trades, and maintaining the retail rate caps that stifled the transmission of accurate price signals from the retail market into the wholesale market.


How can anyone call this deregulation? It wasn't, and stop calling it such. Continuing to call California's restructuring "deregulation" does nothing except play into the hands of policymakers who think that central planning and control is necessary for the existence of electricity service, notwithstanding the mountains of international evidence to the contrary.


For Discussion. When a private firm compounds its own mistakes, it goes out of business. Kiesling argues that California's politicians are compounding their earlier mistakes in electricity regulation. If this proves correct, will there be consequences for those politicians?


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COMMENTS (2 to date)
Scott writes:

Will there be repercussions? Perhaps. There is a recall effort underway for Gov. Davis and the Democrat controlled legislature is not popular. There could be some people turned out office. However the odds are against the public remembering what caused them their pain come election time 18 months from now.

I haven’t seen a lot of political repercussions for failing inner city school systems. When politicians can deflect the blame, voters tend to give them a pass.

Userpf writes:

The governor & policymakers have successfully used the press to deflect the blame for the whole mess onto "deregulation" and the big, evil energy corporations. This is the conventional (read: wrong) wisdom and its seems most everyone believes it.

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