Fabio,
It's difficult to build a power plant in CA for the same that gas
prices are higher here than anywhere else (special processing and
additives are required in CA fuel) and you can't bring in a car from
another state without it passing special CA tests, i.e. CA has long been
hostile to power plants because of its strong environmental movement.
The idea of forcing the private utilities into the day-ahead power
exchange had something to do with "transparency." I think the idea was
that if you let utilities and generators bargain themselves then they
could cut deals which would rip the consumers off either purposively or
because the regulators figured the utilities would make mistakes! In
essence the idea of the PX was the combine a competitive exchange with
central control and oversight of all transactions, the perfect Walrasian
market.
Don't forget also that the CA restructuring was a result of a complex
political bargain between utilities, generators, environmentalists,
consumer groups and others none of whom had creating a free market in
energy as their goal.
Alex
--
Dr. Alexander Tabarrok
Vice President and Director of Research
The Independent Institute
100 Swan Way
Oakland, CA, 94621-1428
Tel. 510-632-1366, FAX: 510-568-6040
Email: [EMAIL PROTECTED]
