"John D. Giorgis" wrote:
>
> At 09:15 AM 5/30/01 -0700 Matt Grimaldi wrote:
> >Makes you wonder why all this would "suddenly" happen as soon as
> >a former oil company executive becomes President...
>
> Except that it didn't happen suddenly.
I agree. 8^)
>
> Gray Davis was warned of the problem over a year ago. He decided that
> price caps benefited him politically in the short run, and is now paying
> the price for not preventing the problem in the first place.
>
Could you elaborate on how Davis gained politically?
The problem is very complex - not just the result of one or two missteps. If
you really want to know what happened and don't mind reading a few long
articles go to:
http://www.jbsenergy.com/Energy/Papers/California_Energy_Crisis/california_energy_crisis.html
>From the article:
"There are two main parts to the story � an electricity piece and a gas piece
with four important elements that contributed to California's electricity
sector collapse: (1) Insufficient generating capacity; (2) insufficient
natural gas capacity; (3) a disconnect between changes in environmental
regulation and changes in the electricity sector; and (4) competitive self
interest in conflict with the public interest, as well as market power
abuses."
And to
http://www.latimes.com/business/reports/power/earlier/lat_dereg001209.htm
>From this article:
"The dramatic increases are the result of critical misjudgments by the
California Public Utilities Commission and the state Legislature, the two main
architects of the plan to open the market. Most serious were: * A gross
underestimation of demand as the state's economy came to life after years of
recession and California's burgeoning computer-based businesses ate up
electricity at rates unheard of in the old economy. * A failure to anticipate
that energy companies could easily exploit a mechanism designed to ensure the
even flow of electricity. By holding back electricity and selling when the
system was desperate, they could earn double the going rate. * A faulty
assumption that deregulation would prompt more competition right away:
Hundreds of companies were expected to serve homeowners, but they didn't
materialize. At times, a few power plant owners can effectively control the
price of electricity."
There is plenty of blame to go around and Gray Davis might well be part of the
problem, but he is by no means the at the root or the heart of the it.
Doug
