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California Wildfires


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#11 PaulT

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Posted 03 November 2019 - 06:32 PM

Has anyone informed the CPUC that they don’t regulate energy companies in California. They certainly claim that it is their job to do so.

https://www.cpuc.ca.gov/energy/

 

Seriously, to what deregulation do you refer? As a non California resident, it appears that electrical energy is a regulated industry in California.

 

Uninformed in Oregon,

Paul


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#12 ntsqd

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Posted 06 November 2019 - 02:13 PM

Deregulation was nationwide. I recall it happening under Reagan, I *think*. That doesn't mean that the utilities are un-regulated, just that they are significantly less regulated than they used to be. It also means that consumers can buy power from other vendors besides their local utility. I'm unclear on how exactly that works, but it was the promise of "de-regulation." And that is the root of the problem, with competition came cost-cutting measures to try to be competitive. That a utility has stock that is traded on Wall St. is a further sign that there is a problem. That whole street never seems to look beyond the next 1/4's returns, and they push HARD for short term results regardless of the long term costs or damage done to the business as a result.


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#13 Mighty Dodge Ram

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Posted 06 November 2019 - 06:21 PM

Couldn’t agree more! When you're more concerned about your investors rather than your customers there’s bound to be a problem and disconnect. Whatever happened to balance? Gordon Gecko is alive and well. 🤦‍♂️


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#14 ski3pin

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Posted 06 November 2019 - 07:08 PM


 

Seriously, to what deregulation do you refer? As a non California resident, it appears that electrical energy is a regulated industry in California.

 

Uninformed in Oregon,

Paul

 

Paul, when Californians talk of deregulation, they are most likely remembering what happened in the early 2000's. The legislature passed a partial deregulation bill that was signed by Governor Pete Wilson in 1996. Lawmakers believed competition would  lower costs. Instead, energy marketers such as Enron manipulated the market for short term massive monetary gain. Rate payer's prices were set but during peak energy use, utilities were forced to buy power at astronomical prices. Blackouts occurred. The crisis led to the bankruptcy of Pacific Gas & Electric and cost around $40-50 billion.

 

As wikipedia article can be found here -

 

California Energy Crisis

 

 

The current crisis is so multifaceted, I believe it fruitless to look for an easy smoking gun cause.


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#15 PaulT

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Posted 06 November 2019 - 08:37 PM

I recall an attempt to control the energy monopolies that were vertically integrated. That is, some energy companies were essentially monopolies due to the fact that they produced the energy, transported it and delivered it to the  end user. Natural gas and electricity are especially predisposed to this because there is only one gas pipeline or electrical power line from a distribution point to an individual house or business.

The delivery system is a "natural monopoly" because it is too expensive to have multiple power lines or gas pipelines going down the street to each user. With a vertically integrated energy provider, there is no incentive to compete on price because ithe customer s locked into whoever owns that last mile of the delivery system.

Deregulating the energy system by requiring the owner of the last mile to either divest themselves of the energy production or allowing other producers access to the bulk delivery system,  allows a customer to buy their power from a cheaper producer, or "green producer', or a producer that is more "socially responsible" in the eyes of the end user. 

This should have no impact on the responsibility for the other parts to meet safety and environmental mandates. A regulated monopoly is guaranteed a profit based on their justified costs of business at the expense of their loss of freedom to set prices to their benefit.  If they need to remove brush and trees in the path of their power lines, that is an allowable expense that they can recover in the price of electricity.

Burying the power lines would also be an allowable expense to recover. There may, however, be other government mandates to not cut trees or remove brush for environmental or aesthetic reasons. Blaming the power company is easy but it will likely take court cases to resolve the responsibility issue. Remember that one can't sue the government without standing or, perhaps, its permission to be sued.

 

You are right. This is not a simple problem to resolve and there are many entities eager to point fingers away from themselves.

 

Paul


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