Another round of energy news from California shows there’s no such thing as deregulation.
Reregulation or restructuring, yes. Elimination of rules? Not by a long shot.
One news item showed the need for rules in so-called
"free markets." Enron apparently manipulated figures to artificially drive up the price of electricity during last year’s energy crisis in California. The bankrupt energy trading corporation used similar tactics in a restructuring trial run in
Texas.
It shouldn’t be news that companies will take advantage of situations. In fact one analyst thought that Enron’s manipulation of the California markets may have all been
legal.
The strong consensus is that people and businesses should be protected from such actions. A California official said they needed
"solid market rules that prohibit abusive behavior."
So they came up with those rules. California has submitted to federal regulators a 700-page plan to, according to one news report,
"reinvent deregulation."
A 700-page deregulation plan? That’s
"exhibit A" in proving that deregulation does not mean the rules are being
eliminated.
About half the states are in some stage of considering radical changes in how utilities do business. (Kentucky is taking a wait-and-see stance.) Federal electricity regulators are rewriting rules and Congress is debating the
issue.
But a key to understanding what’s going on in the electric utility industry is to know that one thing no one is talking about is a completely free market.
By
Paul Wesslund Kentucky Living
Editor
(This article appeared in Kentucky electric cooperatives' July 2002 Business
Edition.)
Kentucky Association of
Electric Cooperatives, Inc.
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