Re: [gentoo-dev] power outage

[<drobbins@gentoo.org>]

On Wed, Mar 21, 2001 at 01:57:31PM +0100, Philippe Namias wrote:

> Here in France we don't have any electricity/gas problem as it's a state 
> company. They have the monopole so there is no choice here but i only paid  
> 42$ by month for electricity. 

In principle and practice, there is nothing wrong with electricity being
provided by private companies.  The problem in California was due to poor
government regulations.  Here's my understanding of what went wrong:

The state of California passed a law that the electric companies can charge no
more than X dollars per kW (no exceptions).  Of course, this seems like a good
idea because it appears to protect consumers.  But then, the cost of
*producing* the electricity rose to above this amount.  This happened because
it is nearly impossible to build a new power plant in California due to
environmental regulations.  So even though California uses more power every
year, they were unable to expand their production capacity to meet demand.  It
gets worse.

Due to the price limit on electricity, the utilities couldn't pass the
additional expense to the Californian consumer.  By law, they had to charge X
dollars per kW, which meant that they were *losing* money.  So, they tried to
borrow money to to maintain their power supplies and even attempt to build new
ones, but no one would lend them money (since the loan people knew that the
utilities were in a no-win situation).  So, by law, California was forced to
buy tons of gas and electricity from neighboring states, dramatically raising
the cost of electricity and gas in the southwest.

Again, there's no problem with private utilities.  Competition will keep the
price low, usually much lower than government-run utilities.  The problem is
when the government sets up impossible-to-follow rules for the utilities
without understanding the consequences.  Then, the utilties are forced to do
stupid things (by law) and things like this happen.

It's as if I asked you to create new ebuilds, but I insisted that you couldn't
use your hands because you might get a repetive stress injury.  To the
uninformed, this sounds like a good rule (protecting you from harm), but in
practice it means you need to type with your toes!

Best Regards,

-- 
Daniel Robbins					<drobbins@gentoo.org>
President/CEO					http://www.gentoo.org 
Gentoo Technologies, Inc.