A beautiful flickering sunset over Sacramento way

If California has ‘deregulated’ electric power then Bill Clinton is undersexed, a prude, and a gay. And the Middle East sets the rest of the world an example by its religious and ethnic tolerance.

The state government of California legislated a politically designed restructuring of the electric power industry in which the utilities were forced to divest themselves of most of their power generation plants, were discouraged by regulators from any longterm supply contracts or hedging, and agreed to buy all their power day by day in a single state supervised spot market (the Power Exchange), while retail sale prices of electricity were rigidly capped by the state. The politicians who devised these gimcrack arrangements called them ‘deregulation’ apparently because it made the authors seem ‘cool’ and ‘with it’ not because it has any logical connection to what is normally meant by the word.

One of the worst atrocities against competition was the rule mandating that all electricity transactions be conducted through a state established monopoly market called the California Power Exchange (CalPX). The CalPX proceeded to establish the Mafia style rules against free competition. Most characteristic of crooked ‘fixed’ markets was the CalPX rule that the highest winning bid of the day of the day would be imposed on all the day’s transactions.

But a state where ‘toll authorities’ are legislated which have no authority over toll rates, or authority over toll collection, and which indeed have no control over the toll facilities themselves – they convene solely to decide how to distribute the spoils of toll profits, and to incur new debt on the security of revenues they take no responsibility for – is a deeply befuddled place, where great government fiascos should be expected from time to time, rather like the earthquakes.

Now the odd Gov Davis has a water department buying electricity and is talking about the state acquiring transmission lines, for which he wants to float billions of bonds. Now maybe he’ll sell off some the highway system before all this is through?