Power Privatisation

[James Bluntus]

The NSW Government in Australia has decided to Privatise the Electricity Industry. While 89% of the state is against it. It has already gone to parliament and been defeated but the premier had a new plan all along. The original Plan was they could privatise the Retails and Generators. The New plan is they can privatise the Retails, portential Electricity building sites and the Electricity that is generated from the generators. They don't have bring this legislation to parliament because it doesn't actully have the words

"generator privatisation".

They say prices won't go up, Jobs won't be lost, Jobs won't go off shore. Well, I can tell you that jobs will go off shore, Prices will go up and Jobs will be lost. Discuss, Thoughts

Take part in the poll to...

[Heinleinites]

I'm of the opinion that anything outside of essential government services(i.e. police, military, etc.)that can be privatised, should be.

[The Pirate Parties]

Well privatization is all well and good if they can do it properly, but given the governments track record I would suggest against it. A few years back they privatized the entire telecommunications network to a single entity, which now has a 98% monopoly on all things phoneline/internet. When the government offered a subsidy to increase the network bandwidth, they asked for a 5 year return of investment of over 30%. The first plans that they announced in their bid for the subsidy started at $70 for basic internet, whilst simultaneously cutting all wholesale. Now the government has given up and is starting to build a new network on its own, at an estimated 47 billion AUD cost.

What would happen with the power network.

Hope you got the cash because I sure don't.

(Company in question is Telstra, many factual errors but its close enough)

[Anumia]

Damnit, I saw No and selected it, then saw Dead Against.

The Queensland Government is considering selling off their power companies too, and Queensland Rail - both of which are bringing quite a bit of money in. Stupid, stupid, stupid.

[Ashmoria]

for privitization of utilities to work you need to have a very strong regulatory system and be able to rely on the good character of the people involved.

its a big risk

see "enron"

[Yootopia]

No, and this is another example of why NSW's regional leadership is proveably retarded.

[Gift-of-god]

From a historical p-erspective, it would seem that privatisation of energy is a bad way to go. Enron, First Energy, Samuel Insull, are a few examples.

[Andaluciae]

for privitization of utilities to work you need to have a very strong regulatory system and be able to rely on the good character of the people involved.

its a big risk

see "enron"

No, no, no. Enron was was a child of deregulation, not privatization.

[Andaluciae]

From a historical p-erspective, it would seem that privatisation of energy is a bad way to go. Enron, First Energy, Samuel Insull, are a few examples.

I can see the first and the last as arguments for good fiscal oversight and fraud protection, but the middle I just don't understand. I had First Energy as my provider when I was in high school, and with one exception they did a pretty good job. Prompt response to service requests and whatnot.

[Gift-of-god]

From a historical p-erspective, it would seem that privatisation of energy is a bad way to go. Enron, First Energy, Samuel Insull, are a few examples.

I can see the first and the last as arguments for good fiscal oversight and fraud protection, but the middle I just don't understand. I had First Energy as my provider when I was in high school, and with one exception they did a pretty good job. Prompt response to service requests and whatnot.

They were implicated in the blackout that affected millions of people in August of 2003. Niagara Mohawk is also a good example. Basically, the idea is to put profits before anything else. Including reliability of service.

[Andaluciae]

From a historical p-erspective, it would seem that privatisation of energy is a bad way to go. Enron, First Energy, Samuel Insull, are a few examples.

I can see the first and the last as arguments for good fiscal oversight and fraud protection, but the middle I just don't understand. I had First Energy as my provider when I was in high school, and with one exception they did a pretty good job. Prompt response to service requests and whatnot.

They were implicated in the blackout that affected millions of people in August of 2003. Niagara Mohawk is also a good example. Basically, the idea is to put profits before anything else. Including reliability of service.

Ah, I remember that. Originated because of problems with trees on lines or whatnot.

I thought part of that was because they sent crews down South to help with hurricane cleanup, though, and as a result they developed a substantial backlog of maintenance work.

edit: Looking at the wiki article, it also looks like there was a race condition bug in the software they were using that did not properly identify the shutdown or something.


That entire situation really doesn't seem like a problem even remotely related to privatization.

[Gift-of-god]

Ah, I remember that. Originated because of problems with trees on lines or whatnot.

I thought part of that was because they sent crews down South to help with hurricane cleanup, though, and as a result they developed a substantial backlog of maintenance work.

edit: Looking at the wiki article, it also looks like there was a race condition bug in the software they were using that did not properly identify the shutdown or something.


That entire situation really doesn't seem like a problem even remotely related to privatization.

More of a deregulation issue. If they had been properly regulated, then they wouldn't have had those problems, and therefore no blackout. Since deregulation can only occur in a privatised environment, the connection seems clear to me.

[Andaluciae]

More of a deregulation issue. If they had been properly regulated, then they wouldn't have had those problems, and therefore no blackout. Since deregulation can only occur in a privatised environment, the connection seems clear to me.

How would proper regulation have improved the situation?

[Newer Burmecia]

I reccoment the British model. Sell everything off and let other European nationalised utilities gobble up the result. Brilliant - not.

[Gelgisith]

for privitization of utilities to work you need to have a very strong regulatory system and be able to rely on the good character of the people involved.

Good character and private enterprise do not go together.

Privatising power will lead to more black-outs, because companies have to utilise their entire capacity in order to make profit. This means there's less excess capacity to negate calamities, which means that small problems, which could be negated with excess capacuty will cause failures. A government can afford to have excess capacity, because it doesn't have to compete for profit.

[Gift-of-god]

More of a deregulation issue. If they had been properly regulated, then they wouldn't have had those problems, and therefore no blackout. Since deregulation can only occur in a privatised environment, the connection seems clear to me.

How would proper regulation have improved the situation?

According to what I've read, they would have had to report the shutdown that occurred before the blackout, which would have allowed other companies to provide the electricity. They would have had independent inspectors checking the transmission lines and would have forced First Energy to maintain them as they should have.

[Andaluciae]

for privitization of utilities to work you need to have a very strong regulatory system and be able to rely on the good character of the people involved.

Good character and private enterprise do not go together.

Privatising power will lead to more black-outs, because companies have to utilise their entire capacity in order to make profit. This means there's less excess capacity to negate calamities, which means that small problems, which could be negated with excess capacuty will cause failures. A government can afford to have excess capacity, because it doesn't have to compete for profit.

False, and I can make a very similar argument as to why a government provided service would not be able to have any excess capacity for calamities. After all, a government is operating with the funds provided by its taxpayers, and in being the responsible fiscal stewards of those taxpayers, and beholden to their democratic wishes, it must also minimize the costs it incurs. As a result, taxpayers will seek to minimize their tax expenditures and the government will not be able to maintain the excess capacity.

[Gift-of-god]

False, and I can make a very similar argument as to why a government provided service would not be able to have any excess capacity for calamities. After all, a government is operating with the funds provided by its taxpayers, and in being the responsible fiscal stewards of those taxpayers, and beholden to their democratic wishes, it must also minimize the costs it incurs. As a result, taxpayers will seek to minimize their tax expenditures and the government will not be able to maintain the excess capacity.

But that's not how it actually ends up working. California is an excellent example of private companies not providing enough electricity. Do you have any examples that a public system has that same problem?

[Gelgisith]

Privatising power will lead to more black-outs, because companies have to utilise their entire capacity in order to make profit. This means there's less excess capacity to negate calamities, which means that small problems, which could be negated with excess capacuty will cause failures. A government can afford to have excess capacity, because it doesn't have to compete for profit.

False, and I can make a very similar argument as to why a government provided service would not be able to have any excess capacity for calamities. After all, a government is operating with the funds provided by its taxpayers, and in being the responsible fiscal stewards of those taxpayers, and beholden to their democratic wishes, it must also minimize the costs it incurs. As a result, taxpayers will seek to minimize their tax expenditures and the government will not be able to maintain the excess capacity.

You have a point, up to a point. Excess capacity is cheaper to maintain for a government than for companies, because each company would have to have excess capacity, even when other companies have excess capacity in the same region, while the government needs less excess to achieve the same coverage.

[Andaluciae]

You have a point, up to a point. Excess capacity is cheaper to maintain for a government than for companies, because each company would have to have excess capacity, even when other companies have excess capacity in the same region, while the government needs less excess to achieve the same coverage.

While I am usually a fan of referencing the impact that economies of scale have in providing marginal benefits, throughout most of the US, at least, the power companies do, indeed pool their resources, resulting in the governments ability to take advantage of economies of scale be far less to non-existent than it would be if they didn't cooperate as they did.

And not just power, but also staffing resources and the like.

[Andaluciae]

According to what I've read, they would have had to report the shutdown that occurred before the blackout, which would have allowed other companies to provide the electricity. They would have had independent inspectors checking the transmission lines and would have forced First Energy to maintain them as they should have.

From what I can recall, First Energy had systems in place to alert the rest of the grid about the shutdown, but the software that they, and virtually every other major electricity provider in the northeast, used had a fatal flaw that failed to compensate.

Further, as I've already referenced, First Energy would have been able to maintain clean lines, but their maintenance staff was behind schedule due to schedule delays incurred when First Energy crews were on loan in the South helping to clean up after a hurricane. Line inspections would only have told them what they already knew--that they had line space that was not clean, and the five year schedule of maintenance had fallen off as a result of emergencies they were required to respond to elsewhere. I fail to see how privatization would cause that.

[Gift-of-god]

According to what I've read, they would have had to report the shutdown that occurred before the blackout, which would have allowed other companies to provide the electricity. They would have had independent inspectors checking the transmission lines and would have forced First Energy to maintain them as they should have.

From what I can recall, First Energy had systems in place to alert the rest of the grid about the shutdown, but the software that they, and virtually every other major electricity provider in the northeast, used had a fatal flaw that failed to compensate.

Further, as I've already referenced, First Energy would have been able to maintain clean lines, but their maintenance staff was behind schedule due to schedule delays incurred when First Energy crews were on loan in the South helping to clean up after a hurricane. Line inspections would only have told them what they already knew--that they had line space that was not clean, and the five year schedule of maintenance had fallen off as a result of emergencies they were required to respond to elsewhere. I fail to see how privatization would cause that.

You work for a living, right? So you know you have to follow up on any important information you send out, just to make sure the other person gets it and the project can move forward. So, why didn't anyone pick up the phone and call the other power companies? Because they had no obligation to. Why did they have no obligation? Because of deregulation.

I highly doubt that emergency aid to other areas was such a problem, as by their very nature, emergencies don't come up that often. If they are coming up often enough that they can affect a schedule that badly, then they should have organised their schedule to accomodate it. Or hired more labour. But all those 'campaign contributions' must have already cut into the bottom line.

[Beachchairs]

Having lived in both a Province with public power, and with private power, I tend to prefer public power. I've experienced a much higher rate of random power outages in the private system than the public. Also, in Canada, private companies have been known not to incorporate smaller towns into their grid, although this isn't such a pressing issue anymore.

[Andaluciae]

You work for a living, right?

Actually I work for the government, which is part of the reason why I don't place much faith in a regulated system. I know people who won't communicate across cubicles, let alone between divisions, because of jurisdiction and turf concerns.

So you know you have to follow up on any important information you send out, just to make sure the other person gets it and the project can move forward. So, why didn't anyone pick up the phone and call the other power companies? Because they had no obligation to. Why did they have no obligation? Because of deregulation.

On this, you're just plain wrong, and I quote:

"The Task Force also found that FirstEnergy did not take remedial action or warn other control centers until it was too late, because of a software bug in General Electric Energy's Unix-based XA/21 energy management system"

http://en.wikipedia.org/wiki/2003_North ... t#Findings

It's not because they didn't have any obligation to, it's because they had no idea.

http://www.securityfocus.com/news/8016

The bug was so deeply buried that it took weeks to find what exactly caused the alarms to not go off. It's an obscure technical problem that would likely have occurred if the system had been a fully public utility, anyways.

I highly doubt that emergency aid to other areas was such a problem, as by their very nature, emergencies don't come up that often.

Except in this little time of year called hurricane season...

If they are coming up often enough that they can affect a schedule that badly, then they should have organised their schedule to accomodate it. Or hired more labour. But all those 'campaign contributions' must have already cut into the bottom line.

Utilities throughout the country, as a cost cutting measure, rely on cooperation across companies and regions to respond to emergencies. The large numbers of maintenance workers that would be needed to respond to a massive outage, such as what would result from a hurricane or severe windstorm (last summer when we lost power in Columbus for a week we had crews in from as far away as Nevada) are not kept on staff, instead utilities cooperate closely and develop contingency plans to address these shortages by sharing crews under the philosophy that it can't be an emergency everywhere.

Power companies, privatized or otherwise

[Gift-of-god]

You work for a living, right?

Actually I work for the government, which is part of the reason why I don't place much faith in a regulated system. I know people who won't communicate across cubicles, let alone between divisions, because of jurisdiction and turf concerns.

This is your unsupported opinion. It would help if you had some sort of evidence that showed that this is a problem in public utilities.

So you know you have to follow up on any important information you send out, just to make sure the other person gets it and the project can move forward. So, why didn't anyone pick up the phone and call the other power companies? Because they had no obligation to. Why did they have no obligation? Because of deregulation.

On this, you're just plain wrong, and I quote:

"The Task Force also found that FirstEnergy did not take remedial action or warn other control centers until it was too late, because of a software bug in General Electric Energy's Unix-based XA/21 energy management system"

http://en.wikipedia.org/wiki/2003_North ... t#Findings

It's not because they didn't have any obligation to, it's because they had no idea.

http://www.securityfocus.com/news/8016

The bug was so deeply buried that it took weeks to find what exactly caused the alarms to not go off. It's an obscure technical problem that would likely have occurred if the system had been a fully public utility, anyways.

This does not answer my question as to why they didn't just pick up a phone and make sure that the other electrical companies received the information that the software was supposed to pass on. I don't think that can be attributed to a software problem. It can, however, be explained by the simple fact that they were under no obligation to follow up.

I highly doubt that emergency aid to other areas was such a problem, as by their very nature, emergencies don't come up that often.

Except in this little time of year called hurricane season...

If they are coming up often enough that they can affect a schedule that badly, then they should have organised their schedule to accomodate it. Or hired more labour. But all those 'campaign contributions' must have already cut into the bottom line.

Utilities throughout the country, as a cost cutting measure, rely on cooperation across companies and regions to respond to emergencies. The large numbers of maintenance workers that would be needed to respond to a massive outage, such as what would result from a hurricane or severe windstorm (last summer when we lost power in Columbus for a week we had crews in from as far away as Nevada) are not kept on staff, instead utilities cooperate closely and develop contingency plans to address these shortages by sharing crews under the philosophy that it can't be an emergency everywhere.

Power companies, privatized or otherwise

In other words, it happens often enough that they should have had a maintenance shedule that takes that into account. But they didn't. And no one knew about it until it was too late, because no one was regulating them.