Power Privatisation

[Reagan States]

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.

When you have a choice between two private power companies are you going to stick with the one that "utilise their entire capacity to make profit" (leading to constant blackouts) or will you change to the company that is a finely reliable power source because it doesn't. The one that is reliable will make more profit, not the one that operates at max capacity.
Government needs to be responsible with electrical capacity just the same. Unfortunately they've proven themselves fairly incapable of being responsible time and again.

[Gift-of-god]

....
campaign contributions are a problem with the political model, not privatization or deregulation. Without addressing problems with buying politcal favor, regulation would just be giving one company an advantage in the industry.

In this specific context, the 'campaign contributions' went directly to those politicians who were supporting deregulation.

[Gift-of-god]

The plants didn't shut down until after the problem had already gone beyond the point of successfully saving the grid. Had the plants shut down before that point, though, it's unlikely it would have changed anything because the control room in Akron was the primary contact point with the grid administrators in other states, and the control room had, essentially, collapsed.
...

Neither was I.

I was responding to your "They could have farmed it out to a subcontractor, or many other options" part, and merely unconsciously lifted the word critical from your sentence.

If you look at the timeline, you would notice that the plant in Eastlake, Ohio run by FirstEnergy was inoperative at 1:31 pm. By 3:32, the technicians are aware of the problems, but have yet to inform other elctrical companies. Experts believe that the grid could still have been saved at 3:41.

In other words, a plant shut down two hours before the grid was beyond saving.

As for the routine maintenance not beiong critical, it is obvious that they were simply wrong. If inspection by thrid parties had been mandatory (i.e. regulated), this would not have been the case.

Here's a quote from the NRC, (the National Research Council, responsible for conducting scientific analyses for government policy - they make all the building codes, fire codes, plumbing codes, etc.) who were tasked with finding the causes of the blackout:

“The causes of the blackout were in large part due to the fact that the electric industry was not meeting voluntary reliability standards,” Julie says. “The Task Force’s number one recommendation was to make reliability standards mandatory and enforceable across North America and to penalize organizations that don’t comply.”

http://www.nrcan-rncan.gc.ca/com/elemen ... an-eng.php

[Gift-of-god]

When you have a choice between two private power companies are you going to stick with the one that "utilise their entire capacity to make profit" (leading to constant blackouts) or will you change to the company that is a finely reliable power source because it doesn't. The one that is reliable will make more profit, not the one that operates at max capacity.
Government needs to be responsible with electrical capacity just the same. Unfortunately they've proven themselves fairly incapable of being responsible time and again.

Do you have any examples of when publicly owned utilities have caused massive blackouts or have otherwise shown unreliability?

[Reagan States]

Yes, an excellent one: http://en.wikipedia.org/wiki/California ... regulation
And as you can see from the (full) url, it even has to do with deregulation; although it's actually regulation that caused the problems, not deregulation... DANG YOU WIKIPEDIA!
Anyway it was a major problem that lasted over a year and occurred partly during a huge California heatwave; that's a major health concern.

Energy price regulation forced suppliers to ration their electricity supply rather than expand production. This artificial scarcity created opportunities for market manipulation by energy speculators.

[Conserative Morality]

Sure, why not? I see nothing wrong with Privatization, if balanced with mild regulation.

[Gift-of-god]

Yes, an excellent one: http://en.wikipedia.org/wiki/California ... regulation
And as you can see from the (full) url, it even has to do with deregulation; although it's actually regulation that caused the problems, not deregulation... DANG YOU WIKIPEDIA!
Anyway it was a major problem that lasted over a year and occurred partly during a huge California heatwave; that's a major health concern.

Energy price regulation forced suppliers to ration their electricity supply rather than expand production. This artificial scarcity created opportunities for market manipulation by energy speculators.

No. That's an example of privatisation and deregulation causing massive blackouts.

The same article lists deregulation, market manipulation (which could not occur if the services are not privatised), and improper maintenance as a problem.

The timeline shown is especially clear in showing how private companies took advantage of an increasingly deregulated market to manipulate the market(s) for profit, and thereby caused the blackouts.

[Reagan States]

market manipulation (which could not occur if the services are not privatised)

the only reason the market was manipulated was because California lawmakers decided it would be a good idea to enforce price controls on the industry.

how private companies took advantage of an increasingly deregulated market to manipulate the market(s) for profit

Yes, sometimes private companies take advantage. Fortunately they go out of business. Enron was only able to manipulate the California electricity market though because of State lawmakers requiring the privatized companies to buy electricity on spot markets. Enron had a near-monopoly on this in California, hence the problems.

increasingly deregulated

It was only AFTER the State added its new regulation that the catastrophe happened.

improper maintenance

I don't see this listed anywhere in the article...

[Gift-of-god]

market manipulation (which could not occur if the services are not privatised)

the only reason the market was manipulated was because California lawmakers decided it would be a good idea to enforce price controls on the industry.

No. California lawmakers thought (erroneously) that deregulation would decrease retail prices for the avreage consumer. As suggested by the theory of the free market. So, they deregulated most of the industry, except for the retail price caps, which stayed the same. Please note, this was not the new regulatory policy. Deregulation was.

how private companies took advantage of an increasingly deregulated market to manipulate the market(s) for profit

Yes, sometimes private companies take advantage. Fortunately they go out of business. Enron was only able to manipulate the California electricity market though because of State lawmakers requiring the privatized companies to buy electricity on spot markets. Enron had a near-monopoly on this in California, hence the problems.

You have misread. The foloowing quote makes it clear that it was Enron's market manipulations, and not the lawmakers, that forced electricity distributors to purchase energy on the spot market.

When the electricity demand in California rose, utilities had no financial incentive to expand production, as long term prices were capped. Instead, wholesalers such as Enron manipulated the market to force utility companies into daily spot markets for short term gain. For example, in a market technique known as megawatt laundering, wholesalers bought up electricity in California at below cap price to sell out of state, creating shortages.

increasingly deregulated

It was only AFTER the State added its new regulation that the catastrophe happened.

Yes. That new regulation policy was deregulation.

[Reagan States]

No. California lawmakers thought (erroneously) that deregulation would decrease retail prices for the avreage consumer. As suggested by the theory of the free market. So, they deregulated most of the industry, except for the retail price caps, which stayed the same. Please note, this was not the new regulatory policy. Deregulation was.

The price controls were used to manipulate the market. If they were not there, manipulation would not have occurred.
No, the average consumer's energy bill didn't go down. Energy prices had been increasing naturally since, well forever. But look at this graph, and see what happens in '96 when deregulation began. Retail prices stopped increasing. Of course they start going up again in 2000, but that's all due to the manipulation that lawmakers could have easily prevented with smarter deregulation.

When the electricity demand in California rose, utilities had no financial incentive to expand production, as long term prices were capped. Instead, wholesalers such as Enron manipulated the market to force utility companies into daily spot markets for short term gain. For example, in a market technique known as megawatt laundering, wholesalers bought up electricity in California at below cap price to sell out of state, creating shortages.

This manipulation mentioned was possible because of the law in place, which had become part of the market under manipulation.

utility companies were required by law to buy electricity from spot markets at uncapped prices when faced with imminent power shortages.

[Franberry]

libertad o muerte

[Gift-of-god]

...
The price controls were used to manipulate the market. If they were not there, manipulation would not have occurred.
No, the average consumer's energy bill didn't go down. Energy prices had been increasing naturally since, well forever. But look at this graph, and see what happens in '96 when deregulation began. Retail prices stopped increasing. Of course they start going up again in 2000, but that's all due to the manipulation that lawmakers could have easily prevented with smarter deregulation.

...

This manipulation mentioned was possible because of the law in place, which had become part of the market under manipulation.

utility companies were required by law to buy electricity from spot markets at uncapped prices when faced with imminent power shortages.

The new law in place that forced them to buy on the spot market was part of the privatisation plan. 40% of the energy generation was privatised, and then the distributors were required by law to buy from the companies they previously owned. This was an example of state enforcing deregulatory laws and privatisation, (coincidentally, exactly what the OP is trying to avoid in Australia) which then led to the blackout.

[Reagan States]

The law in California was anti-free market. "Deregulatory law" is an oxymoron unto itself.
If I were the OP I would be against a law like that too.

[Gift-of-god]

The law in California was anti-free market. "Deregulatory law" is an oxymoron unto itself.
If I were the OP I would be against a law like that too.

Government and big business have a history of working hand in hand to fuck people over. Pinochet's Chile is an excellent example of that. In the context of Enron adn the California crisis, it was a bit more complicated. The law in California before this whole crisis was somewhat anti-free market, in comparison to complete deregulation, but was decidedly more free market than many other places in the developed world. Some people, such as yourself I guess, wanted to make it more free market. And unlike you, they had a big chunk of cash that they used to buy political power (campaign contributions is the popular euphemism).

The purchased legislators then passed laws that forced the public companies to sell their assets then forced them to buy electricity from the companies they used to own. One assumes the legislators could do this because they only affected a public utility. This allowed companies like Enron to stop producing more generators and limiting supply whil edemnd increased, and thereby charge more in terms of the wholesale price of electricity. This is important to understand because it is a real life example of the private free market exerting control over the public process to the detriment of the public.

[Reagan States]

I do understand; Corporatists wearing "free market" disguises really piss me off. Almost all businessmen are Corporatists though, and many politicians are Statists. You've gotta keep them both in check because when they work together the rest of us are in big trouble.

[James Bluntus]

I thought id just bring this up again.
What most of you are saying is that you support the government. even though 89% of nsw and the state parliament is against it. This is undemocratic. I thought AUSTRALIA was a DEMOCRACY.