[PEN-L:33519] Re: Re: RE: Right wing sees the light! (almost)

[Eugene Coyle <eugenecoyle@xxxxxxx>]

Nomi,  There was little resistance to deregulation prior to the bill, AB
1890 being passed in 1996.  Consumer and environmental groups were
unable to get the issue into the major media -- "too hard to explain."
The coalition of consumer and environmental groups fell apart in late
spring '96 when NRDC chose to opt for funding of its programs in return
for signing off on the bill.  Once the big industrial customers reached
a deal with the incumbent utilities, with the approval/brokerage of the
then Governor, Wilson, resistance, such as it was, was generally seen to
collapse.  Each group got a sop -- labor got guarantees of jobs even
after the power plants would be sold off.

	Your other question:  No, power plants (in California) were sold AFTER
the law was passed.  The conventional wisdom was that the old plants
would not be able to compete with the efficient and smarter new
operators -- as it turned out, the latter paid top dollar for the plants
-- and of course made a fortune from the investments.

	An aside re Jim's post -- nuclear investments did benefit from rate of
return regulation -- but that is NOT to say they were driven by
regulation.  Investments still have to make financial sense under any
regime, regulated or not.  As it turned out, the nuclear plants were a
big mistake, but that was partly because of the wild interest rates at a
time when billions were tied up in construction.

Gene Coyle


Nomiprins@xxxxxxx wrote:
> In a message dated 12/30/2002 12:59:11 PM Eastern Standard Time,
> jdevine@xxxxxxx writes:
>
> > 3) bizarre dereg aimed at replacing the regulation of natural
> > monopolies (such as electrical power generation and distribution) with
> > a split market.
>
>
>
> Jim, was there an outcry in California before that piece of '96 dereg
> was enacted? Were Enron and others already buying up key plants and
> generators from PG&E, SoCal Ed, etc. in anticipation of the market split
> between generation and distribution?
>
> Nomi