Deregulation of Electricity
Regarding your Dec. 9 article on electricity deregulation in California: It seems it was a mistake. It seems our state legislators and the Public Utilities Commission didn’t take everything into consideration when they drafted this monster of an experiment and made it law. From everything I read in Nancy Vogel’s article, I get the feeling that in their enthusiasm to be the good guy for the consumer they lost sight of reality. Good intentions don’t always make for good results.
But taking this one step further, I personally believe there are three “commodities” that shouldn’t be traded on the open market to the consumer’s detriment. Water, natural gas and electricity aren’t luxuries, they are life necessities for which we as of yet have no viable substitutes. Calling such necessities “commodities” and creating a market for them so traders can make money introduces price volatility, which I find unacceptable.
SUZAN F. SAGINIAN
Saugus
* The fundamental problem with electricity deregulation is that the power system is not truly a market. The system lacks the feedback necessary for a market to operate properly. Since consumers do not know the going rate at any moment, they cannot adjust demand in the face of rising prices. Not until a bill arrives up to a month later will they know the price they paid.
The power producers, on the other hand, do have real-time price information and can adjust supply accordingly. This leads inevitably to the unbalanced “market” we see today. Compare this to a true market, such as gasoline. When gasoline prices rise, I see them before filling my tank. I can shop different dealers for a lower price, or curtail my driving to lower my total cost. When I flip my light switch I have no such information. Without a major change to the power distribution system, such as installing price displays in every home and business, no power market will ever be workable. Government oversight of an inherently monopolistic system is essential.
LEE AYDELOTTE
Huntington Beach
* Why isn’t every new house built in sunny Southern California required to be outfitted with a solar heating and hot water system?
CAROL MAY
Los Angeles
