Wirt Atmar wrote:

>However, the California problems stand as a stark warning for anyone,
>anywhere considering full market deregulation.

and Mark Bixby wrote:

>An article earlier this week in the L.A. Times said that energy
>conservation of
>14% is being achieved on peak power days.

The problems in California are irrelevant to anyone, anywhere considering
full market deregulation. In California, wholesale electricity prices
were decontrolled, but retail prices were fixed -- hardly "full market
deregulation." This meant that consumers had NO WAY of knowing whether
there was a serious supply shortage until the lights went out.

In a fully-deregulated market, prices normally vary with scarcity. When
price signals are choked off, as in California, demand can't vary with
supply. Once the price signals were reconnected -- sort of -- demand went
down to be more in line with supply.

I say "sort of" because retail prices were just re-fixed at higher
levels. There will be another problem soon.

In Arizona (and New Mexico, Wirt?), consumers have the option of being
billed either a flat rate per KWH, or on a more sophisticated system
where we're charged more per KWH during peak periods (at my home, it's
9AM - 9PM Monday-Friday), and where there's also a charge for the amount
of time that the instantaneous demand goes above 10KW during the peak
period. By switching to this system from the fixed-price system, and
making some painless life-style changes (doing the dishes after 9PM), I
cut my summer electric bill by almost 1/3. If I install some reasonably
simple electronic controls, I can cut another 15% or so.

Price signals WORK, when they're given a chance.

-- Bruce


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