> At bottom, I'm headed thus: To show that this is a crisis of capital
> accumulation (i.e., profits) - in this context , a highly socialized
> capital (which is what the phrase "essential commodity like
> electricity" means for me), not of the "market" (which, in relatively
> deregulated form is working precisely as it should, with a spot market
> clearing price and attendant chaos reverberating throughout the rest
> of the economy/society. Not even to mention that this is not due to a
> "lack" of power generation capacity, although demonstrating this is
> my point of departure, since in all likelihood this will be the
> easiest thing to refute.
Yes, a crisis in capital accumulation. A good way to look at utility dereg is as a change from the expending of specific, targeted capital to the procurement of capital in general. Under regulation, in exchange for a monopoly franchise, utilities had an obligation to serve anyone who wanted service, which translated into an obligation to build capacity. Electric utilities account for a large chunk of US investment in plant and equipment. The grid became interconnected nationally (except for parts of Texas), power pools developed to share capacity, and reliability councils were created to worry about shortages. With a few exceptions, power outages were local, usually a failure of the distribution system that transported power from the utility load centers to individual customers.
Dereg changed all of that. No one has any service obligation. Noone has to build anything. Cooperation is replaced by a merger frenzy because utilities, like all firms, don't want to compete as to price. They want to combine and control supply. Without capital targeted for utility capacity because of service obligations and its procurement facilitated by price regulation that assured returns, investmenet in utility P&E must compete with all other investment outlets. Is it any wonder it's going to take the promise of high prices to draw the needed investment?
>
> The practical aim is to refute this and the attendant claim that rate
> regulation is the "cause" of the impending bankruptcy of the
> utilities. "Environmentalists" blocking capacity/generation and
> "regulations" preventing cost pass through are the obvious
> scapegoats. The is the dominant corporate/right wing theme emerging
> here in California.
These are easily refuted. But note: the groundswell of support from many quarters for quickly building massive central station plants (inefficiently, in an environmental sense, using natural gas to make electricity) to solve this "shortage" is death to the progress that had been made in getting people to consider conservation and renewable energy sources as the way of the future.
>
> Note that this also differs for the traditional Nader/progressive
> approach (more power to them, though, politically speaking), with its
> focus on the market, rather than on capital.
Yes. Everyone, proponets and opponents of dereg alike, want to talk
about markets and price effects, but the more important problem is
capacity, capital accumulation, and ultimately reliability, particularly
because electricity ain't corn flakes--it's an essential good in many
contexts, life-giving even, if, for example you're on oxygen in the
home.
>
> So, I'm looking for, over the last 10 years, for the U.S. AND Canada:
> 2) Description of the regulatory distinction between "utility" and
> "non-utility" sources - are "non-utilities" less regulated? Is this
> where "asset shifting" has gone to? (I, and many others, of course,
> have already noted that the "non-utility" suppliers are heavily
> natural gas dependent, and that natural gas as a source has grown
> rapidly recently. This may suggest a relatively unregulated
> environment.)
There is no such distinction, really, between utilities and "nonutilities". Nonutuility generators (NUGs) is an obfuscatory term manufactured by FERC during its fervor for wholesale dereg, begun in the 80s when Ronnie Raygun's people took over (which it has virtually completed, btw--their latest salvo is to allow markets rates for a transmission line being built under water between Conn. and New Jersey; and you though transmision was a natural monopoly!).
A public utility is simply someone who sells electricity. But it's not defined that way under the Fed. Power Act, which instead defines it as an entity that owns facilities subject to FERC jurisdiction. So what's a jurisdictional facility? I'll spare you the twists and turns, but that little legal quirk has allowed FERC create these NUG power sellers, who own only generation, which FERC, falsely, claims are not jurisdictional faciliites (making the NUGs "nonutilities") If you follow me, it's all part of dereg fantasy. Ignore it for your analysis. Virtually all important NUGs are affilitaed with traditional utilities anyway. As far back as the 80s, when asking for market rates, they started referring to themselves as affiliated independent power producers, The scary part wa that noone at FERC giggled about that.
Point is, in the wholesale market on which Calif. relies, FERC has long ago transcended any distinction between utilites and "nonutilites" as market entities. FERC now claims noone has market power and they have deregulated wholesale prices for all. That means of course, that FERC is a major, though little noticed, villain in the whole Calif. nightmare.
> 3) Market: a) Description of different market sectors ("spot" versus
> anything else, geographically different markets, etc.); b) Prices
> across energy sources, across market sectors, electrical transmission
> prices. It is here, and not in physical capacity or availability,
> that I expect we'll find Californias' difficulty as an electricity
> importer;
Transmission prices are another bottomless pit of obfuscation. What is the cost of using a transmission line with a life of decades, centuries(?) and already in the ground. That's right, very low. But we can't have that. Investment incentives and all of that. So, as I mentioned, FERC (which has jurisdiction over all trasnmission) started loosening prices, offering reasons like "flexible" prices are OK because they are bound by the "expansion cost" of building more capacity (say whhat? is expansion a readily viable alternbative in most cases to the transmission owners market power !?) or specific prices, like that for the underwater line I mentioned, are reigned by the differnce between ths generation costs at each end of the line (one of my fav arguments).
Btw, FERC's utter ineptitude in doing anything about creating a
transmission network capable of facilitating power flows necessary for
efficiency even, to say nothing of deregulated markets, is at the very
bottom of the whole nationwide mess.
>
> 4) Finally, capitalization and profits at the "top" holding company
> level (to use the old-fashioned term). This is the cause of #3
> above. I would expect to find "thieves" engorged with booty.
Good luck in tracking the surplus value. Why do you think utilities created holding companies layered with pages of subs and spred out in many different businesses, both in the US and, despite PUHCA prohibitions, intermingled with foreign capital?
RO