21–30 of 281 posts
Elon Musk making the move to Texas specifically to avoid the regulation that would have helped stop this from happening, would be kicking himself right now if he was in any way affected by this or consistent in his beliefs.
Earlier quoted context omitted.
To say CA is "deregulated" is kind of a bastardization of the term.
That may be, but what deregulation there has been has almost uniformly been a disaster (see: Enron). Vital infrastructure, practically by definition, is unprofitable. That's not a good match to profit driven markets.
Elon Musk making the move to Texas specifically to avoid the regulation that would have helped stop this from happening, would be kicking himself right now if he was in any way affected by this or consistent in his beliefs.
Is he against regulation to keep power plants working in winter?
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Massive bonuses would have been paid out already while the liability burdened company will need to be bailed out.
The article says nothing about a "bailout".
The argument is essential infrastructure, expertise, etc. - I mean, it works for banks, and surely a utility provider is actually essential infrastructure.
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That's not what bankruptcy is? Unless you consider creditors and equity holders "society".
Well the electric grid falls in that category of service, like the military where the market is potentially a bad solution. So in this regard. The electric company was able to be negligent to their personal benefit of 1.8 billion dollars of unfunded liability it created. And then they call bankruptcy and that's the end of that chapter.
By that logic any time a business fails and it impacts a lot of people the losses have “been socialized”.
And CA is far from a free market. The PUC has PG&E on a short leash and the results have been a disaster.
Edit: Replying - No, bankruptcy is actually the exact opposite of socializing losses.
Earlier quoted context omitted.
To say CA is "deregulated" is kind of a bastardization of the term.
That may be, but what deregulation there has been has almost uniformly been a disaster (see: Enron). Vital infrastructure, practically by definition, is unprofitable. That's not a good match to profit driven markets.
Earlier quoted context omitted.
That's kind of what bankruptcy is for, overtly. It's not like some kind of clever hack.
I do find it troubling, however, that it’s more often than not used to clear down the ledger of a going concern, and then continue business as usual, same everything, just a new incorporation. You can bet your bottom dollar that they’ll be buying their own assets back on cents on the dollar, reincorporating, putting everyone back in the same positions, and paying some nice fat bonuses out of the capital they’ll be gi…
[citation very much needed]
Earlier quoted context omitted.
That's not what bankruptcy is? Unless you consider creditors and equity holders "society".
Well the electric grid falls in that category of service, like the military where the market is potentially a bad solution. So in this regard. The electric company was able to be negligent to their personal benefit of 1.8 billion dollars of unfunded liability it created. And then they call bankruptcy and that's the end of that chapter.
Realistically, since the creditors are probably private and the customers, which would otherwise face the loss, are the community, it's actually somewhat the reverse - privatized losses to the benefit of the community (which would otherwise need to pay off the surge in electricity pricing).
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No question about that. The novelty is that a single snow/ice weather event could push a large utility operator into bankruptcy
Or like California is it that deferring costs (winterizing in TX and fire prevention and forest clearing in CA) makes executives look good while kicking problems down the road, maybe even decades down the road. Here in New Zealand the line network operator in the city of Dunedin has underinvested in the city line network, so instead of replacing power poles, they have simply changed the rules so that 2,500+ unservice…
Nobody wants to pay for things like preventative maintenance. So unless you have a regulator that is going to force you to do so, paying for things like winterizing equipment in TX isn’t going to happen. This is especially true when you can just change providers to whomever is going to give you the absolute lowest rate. So instead of being prepared for a once in a decade storm, a provider is more likely to not be ready and just fold of things get bad. You never see the results of what happens when you are successfully prepared for that rare event, only what happens when things go horribly wrong. So people (consumers included) don’t want to pay for things like maintenance. And regulators (who often answer to the public in some way) don’t want to be seen as being the cause of raising peoples’ bills.
Earlier quoted context omitted.
The article says nothing about a "bailout".
They won’t just leave a utility lying dead by the roadside. Going by the last few decades of precedent, its assets will be acquired by a consortium of the current principals, most likely using state provided grants or loans to get things running again. The argument is essential infrastructure, expertise, etc. - I mean, it works for banks, and surely a utility provider is actually essential infrastructure.
Might not be the worst, all things considered.