A Page From the Past

Deregulation's EFfect on Power Outages
©F. Bruce Abel 2001
February 12, 2001
Page Five

Pennsylvania regulators, that a utility needed to build and plan for a 30-35% reserve margin. In today's world, 20 years later, such a reserve margin would be viewed as ludicrous, and, needless to say, such an accepted reserve margin cost the Pennsylvania ratepayers hundreds of millions of dollars in unneeded charges for power plants that came on too early.

As an aside, I can't help noticing as I say the words "hundreds of millions of dollars," that we are using these words to represent the cost of power over years under regulation in Pennsylvania whereas in California these words represent one-week's market rates of one utility under competition, implying to me that the wealth transfers that are occurring under deregulation in California, are of another order altogether, and we have, in my mind, without doubt entered a world many times worse than the Savings & Loan scandal.

To quote California Senator Dianne Feinstein January 31, 2001, questioning Sempera, a seller of power into the California market, before the Senate Energy and Natural Resources Committee, at its Hearing on the California Electric Shortage:"Explain...why spot power at 3 am in the morning is 500 times higher than it would be normally."