While in Russia to pass laws aimed at reducing state control over the pricing of electric power industry in other countries are not only not in a hurry with the restructuring, but returned to various forms of state regulation. This is including in the United States.
End of experiment
It all started in April 1994, the then Commission on Utilities of California (PUC) adopted a decision to begin reform of the electricity in the state. She was guided by a well-known situation (and now popular in Russia - ed.) That the «consumer should have the right to choose electricity supplier». California lawmakers strongly influenced notorious now-bankrupt company «Enron»: it had promises of residents decrease in consumer tariffs for electricity as much as 50%. As a result, in 1996, was terminated by agreement between the private utility companies and the citizens of California, concluded on the Railway Commission of the State in the distant 1912, Reliable, regulated electricity led to the fact that California has reached the highest economic growth rates in the country. However, «the blood of the California Economy» was thoughtlessly transferred to the power of «invisible hand of the market».
The results are known the world over. The citizens of California and the company believed the sweet voices of supporters of the liberalization of the energy market, were out in the cold. From November 2000 to May 2001 and residents of the state a total of 38 days experienced a «fan mute», and also suffered from constant interruptions in the supply of electricity. The sharp increase in tariff has led to the bankruptcy of the largest utility companies - Pacific Gas & Electric. Loss of state budget amounted to $ 10 billion, which sorcerers «new economy» was simply stolen.
The Institute for Public Policy of California (Public Policy Institute of California), the overall losses due to energy crisis, estimated at $ 45 billion they consist of excessive amounts of tariffs, losses of bankrupt companies and lost profits as a result of slowing economic growth. In addition, the utility of the State of California experienced another trouble: credit agencies, Wall Street's lowered its rating to «worthless» (junk) level. As a result, California kommunalschikov shares dropped sharply in price, and they began to experience an acute shortage of funds for repair of nets and the introduction of new production facilities. As a result, in January 2003, the PUC, on which there was already one person, who 9 years ago, supported the idea of liberalizing the electricity market, which was unanimously voted in favor of ending the devastating «experiment».
Already in the crisis winter 2000-2001. Lyndon Larush (he makes his candidacy for president of the United States Democratic Party in elections in 2004 - Ed.) Organized a nationwide campaign, which called for restoring the full regulation of public utilities in California, and «Enron» and «energy pirates» to bankruptcy proceedings. As a result of this campaign, California Governor Gray Davis (Gray Davis), legislative bodies and state PUC from May 2001 began to take measures to restore control. A closed hot spot of the market, entered into long term contracts with fixed prices with suppliers of electricity, reallocated responsibilities between the governing bodies for the protection of the population.
The main problem - the market
As published in the September 2002 report, PUC has been documented that the five largest independent generating companies of - Duke, Mirant, Dynegy, Reliant and AES-Williams - deliberately restricting supply to create artificial shortage of electricity in order to increase tariffs. In this report, PUC has proposed a series of measures to control the wear of equipment of power plants and imposing fines on the generating companies for late filing of electricity. There were recommendations that should be the Federal Energy Regulatory Commission for the United States (FERC), whose leadership is based in Washington. (FERC of its normative activities actually usurped the legislative right of states to regulate the electricity market by issuing many orders «setting the rules»).
Carl Wood (Carl Wood), now a member of PUC, and in the 1994-1999 biennium. Head of the Association of Public Utilities (CUE), announced in early 2003 that in 1994, when no one has ever represented the possibility of monstrous fraud on the market «Enron», together with other «energy pirates», received the title «Star of death», He warned that «the policy of deregulation did not consider other common features of competing markets». «While the rules fail to aggravate the situation in the market with insufficient supply, the main problem is in the market. If everything depended only on market processes, the production of electricity would be subject to fluctuations with sufficiently distinct cycles of ups and downs ».
If demand outstrips the proposal, the only possibility for the creation of new production facilities - an increase in prices, which will motive force for the market. Reliable electricity supply will not be until «imbalance» will not be fixed. This race could continue for many years. If it happens «surplus of proposals», a simple dismissal of employees of enterprises and create a threat to the future of the electric power system. In addition to warnings CUE, many economists had predicted beforehand crisis that California has experienced over the past three years. But the PUC «blindly ignored» Similar warnings, according to Wood, in favor of «simple and naive belief in competition». History 1920-s. showed that the electric power industry in a unregulated market can be a tool for large-scale financial speculation and looting and physical infrastructure industry. This possibility was eliminated during the reform 1930. under President Franklin Roosevelt.
A departure from this policy led to the government of California is still fighting for compensation of almost $ 9 billion that had been stolen from citizens of electrical conglomerates; for a review of long-term contracts, where tariffs are significantly higher real prices for electricity, to bring to criminal liability of those who contributed to the crisis, finally, that the federal government restored the regulation throughout the country. California is not the only example of failure to reform the industry. In many states the process of deregulation on hold, while in others the authorities had decided not even to begin liberalization.
Chronicle of recovery management
Arkansas, New Mexico, Oklahoma and West Virginia, which adopted laws on deregulation of the electricity industry, after the California disaster decided to postpone their implementation. Eighteen states take the consideration of such laws, while another eight are studying the results of the California crisis. In the early years, the newspaper Orlando Sentinel posted an article under the heading «deregulation in Florida failed». The article's author, Christopher Boyd (Christopher Boyd) pointed out that despite all the efforts of Governor Jeb Bush (brother of current U.S. President - Ed.) To revive the policy of deregulation, now, through the «year after the movement for redistribution in the electricity market in Florida ( ie deregulation - Ed.) equal opportunities for all ' », traders who« are traded on exchanges in kilowatts as pork, are aware that this soon will not happen ».
Boyd quoted the representative of Florida Power & Plant Suenka Bill (Bill Swank): «Our prices below the average for the country, and we have reserves of power, and it is due to the hostile climate of deregulation that emerged in Florida». Other states that have been stepped on a slippery path of deregulation, are considering possible ways of retreat. In late 2002, the Corporate Commission of Virginia (State Corporate Commission, SCC) issued a report on the 32 pages devoted to the theme of competition in the electricity industry. The report noted that an accelerated transition to the next stages of deregulation meant leapfrogging through the head remaining in the states of regulatory bodies at the federal level - to the FERC. And it was in 2001, did nothing to prevent the crisis in California. SCC believes that «retail competition does not lead to success in most parts of the country». In California this led to a «serious damage to the economy».
Corporate Commission Virginia FERC was also concerned about the desire to join the network transmission and wholesale electricity market in the Regional Organization for the transmission of electricity (Regional Transmission Organizations, RTO), the work which the Federal Commission will supposedly «manage». SCC has warned that «the investigation of crisis in California and the Midwest United States and the collapse« Enron »revealed the abuse, illegal trading practices and disclosure« dutyh »records several energy companies». The Commission recommended that the utility companies of Virginia not to join RTO. In the state of Ohio, the legal adviser intermediary consumer complaints in its annual report on the electricity market state warned that next year, when a full deregulation of the electricity industry, the residents of the state could face «unstable electricity tariffs». After a three-year transition period, public utility companies from January 1, 2004 can begin to establish «prices» electricity.
Company Dayton Power and Light Company is trying to halt plans to deregulate and to freeze the current rates for the next two years to maintain the financial health of the industry through appropriate, guaranteed rate of return. According to the newspaper Connecticut Post, «Connecticut new competitive electricity market in utter confusion». Less than a year, consumers will be left in terms of «free market», and local suppliers of electric power «as if all does not exist». There is a fear that the «electricity tariffs for individual consumers podskochat sharply upwards as soon as the state of Connecticut will be completely deregulated in the market».
Federal faith in deregulation
However, the federal government, there is a sharp opposition to plans to restore a reasonable state regulation. According to U.S. House members from Connecticut, Terry Baker (Terry Baker): «It is impossible to brine cucumbers from turning back into the fresh». However, in many states is already being done. «We are not correct, we will stop», - stated 8 April 2003 a member of the Senate of the State of California, Joe Dunne (Joe Dunn), on the deplorable results of the liberalization of the electricity market. So in California are going to put an end to the «consumer choice». Utilities would be guaranteed their regular 10-th% return on invested capital in the system «variable costs as the basis for calculating tariffs» in exchange for investments to meet the needs of consumers. Price-based incentives in the public sector will facilitate investments in the construction and upgrading of power lines, and a moratorium on the sale of companies generating capacity will be extended from 2005 to 2010. While California has taken this action, officials in Washington are still trying to liberalize the electricity market.
In the two years of its activities, the Bush administration tried to push through Congress a large bill on energy, which, however, failed to crash through the scandal with «Enron» during the previous convocation of the Congress. Now, however, is preparing an even more liberal project, and if it will pass through the highest legislative body, it will cause more environmental damage than oil drilling in Alaska, as well as the horrendous damage to the entire American economy in general. Conservative economic hawks on Capitol Hill do not stop at the destruction of electric power. They proposed to expand the area of deregulation: to select a state network of power lines and transmit it to FERC - the very committee that was looking through my fingers on the manipulation of the tariffs network operators in California, until they are not citizens of the state obvorovali at $ 9 billion.
The original version of the bill is also intended to remove even a little legal protection for consumers, which involved the act of public utilities companies (Public Utility Holding Company Act, PUHCA), dating from 1935. He is the last obstacle for those who can not resist the temptation szhulnichat.
As a result of strong public resistance to the continuation of policies of deregulation in the electricity market, the chairman of the Senate Energy Committee, Pete Domenichi (Pete Domenici), announced that his committee is going to rewrite the article bill on electricity. However, the lifting of PUHCA is already included in the version of the bill that the House of Representatives approved on 11 April.
One of the most fervent opponents of PUHCA repeal was made by Glenn Inglish (Glenn English), one of the leaders of the National Association of Associations electricity Rural (National Rural Electric Cooperative Association). Thousands of its members are non-profit electric cooperatives that belong directly to users and suppliers of energy to more than 35 million consumers. Inglisha supported by Alan Richardson (Alan Richardson), president of the American Public Energy Association (American Public Power Association, APPA), representing 2,000 state and municipal electric utility companies, serving 40 million customers. At the same hearing a representative group of large industrial consumers of John Anderson from the Resource Consumer Council (Consumer Resources Council) has called for the preservation and strengthening of PUHCA. Industrial consumers, once they believed the legend of Representatives «Enron» that deregulation, saying that would reduce their costs, were the main supporters of the liberalization of energy markets. Now they have for the first time were in opposition to plans to restructure the U.S. energy market.
End of experiment
It all started in April 1994, the then Commission on Utilities of California (PUC) adopted a decision to begin reform of the electricity in the state. She was guided by a well-known situation (and now popular in Russia - ed.) That the «consumer should have the right to choose electricity supplier». California lawmakers strongly influenced notorious now-bankrupt company «Enron»: it had promises of residents decrease in consumer tariffs for electricity as much as 50%. As a result, in 1996, was terminated by agreement between the private utility companies and the citizens of California, concluded on the Railway Commission of the State in the distant 1912, Reliable, regulated electricity led to the fact that California has reached the highest economic growth rates in the country. However, «the blood of the California Economy» was thoughtlessly transferred to the power of «invisible hand of the market».
The results are known the world over. The citizens of California and the company believed the sweet voices of supporters of the liberalization of the energy market, were out in the cold. From November 2000 to May 2001 and residents of the state a total of 38 days experienced a «fan mute», and also suffered from constant interruptions in the supply of electricity. The sharp increase in tariff has led to the bankruptcy of the largest utility companies - Pacific Gas & Electric. Loss of state budget amounted to $ 10 billion, which sorcerers «new economy» was simply stolen.
The Institute for Public Policy of California (Public Policy Institute of California), the overall losses due to energy crisis, estimated at $ 45 billion they consist of excessive amounts of tariffs, losses of bankrupt companies and lost profits as a result of slowing economic growth. In addition, the utility of the State of California experienced another trouble: credit agencies, Wall Street's lowered its rating to «worthless» (junk) level. As a result, California kommunalschikov shares dropped sharply in price, and they began to experience an acute shortage of funds for repair of nets and the introduction of new production facilities. As a result, in January 2003, the PUC, on which there was already one person, who 9 years ago, supported the idea of liberalizing the electricity market, which was unanimously voted in favor of ending the devastating «experiment».
Already in the crisis winter 2000-2001. Lyndon Larush (he makes his candidacy for president of the United States Democratic Party in elections in 2004 - Ed.) Organized a nationwide campaign, which called for restoring the full regulation of public utilities in California, and «Enron» and «energy pirates» to bankruptcy proceedings. As a result of this campaign, California Governor Gray Davis (Gray Davis), legislative bodies and state PUC from May 2001 began to take measures to restore control. A closed hot spot of the market, entered into long term contracts with fixed prices with suppliers of electricity, reallocated responsibilities between the governing bodies for the protection of the population.
The main problem - the market
As published in the September 2002 report, PUC has been documented that the five largest independent generating companies of - Duke, Mirant, Dynegy, Reliant and AES-Williams - deliberately restricting supply to create artificial shortage of electricity in order to increase tariffs. In this report, PUC has proposed a series of measures to control the wear of equipment of power plants and imposing fines on the generating companies for late filing of electricity. There were recommendations that should be the Federal Energy Regulatory Commission for the United States (FERC), whose leadership is based in Washington. (FERC of its normative activities actually usurped the legislative right of states to regulate the electricity market by issuing many orders «setting the rules»).
Carl Wood (Carl Wood), now a member of PUC, and in the 1994-1999 biennium. Head of the Association of Public Utilities (CUE), announced in early 2003 that in 1994, when no one has ever represented the possibility of monstrous fraud on the market «Enron», together with other «energy pirates», received the title «Star of death», He warned that «the policy of deregulation did not consider other common features of competing markets». «While the rules fail to aggravate the situation in the market with insufficient supply, the main problem is in the market. If everything depended only on market processes, the production of electricity would be subject to fluctuations with sufficiently distinct cycles of ups and downs ».
If demand outstrips the proposal, the only possibility for the creation of new production facilities - an increase in prices, which will motive force for the market. Reliable electricity supply will not be until «imbalance» will not be fixed. This race could continue for many years. If it happens «surplus of proposals», a simple dismissal of employees of enterprises and create a threat to the future of the electric power system. In addition to warnings CUE, many economists had predicted beforehand crisis that California has experienced over the past three years. But the PUC «blindly ignored» Similar warnings, according to Wood, in favor of «simple and naive belief in competition». History 1920-s. showed that the electric power industry in a unregulated market can be a tool for large-scale financial speculation and looting and physical infrastructure industry. This possibility was eliminated during the reform 1930. under President Franklin Roosevelt.
A departure from this policy led to the government of California is still fighting for compensation of almost $ 9 billion that had been stolen from citizens of electrical conglomerates; for a review of long-term contracts, where tariffs are significantly higher real prices for electricity, to bring to criminal liability of those who contributed to the crisis, finally, that the federal government restored the regulation throughout the country. California is not the only example of failure to reform the industry. In many states the process of deregulation on hold, while in others the authorities had decided not even to begin liberalization.
Chronicle of recovery management
Arkansas, New Mexico, Oklahoma and West Virginia, which adopted laws on deregulation of the electricity industry, after the California disaster decided to postpone their implementation. Eighteen states take the consideration of such laws, while another eight are studying the results of the California crisis. In the early years, the newspaper Orlando Sentinel posted an article under the heading «deregulation in Florida failed». The article's author, Christopher Boyd (Christopher Boyd) pointed out that despite all the efforts of Governor Jeb Bush (brother of current U.S. President - Ed.) To revive the policy of deregulation, now, through the «year after the movement for redistribution in the electricity market in Florida ( ie deregulation - Ed.) equal opportunities for all ' », traders who« are traded on exchanges in kilowatts as pork, are aware that this soon will not happen ».
Boyd quoted the representative of Florida Power & Plant Suenka Bill (Bill Swank): «Our prices below the average for the country, and we have reserves of power, and it is due to the hostile climate of deregulation that emerged in Florida». Other states that have been stepped on a slippery path of deregulation, are considering possible ways of retreat. In late 2002, the Corporate Commission of Virginia (State Corporate Commission, SCC) issued a report on the 32 pages devoted to the theme of competition in the electricity industry. The report noted that an accelerated transition to the next stages of deregulation meant leapfrogging through the head remaining in the states of regulatory bodies at the federal level - to the FERC. And it was in 2001, did nothing to prevent the crisis in California. SCC believes that «retail competition does not lead to success in most parts of the country». In California this led to a «serious damage to the economy».
Corporate Commission Virginia FERC was also concerned about the desire to join the network transmission and wholesale electricity market in the Regional Organization for the transmission of electricity (Regional Transmission Organizations, RTO), the work which the Federal Commission will supposedly «manage». SCC has warned that «the investigation of crisis in California and the Midwest United States and the collapse« Enron »revealed the abuse, illegal trading practices and disclosure« dutyh »records several energy companies». The Commission recommended that the utility companies of Virginia not to join RTO. In the state of Ohio, the legal adviser intermediary consumer complaints in its annual report on the electricity market state warned that next year, when a full deregulation of the electricity industry, the residents of the state could face «unstable electricity tariffs». After a three-year transition period, public utility companies from January 1, 2004 can begin to establish «prices» electricity.
Company Dayton Power and Light Company is trying to halt plans to deregulate and to freeze the current rates for the next two years to maintain the financial health of the industry through appropriate, guaranteed rate of return. According to the newspaper Connecticut Post, «Connecticut new competitive electricity market in utter confusion». Less than a year, consumers will be left in terms of «free market», and local suppliers of electric power «as if all does not exist». There is a fear that the «electricity tariffs for individual consumers podskochat sharply upwards as soon as the state of Connecticut will be completely deregulated in the market».
Federal faith in deregulation
However, the federal government, there is a sharp opposition to plans to restore a reasonable state regulation. According to U.S. House members from Connecticut, Terry Baker (Terry Baker): «It is impossible to brine cucumbers from turning back into the fresh». However, in many states is already being done. «We are not correct, we will stop», - stated 8 April 2003 a member of the Senate of the State of California, Joe Dunne (Joe Dunn), on the deplorable results of the liberalization of the electricity market. So in California are going to put an end to the «consumer choice». Utilities would be guaranteed their regular 10-th% return on invested capital in the system «variable costs as the basis for calculating tariffs» in exchange for investments to meet the needs of consumers. Price-based incentives in the public sector will facilitate investments in the construction and upgrading of power lines, and a moratorium on the sale of companies generating capacity will be extended from 2005 to 2010. While California has taken this action, officials in Washington are still trying to liberalize the electricity market.
In the two years of its activities, the Bush administration tried to push through Congress a large bill on energy, which, however, failed to crash through the scandal with «Enron» during the previous convocation of the Congress. Now, however, is preparing an even more liberal project, and if it will pass through the highest legislative body, it will cause more environmental damage than oil drilling in Alaska, as well as the horrendous damage to the entire American economy in general. Conservative economic hawks on Capitol Hill do not stop at the destruction of electric power. They proposed to expand the area of deregulation: to select a state network of power lines and transmit it to FERC - the very committee that was looking through my fingers on the manipulation of the tariffs network operators in California, until they are not citizens of the state obvorovali at $ 9 billion.
The original version of the bill is also intended to remove even a little legal protection for consumers, which involved the act of public utilities companies (Public Utility Holding Company Act, PUHCA), dating from 1935. He is the last obstacle for those who can not resist the temptation szhulnichat.
As a result of strong public resistance to the continuation of policies of deregulation in the electricity market, the chairman of the Senate Energy Committee, Pete Domenichi (Pete Domenici), announced that his committee is going to rewrite the article bill on electricity. However, the lifting of PUHCA is already included in the version of the bill that the House of Representatives approved on 11 April.
One of the most fervent opponents of PUHCA repeal was made by Glenn Inglish (Glenn English), one of the leaders of the National Association of Associations electricity Rural (National Rural Electric Cooperative Association). Thousands of its members are non-profit electric cooperatives that belong directly to users and suppliers of energy to more than 35 million consumers. Inglisha supported by Alan Richardson (Alan Richardson), president of the American Public Energy Association (American Public Power Association, APPA), representing 2,000 state and municipal electric utility companies, serving 40 million customers. At the same hearing a representative group of large industrial consumers of John Anderson from the Resource Consumer Council (Consumer Resources Council) has called for the preservation and strengthening of PUHCA. Industrial consumers, once they believed the legend of Representatives «Enron» that deregulation, saying that would reduce their costs, were the main supporters of the liberalization of energy markets. Now they have for the first time were in opposition to plans to restructure the U.S. energy market.
Marsha Freeman
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