Free market not to blame for crisis
Yashar Ettekal (“All
affected by slippery slope of deregulation,” Jan. 18,
2001), like the California Legislature and our poll-motivated
Governor, has shown that he simply has no understanding of why
California is in an energy crisis. The problem is not an
unregulated electricity market. It can’t be since
California’s market was never truly deregulated. The bill by
the Legislature was as thick as a phone book. The root of the
problem comes from the know-it-all elitists in the Legislature who
decided that the free market couldn’t be trusted and that
they needed to “fix” things to make the market work. It
is their incompetence that led us to the problem at hand. One of
the major problems was that the utilities were prohibited from
making long-term energy contracts. These contracts would have
guaranteed stable prices in the long run and prevented the pitfalls
of day-to-day fluctuations. But the know-it-alls in Sacramento
didn’t think of that, and now their mistake is making us all
suffer. The larger problem is that we simply don’t have
enough power being generated. When demand exceeds supply, prices
will rise. Strange how the Legislature was not capable of
understanding basic economics. This problem affects other western
states that don’t have “deregulated” markets,
which proves that the problem is not with the free market.
California’s population has risen greatly in the past decade,
yet no new power plants have been built to be used by the
utilities. The hostility toward building new power plants by the
state government and many activist groups has now resulted in the
energy problem we have today. Real deregulation can and does work.
Take the example of Pennsylvania, which really did deregulate its
market. Energy supply has risen while people have saved billions of
dollars. We have an energy crisis in California. But the fault is
not with the free market. The fault is with the Legislature that
thought it could do better than the free market ““ and failed.
The problem is also with the hostility to new sources of
electricity, which activist groups and the state government have
been able to clamp down on. The solution to this problem is not to
trust the Legislature when it has already shown to be incompetent.
The solution is to make the market truly deregulated and take it
out of the hands of the know-it-alls in Sacramento.
Daniel B. Rego Class of 2000 graduate