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It turned out to be a disaster, because wholesale prices were deregulated but retail rates were capped, and as demand for electricity increased with no new power plants on line, wholesale prices spiraled and left utilities near bankruptcy.
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That worked just fine when wholesale prices were low, but turned bad when wholesale prices soared, leaving utilities no way to cover their costs.
In the United States, full competition is expected to leave utilities with perhaps $100 billion of "stranded assets"—power plants and other facilities left redundant as prices fall.Some experienced power players are aware of all these pitfalls and hope to avoid them.
"If you leave utility privatisation to investment banks, the country will end up with a string of highly profitable monopolies," says one of the EBRD's senior officials.
But development of power supplies has lagged behind the rapid growth on the West Coast, leaving utility companies scrambling to serve their customers.
These kinds of advance payments are exactly the kind of financial shenanigans that brought the last nuclear-construction boom to an end, leaving utility ratepayers with billions of wasted dollars in costs.
Along with many analysts, they attribute California's problems mostly to a badly designed deregulation law -- unique to the nation's biggest state -- that left the utilities victims of a marketplace that invited price spikes and volatility.
Unlike the entrepreneurs of the postwar period, who were taxed at a significantly higher, progressive rate and left public utilities largely intact, the money that individuals in the tech industry have amassed has not been funnelled back into the public sphere, despite claims that entrepreneurs want to do good.
This plan left the utilities vulnerable to extremely high prices in times of relative scarcity.
This aspect of the plan left the utilities vulnerable to extremely high prices in times of relative scarcity.
This aspect of the plan left the utilities vulnerable to extremely high prices in times of relative scarcity a situation the state claims the companies exploited ruthlessly.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com