Sunday, May 29, 2005

Who Has Benefited from Energy Deregulation??

I was reading an interesting article in the Western Standard about energy deregulation in Alberta and Enron's pillaging of consumers, similar to a scheme played out in California, which we all know produced disasterous results for Californian's - energy prices they couldn't afford, businesses closing, brownouts everywhere.

Enron Canada (despite denials from the Klien gov't) was suspected to be a key architect in the market's design. This allowed them leverage when purchasing gov't contracts to supply energy to Alberta residents.

So here is how the scam played out. Enron would bid on supplying a certain amount of the demanded electricity to the marketplace, then at the last minute feign some sort of problem with a generator. This would reduce significantly, the amount originally offered which would in turn leave the province without enough energy to meet its needs. This made spot prices (which is how the majority of Albertan's now pay for the electricity) soar. At this point, anyone selling power into the spot market would make a killing.

This is what Enron was doing - with help of course from other energy generator's. A Frontier Economic's assessment (who Enron used to consult on the Alberta marketplace once it deregulated) shows that Enron Canada made roughly $45 million in a single 22 hour period in 1999. Meanwhile, seniors and those on low or fixed incomes were (and some still are) being forced to go without electricity and gas because they could ill afford the prices being charged.

The June 13/05 issue details the complete story. I urge you to read the article by Cyril Doll and then decide for yourself if you think we got a raw deal.

2 Comments:

At Fri Jun 03, 06:44:00 PM MDT, Blogger ferrethouse said...

energy deregulation in Alberta and Enron's pillaging of consumers, similar to a scheme played out in California, which we all know produced disasterous results for Californian's

It wasn't energy "deregulation" that was a disaster for California. It was the remaining regulations. They allowed energy suppliers to charge whatever they wanted but forced energy producers to charge those suppliers a low, unprofitable rate. Because of this there was not enough supply for the demand resulting in high consumer prices. Suppliers were able to gauge consumers. So it wasn't the fact that the market was deregulated that caused the problems it was that the market wasn't deregulated enough

 
At Sat Jun 04, 08:47:00 PM MDT, Blogger Aizlynne said...

I agree with you. That was exactly how it played out in California. Not enough deregulation "forced" brownouts.

Perhaps if there was enough competition, Albertans would actually benefit from deregulation.

Thanks for your comments!

 

Post a Comment

<< Home

"Success is not final, failure is not fatal: it is the courage to continue that counts" - Sir Winston Churchill.

Free Hit Counter
Free Counter