Feeds

Brits offer to cure Californian energy crisis

Unloved spin-off seeks corporate welfare

  • alert
  • submit to reddit

The essential guide to IT transformation

The British company International Power has "offered" to solve California's energy crisis, by seeking to bid for new plants in the power-stricken hi-tech state, The Observer reports.

International Power, a fragment from the privatized British energy generator National Power, "wants to build 3000MW of generating capacity" in the state, according to the report. IP already has plants in Texas, Georgia, Massachusetts and New Jersey with more underway.

But the news is unlikely to bring gymnasium treadmills screeching to a halt in the state, as Californians throw their snowboards and take-out sushis skywards in celebration. For the corporate welfare now being tabled by California's Governer Gray Davis is guaranteed to bring such oafish, speculative offers from oversees flooding in.

Davis last week offered to bail out the two main distributors PG&E and Southern California Edison (a third, San Diego Gas & Electric covers a smaller area) on a long-term basis.

Claiming that they're on the verge of bankruptcy, the two grid companies, who must purchase their energy under the whacky deregulation scheme California introduced in 1996, have been subsidized by the state in the recent energy in recent weeks Now that's going to be made permanent, kinda, in the form of ten-year public bonds... and an 80 per cent hike in energy costs to the punter.

PG&E and SoCal Edison are forced to pay high wholesale market prices for energy while being prevented from passing the cost on to consumers, thanks to the regulation web.

And here our libertarian idealogues are quite correct. It is a "rigged" market. Only some markets are more obviously rigged than others...

PG&E and SoCal Edison are merely local subsidiaries of larger corporates, and have funnelled money back to their parents. PG&E's holding company has "nearly $30 billion" in assets, according to its web page . And Edison sits on assets of $36 billion, much of which has been invested oversees.

So their local "bankruptcy" is illusory. AP today reports that SoCalEdison has diverted $1.4 billion to parent company Edison International since deregulation, which "represented almost all the parent companies' net income in recent years." Little wonder that the majority of Californians now think the utilities are crying wolf, and favour re-regulation.

For the cost of this expensive, artificial market-making wheeze has been passed to the public. As Gregory Palast nicely characterises it in a history of the great free market energy caper - it amounts to "the brilliant method by which profits are privatised and losses socialised." ®

Note To help conserve energy, the heated jacuzzi here in The Register's Celestial Room Hospitality Wing will be turned off for two hours each morning between 8am and 10am. PRs please note.

Secure remote control for conventional and virtual desktops

More from The Register

next story
6 Obvious Reasons Why Facebook Will Ban This Article (Thank God)
Clampdown on clickbait ... and El Reg is OK with this
Kaspersky backpedals on 'done nothing wrong, nothing to fear' blather
Founder (and internet passport fan) now says privacy is precious
TROLL SLAYER Google grabs $1.3 MEEELLION in patent counter-suit
Chocolate Factory hits back at firm for suing customers
Facebook, Google and Instagram 'worse than drugs' says Miley Cyrus
Italian boffins agree with popette's theory that haters are the real wrecking balls
Mozilla's 'Tiles' ads debut in new Firefox nightlies
You can try turning them off and on again
Sit tight, fanbois. Apple's '$400' wearable release slips into early 2015
Sources: time to put in plenty of clock-watching for' iWatch
Facebook to let stalkers unearth buried posts with mobe search
Prepare to HAUNT your pal's back catalogue
Ex-IBM CEO John Akers dies at 79
An era disrupted by the advent of the PC
prev story

Whitepapers

Endpoint data privacy in the cloud is easier than you think
Innovations in encryption and storage resolve issues of data privacy and key requirements for companies to look for in a solution.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Advanced data protection for your virtualized environments
Find a natural fit for optimizing protection for the often resource-constrained data protection process found in virtual environments.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Next gen security for virtualised datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.