In my little corner of sunny southern california, it's been over 100 degrees more than it's been under 100 degrees in my apartment over the past week or so.  Can't really blame the electrical grid for my apartment not having AC, but I can certainly be a bit peeved when the lack of power knocks out the fans.

New York City does not have a free market for electricity.  There is a monopoly held by Con Edison.  It is regulated by the local government.  Publicly regulated utilities have generally served us well over the past 50 years.

If government solutions are always the answer, look no further than the MTA, a giant monstrosity that has systematically underinvested in infrastructure and suffers outages on a regular basis.  Try getting around the outer boroughs on a weekend with the subway and see what crappy government bureaucracies can do.

I really would like to know how you manage to blame every problem on the "free market". Care to expand on your little thesis? I'm guessing there were abslutely no blackouts before deregulation?

Our provider is the Sacramento Municipal Utility District (SMUD).  There have been a few rolling blackouts;  two hours alternating by neighborhood.  And overall, rates are cheaper.  It is a monopolist.  As are all electricity providers....because it is prohibitively costly to run two or more sets of electric wires to each home or business.

If you actually do some research, read books on the industry, PUC hearing minutes, etc, you will discover that it is all ENORMOUSLY complex and not validly reducible to political sloganeering.

As as practical matter, neither market forces nor politicians are going to provide for that last top end, rarely occurring bit of power in  a national heatwave.  That is a role for conservation, ie partial shutdown protocols by which we, as citizens reduce demand during these events.

For those New Yorkers who don't know any better . . ., there is an electric free market in New York.  Con Edison delivers the electricity and owns the infrastructure.  But Con Ed both generates AND sells electricity in the open market.  If you want to know where, go here:

www.nyiso.com

That's the NY Independent System Operator, the entity responsible for overseeing the New York electricity markets (yes, markets, because there's more than one thing that gets bought and sold).  Unlike previous blackouts, the current ones are related directly to the lack of sufficient electric generation AND to the relative inability to transport it over long distances.  Past blackouts, like the most recent Northeast blackout, had more to do with large-scale system failure.

I had dinner with someone who calls themselves a Democrat and the subject of private ownership of roads and highways came up.

This person just couldn't understand why I would be against large corporations owning all public property including the roads we drive on.  Apparently corporations are perfectly capable to serving all our needs.

So stop blaming the utilities: its actually the fault of government for not allowing the utilities to own the air and water around us.

Matt--

Well done. Spoken like a true idealogue zealot. This hasn't got anything to do with infrastructure and private corporations. In St. Louis, this has everything to do with winds knocking down trees and cutting power lines and nothing to do with the fact those lines are owned by a private company. No amount of public money or government intervention is going to make power lines impervious to elements. Jeez.

No amount of public money or government intervention is going to make power lines impervious to elements.

    Of course there's that bizarre idea of underground utilities which might have some bearing on the problem.  But that costs money which might otherwise be spent at the mall...

And undoubtedly we will be having some more "heckuva job" commendations for the officials responsible.

I think the free market idea is great, but not for utilities. Electricity, sewer and water should be owned by a government (city, county or state). Caifornia deregulated electricity and the state nearly died. PG&E (northern California power company) wrote the bill, the Republicans ran with it and a bunch of dumb Democrats voted for it. Since the Democrats are the majority in both houses in the state government, they control the voting. I say dumb, because a lot of people pointed out the problems and they ignored them. I read a comment a few days ago that the the Rebublicans had "snookered" the Dems into voting for the bill. How can you "snooker" someone that is thinking???

a public monopoly and a private monopoly is that you can hold a public monopoly accountable.

If I'm not satisfied with the way my municipally-owned utility operates, I can pressure my electees to fix it.

If you don't like the way your private utility operates, you can relocate.

Have fun.

if you choose to place government services in the hands of people who believe government services are illegitimate -- for example, by voting for people whose answer to everything is deregulation -- you wind up with, shall we say . . . Amtrak.

The main problem is that in a pure "free market" system, the market players react to news and developments on a relatively short time period.  When you take such reactive approach and you apply it to something critical, like electricity and water, you get in a situation where by the time the market sends the right signals (for example, we need more electricity because prices are starting to rise substantially), you're left in a situation where you may not avoid a crisis before new generation - or new transmission lines - get on line.

The new models try to account for that by requiring a safety margin, which in NY is between 15-25%.  But in case of emergencies, that may not be enough.

And that doesn't even begin to deal with the issue of getting the electricity where it's needed.  For example, NY state has more than enough electricity to meet its needs.  The problem is that electricity cannot flow freely from one place to another because in some places the transmission infrastructure just doesn't allow it.

I agree with Matt that this is a "free market" crisis, to a point, but it's far more complex than that.

There is another way to look a this.

Markets help both private and publicly owned utiilities.  Anybody who has excess capacity can sell it to an adjacent utility experienceing a surge beyond its surge capacity.  This allows the selling utility to earn on its investment in surge capacity, which reduces rates to its ratepayers.  The buying utility avoids costly investment in excess surge capacity.  And of course they change roles, depending on regional weather conditions.  This is actually a great scheme, benefits everyone.  Without this scheme, utilities would have to have huge investments in rarely used surge capacity and it would cost ratepayers a bundle.  THey wouldn't even vote for such a thing if they could.

The problem we have today is that the weather pattern, the heat wave, is enormous and virtually nationwide.  Just like Katrina.  It is entirely possible that it is a harbinger of global climate change.  The problem with a national event is that you can't "borrow" an adjacent utility"s surge capacity because they are using it too to  deal with the same climatic event.  The event itself simply overwhelms the mechanism usually used to deal with such occurrences.

The blame for this part of the problem doesn't lie with the economic format because all formats are similarly impaired.  The fault lies with Bush and the  Congress for having failed to anticipate and address Global Climate change by failing to adopt policies to prevent and reverse climate change and to remediate its effects.  Let's put the blame where it belongs:  the Republicans.

Under regulation, the incentives for utilities are to overspend on extra reliability, since the rates are linked to their costs.

Under free market, there is no incentive to spend on reliablility. All it does it cut into your profits.

Free markets work in some situations, such as natural gas, but electricity is different -- it cannot be stored.

My economist friends tell me that they understand such markets much less than the traditional commodities markets.

Hotshoxi is full of it. I live in an outer borough-  the MTA rarely suffers power outages. Track repair is another issue, but it's also an inevitability. And Manhattan gets track repair delays on the wknd., too.

but thanks for the wiseassitude.

It's not a matter of lack of faith, it's a matter of utter neglect. Somebody who wants to see Amtrak broken up and sold off is not going to put much effort into making it run smoothly. Why would they?

By the way, I used to travel by Amtrak between school and home, and I found it much more efficient and cost-effective than air travel. If you're travelling a very long distance, of course, airplanes might be the way to go. (I also wouldn't recommend Amtrak if you're going overseas.)

sarcasm and snark do not a rebuttal make.

Matt: for the idiots who think I'm against a free market and cleverly call me comrade.

raymond: That's right, everyone who disagrees with you is an idiot.

Notice a disconnect between the group Matt mentioned and the one you did?

People disagree with posts here all the time. It's those of you who descend immediately into mockery and name-calling that get the same thing back. Your little temper tantrum is not going to persuade anybody. All you're really doing is reinforcing Matt's argument.

Matt, the word you probably want, from classical economics, is "Natural Monopoly."  There are services which do not conform to the supply/demand curve. These include energy delivery (and usually production) communications (that's why the net neutrality issue is in this category.) and transportation.  A little history let's you know how bad it was when people built roads through their property and charged a toll.  Someone with three feet of property could charge as much as someone with miles.  And often the roads did not even meet each other.  

I think monopoly and natural monopoly are words that we should use more.  The definition of monopoly that I learned way back is control by four or fewer enterprises of 40% of the market.  If we want a free market we should advocate systematically breaking up or otherwise regulating all monopolies and owning or heavily regulating natural monopolies.

You clearly don't understand de-regulation. If you did, you would realize that what California has is far from de-regulation. True de-regulation would allow the utility company to raise the price of electricity as demand goes up. So if it's 100 degrees outside, consumers must make a choice to pay a lot more to keep the temp at 70 instead of 75 or 80. If utility companies could do that, then they could pay more for other companyies' excess capacity. If they are capped on what they charge for consumers, then they are capped on what they can buy from other companies. Thus supply becomes artificially capped and voila!

The problems lately in California have not been supply problems. They have been infrastructure failures. Transformers are being run harder than they were designed to handle, thus they overheat and blow up. Utility companies could have used more expensive transformers that are designed to handle continuous high capacity. Las Vegas has these for example. They must weigh the benefits, replacing the transformers less often, not having to pay overtime labor to replace them during heat waves, etc. It's a trade off. Of course consumers can't help them make that decision because the rates they charge consumers is fixed by the government.

Americans are so spoiled. We don't want to pay more for electricity when there is higher demand. We don't want to pay more for infrastructure when it is needed. We want the government to take care of it all for them.

As far as I know, New York City has never had public electrical utility, power has always been provided by a private company, so "privatization" hasn't done a damn thing.  I'm not going to make a case for Con Ed being excellent in any way, but the recent outages don't appear to have anything whatsoever to do with public/private issues -- in fact, the cause seems to be aging infrastructure, which has little or nothing to do with the free market.

This claim seems to me to be an example of over generalization based on ideoloogical inclination more than anything else.