Monday, September 23, 2002

A Texas gas company was found guilty by federal energy regulators (FERC) of "the unlawful exercise of market power" by charging California too much for gas during the energy crisis of a couple of years ago.

Gov. Davis will probably argue that this proves that he was not responsible for the mess. But I think it proves that California was being run by incompetent crooks. As the article says, the California/Texas gas price differential was more than 50 times the usual during the crisis. Obviously the market was broken, and the so-called deregulation was really a re-regulation in which suppliers discovered that, under the rules, they could sometimes make more money by limiting supply. The rules should never have been designed that way, and Gov. Davis should have changed them when these flaws were discovered.

AFAIK, Bill Simon doesn't say what he would have done about the energy crisis.

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