# ESB and deregulation



## Tom (2 Oct 2003)

Just saw in todays paper that the ESB have just declared 250 million in profits after yet another price rise.In the last 2 years they've been given price rises totaling 25% by the regulator who has decided our electricity charges should be brought up to European levels.This was with the intention of making it attractive for foreign companies to enter the market here and provide competition to the ESB, with the idea that increased competition would drive prices down.Am I the only one who finds this bizarre?.


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## stobear (2 Oct 2003)

No Tom, you are not, but look at it from a board members point of view, there will be squabbling about selling it, this will drag on and on, the fat cats will be creaming off the profits , make enough to retire to the hills and let  whatever happens , happen. Short term greed and bugger the consumer in the process.

Stobear


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## rainyday (2 Oct 2003)

*ESB*

Greg Palast had a great chapter on electricity prices in his 'Best Democracy Money Can Buy' book, showing how deregulation and 'competition' had lead to exponential increases in prices in both UK & USA. I wonder if the recent power cuts in NY & Italy would have happened in a pre-deregulation environment? So much for the great panacea of 'competition' to bring about improvements for the consumer, eh?


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## darag (2 Oct 2003)

*Re: ESB*



> So much for the great panacea of 'competition' to
> bring about improvements for the consumer, eh?


Sure rainyday - protectionism is the answer.  I
can't see how it can ever be possible for
competition among suppliers to hurt consumers while
it's very easy to see how the lack of competition
causes consumers to be screwed. 

I haven't heard of "exponential" rises in electricty
rises in the UK; when did this happen?  Given that
popular protest shut down the country over a petrol
price increase last year I would have assumed we
would have heard something about it.

What happened in California borders on criminal;
needless to say Enron were involved and it had
nothing to do with opening the market to
competition. All the commentary I read about it
points out that they created the worst of both
worlds - by allowing private companies to get
involved without creating a environment which would
allow competition.  A bit like what they did with
Railtrack in the UK.


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## rainyday (3 Oct 2003)

*Power*



> I can't see how it can ever be possible for
> competition among suppliers to hurt consumers while
> it's very easy to see how the lack of competition
> causes consumers to be screwed.



Hi Darag - Have a read of [broken link removed] and [broken link removed] for some enlightenment, e.g.



> Shortly after the California market opened for business, for example, an Enron trader sold the state about 5,000 megawatts of power to go over a 15 megawatt line. That's like trying to pour a gallon of gasoline into a thimble-it can't be done. This forced the system operator, the agency that actually keeps our lights on, to make costly emergency purchases, blowing market prices through the roof. Enron, knowing in advance of the panic it would create, could earn a super-profit.



and



> San Diego's power distribution company told me that Duke Power of North Carolina ordered them to shut down a plant during a shortage period-an order the California firm refused. Merely by holding back the power from a single generator, the power merchants could make the electricity from their other plants worth more than gold.



Note that Enron's fun & games were not restricted to California.


> What happened in California borders on criminal;
> needless to say Enron were involved


Yep - and they were involved in the UK too. Thatcher's energy minister John Wakeham joined the Enron board shortly after he 'deregulated' the UK power market, but that was just co-incidence, I'm sure.


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## Roytheboyo (5 Oct 2003)

*Power companies.*

I realise that 90% of people who read this reply will think i am a total lunatick but here goes anyway:
It is my humble opinion that in the last 15 to 20 years the political power and influence wielded by power companies (oil, gas, electricity) has snowballed.  It is beyond argument that power companies put mr bush where he is today (just look at all the people he appointed under him when "elected", almost every one had previously or currently huge interests in power companies).  He is now there to repay the favour for getting him there (putting no cap on fuel efficiencies for SUVs in US being just one example. Bring this down to the irish example, i work in the power field and i cannot understand the theory of deregulation.  One question that nobody has answered to my satisfaction is what is the final goal.  Some say "competition", some say " to reduce prices to customer" i dont believe this. Take ESB, if the goal was to reduce prices the government would walk in with a hatched and streamline the company (leave aside all union bull), or even scrap and reform, then you control everything and this has to be the most efficient method to deliver electricity (same for gas), in the case of gas, the gov could control every stage, put a team in to hatchet costs at every stage and this by definition must be the cheapest way (and cheapest price for cust).  Onto the second explanation"to encourage competition", this is more correct.  When you encourage competition the best placed people to jump are the same companies i referred to earlier in the US case.  This is the goal, so that they can make big bucks from the likes of ireland.  I think that their influence has reached this far. Competition will not deliver the lowest price to customers, this is fabrication to hide the fact that the aim is to let these mammoth companies graze on the likes of ireland and they get bigger, more influencial etc.   So there!


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