No. of Recommendations: 1

You make excellent points about free markets and electrical power distribution.

One of the things that most deregulation efforts do is divorce power producers from power distribution, much like long distance phone calls were divorced from local phone companies or like gasoline and natural gas pipeline companies are divorced from gasoline refiners and gas well operators. Power distribution to consumers is a local monopoly and must be regulated as a local monopoly. Power bills are broken up into an infrastructure component and a demand component. Power production is where competition can thrive and where consumers can benefit from having choices as we benefit from having our choice of long distance phone companies.

With regards to supply and encouraging consumers to waste power, let's be clear that we have a managed market and not a free market. The social cost of allowing everone to run their own stinky noisy inefficient generator is recognized as a bad thing. The social cost of wasting power provided by a competitive producer is also. Power has become recognized as a vital resource just like drinking water. When I lived in the LA area, my water bill recognized that I, as a human consumer needed a certain daily allotment of water for drinking, washing myself and my clothes and flushing my toilet. Water use in excess of the basic allotment for a single family home resulted in a higher per unit cost for units above the base. This meant that the home with a green lawn, a fountain, a pool and a fishpond was paying for those luxuries. The base was adjusted up for people who lived further from the more humid coastal areas. A small home with an average lot and four people could keep their lawn reasonably green without exceeding their base.

I suspect that electric power consumption would have a base that slid based on air temperature to minimize the number of people who suffered from heatstroke due to excessive conservation. A base allotment suitable for a small single family home would slide around seasonably. The difference with a deregulated power supply, would be the competition aspect. Each consumer power meter would have an infrastructure charge. Beyond that you could choose a supplier plan that might be taylorable to your situation. The government could mandate three power cost scales based on fixed or sliding consumption rates for single family homes with the per unit price for the bottom scale not to exceed X% of the price for the middle scale which could not exceed Y% of the price of the top scale. In this manner, the social needs of limiting consumption would not conflict with allowing competition among producers to flourish. The key here is that each producer is on the same level legal playing field.

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