Quote:
Originally Posted by Flame Of Liberty
I think what a Slappy anarcho capitalist would tell you is that government regulating the industry (for example by keeping the prices down) pretty much GUARANTEES that no new company will enter the market and create more competition. High infrastructure cost and artificaly low profit margins cements the status quo.
If you let markets be and companies start to "take advantage" it means the margins in the industry are high, which is a good incentive for a new company to enter the market, compete, drive prices down.
No?
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Well, electricity is a little different. In this case a lot of the generation is owned by the retailers (in Calgary's case, Enmax) so in order for a new retailer to come on line they would have to own their own power generation facilities, buy spot market from the power pool, or enter into a long term contract from Enmax.
There are small retailers that own generation, but they don't have enough to supply large municipalities like Calgary. They focus on large industries. Add to the fact that banks won't lend money for a new power plant unless you have long term contracts with an end user in place, and you can see how hard it is to become a generator or a retailer in Alberta.
Electricity has been a gong show since day one when we spent countless hours on radio and TV fighting it, but finally gave up when every fact and fallacy that we came up with was largely ignored by the Klein government. It was quite the introduction to politics for us, and ultimately changed the way we did business.
I'm actually surprised it took this long for it to go completely sideways.