[Carry_Okie]

Ideally, California would remove obstacles, and even create incentives, for new power plant construction. At the point where California has at least 15% more power capacity than peak demand, then it should phase in price deregulation for all consumers, both commercial and residential. Allow everyone to contract directly with a power provider.

Actually, I'm a little more aggressive than that, but in general I agree.

The key to a healthy and reliable power system is to quit interfering and manipulating it, as is being done now, and to let market forces work their magic.

Well, we both agree about the magic part, but as you know, until we can get the patient off of life-support, it isn't going to walk when we pull the plug. As much as I would like to see a totally open market (with a few twists brought to you by yours truly to help keep it honest :-), deregulating pricing alone now would IMHO, be counterproductive for the people of California.

[Dog Gone]

Best I can tell, the Schwarzenegger plan isn't going to deregulate pricing, except for commercial users who can opt out of the system.

The problem with that is that there is no incentive to opt out unless they're getting a lower price than the rest of you are stuck with. And you are stuck. Gray Davis committed California to long-term contracts and that power has to be delivered to somebody. I suppose California could re-sell the power at a loss if all consumers were allowed to opt out, but that would only add to the state budget problems.

The state should never have become involved in purchasing power and entering into long-term contracts. That decision not only was financially folly, but greatly complicates any attempt to achieve deregulation. I think Arnold should focus on creating more supply, and worry about deregulating prices (and even direct access) later.