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Indybay Feature

Deregulation Price Tag: $40 billion

by RR
Deregulation Price Tag: $40 billion. Here¹s a partial, estimated itemization of what this colossal mistake has cost ratepayers so far:

Cost of creation of ISO $100 million
Ratepayer-funded ad campaign supporting AB1890 $100 million
Bailout of utilities¹ "stranded costs" under AB1890 $20 billion
AB1X State procurement of electricity, with interest $17.5 billion
Emergency Purchases of Electricity from "market" $2 billion
Total $39.7 Billion

Where did it all go? Did any of this massive transfer of wealth from ratepayers actually benefit California in any way? No. The utilities used their $20 billion on an international spending spree, buying plants in other states, buying back stock, paying dividends and increasing executive pay. Unless you count the increased purchasing power of their CEOs, not much of this money trickled back to California. The rest is going into the pockets of energy generation companies based in other states. And note that the above amount does not include the $12 billion the utilities are demanding in the form of a bailout of their losses between May 2000 and January 2001.

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