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Ethics adn the regulation and deregulation of energy - Essay Example

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Millions of households and businesses within the 24 different States which have enacted deregulation plans find themselves torn in two from what is the falling of the $220 billion electricity industry; that being one of the last government sanctioned monopolies…
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Ethics adn the regulation and deregulation of energy
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Download file to see previous pages In the United States, the electrical and natural gas industries have found themselves undergoing developments of change in the way they supply their resources. Millions of households and businesses within the 24 different States which have enacted deregulation plans find themselves torn in two from what is the falling of the $220 billion electricity industry; that being one of the last government sanctioned monopolies. The deregulation of both markets has applied extreme pressure on both industries to act more efficiently.This drive in efficiency has then directly impacted more of a commitment from the two industries to establish further safety procedures and increased attention to ethical standards. In theory the deregulation of the markets should expand services further, creating more selection which in return directly opens up the market for competition. This in theory should create lower prices and of course a wider selection which will ultimately allow those of lower incomes to comfortably afford hydro and natural gas. These benefits have deregulation supports quite touted as they appear very certain that it will generally create greater occurrences. In some regions this plan has been a success however in most cases the results have been the opposite with an actual rise in prices with accounts of crisis in supply.Prior to the infamous electricity shortages and skyrocketing prices, California went through an uprising provided by the citizens to halt and overturn the states deregulation plan.

deregulation plan. In 1996 California became one of the first states to enact what was a

restructuring plan of electricity and natural gas. No later then two years after the plan was

put into effect public support of deregulation began to sway due to actual increases in

pricing. This measure obviously failed and criticism of deregulation grew further to a one

sided opinion from the public. The limited power supplies and astounding increases in

demand forced the electrical industry to further up the retail prices on power. In some

cases companies that provide retail prices based on wholesale value fluctuated

dramatically, electrical bills were noted to be double then what they were before the plan

started. This equalled not only outrage by the public but also examples that deregulations

were not consistent with its theory.

A good example success from deregulation comes from the analysis of the post

deregulation era in Pennsylvania. The enactment of the plan started in 1998, which

appears to have uplifting reviews. The state has been in blossom according to reports that

conclude great success on many accounts. The analysis shows that 500,000 consumers

being just over 11 percent of ratepayers have chosen to leave their current utility

companies no more then a year after the plan enacted. The trial in the Philadelphia area

concurs with this, concluding that residential consumers who decided to leave their

electricity providers for one that was least expensive in competition saved on average

$10.00 a month.

Ethnically speaking, those who are of the lower income brackets have been able

hopefully to sustain hydro more easily then before the plans enactment in Pennsylvania.

Whether or not the benefits such as lower prices can be consistent throughout the nation

is still however an unresolved question. California is a great example of the opposite

because the outcome of California deregulating electricity markets is substantially

different then that of Pennsylvania state.

After some of the main providers experienced financial crisis, consumers were

faced with rising prices beyond affordability, many ended up having to go without any

source of power and those who could continue to afford the up roaring prices experienced

shortages of electricity due to the overwhelming increase in demands.

Although deregulation shows ethical value it also proves to be inconsistent. The ...Download file to see next pagesRead More
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