• Guest, The rules for the P & N subforum have been updated to prohibit "ad hominem" or personal attacks against other posters. See the full details in the post "Politics and News Rules & Guidelines."

Should ESSENTIAL utilities be controlled by private companies.

DCal430

Diamond Member
Feb 12, 2011
6,021
9
81
In the U.S essential utilities such as Water, Electricity, Natural Gas, and Sewage are often controlled by private companies and ordinary citizens must rely on these private companies for these services. Often times these private companies will charge very exessive fees for these services leaving consumers with choice of either having water and electricity for their home or food for their mouths.

Should the local government provide these services to ensure they are provided at a fair and efficient price? Should we continue to allow private companies the right to dictate these services?

Why is a private company needed to provide water and sewage, why do we allow private companies to earn large profits off something so essential. The same for electricity and gas.
 

BoberFett

Lifer
Oct 9, 1999
37,587
9
81
Not familiar with the concept of the PUC, huh? Once again, DCal430 brandishes his ignorance like Arthur holding Excaliber aloft for all the world to see, announcing that he is the new ruler of Idiotville!
 

DCal430

Diamond Member
Feb 12, 2011
6,021
9
81
Not familiar with the concept of the PUC, huh? Once again, DCal430 brandishes his ignorance like Arthur holding Excaliber aloft for all the world to see, announcing that he is the new ruler of Idiotville!
These regulatory commisions are in the pockets of the big business. PUC, FDA, EPA, USDA, ect all in the pockets of big companies, this is well known.

Here is in Cali the State PUC has to approve all fee increases, but they haven't seen a fee increase they didn't love. They are in the pockets of the industry they regulate.
 

the DRIZZLE

Platinum Member
Sep 6, 2007
2,956
1
81
Not familiar with the concept of the PUC, huh? Once again, DCal430 brandishes his ignorance like Arthur holding Excaliber aloft for all the world to see, announcing that he is the new ruler of Idiotville!
This. You clearly have no idea how public utilities work in the U.S.
 

davmat787

Diamond Member
Nov 30, 2010
5,514
24
76
Not familiar with the concept of the PUC, huh? Once again, DCal430 brandishes his ignorance like Arthur holding Excaliber aloft for all the world to see, announcing that he is the new ruler of Idiotville!
PUC== Public Utilities Commission I assume?

This is what I was asking DCAL420 about in the water thread. He is of the opinion that these private water supply companies can simply charge whatever they want. I basically asked him if he is aware that these companies must first submit and justify any rate increases with the corresponding .gov agency, often the local PUC.

So in effect the .gov is setting the prices via approving or denying any rate increases.

What DCAL420 should really be asking: Can private utility companies provide the same essential services better and/or cheaper than their government counterparts? When and where does it make sense to privatize these services?

Simply raging against the privatized machine is boring, and does not make sense anyway. I would be very surprised if these companies can set rates arbitrarily and on their own.
 
Last edited:

davmat787

Diamond Member
Nov 30, 2010
5,514
24
76
This. You clearly have no idea how public utilities work in the U.S.
Doesn't DCAL work for a California state agency? I seem to recall it might even be in the realm of utilities, but I could be mistaken of course.
 

davmat787

Diamond Member
Nov 30, 2010
5,514
24
76
These regulatory commisions are in the pockets of the big business. PUC, FDA, EPA, USDA, ect all in the pockets of big companies, this is well known.

Here is in Cali the State PUC has to approve all fee increases, but they haven't seen a fee increase they didn't love. They are in the pockets of the industry they regulate.
Then you should probably direct your rage at the overseeing bodies. Would that not be more effective?

Have you seen this link? At a quick glance, it seems like it would provide a lot of ammo for the "utilities should not be privatized" crowd. I have no idea as to their credibility or sources, I found it a minute ago and only glanced through it.

http://www.foodandwaterwatch.org/water/private-vs-public/facts-and-figures/
 
Last edited:

nehalem256

Lifer
Apr 13, 2012
15,670
6
0
In the U.S essential utilities such as Water, Electricity, Natural Gas, and Sewage are often controlled by private companies and ordinary citizens must rely on these private companies for these services. Often times these private companies will charge very exessive fees for these services leaving consumers with choice of either having water and electricity for their home or food for their mouths.

Should the local government provide these services to ensure they are provided at a fair and efficient price? Should we continue to allow private companies the right to dictate these services?

Why is a private company needed to provide water and sewage, why do we allow private companies to earn large profits off something so essential. The same for electricity and gas.
Please provide an example of a Utility company earning what you would consider to be "excess" profits.
 

Hayabusa Rider

Admin Emeritus & Elite Member
Jan 26, 2000
50,880
4,212
126
Sorry this is fail. If utilities got what they wanted then they'd be charging more. Also the agencies you cite are- you guessed- government. So you want to give corrupt people complete control? BTW, how long did the government take to upgrade the fbi and air traffic systems? Decades and I'm not sure if it's done yet. Yeah lets extend that level of accountability and competence to utilities. Well how about no.
 

MovingTarget

Diamond Member
Jun 22, 2003
8,990
84
91
I prefer that they not be controlled by private companies. Water, power, and sewer are absolutely essential to modern life and should be run on a non-profit basis. Sometimes though, local government does not have the expertise required and must use private companies. Such is the way of the world. :/
 

glenn1

Lifer
Sep 6, 2000
25,388
1,013
126
Should ESSENTIAL utilities be controlled by private companies.
I don't really care if the government or private companies run the utilities so long as they're efficient and disruptions are kept to a minimum. Neither public nor private sector has a monopoly on competence.
 

nehalem256

Lifer
Apr 13, 2012
15,670
6
0
I prefer that they not be controlled by private companies. Water, power, and sewer are absolutely essential to modern life and should be run on a non-profit basis.
But you do not have problems with say grocery stores being run on a for profit basis?

Sometimes though, local government does not have the expertise required and must use private companies. Such is the way of the world. :/
Actually this is a good point.

While it might be practical for say New York City to run all of its own utilities...

What about smaller cities. Or metropolitan areas made up of many cities. It would seem that their would be economies of scale in allowing one private company to run things and then I don't know have some sort of commission run by those cities oversee it to make sure it doesn't rape everyone too hard.
 

Doppel

Lifer
Feb 5, 2011
13,313
2
0
These regulatory commisions are in the pockets of the big business. PUC, FDA, EPA, USDA, ect all in the pockets of big companies, this is well known.
So the answer to a private company being regulated by government agencies in the pocket of big business is to put it all in the hands of government?
 

wirednuts

Diamond Member
Jan 26, 2007
7,121
1
0
government companies might run a little less efficient, but there is less money wasted on profit. and government workers are usually less stressed (well they dont have the brain power to be stressed but i digress lol).

so either government or private, corporations suck either way.
 

DCal430

Diamond Member
Feb 12, 2011
6,021
9
81
The government doesn't operate at a profit, private companies do. That alone makes the government better. Hell I think the government should start its own oil company and start selling gasoline to the people at a lower rate than private companies can, drive them out of business.
 

cybrsage

Lifer
Nov 17, 2011
13,021
0
0
The government doesn't operate at a profit, private companies do. That alone makes the government better. Hell I think the government should start its own oil company and start selling gasoline to the people at a lower rate than private companies can, drive them out of business.
Do you honestly think the government could design a better smartphone at a cheaper price than HTC?
 

DucatiMonster696

Diamond Member
Aug 13, 2009
4,269
1
71
I don't really care if the government or private companies run the utilities so long as they're efficient and disruptions are kept to a minimum. Neither public nor private sector has a monopoly on competence.
But which one is most effected by inefficiencies and has to deal with the true cost of resources?

Oh that's right the private sector as inefficiencies will in due time bare themselves out via the looming threat of bankruptcy. Government on the other hand will and can just continue brushing the true costs of consumption under the rug (or pass it along to other users as CA does for water usage in the state, i.e. farmers pay a subsidized rates of pennies on the gallon propped up by urban dwellers) until a crisis develops (even in wet years CA has "droughts") because the reality of the cost of consuming subsidized resources can no longer be ignored.
 
Last edited:

DucatiMonster696

Diamond Member
Aug 13, 2009
4,269
1
71
The government doesn't operate at a profit, private companies do. That alone makes the government better. Hell I think the government should start its own oil company and start selling gasoline to the people at a lower rate than private companies can, drive them out of business.
No that alone makes government unresponsive and slow to act when the cost of consumption for natural resources is not accurately reflected due to political expediency.
 

davmat787

Diamond Member
Nov 30, 2010
5,514
24
76
But which one is most effected by inefficiencies and has to deal with the true cost of resources?

Oh that's right the private sector as inefficiencies will in due time bare themselves via the looming threat of bankruptcy. Government on the other hand will and can just continue brushing the true costs of consumption under the rug (or pass it along to other users as CA does for water usage in the state, i.e. farmers pay a subsidized rates of pennies on the gallon propped up by urban dwellers) until a crisis develops (even in wet years CA has "droughts") because the reality of the cost of consuming subsidized resources can no longer be ignored.
No that alone makes government unresponsive and slow to act when the cost of consumption for natural resources is not accurately reflected due to political expediency.
Las Vegas water district says hi!
 

the DRIZZLE

Platinum Member
Sep 6, 2007
2,956
1
81
I prefer that they not be controlled by private companies. Water, power, and sewer are absolutely essential to modern life and should be run on a non-profit basis. Sometimes though, local government does not have the expertise required and must use private companies. Such is the way of the world. :/
Regulated utilities are generally only allowed to earn their cost of capital, so they are non-profit in a sense. It's not that different from the state issuing bonds and building the infrastructure itself. However, I don't think "essential for everyday life" is the correct test to determine if something should be government owned and/or regulated. Food is essential for everyday life but centrally planned agriculture is universally accepted as a terrible idea.

The determining factors should be whether the government can do it better than the private sector, whether the industry is a natural monopoly, whether there any market failures or external costs in the industry.

Also note that we can lump the choice into three categories rather than two.
1. Government owned utiltiies
2. Regulated, monopolistic utilities in which the government sets prices (i.e Water and power distribution).
3. "Unregulated" utilities which are in fact regulated but are free to set prices in government sanctioned markets.
 

DucatiMonster696

Diamond Member
Aug 13, 2009
4,269
1
71
Las Vegas water district says hi!
/waves

Of which Las Vegas passed the buck on its water usage and infrastructure maintenance (they massively expanded their system and then the housing bubble went "pop") unto the back of local businesses in order to prevent fee hikes for residential homes.

Thus in the end someone will always have to pay the piper his dues when it comes to the true costs of consumed resources.
 

MovingTarget

Diamond Member
Jun 22, 2003
8,990
84
91
Regulated utilities are generally only allowed to earn their cost of capital, so they are non-profit in a sense. It's not that different from the state issuing bonds and building the infrastructure itself. However, I don't think "essential for everyday life" is the correct test to determine if something should be government owned and/or regulated. Food is essential for everyday life but centrally planned agriculture is universally accepted as a terrible idea.

The determining factors should be whether the government can do it better than the private sector, whether the industry is a natural monopoly, whether there any market failures or external costs in the industry.

Also note that we can lump the choice into three categories rather than two.
1. Government owned utiltiies
2. Regulated, monopolistic utilities in which the government sets prices (i.e Water and power distribution).
3. "Unregulated" utilities which are in fact regulated but are free to set prices in government sanctioned markets.
I see your point. Though I typically consider agriculture separate from utilities in the traditional sense, I should have included more than "essential to everyday life" as a requirement.
 

DCal430

Diamond Member
Feb 12, 2011
6,021
9
81
Regulated utilities are generally only allowed to earn their cost of capital, so they are non-profit in a sense. It's not that different from the state issuing bonds and building the infrastructure itself. However, I don't think "essential for everyday life" is the correct test to determine if something should be government owned and/or regulated. Food is essential for everyday life but centrally planned agriculture is universally accepted as a terrible idea.

The determining factors should be whether the government can do it better than the private sector, whether the industry is a natural monopoly, whether there any market failures or external costs in the industry.

Also note that we can lump the choice into three categories rather than two.
1. Government owned utiltiies
2. Regulated, monopolistic utilities in which the government sets prices (i.e Water and power distribution).
3. "Unregulated" utilities which are in fact regulated but are free to set prices in government sanctioned markets.
"Regulated" Utilities earn lots of profits, PG&E earned around 2 billion in profit in 2011, out of 15 billion in revenue. I think a 1% profit margin is better. So they do earn a significant profit. Around 10 to 20% profit.
 

ASK THE COMMUNITY