Friday, January 18, 2008

The Efficiency of Publicly Owned Power Companies

Earlier, I mentioned are prolonged power outage. An invaluable article in our local weekly paper reports that our IOU -- the appropriate acronym for Investor Owned Utility -- PG&E suffered much more damage than the publicly owned utilities in the region. Apparently, PG&E has been relatively negligent in maintenance, leaving its infrastructure more vulnerable.

Because of aggressive tree trimming and replacement of ancient power poles, the publicly owned companies experienced virtually no outages.

Here is the link to the article:


Anonymous said...

Thanks for this. I commonly find myself in arguments with people that believe certain enterprises are more efficient (or otherwise just better) by mere virtue of their being "private." This adds another example I can cite. Werd.

Anonymous said...

This is of little surprise to anyone who has worked in the public sector. I believe that it is fairly well documented (don't ask me for citations, you're the economist) that Medicare offers better coverage for less. I can tell you from repeated
conversations with doctors that they prefer to bill Medicare over the private carriers. Not Medicaid. No surprise there since Medicaid is funding for the poor.

As has been noted in another thread on this site, our economy is now better described as a managerial process, rather than an entrepreneurial one. Managers are the decision makers in both the public and private sectors. They answer to some third parties. Lord knows it's not the share holders nor the tax payers. There is no good reason to expect that level of compensation has anything to do with better decision making. Medicare administration is required to run a system that funds a decent level of health care. Both rich and poor older people use it. Private health care funding is only required to make enough profit to pay the over valued executives that make those decisions.