Public Fuel and Power Act of 2014 (Final vote)

[Fmr. Pres. Duke]

There is no deep profit pool. How dense are some of you? These companies, on average, make an 8% margin. They do not have billions and billions of cash sitting on the sidelines just waiting to be invested. And you have to pay for that cash in the event of a takeover. You cannot just say "we want to nationalize, so we are taking all your profits and your company for free or less than market value." It is unconstitutional otherwise because the government cannot just take private businesses without compensating the shareholders, and in most cases, it is above market value.

I echo others. I'd like to see those favoring the bill merely state they do not like private ownership and then we know where you all stand. Right now, we are just arguing in circles and none of the answers make any sense at all.

[Simfan34]

Who would lend us the money the money, anyway?  Send me to Beijing to ask the PBOC if you'd like, but $2 trillion or anything near that doesn't just come out of thin air.

[President Tyrion]

First off, let me preface this by saying this is me talking, and I'm not even going to attempt to touch the statements of anyone else, so don't hold me accountable for anything anyone else was saying (not saying anyone has actually done that, but it's hard to tell who is responding to whom).

At least someone admitted they are ok at operating at a loss. Of course, when you decide you're going to do that, if the losses become too great, you have to start cutting back to the point where the public is actually hurt far more than it would have been should the nationalization never had taken place.

[...]

There is little evidence to suggest the public will benefit from this change long term or even short term unless we take a massive hit in our budget.

Well, ok, here. Let's take a look at a couple scenarios, shall we:

1) Atlasia buys all power companies (Let's neglect fuel for a moment. As Averroes rightly points out, we might be better served splitting the discussion, because of the nature of the two markets.). Let's assume that Atlasia woefully mismanages its resources, and there are power shortages.

2) Atlasia creates public infrastructure for power, and creates a public enterprise to compete with private companies. Let's say Atlasia wins a ton of market share (near 100% in a certain area) by offering lower prices, pushing private companies out of business. Then, Atlasia woefully mismanages its resources, and there are power shortages.

3) A private company is winning near 100% of market share in a certain area, but then is woefully mismanaged, causing shortages.

Now, let's for a moment assume that each of these scenarios is equally likely. Now, given what we know, would you say it's tougher for the economy to recover from #1 or #2 as opposed to #3, given that the failure itself is equally likely?

Why I ask this is because I'd love to see an answer to this, if only to understand your viewpoints.

Let ask one more time. Why is this necessary? To tap into the profit pool? I have said there is no deep profit pool. Rates are pretty low already. It's not as if we're suffering from high rates and need relief.

Or is it because, as you said, "this is a resource that should belong to the citizens, not a corporation"? If this is for purely ideological reasons, an opposition to private ownership, then let's stop beating around the bush (sans TNF, who isn't) and make that clear. I can't really counter that, so if that's how you all feel then let's stop dancing around trying to lower costs, increase usage of renewable energy, or anything like that, and just be open about it.

Are none of those reasonable goals? Or do you just think they're not realistic? I do think we can reasonably see 5-10% cuts in consumer costs from a solid public approach.

Also, do not forget that reducing the per unit cost of energy will disincentive investments in energy conservation, energy efficiency, and distributed renewable energy generation.

We implemented a carbon tax that makes (most) energy more expensive to encourage these behaviors... and now we're about to undermine that by taking over the industry, operating at a loss, and slashing prices?

Again, if energy affordability, is our concern, there are other ways to address that. As I asked before (someone should do a round-up of all of the questions about this that have been ignored, by the way): Why not expand aid for home heating and weatherization, if that is the problem?

I'm sorry, I must have missed that. Are you suggesting some sort of subsidy for double-paned windows and better insulation and the like?

[Fmr President & Senator Polnut]

Respectfully, there are a lot of assumptions here.

[Fmr. Pres. Duke]

I'm not sure I am understanding your question, but I think it is tougher for the economy to recover if this government project fails as opposed to a single private power company failing to meet demand in this instance because it is such a massive project - 1/10th of the economy. It would be difficult for the government to absorb that large of a shock. If this goes through and is a failure, we are looking at a major drag on our economy and as the budgetary pressure this would be astronomical. Imagine the troubles with the post office x10.

And if a private company is able to offer lower rates than the public company, it's just game over. If the government undercuts the prices of private companies artificially because its operating at a loss, and they decide to just stop doing business here, then what? When supply drops and prices for the energy soars?

Again, how can we expect more than a nominal drop in rates when it is a given that labor costs will increase if we nationalize due to unionization? Where will the money come from to invest in the maintenance, support and R&D that the current profits are used for? Is it really worth going through all of this trouble for a small drop in rates, if that's even possible? And I am not convinced rates will drop; I believe they will increase unless we operate at a permanent loss.  

As of now, most energy companies have between $1-5 billion in cash on hand, hardly a ton, and most invest these profits back into their operations. These are not companies swimming in cash like other sectors.

[Fmr President & Senator Polnut]

It's certainly a lot harder for a community to recover when a national monopoly fails.

[President Tyrion]

Respectfully, there are a lot of assumptions here.

I wasn't making any conclusions based on the assumptions. I was just asking a question!

And if a private company is able to offer lower rates than the public company, it's just game over. If the government undercuts the prices of private companies artificially because its operating at a loss, and they decide to just stop doing business here, then what? When supply drops and prices for the energy soars?

I'm not sure I'm understanding your assumption correctly, here. Are you suggesting that a government-run corporation driving a private company out of business is worse than a private company doing that to a private company, on principle? If so, I don't mind you making that assumption. I won't agree with it, but I'm just trying to see what you're saying.

Also, do not forget that reducing the per unit cost of energy will disincentive investments in energy conservation, energy efficiency, and distributed renewable energy generation.

We implemented a carbon tax that makes (most) energy more expensive to encourage these behaviors... and now we're about to undermine that by taking over the industry, operating at a loss, and slashing prices?

Again, if energy affordability, is our concern, there are other ways to address that. As I asked before (someone should do a round-up of all of the questions about this that have been ignored, by the way): Why not expand aid for home heating and weatherization, if that is the problem?

I'm sorry, I must have missed that. Are you suggesting some sort of subsidy for double-paned windows and better insulation and the like?

Correct. Lowering energy prices across the board - to the point where they do not reflect even the cost of production, to say nothing of negative externalities such as carbon emissions - creates perverse incentives and should not be a goal of our energy policy.

Nationalization is an extremely blunt policy tool if our goal is only to guarantee that families can keep their lights on and their houses warm through the winter. The same subsidies that reduce energy prices for the needy will encourage the better off to drive more, live in larger homes, and crank up their thermostats. Targeted assistance is a simpler, less risky, and more cost-effective approach.

Well, I don't necessarily disagree that lower prices can raise usage, but I do think it's more inelastic than what you're suggesting. And power companies or a nationalized power structure can always erase that incentive with tiered rates. I don't think that's an intractable problem, by any stretch, although I certainly acknowledge its existence.

[TNF]

For the purpose of moving forward (and making sure that we get a chance to address everything that's worth addressing this session), I motion that we end debate for the time being and let this go out as it clearly has. If an individual Senator would like to bring this back up, he can do so via the queue, but it's clear to me that, at least for the time being, there's a whole lot of yapping going on here by non-Senators and very little input from the Senate itself. If non-Senators wish to discuss this or discuss their plans for energy or any of this or that going forward, I would prefer they do so on the Atlas Fantasy Elections board, rather than here, from this point out.

As far as I'm concerned this bill has failed and I will be withdrawing it from the floor in favor of the next piece of legislation in queue. Thank you.

[Southern Senator North Carolina Yankee]

Never has an administrator closed down the Senate to outsiders in this fashion in the five years I have been a member.

[bore]

Surely debate is over anyway because the bill failed?

[Fmr. Pres. Duke]

So non-senators are not allowed to post in senate threads anymore going forward?

[Southern Senator North Carolina Yankee]

Surely debate is over anyway because the bill failed?

Debate is a procedural recognized process defined by rules and yes by nature is over before the vote starts.

Discussion and open discussion that didn't exclude non-Senators has long occurred, particularly on bills that were finished with shall we say, "unfinished business". In general outside input has always been welcomed, and if a bill is basically dead, it is hardly an imposition on the Senate, in fact such discussion is less so.

[Oakvale]

Is this still going to be reintroduced, then?

[HagridOfTheDeep]

Of course it will, oakvale. You know the playbook.

[Simfan34]

One might think the opinions of no less than three former Presidents would count for something.