Letter: Sparks should fly after recent energy meltdown

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Over three decades ago, when we were part of a team trying to get the mandate to handle the international sale of privatized UK power companies, we suggested that local distribution companies buy power from the market. and sell it to consumers. No middlemen. The government has made it clear that we Americans are there to whip up the stock, not to offer advice. We did not get the warrant.

Patrick Jenkins, in his analysis of the current difficulties in the energy sector (“UK energy companies hit by crisis are like macho banks of 2007”, September 28) argues for financial negligence and regulation inept. Corn

I suggest he also examine whether retail energy providers serve some other useful purpose other than acting as a hedge for their generator owners / producers, and might not be viable outside of this function.

Suppliers all buy the same energy in the same markets, making it highly unlikely that any of them will be able to consistently buy at a better price over time. So much for real competition. Then they need to add the costs and margin for marketing, administration, and coverage, some of which might not have been necessary if retail customers were buying from the distributor. I suspect that the procurement function has increased costs for consumers, but it has given the appearance of competition. And what matters most?

In short, the recent debacle should call for rethinking the structure of the industry, not just complaining about inadequate regulation and risk management. Advice from an American, however.

Leonard Hyman
Sleepy Hollow, NY, United States

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