The point is, zdas04, that many seem to be trying to scapegoat the issue here onto regulations/regulators. This is done under the assumption that the system would work much more efficiently if the market was allowed to operate more independently. I just wanted to note that the energy sector in California was allowed to operate more independently in the late 1990’s and the results were less than stellar. I do agree that suggesting that Kenneth Lay run for Governor posthumously was silly. But hey, I can’t be serious all the time!
More on point, this situation highlights the need for changes to prevent this from happening again. Two such changes could be tighter regulations with more oversight or strong punitive action to incentivize companies to invest in maintenance and reliability. The former comes with added costs to an already thin and stretched budget of regulators. Furthermore, it is not the job of regulators to babysit companies; it is the companies that need to be accountable. Both points lead to the latter change.
To borrow a quote from moltenmetal, companies are algorithms. If X, the cost to perform preventative/regular maintenance, is greater than Y, the chance of a failure, times Z, the cost of a failure (both internal loss and external punitive measures), then usually the maintenance doesn’t get done. The threat of punitive measures needs to be real and needs to be substantial in order to affect that equation. In this way, regulations and punishments for breaking them, act to impose a sort of artificial morality onto an amoral entity (note: amoral, as in the absence of morals (descriptive), not immoral, as in morally wrong (judgmental)). In the absence of those, we continually see the amorality of companies seep through, such as in the case of Enron (my first point).
It is for this reasons that I agree with MJCronin that action needs to be taken against PG&E.