The Australian government announced that they plan to sell off and privatize the electric grid. My American friends should find this amusing. I was in hysterical laughter listening to the talking heads talking about it.

• Privatizing the electric utilities will result in reduced costs for the consumer.
• It will lead to investment in new power generation facilities.
• It will lead to increased competition, which is good for the consumer.

Right. Let me tell you about what happened in California when they did something similar...

Prices went through the roof.

No new power generation facilities were built. This would of course increase supply, which would lower the price - which reduces profits. The primary goal of private sector companies is to maximize profits.

Existing facilities were taken offline during peak periods for 'maintenance', resulting in artificial shortages, which made rates skyrocket. At times, more than half of the generating capacity was idle when it was needed the most. As the spot-rates per kilowatt rose as a result, somebody pushed a button and allowed electricity to flow from these idle plants - at ten to thousands of times the normal cost of off-season power. 

But not before creating a shortage and widespread blackouts. This created a hostage situation where people would pay anything to turn the lights back on.   

So maybe the thing to do is invest in the stocks of the companies who buy these power generation resources?

Wrong again, although this is a good short-term play. Eventually the power companies went into receivership, but not before siphoning off all the profits and laundering them through subsidiary companies and off-shore accounts. The investors lost everything. The only folks that came out ahead were the company directors.

So you're saying there's no way for the consumer to come out ahead in this situation?

That's exactly what I'm saying.

[Though I should point out that if you're planning on buying any real estate in the near future, consider buying within two blocks of a hospital or fire station. These are the last places to lose power when the rolling blackouts occur.]