| Indeed.
We had a nationalised electricity service. That is "bulk buying" in spades, and it also removes the costs associated with making profit. But it was decided to privatise it, for the reasons outlined in the privatisation thread.
In the strange world of plutocracy, privatisation produces efficiency and the cheapest possible price, through the operation of "competition" and fairy dust. This is inevitable: a law of nature like gravity. It is so because of "equilibration" and other words. Of course, like water, electicity is a natural monopoly and competition can't actually work: so there has to be a regulator to ensure that the companies don't overcharge for the reasons you give: we can't do without the stuff. So although it is private, and therefore efficient and cheap by definition, the companies are limited in what they can charge, and the service they can choose to provide. In other words the administration costs. which formerly fell on the public and were met from the income from sale of electricity. are still met by the public. But now they come out of general taxation, and the inome goes to the private companies, who only pay a share of those costs if they can be bothered to actually pay any tax.
This has the beautiful effect of proving the case for privatisation if you don't look too closely. Profit is reported as income over expenditure before tax. If you compare a nationalised industry with a private one then, even without price manipulation, the private company will look better: because a huge chunk of costs has been exported, as compared to the nationalised industry. They are still paid: but they are not a company cost and are not in the accounts.
That trivial truth is not important because competition will ensure that suppliers are forced to sell at the cheapest possible price, or they will go bust. This is the "discipline of the market". Obviously all consumers are going to buy from the cheapest supplier: they are "hard wired" for this, being rational economic actors, and nothing else. Oops: in all these years 60% of consumers have never changed their supplier. Naughty consumers, going about messing up elegant theories like that. But that is ok: it means that any failure of this theory is their fault for having the wrong priorities: and it will all be fine if they can be brought to behave properly. If they won't keep devoting time and effort into exercising consumer pressure in this and every other market, we must assume that they judge that "maximising utility" involves values other than price: and that is Freedom!! So what we have to do is devise means whereby they can be brought to impose that discipline by other mechanisms: what we must not do is disturb the theory. Cos that would be rational, but it would mean the theory is wrong: and that cannot be....
If we accept all this then we can turn to the notions underpinning the discount which attaches to bulk buying: the so called "leverage" which increases negotiating power. How does that work? In theory a supplier is able to cut price for a bulk buyer because it reduces uncertainty of income. He knows he can sell his product for sure, and that means he will offer the discount for that benefit. If the consumers organise themselves then the market pressure will mean they will all do this so as to preserve market share: and in the transition some suppliers will be left with warehouses full of electricity. That excess, which arises from those suppliers who do not offer the discount, will probably also mean that those consumers who do not join the bulk buyer mechanism will be able to take advantage of "closing down sales" Win-Win!!
It is of course possible that suppliers will raise the base cost by 20% then offer a bulk buying discount of 5%: but they won't because we will know they have done that, and we will take our business elsewhere: in a natural monopoly situation with a toothless regulator; and no right to proper information; and no in depth understanding of how the industry works or how the costs are determined; and no interest in those things even if the whole thing is "transparent" that is bound to work well. Magic, again. Arguably the organisation which is set up to bring those consumers together will take an interest in analysing this market and their decisions will be better because they can devote the time to figuring all that out. But they will have to be paid. So the savings arising from the discount will have to be greater than the costs of getting it. No problem: the organisations will be "community groups" or political parties or whatever: they will be cheap at any rate. Because charities have not bought the free market ideology and decided to pay their executives enormous remuneration packages, as we all know: never happens. And political parties are notoriously frugal in their running costs and they do not get bought by big corporations like....well energy suppliers. That never happens either. You only have to look at this idea to see that....
In the real world this proposal boils down to this
1. We have a privatised electricity industry
2. Privatised industries produce the cheapest possible price
3. Electricity is already as cheap as it can be
4 Electricity is too expensive for many
5. Therefore the market dictates that some people can't have electricity.
6. Oh dear....
That should be the end of the story, if you are a plutocrat. So why are they even talking about this? Time for a new theory, methinks
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