ABSTRACT
The passage of the Energy Policy Act of 1992 began the process of opening electric power markets to competition. Soon after its passage, California became one of the first states to examine, adopt, and implement electric restructuring at the retail level. The problems with California power markets were amplified during the summer of 2000 and through the better part of 2001, when prices in the state’s wholesale power markets surged to unprecedented levels. Before the advent of electric restructuring, California had a reputation for pursuing the latest innovations in utility regulation and planning. The restructuring of industry in California consisted of a lot of shuffling of existing resources without the significant growth of new players. Competitive markets responded to the short supply of generation resources by using price to ration the market. The unfortunate bystander in this experience has been consumers.
