Energy Crisis Costly For State
A new study estimates California€™s energy crisis cost the state as much as $45 billion.
According to the report from the Public Policy Institute of California, there wasn€™t any “smoking gun” for the crisis, which reached its peak two years ago. It led to six days of rolling blackouts and spread to other western states. The report blamed a shortage of electric generating capacity as well as the control energy companies had over wholesale prices.
The reports author says the newly deregulated market was “ripe for the exercise of market power,” in which energy companies acquire enough market shares to be able to drive wholesale prices. But the report also found there were circumstances beyond California€™s control. It says electricity production was quite high at the time…and a drought in the Northwest limited the supply of electricity from hydroelectric sources.