Abstract
Skyrocketing wholesale power prices in California and the daily threat of brownouts and blackouts have cast a pall over the merits of electricity deregulation. Liberals, led by California’s governor, Gray Davis, blame the restructuring law passed in 1996 for the crisis, arguing that it left the state vulnerable to market manipulation by greedy power producers. According to Davis, the crisis is largely artificial but nonetheless a harbinger of things to come, not only in national electricity markets, but also in industries throughout the economy if we continue our mad rush toward laissez faire.
The authors would like to thank Douglas Hale, Tim Brennan, Richard Gordon, Rob Bradley, and Charlotte Le Gates for their comments on earlier drafts of this paper.
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References
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Taylor, J., VanDoren, P. (2002). California’s Electricity Crisis. In: Faruqui, A., Eakin, B.K. (eds) Electricity Pricing in Transition. Topics in Regulatory Economics and Policy Series, vol 42. Springer, Boston, MA. https://doi.org/10.1007/978-1-4615-0833-5_17
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