Electricity How Inadequate Hydro, Gaming Essay

" (THE CALIFORNIA CRISIS)

Studies also refer to the very structure of the deregulation system in California as being intrinsically flawed. As one study notes; "The most important flaw of California's deregulated electricity market was that the market was more re-regulated than deregulated" and that it was "...the most complicated electricity market ever created..." (Ritschel and Smestad 1379)

This situation was exacerbated by other pertinent factors, all of which contributed to the crisis. Central to these factors was the drought during this period, which can be linked to the shortage of hydroelectric power. There was a severe drought in the northwest states in 2001 and California obtained much of its hydroelectric power from the Pacific Northwest. The drought in this region therefore placed a heavy drain on the supply of power to California. This was also worsened by the increased demands on the electricity supply at the time due to the extremely hot weather. (Hot, Dark Summer Ahead for California)

There were also a number of other causative factors to consider. These included the fact that a large number of power plants had to be shut down for various unexpected reasons, as well as the shutting down of a nuclear plant when the crisis was at its most intense. ( Rothwell) There are also studies which suggest that the idea of deregulation of the electricity market is intrinsically flawed and that any attempt at deregulate will lead to failure."In industries such as electric power, pure competition cannot result in an efficient level of capacity, nor can it result in just and reasonable rates." (The Myth of Deregulation)

In conclusion, as the above discussion has indicated, it would be naive to suggest that there was one single reason for the crisis and the failure of Californian deregulation. There were in fact many reasons, including cynical market manipulations and external factors such as drought.

Works Cited

Bradshaw and Woodrow. The California Experience: From Deregulation Disaster to Flexible Power. Web. 3 Nov. 2011. (http://uneprisoe.org/SectorReform/CaliforniaExperience.pdf.)

Hot, Dark Summer Ahead for California. Drought Worsens Power Crunch, Senators

Told. The Washington Post, Feb. 1, 2001. Web. 3 Nov. 2011.

(http://www.heatisonline.org/contentserver/objecthandlers/index.cfm?id=3607&method=full).

Ritschel, A. And Smestad G.P. Energy subsidies in California's electricity market deregulation. Energy Policy 31, 2003. Web. 3 Nov. 2011. (http://www.solideas.com/papers/AR_GPS_CASubs.pdf).

Rothwell J. The California Electric Power Crisis and Alternative Energy. 2001. Web. 3

Nov. 2011.(http://www.infinite-energy.com/iemagazine/issue36/capower.html).

THE CALIFORNIA CRISIS. Regulation. 2001. Web. 3 Nov. 2011.

(http://www.cato.org/pubs/regulation/regv24n3/specialreport2.pdf)

The Myth of Deregulation. 2003. Web. 3 Nov. 2011.

(http://mthink.com/utilities/sites/mthink.com.utilities/files/legacy/content/pdf/UTP3_wp_hoge.pdf)......