" (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...
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