According to Southern California Edison ( SCE ), one of the two largest suppliers of electricity in the State of California, the California Public Utilities Commission ( CPUC ) pressured SCE in 1994 to submit to statewide deregulation of wholesale electricity. In 1996 legislation was passed ( AB1890 ) which  required that  SCE "divest at least 50 percent of the generation portfolio it owned". Edison was also required to sell all of the electricity generated by its remaining generation plants into the state wholesale market, the Power Exchange (PX), and purchase all of its electricity requirements for its customers from the PX." 

 In May 2000 "prices in the wholesale market were no longer workably competitive".Key to the failure of the market was the requirement by the CPUC that the state's investor-owned utilities purchase all of their electricity in the CalPX a day ahead, or so-called, spot market. In effect, utilities were "short" for the electricity required to serve more than 20 million people and the California economy everyday. This was a prescription for disaster; it allowed an energy cartel to emerge. A relatively small number of entities, principally owned by out-of -state businesses, largely control the electricity supply for California. They began bidding prices into the market which were uniformly high and which bore little relationship to the cost of producing electricity." 

Edison has continuly petitioned the CPUC for approval to enter into long-term contracts with suppliers outside of the CalPX, which would have moderated wholesale prices and made the spot market more of a balancing mechanism, which is how electricity markets generally work everywhere else, but the CPUC denied their requests until August of 2000. 

The CPUC's web sites only obvious reference to the energy crisis is their "Flex Your Power" campaign. This portion of their site has numerous links to other pages such as Energy-Saving Tips, Rebate Programs, Energy Ideas, Governor's Retail Outdoor Lighting Reduction Program, and Your Utility Bill. It becomes obvious, by its lack of response to the actual issue, that the message it sends is....'we are guilty, we have done nothing to prepare for this, and we embarrassed by it, so we won't speak about it.'

"There is not enough generation ( capability ) in the state to supply loads with the temperatures that we're seeing," said Jim McIntosh, director of grid operations for the state Independent System Operator, which manages the states power grid. On Monday afternoon, May 7, the ISO ordered rolling blackouts for more than an hour ( in Southern California ) as unseasonably warm temperatures in the Southwest prompted Californians to turn up their air conditioners.

California Gov. Gray Davis urged state residents to cut back their electricity consumption by as much as 10 percent. But McIntosh said Californians were using about 1,000 megawatts
more power Tuesday ( May 8 ) than Monday ( May 7 ).

Goodness gracious ! Gezzzzz, it was in the high 90's here in the San Fernando Valley area of Los Angeles on that Tuesday ! What are these guys thinking....oh yeah, they are NOT thinking, they are just hoping everyone will use less, no matter what the weather is.

On May 8th CNN's John King interviewed Vice President Dick Cheney who had this to say about California "they've taken the route of saying, "Well, we can conserve our way out of the problem. All we have to do is conserve; we don't have to produce any more power." So they haven't built any electric power plants in the last 10 years in California, and today they've got rolling blackouts, because they don't have enough electricity; they've got rising prices; they've got a whole complex of problems that are caused by relying only on conservation and not doing anything about the supply side of the equation."

With these energy problems affecting the Golden State, other states are now taking aim at Californias businesses. A package from the Tennessee Department of Economic and Community Development boasts: "The lights are always on in Tennessee". "You open it up, and it's a flashlight asking companies that the next time the lights go out in California, you use this flashlight to find their way to Tennessee," state recruiter Alex Fischer said.

Utahs Govenor Mike Leavitt is attempting to lure businesses by stating "You can, as a Utah company -- or a Silicon Valley company with a Utah operation -- rest with some certainty that you will have power".

In addition to outside states attempting to draw businesses out of California, there is the unspoken question in the California real estate market 'how will this effect home prices in PG&E and SCE areas ?' Who wants to purchase a home in a high cost energy area ?

As a reef aquarium hobbyist, and a home-operated aquarium business owner, I have seen my monthly electrical expenses rise from $150 ( summer of 1997 ) a month to $495 per month ( as of March 2001 ). Ultimately this is an expense that will cause two things, the dismantling of my 250 gallon SPS Coral Reef Aquarium, and an increase in maintenance costs passed along to my customers.

In a nut-shell, certain individuals within Californias past planned out this great scheme, whether it be one that was improperly thought out or one that someway lined the pockets of these individuals, it certainly has back fired. 

The sad truth is there will never be a decrease in electrical costs. Nothing ever goes down in cost. The frightening truth is the situation will only spread to other areas and states across the country. 

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