This press release is copyrighted by The Institute of Electrical and Electronics Engineers, Inc. (IEEE). Its use is granted only to journalists and news media.
Commentaries, news reports, and a timeline in the February issue of IEEE Spectrum analyze the root causes of California's startling electricity crisis and assess the real danger of other states experiencing similar difficulties.
According to the authors of "Electricity Troubles in California: Who's Next?," any of the 23 other states and the District of Columiba that have passed legislation to restructure their electric power industries could meet the same fate as California, with rocketing prices and rolling blackouts.
The core problem in California is inconsistency, with the industry operating under a hodge-podge of rules. For example, private utilities agreed to sell off their generating capacity and buy electricity on the open market. Yet the prices they could charge their customers were capped for a number of years. When prices to the utilities skyrocketed as demand grew with a rising economy, utilities moved toward bankruptcy.
These rules and more are discussed in this article written by members of the Energy Laboratory at the Massachusetts Institute of Technology, Cambridge, Mass. And they offer their views of what should be done by other states to safeguard against electric power industries "blowing up" there, too.
A second commentary by Jason Makansi, editor-in-chief of Power magazine for 14 years, argues that California's travails may also be traced to inadequate investment in new power plants, environmental regulation, high natural gas prices, absence of incentives for consumers to conserve, and "gaming"--exploitation of local bottlenecks by suppliers to drive prices up. Makansi believes that Texas could be the next big state to get into trouble--ironically, not because of electricity shortages but, rather, because of a glut.
Finally, a short report by industry observer Barbara Klein explains why some California municipalities have been laughing all the way to the bank.
Contacts: Marija Ilic, 617 253 4682, [email protected]; William Sweet, 212 419 7559, [email protected].For faxed copies of the analyses or to arrange an interview, contact: Nancy T. Hantman, 212 419 7561, [email protected].
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