The California Energy CrisisThe California Energy Crisis of 2000 and 2001 was among the nation's worst economic disasters and had reverberations that can be linked to a national economic downturn, the bankruptcies of Enron, Pacific Gas and Electric and other energy firms, as well as California's historic recall of former Governor Gray Davis. During the crisis, FTCR was California's leading critic of energy industry profiteering, utility bailouts and the administration of Gray Davis. First we had the deregulation rip-off - California's deregulation law - sponsored by California's utility companies, Enron and other energy companies. Greased with millions in campaign contributions, the 1996 legislation forced all residential and small business ratepayers of Edison, PG&E or SDG&E to pay the three utilities nearly $20 billion in extra electricity charges through 2000. This was to cover their mismanagement, cost overruns, multi-million dollar executive salaries and bloated corporate bureaucracies from the 1970s and 1980s. That was Bailout #1. FTCR challenged deregulation with a ballot initiative in 1998, trying to warn the public of its dangers. But no one knew about deregulation at the time, and the utilities defeated Prop. 9 with a $45 million campaign. Then came the phony electricity crisis: blackouts in the middle of the winter of 2000-2001, as the energy companies took advantage of the deregulation law they wrote to artificially manipulate the supply of electricity, creating shortages that boosted electricity prices by as much as 3000%. The energy industry claimed Californians were using too much electricity and scape-goated environmental protection laws. FTCR's analysis proved that the crisis was phony, but it wasn't until the collapse of Enron that FTCR was proved right. Heads the Utilities Win, Tails the Public Loses Then, consumers and small businesses were once again left with the bill: another $15 billion to cover the money the utilities lost over the last two years plus another $43 billion in long-term energy contracts extorted from the state of California and other expenses. This was Bailout #2. FTCR blocked it in the Legislature, but Gov. Davis's Public Utilities Commission went ahead and, in violation of California law, has given Edison and PG&E billions of dollars of our money. Deregulation has failed, and the utility companies that pushed deregulation -- and prospered from it -- now want California ratepayers to bail them out. And even though deregulation has been a disaster, our energy system is still in the hands of greed-driven private firms, most of them out-of-state, who can reap profits only by squeezing down our supply of electricity. Key California Energy Crisis Resources
Key Commentaries About the Energy Crisis
Energy Crisis Principles for Protecting the Public
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