BUSINESSWEEK ONLINE : JANUARY 8, 2001 ISSUE
NEWS: ANALYSIS & COMMENTARY How California Short-Circuited -- State legislators forced utilities to sell off many power plants, leaving them vulnerable to high wholesale prices when the strong economy sent electricity demand higher. -- Utilities and state authorities delayed new plant construction by dickering over how much power was needed and who should build it. That intensified supply shortages. -- The environmentally conscious state relies increasingly on natural gas for electricity generation. But heavy demand and rising oil prices have sent natural gas prices soaring, too. -- Legislators and the utilities bet wrong that wholesale energy prices would go lower. Now they're on the hook for billions in losses that could bankrupt the companies because they can't raise rates. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _					RELATED ITEMS California's Power Failure TABLE: How California Short-Circuited TABLE: What's Being Done to Fix the Mess INTERACT E-Mail to Business Week Online

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