Some Straight Dope on the California Electricity Crisis

Update, Mar 2003

FERC have ruled that there was in fact illegal price-manipulation in the electricity market, and have levied over a billion dollars in fines.

El Paso have agreed to pay $1.7 billion over 20 years to settle charges about natural-gas market manipulation.

The totals add up to much less than California had been asking for, but are still significant (around $4 billion).

How about my predictions?

California's experience will repeat in other states.

The jury is still out on this one. I did not set a time frame; I meant to say "within a decade or so", so I have until 2011. Brief note, added Apr 2007: sure enough, prices climbed like crazy as soon as freezes expired. New freezes were instituted in places like Maryland, where Baltimore prices were going to jump 72% but were limited instead to 15%; those are now set to expire soon and prices are set to jump another 50% or more. [ref]

Distributed generation, especially combined heat and power systems, will come.

There is still more smoke than flame in this area. Again I will give it ten years to come true.

More homes will be built with solar PV systems.

This has already occurred, albeit not in great numbers. The California PUC are still working on a ruling about `exit fees' and whether they should apply to solar PV systems.