The committee's chairman, state Sen. Joe Dunn, recently told the Los Angeles Times that while demand in California has increased 4 percent over the last year, wholesale prices have jumped 266 percent. At the same time, Dunn said, the profits of some wholesale suppliers have soared an average of 508 percent. The state's lawmakers and energy executives are blaming each other for the energy crisis. Secondly, there was no effort to build new plants to meet the demand. But critics of Davis counter that while his Republican predecessor Pete Wilson signed the deregulation bill, Davis, a Democrat, failed to act when early power shortages signaled a looming crisis.
Consumers protest California's power crisis.
California was the first state to deregulate its electricity market in 1996. The move was supposed to lower the bills of consumers by preventing most utilities from passing rising costs on to their customers until at least March 2002. Under deregulation, the state's investor-owned utilities sold most of their power generating plants. Now they must buy back that power at market prices. Meanwhile, the neighboring states where California has been buying surplus electricity grew rapidly, boosting the price of wholesale energy.