Throughout the late 1990s, California enjoyed an international image as the homeland of the new economy, with Silicon Valley as its capital. Now on the verge of a threatened U.S. recession, the state battles a reputation as a Third World country constantly at risk of a power failure. But there are still good lessons for Florida from such adversity. Florida is one of more than 25 states that are in various stages of deregulating their power markets. Before recent spikes in prices for natural gas, oil and other fuels used to generate power, electric rates nationwide had been falling steadily.
Deregulation deserves more credit than it gets.
Experts say deregulation of a market as complex and as fundamental as electricity will work. But it will take time to iron out the kinks. Trial and error is unavoidable. In that light, Florida owes California a world of thanks. Though Florida may not be ready to admit it, the crisis in California could have happened here.