In addition, major population centers, including Los Angeles and San Francisco, have air quality standards that limit the amount of electricity that can be produced in those regions. More than 40 new power facilities are now proposed for California. California began the 1990s with a surplus of generating capacity. But supplies have not kept up with demand. Yet no new plants have been built in the last 10 years.
Conservation can help.
But simply saying that word does not make it happen. As it is, California's system has created a no man's land, trapping the state's utilities between high wholesale prices and regulated, frozen retail rates. Over the past six months, California's utilities have been paying more than 13 cents per kilowatt-hour to buy electricity from the wholesale market while charging their customers an average of 6 to 7 cents. This situation is untenable and unsustainable, as the near bankruptcy of the state's two largest utilities makes clear. Despite the urging by federal regulators, California's Public Utilities Commission has turned aside proposals to get costs and prices back into a rational balance.