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. Others have argued that there is no energy shortage in California, but an energy cartel of companies that is manipulating the supply to raise prices and profits. The power industry in California is now the target of six investigations by state and federal agencies.
Consumers protest California's power crisis.
California's struggle to come up with a long-term solution to its energy crisis has nationwide implications. Increased use of computers and other appliances and the lack of adequate new power plants are the norm across the country. The 25 other states that are moving toward deregulation are watching the developments in California closely. The Associated Press and CNN Correspondent Charles Feldman contributed to this report. Pages will open in a new browser window External sites are not endorsed by CNN Interactive.