In the past, rate regulations were set up to keep power companies from overcharging. Those regulations resulted in reliability, but also tremendous waste. Deregulation of the industry is now underway in 24 states. Because deregulation isn't the same in many places, regulators haven't been sure whether to enforce old rules or help tear them down. Old power companies have shied away from adding capacity in fear that they wouldn't be able to turn a profit, while independent firms who were supposed to pick up the slack held back, searching for the most profitable markets.
Local utilities are responsible for much larger areas than they have been in the past.
Human error and equipment failure make the system very vulnerable to disruption. Weather forecasting has also led to outage problems. The effects of global warming were underestimated. Entergy Corp., a Southern energy producer, experienced outages throughout its four-state territory last summer when its predictions of cooler weather caused the company to come up short. Entergy wasn't able to purchase enough outside electricity to serve their customers, and outages resulted.