In terms of electricity prices, the shockwaves have already extended beyond California. Rates have skyrocketed in Idaho, Montana, Utah and other states that compete for the same power sources. Several factories have closed rather than run up catastrophic power bills, and hundreds of workers have been laid off. Of course, not all of the circumstances that led to this predicament were California's fault. In 1996, few people anticipated the dramatic surge in natural gas prices.
Natural gas is the predominant fuel on the margin for electric generation in California.
Recently, it has sold for four times as much as it did the year before. And an earlier explosion at one of the major pipelines feeding the state hasn't helped. The extended economic boom also surprised many. California's economy grew by 32 per cent in the past five years, led by the energy-intensive demands of Silicon Valley, which resulted in a 24 percent increase in the consumption of electricity. Weather also played a part.