But in his expensive haste to blame deregulation for the failures of government ineptitude, Davis risks subjecting the state to a prolonged future of yet more government ineptitude. He's also discarding the one viable way out of the state's self-inflicted mess. The real problem with deregulation is that the state never tried it. Real deregulation fosters competition. California, though, made switching utilities burdensome and expensive - which is why only 1.7 percent of residential users ever did.
Real deregulation allows market factors to bridge gaps between supply and demand.
Not so in California, where Sacramento fixed retail energy prices. Because consumers never had to pay for using more energy, they never saw any reason to conserve. The energy-intensive new economy sent demand soaring 25 percent in eight years, while supply rose by only 6 percent. By pinning the failures of government on deregulation, Davis risks losing seasons for many years to come. California's biggest energy problem is a lack of supply, which owes itself to the state's stringent policies on power-plant construction.