Of course, everyone now knows the theory didn't work. Protesters blamed outside generating companies for gouging the utilities and their consumers. But, as Professor Brennan explained, it is more complicated than that. It can cost a lot to provide electricity when people are using it right down to that last kilowatt. If the generator is going to have capacity over the entire time it is needed, it must make money in a short period of time.
Peak power is very expensive.
That's just the way markets work. Some features in the California situation made it worse. For one thing, retail price regulation created a situation where the cost of electricity increased by a factor of 10. Lack of in-state generating plants was complicated by a shortage of efficient transmission. In fact, power transmission turned out to be as big a problem as generating.