New Generation California created obstacles, Virginia created opportunities California discouraged construction of new generation by regulating wholesale electricity prices in its power pools. The state s slow and complicated regulatory process also made it difficult for developers to build new power plants. No major facilities have been built in the state in the past 10 years. Almost 8,000 megawatts of power production capacity are underway or planned. Most are scheduled to be in operation by 2005 well before the end of the Commonwealth s transition period.
Observers agree that adequate supplies are essential to fostering vigorous competition.
Transition Periods Inadequate in California, adequate in Virginia California failed to provide an adequate transition period for competition. Price protection for San Diego-area consumers ended in 1999 and may end for other consumers as early as this year. That simply did not give the competitive market enough time to develop. In contrast, Virginia s transition period extends to mid-2007. That will give ample time for new units to come on line and a robust supply market to develop.