A rate freeze lasting until 2002 sets the limit on what electric companies can charge retail customers. When the rate freeze goes away, consumers may bear the full brunt of rising power costs. The major utilities affected by deregulation claim to have lost billions of dollars since they're not able to pass true costs along to their customers. Wholesale electricity prices are running ten times above last year, with the average cost at 33 cents a kilowatt-hour. The utilities, now short of cash and credit, are teetering on bankruptcy.
Tight Supplies Going hand in hand with high bills are short supplies.
The state is constantly under the threat of power blackouts, each possibly affecting millions of customers. While California's electricity demand is up 30 percent, electricity generation has grown by only six percent. Some experts blame the shortfall on underestimates of population growth and the growth of the state's power-hungry computer and technology industries. There has been no significant increase in power generation in the state in 20 years. Laws hostile to power plants and the state's uncertain power market have scared away potential companies from building new facilities.