The ongoing debate about the California Natural Gas crisis seems more of a political problem than anything else. CAlifornia, in the past year has witnessed an extremely hot summer and a severe winter. Therefore, the consumption of energy has been drastically increased. Last year, energy industry was deregulated. The utilities were allowed to buy energy on short-term contracts.
Utilities are price takers and they normally pay a certain price to buy wholesale energy.
Anyway, this enabled utilities of California to buy cheap energy and sell it to the people at a higher price, thus, paying their debt to the govt. This contract of deregulation did not increase the cap that utilities could charge their customers. The fastest or perhaps the most logical solution to the problems seems to be in the elimination of the price cap. Utilities will pass their cost to consumers, consumption will be reduced, demand will decline and more utlities will supply to western grid. In short, demand and supply balance will adjust.