standards favored in-state electricity generation which burned natural gas because of its lower emissions, as opposed to coal whose emissions are more toxic and contain more pollutants.
In the summer of 2001 a drought in the northwest states reduced the amount of hydroelectric power available to California. Though at no point during the crisis was California’s sum of [actual electric-generating capacity]+[out of state supply] less than demand, California’s energy reserves were low enough that during peak hours the private industry which owned power-generating plants could effectively hold the State hostage by shutting down their plants for “maintenance” in order to manipulate supply and demand. These critical shutdowns often occurred for no other reason than to force California’s electricity grid managers into a position where they would be forced to purchase electricity on the “spot market”, where private generators could charge astronomical rates. Even though these rates were semi-regulated and tied to the price of natural gas, the companies (which included Enron and Reliant Energy) controlled the supply of natural gas as well. Manipulation by the industry of natural gas prices resulted in higher electricity rates that could be charged under the semi-regulations.
In addition, the energy companies took advantage of California’s electrical infrastructure weakness. The main line which allowed electricity to travel from the north to the south, Path 15, had not been improved for many years and became a major bottleneck point which limited the amount of power that could be sent south to 3,900 MW. Without the manipulation by energy companies, this bottleneck was not problematic, but the effects of
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