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Rolling Blackouts

Why Did The California Energy Crisis Repeat Itself After 20 Years?


Extreme weather conditions, wildfires, drought, energy supply crisis… Nothing happens without reason. All these critical occurrences can be a valuable lesson that California should learn from. Today California’s electric grid is under a lot of pressure to keep the lights on for millions of residents. It turns out it’s not the first time that the state comes across such a challenging situation.

California Energy Crisis in 2001

Precisely 20 years ago, California was shocked as the market suddenly found itself short of supply. What happened as a reason was an abrupt price jump of electricity rates by 800% or even more. Initially, no one was able to really figure out why this energy crisis happened, bringing out massive California Rolling Blackouts. As a result, the state’s largest energy companies collapsed because of market manipulation and capped retail electricity prices.


Indeed, the demand-supply gap was created intentionally by energy companies to create an artificial shortage and to increase the electricity rates. Energy traders took power plants offline for maintenance for days to increase the price. As a result, the companies were able to sell the energy at a premium price up to 20 times its average value. Consequently, Pacific Gas and Electric Company went bankrupt, as well as Southern California Edison was on the verge of bankruptcy. The crisis cost about 45 billion dollars.

Energy Market In California

According to Loretta Lynch, the former president of the California Public Utilities Commission, California turned its energy market into a casino. The state turned its electricity system over to a private corporation that answered to the FED. The customers are the ones paying for the consequences.


Based on Lynch’s opinion, this is the main reason that other western states and local government-owned utilities are not shutting down their customers’ power or forcing them to pay illogical prices. They all still face droughts, wildfires and water shortages to power up the hydropower plants. Climate change is not as responsible for blackouts as greedy private companies.

Get Free From The Grid

Going Solar is a great way to avoid being a victim of energy market manipulations.


Indeed, the solar panel system, together with storage batteries, sets you free from the grid, not only preventing you from unexpected Rolling Blackouts but also saving you from enormous electricity rates.

The author of a publication: Elen Gevorgyan



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