At the outset of 2002, Californians found low prices at the gas pumps and their state once again enjoyed a surplus of electric power. Given current circumstances, and with issues such as terrorism dominating the news, many have forgotten that barely one year ago the state’s experience was quite different.

During 2000–2001, Californians faced electricity blackouts in winter, the season of lowest demand.Massive summer shortages loomed, along with huge costs, for years to come. To keep the lights on, state officials were forced to deplete a healthy budget surplus in order to purchase wholesale power. These conditions should not only be recalled with clarity but understood within a larger context.

They did not come to pass in a developing Third World nation but in a modern, high-tech state that carries the economic clout of a major power. To the consumer, the reasons for the power woes were far from clear at the time.

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