California's Electricity Crisis
AbstractThis paper discusses the political, regulatory and economic factors that led to California's electricity crisis in 2000 and 2001. It begins with a discussion of the origins of California's electricity restructuring and competition programs. It then discusses the structure of the wholesale and retail markets and associated transition institutions created in 1996-98 and the performance of these institutions during their first two years of operation. The discussion of the electricity crisis is then conveniently broken down into three phases: (a) May 2000 through September 2000, (b) October 2000 through December 2000, January 2001 to the June 2001. Each phase is discussed in turn. The paper concludes with a discussion of lessons about electricity market liberalization gained from the recent experience in California.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 8442.
Date of creation: Aug 2001
Date of revision:
Publication status: published as Paul L. Joskow, 2001. "California's Electricity Crisis," Oxford Review of Economic Policy, Oxford University Press, vol. 17(3), pages 365-388.
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Other versions of this item:
- Paul L. Joskow, 2001. "California's Electricity Crisis," Oxford Review of Economic Policy, Oxford University Press, Oxford University Press, vol. 17(3), pages 365-388.
- L5 - Industrial Organization - - Regulation and Industrial Policy
- L9 - Industrial Organization - - Industry Studies: Transportation and Utilities
This paper has been announced in the following NEP Reports:
- NEP-ALL-2001-08-30 (All new papers)
- NEP-MIC-2001-08-30 (Microeconomics)
- NEP-PKE-2001-08-30 (Post Keynesian Economics)
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- Joskow, Paul L, 1996. "Introducing Competition into Regulated Network Industries: From Hierarchies to Markets in Electricity," Industrial and Corporate Change, Oxford University Press, vol. 5(2), pages 341-82.
- William W. Hogan, 1993. "Markets in Real Electric Networks Require Reactive Prices," The Energy Journal, International Association for Energy Economics, International Association for Energy Economics, vol. 0(Number 3), pages 171-200.
- Borenstein, Severin & Bushnell, James & Wolak, Frank, 1999. "Diagnosing Market Power in California's Deregulated Wholesale Electricity Market," Competition Policy Center, Working Paper Series, Competition Policy Center, Institute for Business and Economic Research, UC Berkeley qt3rx965d5, Competition Policy Center, Institute for Business and Economic Research, UC Berkeley.
- Paul L. Joskow, 1997. "Restructuring, Competition and Regulatory Reform in the U.S. Electricity Sector," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 11(3), pages 119-138, Summer.
- Borenstein, Severin & Bushnell, James & Kahn, Edward & Stoft, Steven, 1995. "Market power in California electricity markets," Utilities Policy, Elsevier, Elsevier, vol. 5(3-4), pages 219-236.
- Newbery, David M & Pollitt, Michael G, 1997. "The Restructuring and Privatization of Britain's CEGB--Was It Worth It?," Journal of Industrial Economics, Wiley Blackwell, Wiley Blackwell, vol. 45(3), pages 269-303, September.
- Hogan, William W, 1992. "Contract Networks for Electric Power Transmission," Journal of Regulatory Economics, Springer, Springer, vol. 4(3), pages 211-42, September.
- Joskow, P.L., 1989. "Regulatory Failure, Regulatory Reform And Structural Change In The Electric Power Industry," Working papers, Massachusetts Institute of Technology (MIT), Department of Economics 516, Massachusetts Institute of Technology (MIT), Department of Economics.
- Catherine D. Wolfram, 1999. "Measuring Duopoly Power in the British Electricity Spot Market," American Economic Review, American Economic Association, American Economic Association, vol. 89(4), pages 805-826, September.
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