From: "Kavi, Prabhu" <prabhu_kavi@tenornetworks.com> Date: Wed, 24 Jan 2001 13:25:43 -0500 Sender: owner-nanog@merit.edu

Quoting from the 1/22/01 online issue of US News & World Report:

"Ironically, California's nightmare stems in part from the state's efforts to lower rates. In 1996, both houses of the state legislature voted unanimously to deregulate the market for wholesale electricity, enabling power producers to sell electricity to utilities on the spot market. But the new law failed to create a free retail market-in most cases, rates for consumers and businesses were fixed until at least April 2002. ... No major power plant has been built in California for more than a decade, partly because of environmental restrictions."

And in the 1/29/01 online issue:

"... In California, however, utilities were forbidden to enter into long-term supply contracts and were forced immediately to buy energy in the volatile wholesale spot market."

So tell me, how could PG&E have accurately forecasted the booming demand for power back in 1996 and protected themselves, given no new plants were being built?

They could/did not. They made a corporate bet and they lost. That does not make it someone else's fault. PG&E and SO. Cal. Edison were major forces in lobbying for the regulatory changes that have driven them to the edge of insolvency. R. Kevin Oberman, Network Engineer Energy Sciences Network (ESnet) Ernest O. Lawrence Berkeley National Laboratory (Berkeley Lab) E-mail: oberman@es.net Phone: +1 510 486-8634