Deregulation of the energy market in California in 1998:

Question

Quizplus · Accepted Answer

The deregulation of the energy market in California in 1998 created incentives for power generators to decrease their output. This was because the state capped retail prices, which meant that power generators could not charge more for the electricity they produced, even during times when demand was high. With no financial incentive to increase their output, power generators had a greater incentive to decrease it in order to create artificial scarcity and drive up prices in the wholesale market. This ultimately led to the California energy crisis of 2000-2001, which saw widespread blackouts and skyrocketing electricity prices.

Deregulation of the Energy Market in California in 1998