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Pastimes : The California Energy Crisis - Information & Forum
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To: DavesM who wrote (1089)2/15/2002 1:08:16 AM
From: portage  Read Replies (1) of 1715
 
Price caps were effective in that they removed the incentive for the power providers to manipulate the shutting down of plants. That supply manipulation had forced the artificial supply/demand balance into a position of allowing price gaming, which occurred during the excessive plant shutdowns (see Quincy's post 1090). The power could then be sold on the spot market at the highest gamed price, applied to all power sold then, not just to the small additional incremental units needed at the time of the shutdowns.

These artificial shutdowns ended shortly after the caps went in and the newly Democratic Senate threatened to investigate, and combined with lower demand from the cooler summer weather and conservation, provided plenty of supply. That adequate supply had been there prior to all the artificial shutdowns that aided the gaming during the late winter, and which was aggravated by El Paso Gas and its subsidiary's market power control of the gas pipeline supply into California.
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