Energy Crisis mostly, courtesy of Enron.
"Artificial supply shortage was created by gratuitously taking power plants offline for (unnecessary) "maintenance" on hot summer days of peak demand. Rolling blackouts adversely affected many businesses dependent upon a reliable supply of electricity, and inconvenienced a large number of retail consumers. This demand supply gap was further exploited by energy companies, mainly Enron. Enron traders were thus able to sell power at premium prices, sometimes up to a factor of 20x its normal peak value. Because the state Government had a cap on retail electricity charges, this market manipulation squeezed the industry's revenue margins, causing the bankruptcy of Pacific Gas and Electric Company (PG&E) and near bankruptcy of Southern California Edison in early 2001.
The financial crisis was possible because of deregulation legislation instituted in 1996 by Governor Pete Wilson. Enron took advantage of this deregulation and was involved in economic withholding and inflated price bidding in California's spot markets. The crisis cost $40bn to $45bn."
Had this not occurred, that would have been enough to plug the budget shortfall in California this year. Hmmmmm Pete Wilson. Isn't he a............Republican?
· 9 years ago