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> Antitrust |
Historically, regulation has been concerned with the proper pricing of products so that the needs of all stakeholders, business users, and consumers are met. However, when regulation or deregulation is undertaken in a manner inconsistent with sound economic theory, serious problems can arise. Nowhere is this more accurate than in the electricity industry, as shown recently by the California electricity crisis. In the summer of 2000, the increase in demand caused by record-breaking heat triggered a serious challenge to California's energy system. As wholesale prices per megawatt hour soared, consumers faced energy emergencies and rolling blackouts. But, the genesis of California's electricity crisis began long before 2000. In his latest book, The California Electricity Crisis, AEP academic expert James L. Sweeney, a noted Stanford University economist and Hoover Institution fellow, explores the causes of the crisis, from poorly planned deregulation and restructuring in the early 1990s through recent political mismanagement of the crisis. As Professor Sweeney writes, "California's political leadership failed in 2000 to respond effectively to the challenge of tight electricity markets, mismanaged the electricity crisis in 2001, and thereby saddled the state with heavy long-term, electricity-related financial obligations." After charting the development of the crisis, Professor Sweeney offers a number of policy recommendations for improving regional integration of the electricity industry, restructuring California electricity markets, and better managing California's energy-related financial obligations. AEP works with Professor Sweeney on complex issues involving electricity regulation and energy economics in addition to commercial litigation and antitrust.
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