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Word Count: 835
Deregulation is the elimination of regulated rate tariffs on energy that is supplied Deregulation ultimately spreads the risk of an energy crisis amongst multiple companies in a specific region then on one monopoly company What it boils down to is big money Whether it is a natural gas company or a supplier of energy the main goal is to make profit Over the past years in California it can be seen that many energy suppliers have been working to bring down the cost of making and providing energy while staying in line with the deregulation mandates in doing so they have made it almost impossible for themselves to make economic profit There are many reasons why electricity deregulation happens and California has seen just about all of them Many have put their money on the deregulation plan of the state It is believed that this plan that was signed in 1996 by former Governor Pete Wilson holds most of weight of the problem The plan was intended to bring more competition into the states electricity industry At the time the plan was signed Californias major utilities sold several of their power plants to a number of electricity wholesalers But the plan did not give power suppliers much of a motivation to increase their capacity as the demand for electricity increased in the state And the demand for electricity has been increasing Californias demand for electricity has risen by six percent every year for the past five years This increase in demand is largely due to the growth of digital and Internet companies that are headquartered in major California cities With the increasing demand for electricity unregulated wholesale energy prices have increased dramatically The problem here is that the price paid by a consumer is a much lower cost then what the supplier is paying for the electricity This is driving some of the larger suppliers into debt Some suppliers have said that filing for bankruptcy
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