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HomePolicy Articles Article Summary

California Shorts a Circuit: Should Canadians Trust the Wiring Diagram?

Research Report by Mark Jaccard

Mark Jaccard’s article focuses on the California energy crisis of 2000-01 in the aftermath of its electricity reforms, considers the apparent failures of those reforms, and suggests lessons that can be learned, from a Canadian perspective.

Jaccard begins by outlining the debate surrounding privatization of the energy sector, arguing that “sceptics” who believe privatization will inevitably lead to California-like crises are wrong. Rather than demonstrating an inherent flaw in the reforms being undertaken in Ontario and Alberta (occurring at the time of his writing), Jaccard suggests the California crisis should be viewed as an example of the “large risks of market design.” According to the author, such risks should not prevent reforms from occurring. Jaccard also suggests that designing the market so there are incentives to augment energy reserves, for example, as well as using long term supply contracts and “having the means of acquiring supplies on short notice,” should counteract any ‘California type’ risks while maximizing the benefits of privatization.

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Policy Publication Details

Author(s): Mark Jaccard;
Publisher: C.D. Howe Institute [ Visit Website ]
Year Published: 2002; Publisher Type: Research Institute
Publicly Available: Yes Research Focus: Provincial;
Registration Required: No Language: English
Payment Required: No Publication Format: Adobe PDF

Subjects / Categories:

Policy Articles / Monetary & Capital Management / Privatization
Policy Articles / Regional & Sectoral / Energy
Policy Articles / Monetary & Capital Management
Policy Articles / Regional & Sectoral
Policy Articles / Monetary & Capital Management / Privatization / 2002
Policy Articles / Regional & Sectoral / Energy / 2001

Keywords / Tags:

Energy; Electricity; California; Hydro; Privatization; Reform; Power; blackout;