California Not Blameless in Energy-Contract Dispute

California officials continue to return to a dry well, seeking further refunds from financially distressed energy providers (State in Last-Ditch Effort to Kill Energy Pacts,” May 16). They want to take back energy contracts because “the devil made them do it.”

We now know that there were some energy market players that abused the rules the state of California created in its attempt at electric deregulation. But to accuse generators and marketers who responded to the state’s 2001 request of intentionally manipulating the market to maximize their contract price is ridiculous.

The reality is that the state requested these power contracts after the new system that the state created failed.

It was the state that refused to allow utilities to lift frozen rates in 2000, resulting in financial collapse of 100-year-old utility institutions.


It was the state that created an energy market in 1998 that relied solely on short-term (spot) markets for power, prohibiting utilities from entering into long-term contracts before price spikes occurred.

It was the state in the 1990s that imposed onerous permitting processes, slowing the process for building power plants.

Should we accuse the state of market manipulation as well?

If there was fraud committed on the people of California, it was by California officials who failed to step up and be held accountable for the energy crisis they created in the first place.


Bob Hoffman


Energy Dynamix Corp.

Redondo Beach