Electrical

Dismantle deregulation? Corral the wholesalers? Beg for a federal bail out? Remove price freezes? Gouge consumers?

As if California's housing crisis wasn't enough, the nation's bastion of the New Economy now faces an energy crisis that threatens both its economy and its inextricably intertwined real estate market.

If the high tech industry can't get the juice it needs from California to fuel continued creation of all those new technological widgets and whiz bang information services, other states will be more than willing to provide well-lighted facilities.

And where goes the high tech industry so goes its jobs and the insatiable demand for housing that's been pumping up real estate values for most of the decade.

Right now, conservation is the first line of defense and, perhaps, the only short term solution.

If lost home value doesn't put the fear of not conserving into your household, utility companies could very well turn out the lights for you.

On numerous occasions in recent weeks, California has been one alert level away from rolling blackouts -- a sort of forced conservation designed to prevent the state from slipping into total darkness.

A combination of greater power use, expensive spot market energy purchases, power plant maintenance outages, aging power grids and other troubles have been been blamed for the Golden State's latest crisis.

And while California has been hit hardest, it isn't suffering alone.

The crisis is spreading.

Even with oil prices staging a retreat this winter, natural gas prices are up 100 percent or more in many locations this year as the Midwest suffers through one snow storm after another. The Northeast is also digging out, while in the Pacific Northwest, limited rainfall left little water to fuel hydroelectric systems.

Earlier this week western state governors, electric utility officials and federal regulators, including Energy Secretary Bill Richardson met in Denver to grabble with all the energy woes.

Deregulation dilemma

Consumer advocates are pointing the big finger at deregulation, a consumer-friendly approach to doing business that has worked for some industries, but not for the nation's electric power monopolies.

Three years of price spikes and brown outs across the country indicate that supply and demand conditions in electricity markets will not allow major segments of the industry to function effectively on a competitive basis, destroying their ability to deliver the promised consumer benefits of electricity restructuring, according to "Reconsidering Electricity Restructuring: Do Market Problems Indicate A Short Circuit Or A Total Blackout?" recently released by the Consumer Federation of America (CFA) and Consumers Union (CU).

"We do not have to deregulate every segment of every market," Gene Kimmelman, Washington co-director of Consumers Union said.

"Deregulation is a means to an end - lower prices, higher quality, and more real choices for consumers. If the conditions are not right for a vital commodity like electricity, consumers will be hurt by deregulation," he added.

Simply put, the nation's power supply system more and more often can't meet the demands of the nation in the throes of the largest economic expansion on record.

According to the report, aside from sheer demand, deregulation places an additional burden on power systems in a number of ways, including:

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