A fundamental learning from the failed Californian Power Exchange and Californian Independent System Operator Model of 1995 to 2001

Abstract

A fundamental learning from the failed Californian Power Exchange and Californian Independent System Operator model of 1995 to 2001 is that customers are trapped and completely embedded in the electrical energy distribution system. This is by virtue of the historical connection to the physical wires of the distribution and transmission lines feeding in from the various power stations. Customers do not have practical energy substitutes and are totally dependent on the incoming electrical energy supply. It is for this reason that customers continued with consumption even when the market reached its point of meltdown and prices increased uncontrollably. This paper reviews the motivation for restructuring,, the diary of events from 1995 to 2001 and then motivates the fundamental learning from the failed model