California Energy Problem, Research Paper Example

The case of electric case in California between the years 2000 and 2001 specifically created massive problems on economy and business operations in the state. This situation highly created inconvenience among residents of the area therefore resulting to dissatisfaction among the most common consumers of the product that the industry provided. Relatively, this problem specifically mandated a need to check on how the energy industry in the state is being managed causing the downfall of its operation for the sake of the community’s benefit.

Investigations on the case pointed out that one of the major causes of the problem was market manipulation.  Since California is one of the country’s central energy producing states, the condition of operation in the area specifically affected the whole country with major blackouts and power outages. Deregulation and manipulation strategies used across the country to mandate energy distribution among power companies was rather unbalanced causing the Pacific Gas and Electric Company to go bankrupt and in the end were forced to close down. Another matter pointed out to have caused the issue was that of Megawatt laundering. This process is pointed out to have been evidently affective to the industry due to the anomalous production of electricity outside of California making the said source of power cost higher than the usual energy source produced in the area. Another cause pointed out to have brought about this problem is over scheduling which involved scams on putting up illegal lines making it harder for the power to pass through the already existing legal lines in the area.

There are still other reasons that have caused the emergence of the California Energy Crisis. Nevertheless, the three mentioned herein are among the most insistent elements that have been seen to have directly implicated a strong sense of distinction as to why the problem has practically risen. Due to this, energy prices have risen making it harder for the market to accept what the industry offers. Relatively such condition of operation created a problematic scene for the entire community that the industry tried to serve.

To resolve the issue, there is of course a need to see through the illegal conditions of operation cushioning the situation. Relatively, when it comes to marketing, it could be helpful if the operation would be returned to government control thus making it easier for the local residents of the area to get the ample supply of energy that they require for basic survival. Marketing wise, the target should be the people. Providing them with the product and the service they need shall better improve the situation thus creating a more reflective impact on how the energy resources are manipulated in the area to make ample supply in the country possible for distribution.

Supply- demand cycle in the industry caused for several other problems to arise. The lesser production of energy in par with the higher demands for the said product created uncontrollable rise of prices in the market. For future research, it is attributed that particular references to the development of resolution to the matter be given specific attention to. FERC’s role should be further defined so as to create a manageable control on the situation on power distribution not only in California but also towards all the other states that the said power source is supporting. Responding to market demand is an all-important matter that should be given attention to. Relatively, researching upon this matter is assumed to ease out the possibility of the same situation occurring again in the near future or in other areas other than California itself.

References:

Weare, Christopher (2003). The California Electricity Crisis: Causes and Policy Options. San Francisco: Public Policy Institute of California.

Sweeney, James L. (2002). The California Electricity Crisis. Stanford: Hoover Institution.