New Book Targets Problems, Proposes Solutions to California's Electricity Crisis; Complimentary Copies Available for Working Press.

News Editors

"Since mid-year 2000, California's electricity problems have been a central concern in the state," writes James L. Sweeney in his new book The California Electricity Crisis (Hoover Institution Press, 2002).

"Californians have faced blackouts, seen the state budgetary surplus decimated, and listened to state official point fingers at myriad organization and individuals for causing the crisis."

What began as an opportunity for California to restructure its electricity system, making it more flexible and responsive to changing economic conditions, ended up -- through flawed implementation and failed political leadership -- in the electricity crisis and the financial crisis of 2001.

Could these dual crises have been avoided or, at least, anticipated? Did state and federal officials react appropriately? What realistic policies can help solve the blight California may now face?

The California Electricity Crisis answers these questions and offers some policy recommendations for the future, including

Improving regional integration through

-- Renegotiating long-term electricity contracts

-- Considering realistic options to pay for California's long-term financial obligations

Improving California electricity markets by

-- Renegotiating long-term electricity contracts

-- Considering realistic options to pay for California's long-term financial obligations

Improving risk management by

-- Renegotiating long-term electricity contracts

-- Considering realistic options to pay for California's long-term financial obligations

Managing California's financial obligations by

-- Renegotiating long-term electricity contracts

-- Considering realistic options to pay for California's long-term financial obligations

"California's political leadership failed in 2000 to respond effectively to the challenge of tight electricity markets, mismanaged the electricity crisis in 2001, and thereby saddled the state with heavy long-term, electricity-related financial obligations," writes Sweeney.

The governor and the California legislature responded to the short-term crisis by enacting a group of long-term measures that seemed "designed to turn California into a public power state rather than one characterized by a free market system for electricity."

"As a result of the fundamental policy mistakes made by the state's governor and other political leaders, the saga continues," writes Sweeney, "with California facing an electricity blight as it struggles to recover from its self-imposed wounds."

About the Author

James L. Sweeney, a senior fellow at the Hoover Institution and the Stanford Institute for Economic Policy Research (SIEPR), is a professor of management science and engineering at Stanford University. He is known for his work on energy economics and energy policy.

Sweeney recently served on the review panel for the State of California Public Interest Energy Research Program, the National Research Council's Committee on Benefits of DOE R&D in Energy Efficiency and Fossil Energy, and the National Research Council's Committee on Effectiveness and Impact of Corporate Average Fuel Economy (CAFE) Standards.

He is a fellow of the California Council on Science and Technology and a senior fellow of the U.S. Association for Energy Economics.

The Hoover Institution, founded at Stanford University in 1919 by Herbert Hoover, who went on to become the 31st president of the United States, is an interdisciplinary research center for advanced study on domestic public policy and international affairs, with an internationally renowned archive.

The Stanford Institute for Economic Policy Research (SIEPR) is a non-partisan economic policy research organization. Academics at SIEPR conduct studies on important economic policy issues in the United States and other countries. SIEPR's goal is to inform and advise policymakers and the public to guide their decisions with sound policy analysis. In the course of their research, SIEPR faculty train Ph.D. students as future economic policy analysts.