Background

• Federal Energy Regulatory Commission (FERC) Orders 888 and 889 were put in place in 1996. These regulations allowed for the wholesale trading of electricity (between generators and customers regardless of where they are in the country) and helped California to implement competition at the retail level.
  
  
• In 1996 (when California passed deregulation legislation), the average revenue per kilowatthour (a proxy for price) of electricity sold in California was 9.48 cents, the 10th highest among the 50 States and the District of Columbia. The U.S. average price was 6.86 cents per kilowatthour.
  
  
• During the period from 1990 through 1999, overall demand increased by 11.3 percent. Electric generating capacity decreased by 1.7 percent during the same period.
  
  
• California's reliance on power imports increased with the State currently relying on about 11,000 megawatts of out-of-state capacity. Less than 5,000 megawatts of new capacity is projected to come on line in California by 2004.