As California moves to stabilize the state's electricity market, a clear picture of that market's future shape may not emerge for weeks or longer. This month's blackoutsthe first ones forced since California's deregulation experiment began in 1998cemented lingering doubts about the approach's future. On Jan. 23, the Bush administration gave the state some breathing room by extending for two weeks two emergency orders from the U.S. Energy Dept. requiring energy producers to sell the state electricity and gas.
Proposed fixes for the ailing system, including calls for massive state intervention, are drawing cautious responses from observers. Yet developers remain confident in the state's appeal. "All indications are that the private sector is prepared to invest billions of dollars in California," claims Steven Kelly, policy director for the Independent Energy Producers Association, Sacramento. "I don't think the California economy is going to suffer greatly," says Bill Highlander, a spokesman for power developer Calpine Corp, San Jose.