Power's Surge

Unexpected brownouts and price hikes are the by-products of deregulation

Like most consumers, Mike Hawkins took electricity for granted. He paid predictable, state-regulated rates, and in return the local utility kept the juice flowing. But when Hawkins got his bill in June from San Diego Gas & Electric (SDG&E), he was in a state of shock--$135, nearly twice the previous amount.

The culprit was deregulation, which, students of the telephone and airline industries will tell you, doesn't always go according to plan. When states started breaking up one of the last subsidized monopolies a few years back, they hoped to usher in a wave of competition that would lower prices,...

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