The California Assembly voted unanimously in 1996 to deregulate the state's electric industry and to dismantle what it considered a government-regulated monopoly. The state created incentives for the utilities to sell their generating plants to unregulated private companies. They were required to transfer operational control of transmission lines and power grids to a private nonprofit organization. But they retained control and ownership of the distribution system.
Before:
After:
Prices
Generating plants were owned by utility companies that
set prices regulated by the state.
Prices are set at auction by the California Power Exchange,
a private nonprofit organization.
Transmission
Utilities that generated electricity also owned transmission
lines and the power grids.
Transmission lines and power grids were transferred
to the Independent System Operator, a private nonprofit
organization that manages the system's operation.
Distribution
Utilities own and control distribution systems -- the
wires that supply homes and businesses.
Utilities own and control distribution systems -- the
wires that supply homes and businesses.
