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Friday, 1 June, 2001, 06:57 GMT 07:57 UK
California power bills rise sharply
Control room at Southern California Edison
There have been rolling blackouts since January
By David Willis in California

After suffering a series of rolling blackouts, people in America's largest state, California, are on Friday being sent bills which are 50% higher than normal.

Residents and businesses are paying the price for a crisis which stems from the deregulation of the state's electricity industry.

Attempts to change the way people here are supplied with electricity have gone horribly wrong.

For months, California's 34 million residents have lived with sudden rolling blackouts.

If that was not bad enough, they have now been told their bills are about to rise dramatically.

Hi-tech heaven turned hell

It would be embarrassing enough if this was the Third World, but it is arguably the most technologically advanced place on Earth, home to Silicon Valley - the birthplace of the new economy.

California Governor Gray Davis
The state has had to step in to guarantee power
Some high-tech companies have already indicated they are considering moving elsewhere.

The problems stem from the deregulation of the energy supply industry five years ago, when power companies were prevented by law from passing price increases onto the consumer.

As demand soared, so did wholesale prices, and it was not long before the utilities went bankrupt and the state was forced to bail them out.

Officials are predicting at least another 30 days of blackouts this summer.

Without power to supply fans and air conditioners, this looks like being a long and extremely hot Californian summer.

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See also:

30 May 01 | Americas
California governor to sue Bush
18 May 01 | Business
Hostile reaction to Bush energy plan
05 Apr 01 | Americas
California's $4bn energy boost
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