Without any attempt to justify the criminal actions of Belden or any others that the cops may eventually nail, some of this situation is due to the convoluted dog's breakfast of regulatory rules created in California--under a Republican governor, it must be noted--and with the enthusiastic support of the utilities. Screwball rules, nowhere close to any form of actual deregulation, that totally ignored market forces and set up huge loopholes that begged for crooks to waltz through them.

The worst was the deregulation of prices wholesalers were allowed to charge, while freezing the prices that consumers were required to pay. A five year old would have predicted that the middlemen would be crushed like an aluminum can under an elephant's foot and that wholesale prices would go haywire.

Other screwball concepts included allowing out-of-state generators to use a more lucrative price scale than in-state, inspiring crooks to fake the source of their generated energy to make it look out-of-state.

The Forbes article linked above speculates that Enron is taking the heat because it was the most closely investigated. Other companies did a lot more business in California, and (as the SFGate article also says) when more info comes out, it may be that we will find worse offenders.

True energy deregulation would require eventual removal of price controls from the consumer all the way up to the generator. Or it ain't gonna work.

A small caveat when considering the original source article on this thread: There is a proposition D on the local San Francisco ballot in a couple of weeks to "nationalize" (or whatever the local city equivalent is) the San Francisco electrical utility company, turning it over to the "public." Needless to say, the Left is highly enthusiastic about this, champing at the bit to be able to shut down power plants and force their favorite electrical generation fantasies on the region.

Also needless to say, making the private utilities look as bad as possible before the election is part of the game.