This paper looks at the causes of the California energy crisis that occurred in 2000-2001 following the
deregulation of the
state's
electrical utilities. The paper discusses the arguments cited in favor of
deregulation, what the deregulation entailed for the electrical utilities, and what this meant in terms of the major heat wave that hit in the summer of 2000. Also discussed is the flawed reasoning behind the arguments for deregulation, which ultimately caused the bankruptcy of the California electrical utilities.