Tennessee May Avoid California-Style Power Crisis

Knoxville – The director of the University of Tennessee-s Energy, Environment and Resources Center said Tuesday that California officials may have really hurt their state when they incompletely deregulated electrical utilities.

But Jack Barkenbus said Tennessee is not likely to follow suit and deregulate its electricity.

“Tennessee gets its energy from the Tennessee Valley Authority, which is a very regulated source of electricity,” Barkenbus said. “Given what-s happened in California, I doubt deregulation is going to come to Tennessee in the near future.”

Californians are dealing with severe electricity shortages, after a hard winter and skyrocketing prices for natural gas and fuel oil threw the energy market into chaos.

“In California they believed that the deregulation of electricity would bring cheaper rates so they moved toward it,” Barkenbus said, “but they retained some of the regulatory structure, so they ended up with a system that-s probably worse than either full regulation or full deregulation.”

Under deregulation, California-s publicly-owned utilities were prevented from passing rising costs on to their customers until at least March 2002. But the growing power needs of surrounding states left California with less and less available electricity.

As California struggles with the problem, the other 25 states considering deregulating their electric utilities are watching closely.