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One remedy, as our colleague Paul Krugman has suggested on the Op-Ed page, is for the federal government to impose a temporary cap on wholesale prices. That will not ease the actual shortage of energy -- only conservation and more generating capacity can do that -- but it will help reduce the $1 billion a month the state is currently paying to subsidize the purchase of power. The spread between uncontrolled wholesale prices and the regulated retail prices has already forced one of California's two main utilities into bankruptcy. It would take some doing to bankrupt the entire state government, but without a price cap, the damage to Sacramento's financial flexibility could be significant.
Oops, wrong.. Damn you Howell Raines!
I'm sure we could play this game all day.
I think this Krugman column should have had the title "Neener, Neener."