ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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California Energy Crisis and Its Lessons for Power Sector Reform In India

What appears to be an unstoppable and unquestionable 'consensus' regarding the necessity of restructuring/reforming the electricity sector in India has been shattered by the unbelievable news of the California energy crisis. In a state at the forefront of the IT revolution, there have been unscheduled interruptions of power and rolling blackouts covering hundreds of thousands of consumers. Suddenly, the situation there appears no different from backward developing country cities. This paper is addressed to the task of understanding the California energy crisis through a factual description of the crisis and a discussion of the causal factors responsible for it. It concludes with drawing the lessons from the California energy crisis particularly with regard to power sector reform in India.

The imperative necessity of restructuring/reformingthe electricitysector in India to overcome thefinancial ill health and technical shortcomingsof the electricity boards is beingrepeated ad nauseum, particularly by themultilateral donors and their acolytes ingovernment and academia. To justify therecommendations, there are hand wavingreferences to the successes of reform in theindustrialised countries. Just when theprocess appeared to be unstoppable andunquestionable, the ‘consensus’ has beenshattered by the unbelievable news of theCalifornia energy crisis. In a state at theforefront of the IT revolution, there havebeen unscheduled interruptions of powerand rolling blackouts covering hundredsof thousands of consumers. Suddenly, thesituation there appears no different frombackward developing country cities. Oneis reminded of Hans Christian Andersen’sstory where it is discovered that “theemperor has no clothes”. Clearly, there isa need to understand the California energycrisis and to draw the lessons for India andother developing countries.

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