There's a good article in Slate explaining the California energy crisis. It turns out that they didn't deregulate the electric power industry after all - they changed the regulations in a weird way, so as to take power generation away from the utilities and allow wholesale prices to fluctuate, meanwhile fixing retail prices - a recipe for disaster. The California legislature also taxed companies who bought their own generating equipment, thus making the economy even more dependent on the grid. Also, see Jon Carroll's take on things.