California electricity crisis (2000–2001)
A flawed market design, low hydro output and market manipulation sent wholesale prices soaring and triggered rolling blackouts across California in 2000 and 2001. Regulators responded by speeding up siting and approval for new generation rather than relying only on the market.
Hundreds of new gas plants were proposed under expedited permitting. California quickly moved from shortage to surplus within a few years.
The episode reshaped electricity market rules nationwide, moving most regions to capacity markets that pay generators to be available. It also fed lasting distrust of deregulated electricity markets.
California's crisis shows the pattern of regulators creating fast-track generation pathways during acute supply crunches. PJM's expedited track follows the same logic, though the current squeeze comes from surging demand rather than a market collapse.
