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Defense Support Program

2025-11-02T01:02:20Z

2600:4041:4284:100:45D8:4DC6:57E7:8C92: not historical

{{Short description|US infrared satellite early warning system}}
{{More citations needed|date=December 2019}}
{{Use American English|date=January 2014}}
{{Use dmy dates|date=April 2017}}

[[File:DSP Phase3.jpg|thumb|right|260px|Painting of a DSP satellite on station. Primary sensor (lower left) is pointed at Earth. The star tracker is seen pointing off to the side, above and to the right.]]

The '''Defense Support Program''' ('''DSP''') is a program of the [[United States Space Force]] that operated the [[reconnaissance satellite]]s which form the principal component of the ''Satellite Early Warning System'' used by the United States.

DSP satellites, which are operated by the [[460th Space Wing]], detect [[missile]] or [[spacecraft]] launches and [[nuclear weapon|nuclear]] explosions using sensors that detect the [[infrared]] emissions from these intense sources of heat. During [[Desert Storm]], for example, DSP was able to detect the launches of Iraqi [[Scud]] missiles and provide timely warnings to civilians and military forces in Israel and [[Saudi Arabia]].<ref>{{cite web|url=http://www.fas.org/spp/military/program/warning/dsp.htm|title=Defense Support program|publisher=Fas.org|access-date=26 October 2013|archive-url=https://web.archive.org/web/20140808022715/http://fas.org/spp/military/program/warning/dsp.htm|archive-date=8 August 2014|url-status=live}} {{PD-notice}}</ref>

The satellites are in [[geosynchronous orbit]]s, and are equipped with infrared sensors operating through a wide-angle [[Schmidt camera]]. The entire satellite spins so that the linear [[sensor array]] in the focal plane scans over the Earth six times every minute.<ref>{{cite web|url=http://www.afspc.af.mil/library/factsheets/factsheet.asp?id=9206|title=Factsheets : DSP Animation Only|publisher=afspc.af.mil|date=19 July 2007|access-date=26 October 2013|url-status=dead|archive-url=https://web.archive.org/web/20131029195801/http://www.afspc.af.mil/library/factsheets/factsheet.asp?id=9206|archive-date=29 October 2013}} {{PD-notice}}</ref>

Typically, DSP satellites were launched on [[Titan IV]]B boosters with [[Inertial Upper Stage]]s. However, one DSP satellite (DSP-16) was launched using the [[Space Shuttle Atlantis]] on mission [[STS-44]] (24 November 1991).

The last known DSP satellite (flight 23) was launched in 2007 aboard the first operational flight of the [[Delta IV rocket|Delta IV Heavy]] rocket, as the Titan IV had been retired in 2005. All 23 satellites were built by the prime contractor [[Northrop Grumman|Northrop Grumman Aerospace Systems]], formerly [[TRW Inc.|TRW]], in [[Redondo Beach, California|Redondo Beach]], [[California]].<ref>https://fas.org/sgp/crs/weapons/RS21148.pdf {{PD-notice}}</ref>

The [[460th Space Wing]], with headquarters at [[Buckley Space Force Base]], [[Colorado]], has units, primarily the [[2nd Space Warning Squadron]], that operate DSP satellites and report warning information, via communications links, to the [[North American Aerospace Defense Command|NORAD]] and [[United States Strategic Command|USSTRATCOM]] early warning centers within the [[Cheyenne Mountain Space Force Station]], Colorado. These centers immediately forward data to various agencies and areas of operations around the world.{{citation needed|date=December 2019}}

The SBIRS Wing at the [[Space Systems Command]], [[Los Angeles Space Force Base]], California is responsible for development and acquisition of the satellites.<ref>{{cite web |url=https://www.losangeles.spaceforce.mil/?id=5514|title=Factsheets : Infrared Space Systems Directorate|publisher=Losangeles.af.mil|date=21 November 2012|access-date=26 October 2013 |url-status=live|archive-url=https://web.archive.org/web/20130824010931/http://www.losangeles.af.mil/library/factsheets/factsheet.asp?id=5514|archive-date=24 August 2013}} {{PD-notice}}</ref>

== History ==
The Defense Support Program replaced the 1960s space-based infrared [[Missile Defense Alarm System]] (MIDAS). The first successful launch of [[Missile Defense Alarm System|MIDAS]] (MIDAS-2) was 24 May 1960 and there were twelve launches before the DSP program replaced it in 1970.

Benefiting from funds released by the cancellation of [[Manned Orbiting Laboratory]],<ref name="tsr20240102">{{Cite web |last1=Hendrickx |first1=Bart |last2=Day |first2=Dwayne A. |author-link2=Dwayne A. Day |date=2024-01-02 |title=The Space Review: Diamonds and DORIANS: The Soviet Union's Almaz and the United States' Manned Orbiting Laboratory military space stations (part 3) |url=https://www.thespacereview.com/article/4717/1 |access-date=2024-01-03 |website=The Space Review}}</ref> the first launch of a DSP (IMEWS-1 - [[Integrated Missile Early Warning Satellite]])<ref name="Display">{{cite web|url=https://nssdc.gsfc.nasa.gov/nmc/spacecraft/display.action?id=1970-093A|title=Display: IMEWS-1 1970-093A|publisher=NASA|date=14 May 2020|access-date=13 August 2020}}</ref> was on 6 November 1970 and since then it has become the mainstay of the United States ballistic missile early warning system. For the last 45 years they have provided an uninterrupted space-based early warning capability. The original DSP satellite weighed 2,000 pounds (900 kg) and had 400 watts of power, 2000 detectors and a design life of 1.25 years.

Throughout the life of the program, the satellite design has undergone numerous improvements to enhance reliability and capability. The weight grew to 5,250 pounds (2380 kg), the power to 1275 watts, the number of detectors increased threefold to 6000 and the design life has been increased to a goal of ten years.

[[File:STS-44 DSP deployment.jpg|thumb|220px|DSP satellite deployment during [[STS-44]]]]

The numerous improvement projects have enabled DSP to provide accurate, reliable data in the face of evolving missile threats. On-station sensor reliability has provided uninterrupted service well past their design lifetime. Recent technological improvements in sensor design include above-the-horizon capability and improved resolution. Increased on-board signal-processing capability improves clutter rejection. Enhanced reliability and survivability improvements were also incorporated.

The 23rd, and last DSP satellite (DSP-23) was scheduled to be launched on 1 April 2007, aboard a [[Delta IV rocket|Delta IV Heavy rocket]], but the launch was postponed until mid-August 2007 after two structural cracks were found in the metal launch table at pad 37B, caused by a fuel leak during testing. Further delays forced the launch back to 11 November 2007, when the satellite launched at 01:50:00 [[UTC]] (20:50 EST on 10 November). This satellite died in space sometime during 2008, for reasons unknown. It is now adrift in geosynchronous orbit and remains a potential hazard to other craft.

The Department of Defense sent a [[MiTEx]] spacecraft to inspect DSP 23 sometime in 2008.<ref>{{cite web|url=http://www.spaceflightnow.com/news/n0901/14dsp23/|title=Secret inspection satellites boost space intelligence ops|publisher=Spaceflight Now|access-date=26 October 2013|archive-url=https://web.archive.org/web/20131029190550/http://www.spaceflightnow.com/news/n0901/14dsp23/|archive-date=29 October 2013|url-status=live}}</ref>

Another DSP satellite was lost in 1999, DSP-19, after its [[Inertial Upper Stage]] failed following launch from a [[Titan IV|Titan 4B]] booster.<ref>{{cite web |url=http://www.fas.org/spp/military/program/launch/t4table.htm|title=Titan-4 Launch History and Future Schedule|publisher=fas.org|access-date=26 October 2013|archive-url=https://web.archive.org/web/20121031203558/http://www.fas.org/spp/military/program/launch/t4table.htm|archive-date=31 October 2012|url-status=live}} {{PD-notice}}</ref> DSP-19 was a USAF Defense Support Program missile early warning satellite equipped with an [[infrared telescope]] to detect rocket launches. The Titan 4B rocket placed the IUS upper stages and payload into a 188 km x 718 km x 28.6° parking orbit. The first stage on the IUS burned at 18:14 GMT and put the second stage and payload into a geosynchronous transfer orbit. The IUS second stage fired at 23:34 GMT. However, the two stages of the IUS failed to separate completely. At least one connector remained attached. This meant the second stage motor nozzle did not extend properly. When the stage fired, the vehicle tumbled during the burn and the satellite was left out of control in a useless orbit.

The project was originally to have had 25 satellites, but the last two have been canceled, mainly due to SBIRS. DSP satellites have been replaced by the '''[[Space-Based Infrared System]] (SBIRS)''' satellites.

There were five major improvement programs on the 23 satellites:

* Block 1: Phase I, 1970–1975, five satellites
* Block 2: Phase II, 1976–1987, seven satellites
* Block 3: Multi-Orbit Satellite Performance Improvement Modification (MOS/PIM), 1989–1991, three satellites
* Block 4: Phase II Upgrade, 1994–1997, two satellites
* Block 5: DSP-I (DSP-Improved), 1999–2007, six satellites

More recently, there has been some effort put into using DSPs' infrared sensors as part of an early warning system for natural disasters like volcanic eruptions and forest fires.

== Limitations ==
The DSP constellation may have offered an excellent vantage point for an early warning system against state-centric threats such as missiles, but military analysts warn its ability to collect intelligence on non-state actors is severely limited.<ref>{{Citation|last=Danskine|first=William B., Lt Col, USAF|title=Aggressive ISR in the War on Terrorism – Breaking the Cold War Paradigm|journal=Air & Space Power Journal |issue=Summer 2005|page=76|publisher=USAF|year=2005|url=http://www.airpower.maxwell.af.mil/airchronicles/apj/apj05/sum05/sum05.pdf|access-date=22 May 2007|archive-url=https://web.archive.org/web/20060617215051/http://www.airpower.maxwell.af.mil/airchronicles/apj/apj05/sum05/sum05.pdf|archive-date=17 June 2006|url-status=dead}} {{PD-notice}}</ref>

== General characteristics ==
* Primary mission: strategic and tactical missile launch detection
* Contractor team: [[Northrop Grumman|Northrop Grumman Aerospace Systems]], formerly [[TRW Inc.|TRW]] (for satellite bus) and [[Northrop Grumman Electronic Systems]], formerly [[Aerojet|Aerojet Electronics Systems]] (for [[Infrared|IR]] sensor)
* Weight: 5,250 lb (2,380 kg)
* Orbit altitude: 22,000 miles (35,900 km)
* Power plant: solar arrays generate 1485 watts
* Height: 32.8 ft (10 m) on orbit; 28 ft (8.5 m) at launch
* Diameter: 22 ft (6.7 m) on orbit; 13.7 ft (4.2 m) at launch
* Date first deployed: 1970
* Date late deployed: 2007
* Latest Satellite Block: satellites 18–23
* Unit Cost: US$400 million

== Gallery ==
<gallery>
Image:2d Space Warning Squadron.png|[[2d Space Warning Squadron]]
Image:8th Space Warning Squadron.png|[[8th Space Warning Squadron]]
Image:11th Space Warning Squadron.PNG|[[11th Space Warning Squadron]]
Image:DSP Flight 1.png|DSP Flight 1
Image:DSP Flight 2.png|DSP Flight 2
Image:DSP Flight 3.png|DSP Flight 3
Image:DSP Flight 4.png|DSP Flight 4
Image:DSP Flight 5.png|DSP Flight 5
Image:DSP Flight 7.png|DSP Flight 7
Image:DSP Flight 8.png|DSP Flight 8
Image:DSP Flight 9.png|DSP Flight 9
Image:DSP Flight 10.png|DSP Flight 10
Image:DSP Flight 13.png|DSP Flight 13
Image:DSP Flight 14.png|DSP Flight 14
Image:DSP Flight 15.png|DSP Flight 15
Image:DSP Flight 16.png|DSP Flight 16
Image:DSP Flight 17.png|DSP Flight 17
Image:DSP Flight 18.png|DSP Flight 18
Image:DSP Flight 1 Launch 6 Nov 1970.png|DSP F1 Launch 6 November 1970
</gallery>

== See also ==
{{Portal|Spaceflight}}
* [[Missile Defense Alarm System|Missile Defense Alarm System (MIDAS)]]
* [[Space-Based Infrared System|Space Based Infrared System (SBIRS)]]

== References ==
{{Reflist}}

== External links ==
* [http://www.af.mil/AboutUs/FactSheets/Display/tabid/224/Article/104611/defense-support-program-satellites.aspx US Air Force DSP Satellites Fact Sheet] {{Webarchive|url=https://web.archive.org/web/20140226130139/http://www.af.mil/AboutUs/FactSheets/Display/tabid/224/Article/104611/defense-support-program-satellites.aspx |date=26 February 2014 }}
* [http://www.cyclebikeapp.com Augmented-reality view of DSP satellites] {{Webarchive|url=https://web.archive.org/web/20210225094859/http://www.cyclebikeapp.com/ |date=25 February 2021 }}
* [http://www.heavens-above.com/orbit.aspx?satid=28158 Orbit of DSP F22, the latest operational DSP satellite]

{{USAF Weapons}}
{{US Reconnaissance Satellites}}
{{USAF system codes}}

[[Category:Military satellites]]
[[Category:Missile defense]]
[[Category:Reconnaissance satellites of the United States]]
[[Category:Equipment of the United States Space Force]]
[[Category:Early warning systems]]
[[Category:Military space program of the United States]]
[[Category:Infrared technology]]
[[Category:Early warning satellites]]
[[Category:Spacecraft launched by Delta IV rockets]]
[[Category:Military equipment introduced in the 1970s]]

2000–2001 California electricity crisis

2025-11-01T23:29:54Z

2600:4041:4284:100:45D8:4DC6:57E7:8C92: Fixed grammar

{{Short description|Energy crisis in 2000–01 in California, U.S.}}
{{Use American English|date=December 2024}}
{{Use mdy dates|date=June 2022}}
{| class="infobox" style="width:30em;"
| colspan="2" style="padding:0.3em; border-collapse:collapse; background:#ccf; text-align:center;" | '''Chronology'''<ref>{{cite web|url = https://elibrary.ferc.gov/idmws/common/opennat.asp?fileID=10492781 |title = Federal Energy Regulatory Commission Chronology}}</ref><ref>{{cite web |url=http://www.erisk.com/Learning/CaseStudies/ref_case_californiacrisis.asp |title= ERisk.com's The California Energy Crisis 2063-20100|archive-url=https://web.archive.org/web/20060118233725/http://www.erisk.com/Learning/CaseStudies/ref_case_californiacrisis.asp |archive-date=January 18, 2006}}</ref><ref>{{cite web|url = https://www.pbs.org/wgbh/pages/frontline/shows/blackout/california/timeline.html |title = FrontLine's California Crisis Timeline |website = [[PBS]] | access-date=August 17, 2008}}</ref>
|-
| width=120 | '''1996'''
| California begins to modify controls on its energy market and takes measures ostensibly to increase competition.
|-
| '''September 23, 1996'''
| [[Pete Wilson]] signs Electric Utility Industry Restructuring Act (Assembly Bill 1890) and it becomes law.<ref name="EUIRA">{{cite web |url=https://www.eia.gov/electricity/policies/legislation/california/assemblybill.html |title=California Electric Energy Crisis - Provisions of AB 1890 | publisher= U.S. Energy Information Administration (EIA) | access-date=May 1, 2019}}</ref>
|-
||'''April 1998'''
| Spot market for energy begins operation.
|-
| '''May 2000'''
| Significant rise in energy prices.
|-
| '''June 14, 2000'''
| Blackouts affect 97,000 customers in San Francisco Bay area during a [[heat wave]].
|-
| '''August 2000'''
| San Diego Gas & Electric Company files a complaint alleging manipulation of the markets.
|-
| '''January 17–18, 2001'''
| Blackouts affect several hundred thousand customers.
|-
| '''January 17, 2001'''
| Governor Davis declares a state of emergency.
|-
| '''March 19–20, 2001'''
| Blackouts affect 1.5 million customers.<ref>{{Cite news|url=https://www.nytimes.com/2001/03/21/us/california-orders-blackouts-for-a-second-straight-day.html|title=California Orders Blackouts For a Second Straight Day|newspaper=The New York Times|date=March 21, 2001|access-date=July 3, 2024}}</ref><ref>{{Cite news|url=https://www.latimes.com/archives/la-xpm-2001-mar-21-mn-40618-story.html|title=Second Day of Blackouts Disrupts 500000 Homes and Businesses|newspaper=Los Angeles Times|date=March 21, 2001|access-date=July 3, 2024}}</ref>
|-
| '''April 2001'''
| Pacific Gas & Electric Co. files for bankruptcy.<ref>{{Cite news|url=https://www.nytimes.com/2001/04/07/us/california-s-largest-utility-files-for-bankruptcy.html|title=California's Largest Utility Files for Bankruptcy|newspaper=The New York Times|date=April 7, 2001|access-date=July 3, 2024}}</ref><ref>{{Cite news|url=https://www.latimes.com/archives/la-xpm-2001-apr-07-mn-48927-story.html|title=PG&E; Declares Bankruptcy; State's Crisis Plans Collapse|newspaper=Los Angeles Times|date=April 7, 2001|access-date=July 3, 2024}}</ref>
|-
| '''May 7–8, 2001'''
| Blackouts affect upwards of 167,000 customers.<ref>{{Cite news|url=https://www.sandiegouniontribune.com/2001/05/08/rolling-blackouts-ordered-across-state/|title=Rolling blackouts ordered across state|newspaper=San Diego Union-Tribune|date=May 8, 2001|access-date=July 3, 2024}}</ref>
|-
| '''September 2001'''
| Energy prices normalize.
|-
| '''December 2001'''
| Following the bankruptcy of Enron, it is alleged that energy prices were manipulated by Enron.
|-
| '''February 2002'''
| Federal Energy Regulatory Commission begins investigation of Enron's involvement.
|-
| '''Winter 2002'''
| The Enron Tapes scandal begins to surface.
|-
| '''November 13, 2003'''
| Governor Davis ends the state of emergency.
|}

The '''2000–2001 California electricity crisis''', also known as the '''Western U.S. energy crisis''' of 2000 and 2001, was a period during which the state of [[California]] had a shortage of [[electricity supply]], caused by [[market manipulation]]s and capped retail electricity prices.<ref name="Sweeney_2002">{{cite web |url= http://www.nae.edu/Publications/Bridge/OurEnergyFuture/TheCaliforniaElectricityCrisisLessonsfortheFuture.aspx
| title=The California Electricity Crisis: Lessons for the Future|last=Sweeney|first=James L.|date=Summer 2002 |publisher=National Academy of Engineering of the Nation Academies|access-date=January 9, 2012|quote="... volatile commodity market, but it had fixed sales prices for the investor-owned utilities at the retail level, a potentially untenable combination"
}}</ref> The state suffered from multiple large-scale [[power outage|blackouts]], one of the state's largest energy companies collapsed, and the economic fall-out greatly harmed the standing of [[Gray Davis|Governor Gray Davis]].

Drought and delays in approval of new power plants also decreased supply.<ref name="Sweeney_2002" />{{rp|109}}<ref name="tapes-nyt"></ref> This caused an 800% increase in wholesale prices from April 2000 to December 2000.<ref name="Weare_2003">{{cite book |title=The California Electricity Crisis: Causes and Policy Options |last=Weare |first=Christopher |year=2003 |publisher=[[Public Policy Institute of California]] | location=[[San Francisco]] | isbn=1-58213-064-7 |url=http://www.ppic.org/content/pubs/report/R_103CWR.pdf }}</ref>{{rp|1}} In addition, [[Rolling blackout#California|rolling blackouts]] adversely affected many businesses dependent upon a reliable supply of electricity, and inconvenienced many retail consumers.

California had an installed generating capacity of 45 GW ([[gigawatts]], or billions-of-watts). At the time of the blackouts, demand was 28 GW. A demand-supply gap was [[market manipulation|created]] by energy companies, mainly [[Enron]], to create artificial shortages. Energy traders took power plants offline for maintenance during days of peak demand to increase the price.<ref name="tapes-cnn">[http://www.cnn.com/2005/US/02/03/enron.tapes/ Tapes: Enron plotted to shut down power plant.]</ref><ref name="tapes-nyt">{{cite news |last1=Egan |first1=Timothy |author-link1=Timothy Egan |title=Tapes Show Enron Arranged Plant Shutdown |url=https://www.nytimes.com/2005/02/04/national/04energy.html?ex=1107666000&en=01449ebf62df572e&ei=5070 |access-date=September 9, 2020 |work=[[The New York Times]] | date=February 4, 2005 |archive-url=https://archive.today/20120905051311/http://www.nytimes.com/2005/02/04/national/04energy.html?ex=1107666000&en=01449ebf62df572e&ei=5070 |archive-date=September 5, 2012}}</ref>{{cbignore|bot=InternetArchiveBot}} Traders were thus able to sell power at premium prices, sometimes up to a factor of twenty times its normal value. Because the state government had a cap on retail electricity charges, this market manipulation squeezed the industry's revenue margins, causing the bankruptcy of [[Pacific Gas and Electric Company]] (PG&E) and near bankruptcy of [[Southern California Edison]] in early 2001.<ref name="Weare_2003" />{{rp|2–3}}

According to the [[Federal Energy Regulatory Commission]] (FERC), such a situation became possible because of legislation instituted in 1996 by the California Legislature (AB 1890) and Governor [[Pete Wilson]] that deregulated some aspects of the energy industry. [[Enron]] took advantage of this partial deregulation and was involved in economic withholding and inflated price bidding in California's spot markets.<ref name="ferc-summary">{{cite web |url = http://www.ferc.gov/industries/electric/indus-act/wec/enron/summary-findings.pdf |title = FERC Summary of findings |access-date = March 17, 2010 |archive-date = May 27, 2010 |archive-url = https://web.archive.org/web/20100527135313/http://www.ferc.gov/industries/electric/indus-act/wec/enron/summary-findings.pdf |url-status = dead }}</ref>

The damage caused by the crisis was estimated to be between $40 and $45 billion.<ref name="Weare_2003" />{{rp|3–4}}

== Causes ==

=== Market manipulation ===
As the FERC report concluded, [[market manipulation]] was only possible as a result of the complex market design produced by the process of partial deregulation. Manipulation strategies were known to energy traders under names such as "Fat Boy", "[[Death Star (business)|Death Star]]", "Forney Perpetual Loop", "Wheel Out", "Ricochet", "Ping Pong", "Black Widow", "Big Foot", "Red Congo", "Cong Catcher" and "Get Shorty".<ref>[http://www.mresearch.com/pdfs/19.pdf Congestion Manipulation "DeathStar"], McCullough Research (June 5, 2002)</ref>

In a letter sent from David Fabian to Senator Boxer in 2002, it was alleged that:
: "There is a single connection between northern and southern California's power grids. I heard that Enron traders purposely overbooked that line, then caused others to need it. Next, by California's free-market rules, Enron was allowed to price-gouge at will."<ref>Letter from David Fabian to Senator Boxer, February 13, 2002, p.1, quoted in [http://www.mresearch.com/pdfs/19.pdf Congestion Manipulation "DeathStar"], McCullough Research (June 5, 2002) at p.4.</ref>

=== Effects of partial deregulation ===
On a federal level, the [[Energy Policy Act of 1992]], for which Enron had lobbied, opened electrical transmission grids to competition, unbundling generation and transmission of electricity.<ref>{{cite news|title=A most favored corporation: Enron prevailed in federal, state lobbying efforts 49 times|url=https://www.publicintegrity.org/2003/01/06/3160/most-favored-corporation-enron-prevailed-federal-state-lobbying-efforts-49-times|work=Center for Public Integrity|date=January 6, 2003}}</ref>

On the state level, part of California's [[deregulation]] process, which was promoted as a means of increasing competition, was also influenced by lobbying from Enron, and began in 1996 when California became the first state to deregulate its [[electricity market]].<ref>{{cite news|last1=Fogarty|first1=Thomas A.|last2=Iwata|first2=Edward|title=Energy deregulation: Is it friend or enemy?|url=http://usatoday30.usatoday.com/money/covers/2002-05-16-enron-california-hearings.htm|work=USAToday|date=May 15, 2002}}</ref><ref>{{cite news|title=Editorial: Don't let ghosts of Enron haunt us again|url=https://www.sacbee.com/opinion/op-ed/article103535032.html|work=Sacramento Bee|date=September 24, 2016|language=en}}</ref>

[[Image:PG&E Yard.jpg|thumb|right|200px|PG&E yard in [[San Francisco]]]]

Energy deregulation put the three companies that distribute electricity into a tough situation. Energy deregulation policy froze or capped the price of energy that the three energy distributors could charge.<ref>{{cite news|url=http://www.sfgate.com/cgi-bin/article.cgi?file=/gate/archive/2001/05/08/lookhow.DTL |title=Energy Crisis Overview: How we got here |access-date=August 17, 2008 |work=The San Francisco Chronicle |url-status=dead |date=May 8, 2001 |archive-url=https://web.archive.org/web/20080206194211/http://www.sfgate.com/cgi-bin/article.cgi?file=%2Fgate%2Farchive%2F2001%2F05%2F08%2Flookhow.DTL |archive-date=February 6, 2008 }}</ref> Deregulating the producers of energy did not lower the cost of energy. Deregulation did not encourage new producers to create more power and drive down prices. Instead, with increasing demand for electricity, the producers of energy charged more for electricity.<ref name="sfgate1">{{cite news|url = http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2001/12/24/MN71492.DTL |title = The Energy Crunch / A Year Later / State's deregulation folly is no laughing matter / Consumers face inflated bills for years for failed electricity plan |author=Carolyn Said |date = December 24, 2001 |access-date=August 17, 2008 | work=The San Francisco Chronicle}}</ref> The producers used spikes in energy production to inflate the price of energy.<ref name="sfgate1"/> In January 2001, energy producers began shutting down plants in order to increase prices.<ref name="sfgate1"/>

=== Government price caps ===
By keeping the consumer price of electricity artificially low, the California government discouraged citizens from practicing conservation. In February 2001, California governor Gray Davis stated, "Believe me, if I wanted to raise rates I could have solved this problem in 20 minutes."<ref name="signonsandiego.com">[http://www.signonsandiego.com/news/politics/recall/20030902-9999_1n2power.html Energy crisis cited as turning point for Davis] {{webarchive|url=https://web.archive.org/web/20090221160025/http://www.signonsandiego.com/news/politics/recall/20030902-9999_1n2power.html |date=February 21, 2009 }}, San Diego Union-Tribune, September 2, 2003</ref> However, in San Diego, where San Diego Gas & Electric had paid off its debt, market rates were charged beginning in July 1999. Prices doubled in two months due to a hot summer, and people protested by not paying their bills and calling the power company.<ref>{{Cite news |last=Lazarus |first=David |date=2000-07-27 |title=Deregulation Doubling Electric Bills / San Diego jolt a preview of what Northern California may face |url=https://www.sfgate.com/news/article/Deregulation-Doubling-Electric-Bills-San-Diego-3303208.php |work=San Francisco Chronicle}}</ref>

When the electricity demand in California rose, utilities had no financial incentive to expand production, as long term prices were capped. Instead, wholesalers such as [[Enron]] manipulated the market to force utility companies into daily spot markets for short term gain. For example, in a market technique known as megawatt laundering, wholesalers bought up electricity in California at below cap price to sell out of state, creating shortages. In some instances, wholesalers scheduled power transmission to create congestion and drive up prices.<ref>{{Cite news|last=Leopold|first=Jason|title=Enron linked to California blackouts|url=https://www.marketwatch.com/story/enron-caused-california-blackouts-traders-say|access-date=May 27, 2021|website=MarketWatch|language=EN-US}}</ref>

After extensive investigation, the [[Federal Energy Regulatory Commission]] (FERC) substantially agreed in 2003:<ref name="ferc-summary"/>

: "supply-demand imbalance, flawed market design and inconsistent rules made possible significant market manipulation as delineated in final investigation report. Without underlying market dysfunction, attempts to manipulate the market would not be successful."

: "many trading strategies employed by Enron and other companies violated the anti-gaming provisions".

: "Electricity prices in California's spot markets were affected by economic withholding and inflated price bidding, in violation of tariff anti-gaming provisions."

=== New regulations ===

In the mid-1990s, under Republican Governor [[Pete Wilson]], California began changing the electricity industry. Democratic State Senator [[Steve Peace]] was the Chairman of the Senate Committee on Energy at the time and is often credited as "the father of deregulation".<ref>{{cite news|last1=Martin|first1=Mark|title=Newsmaker Profile: Steve Peace / Davis' finance chief skilled at raising hell / Brash ex-senator a bold pick|url=http://www.sfgate.com/politics/article/NEWSMAKER-PROFILE-Steve-Peace-Davis-finance-2709769.php|work=San Francisco Chronicle|date=December 22, 2002}}</ref> The author of the bill was Senator Jim Brulte, a Republican from Rancho Cucamonga.<ref>[http://www.commondreams.org/headlines/120900-01.htm How California's Consumers Lost With Electricity Deregulation] {{Webarchive|url=https://web.archive.org/web/20120628142938/http://www.commondreams.org/headlines/120900-01.htm |date=June 28, 2012 }} [[Common Dreams]]</ref> Wilson admitted publicly that defects in the deregulation system would need fixing by "the next governor".

[[Image:PG&E Meter on Angel Island.jpg|thumb|200px|right|PG&E electric meter on [[Angel Island (California)|Angel Island]].]]

=== Supply and demand ===
California's population increased by 13% during the 1990s.<ref>{{cite web |last1=Perry |first1=Marc |last2=Mackun |first2=Paul |title=Population Change and Distribution: Census 2000 Brief |url=https://www.census.gov/prod/2001pubs/c2kbr01-2.pdf |website=United States Census Bureau |access-date=June 7, 2021}}</ref> The State did not build any new major power plants during that time, and California's generation capability decreased 2 percent from 1990 through 1999, while retail sales increased by 11 percent.<ref>{{cite web |title=Subsequent Events-California's Energy Crisis |url=https://www.eia.gov/electricity/policies/legislation/california/subsequentevents.html#N_7_ |website=U.S. Energy Information Administration |access-date=June 7, 2021 |ref=EIA}}</ref>

California's utilities came to depend in part on the importation of excess [[hydroelectricity]] from the [[Pacific Northwest]] states of [[Oregon]] and [[Washington (state)|Washington]].<ref>{{cite web |title=Subsequent Events-California's Energy Crisis |url=https://www.eia.gov/electricity/policies/legislation/california/subsequentevents.html#N_7_ |website=U.S. Energy Information Administration |access-date=June 7, 2021 |ref=EIA}}</ref> During that time, California relied upon out-of-state generators to supply 7 to 11 gigawatts of power.<ref>{{cite web |title=Subsequent Events-California's Energy Crisis |url=https://www.eia.gov/electricity/policies/legislation/california/subsequentevents.html#N_7_ |website=U.S. Energy Information Administration |access-date=June 7, 2021 |ref=EIA}}</ref>

In the summer of 2001 a drought in the northwest states reduced the amount of hydroelectric power available to California.<ref>{{cite web |title=Subsequent Events-California's Energy Crisis |url=https://www.eia.gov/electricity/policies/legislation/california/subsequentevents.html#N_7_ |website=U.S. Energy Information Administration |access-date=June 7, 2021 |ref=EIA}}</ref> Moreover, wholesale prices of natural gas spiked nationwide, rising from around $2 per {{convert|1|e6BTU|kWh|lk=on|abbr=off|spell=in}} at the beginning of 1999 to over $10 per million BTU in the winter of 2000-2001.<ref>{{cite web |title=Natural Gas: Analysis of Changes in Market Price |url=https://www.gao.gov/assets/gao-03-46.pdf |publisher=U.S. General Accounting Office |ref=USGAO}}</ref>

The main line which allowed electricity to travel from the north to the south, [[Path 15]], had not been improved for many{{Quantify|date=December 2010}} years and became a major bottleneck point which limited the amount of power that could be sent south to 3,900 [[Megawatt|MW]].

The [[International Energy Agency]] estimates<ref name="IEA-billing-2003">[http://www.iea.org/textbase/nppdf/free/2000/powertochoose_2003.pdf The Power to Choose – Enhancing Demand Response in Liberalised Electricity Markets] Findings of [[International Energy Agency|IEA]] Demand Response Project, Presentation 2003</ref> that a 5% lowering of demand would have resulted in a 50% price reduction during the peak hours of the crisis in 2000/2001. With better [[demand response]] the market also becomes more resilient to intentional withdrawal of offers from the supply side.

== Some key events ==

Rolling blackouts affecting 97,000 customers hit the San Francisco Bay area on June 14, 2000, and San Diego Gas & Electric Company filed a complaint alleging market manipulation by some energy producers in August 2000. On December 7, 2000, suffering from low supply and idled power plants, the [[California Independent System Operator]] (ISO), which manages the California power grid, declared the first statewide Stage 3 power alert, meaning power reserves were below 3 percent. Rolling blackouts were avoided when the state halted two large state and federal water pumps to conserve electricity.<ref>{{cite web |last1=Quinton |first1=Amy |title=California's Water Supply, A 700 Mile Journey |url=http://www.capradio.org/articles/2013/10/07/californias-water-supply-a-700-mile-journey/ |website=Capradio.org |access-date=February 25, 2020}}</ref>

Most notably, the city of Los Angeles was unaffected by the crisis because government-owned public utilities in California (including the [[Los Angeles Department of Water & Power]]) were exempt from the deregulation legislation and sold their excess power to private utilities in the state (mostly to Southern California Edison) during the crises. That enabled much of the greater Los Angeles area to suffer only rolling brown-outs rather than long term black outs suffered in other parts of the state.<ref>{{cite news|title=Hahn Orders DWP to Probe Power Deals|url=https://www.latimes.com/archives/la-xpm-2002-jun-29-me-dwp29-story.html|access-date=April 3, 2013|newspaper=Los Angeles Times|date=June 29, 2002|author=Seema Mehta|author2=Nancy Vogel}}</ref>

== Consequences of wholesale price rises on the retail market ==

As a result of the actions of electricity wholesalers, [[Southern California Edison]] (SCE) and [[Pacific Gas & Electric]] (PG&E) were buying from a spot market at very high prices but were unable to raise retail rates. For a product that the IOU's used to produce for about three cents per kilowatt hour of electricity, they were paying eleven to fifty cents, or occasionally even more, but they were capped at 6.7 cents per kilowatt hour when charging their retail customers. As a result, PG&E filed bankruptcy, and Southern California Edison devised a workout plan with the State of California to save their company from the same fate.<ref>{{cite web |last1=Keeley |first1=Fred |author-link1=Fred Keeley |title=The Energy Crisis: Keeping The Lights On |url=http://www.commonwealthclub.org/archive/01/01-03keeley-speech.html |website=[[Commonwealth Club of California]] | access-date=August 18, 2020 |archive-url=https://archive.today/20021020055030/http://www.commonwealthclub.org/archive/01/01-03keeley-speech.html |archive-date=October 20, 2002 |date=March 8, 2001 |url-status=dead}}</ref>{{cbignore|bot=InternetArchiveBot}}

According to a 2007 study of [[United States Department of Energy|Department of Energy]] data by Power in the Public Interest, retail electricity prices rose much more from 1999 to 2007 in states that adopted deregulation than in those that did not.<ref>{{cite news | last = Johnston | first = David | title = Competitively Priced Electricity Costs More, Studies Show | work = The New York Times | date = November 6, 2007 | url = https://www.nytimes.com/2007/11/06/business/06electric.html | access-date = August 17, 2008 }}</ref>

== Involvement of Enron ==

{{Main|Enron}}

One of the energy wholesalers that became notorious for "gaming the market" and reaping huge speculative profits was [[Enron|Enron Corporation]]. Enron CEO [[Kenneth Lay]] mocked the efforts by the California state government to thwart the practices of the energy wholesalers, insisting "no matter what the 'crazy people in California' did, he had people working for him at Enron that could figure out a way to make money." The original statement was made in a phone conversation between [[S. David Freeman]] (Chairman of the California Power Authority) and Lay in 2000, according to statements made by Freeman to the Senate Subcommittee on Consumer Affairs, Foreign Commerce and Tourism in April<ref>{{cite web|url=http://commerce.senate.gov/hearings/041102freeman.pdf |archive-url=https://web.archive.org/web/20060301073438/http://commerce.senate.gov/hearings/041102freeman.pdf |archive-date= March 1, 2006 |title=Testimony of S. David Freeman |date = April 11, 2002 |access-date=August 17, 2008}}</ref> and May 2002.<ref name="FreemanMay2002">{{cite web|url=http://commerce.senate.gov/hearings/051502freeman.pdf |archive-url=https://web.archive.org/web/20060301072016/http://commerce.senate.gov/hearings/051502freeman.pdf |archive-date= March 1, 2006 |title=Testimony of S. David Freeman |date =May 15, 2002|access-date=August 17, 2008}}</ref>

Freeman, who was appointed Chair of the California Power Authority in the midst of the crisis, made the following statements about Enron's involvement in testimony<ref name="FreemanMay2002" /> submitted before the Subcommittee on Consumer Affairs, Foreign Commerce and Tourism of the Senate Committee on Commerce, Science and Transportation on May 15, 2002:

: "There is one fundamental lesson we must learn from this experience: electricity is really different from everything else. It cannot be stored, it cannot be seen, and we cannot do without it, which makes opportunities to take advantage of a deregulated market endless. It is a public good that must be protected from private abuse. If [[Murphy's Law]] were written for a market approach to electricity, then the law would state 'any system that can be gamed, will be gamed, and at the worst possible time.' And a market approach for electricity is inherently gameable. Never again can we allow private interests to create artificial or even real shortages and to be in control.

: "Enron stood for secrecy and a lack of responsibility. In electric power, we must have openness and companies that are responsible for keeping the lights on. We need to go back to companies that own power plants with clear responsibilities for selling real power under long-term contracts. There is no place for companies like Enron that own the equivalent of an electronic telephone book and [[game the system]] to extract an unnecessary middleman’s profits. Companies with power plants can compete for contracts to provide the bulk of our power at reasonable prices that reflect costs. People say that Governor Davis has been vindicated by the Enron confession."

== Handling of the crisis ==

=== Governor Gray Davis ===

Some critics, such as [[Arianna Huffington]], alleged that Davis was lulled to inaction by [[campaign contribution]]s from energy producers.<ref>{{cite web |last1=Huffington |first1=Arianna |author-link1=Arianna Huffington |title=Gov. Davis and the failure of power: California's energy crisis is another lesson in the need for campaign finance reform |url=https://www.salon.com/2001/01/27/power_4/ |website=[[Salon (website)|Salon]] | access-date=September 2, 2020 |date=January 27, 2001 |archive-url=https://archive.today/20080726204147/http://www.salon.com/politics/feature/2001/01/27/power/index.html |archive-date=July 26, 2008 |url-status=live}}</ref>{{cbignore}} In addition, the California State Legislature would sometimes push Davis to act decisively by taking over power plants which were known to have been gamed and place them back under control of the utilities, ensuring a more steady supply and punished the worst manipulators. Meanwhile, conservatives argued that Davis signed overpriced energy contracts, employed incompetent negotiators, and refused to allow prices to rise for residences statewide much like they did in San Diego, which they argue could have given Davis more leverage against the energy traders and encouraged more conservation.<ref>{{cite news|url = http://www.findarticles.com/p/articles/mi_qa3827/is_200308/ai_n9286114 |archive-url = https://web.archive.org/web/20070324221436/http://www.findarticles.com/p/articles/mi_qa3827/is_200308/ai_n9286114 |url-status = dead |archive-date = March 24, 2007 |title = Ten good reasons to recall Gray Davis |date=August 18, 2003 |access-date=August 17, 2008 | work=Human Events }} </ref> More criticism is given in the book ''[[Conspiracy of Fools]]'', which gives the details of a meeting between the governor and his officials; [[Clinton Administration]] Treasury officials; and energy executives, including market manipulators such as Enron, where Davis disagreed with the Treasury officials and energy executives. They advised suspending environmental studies to build power plants and a small rate hike to prepare for long-term power contracts (Davis eventually signed overpriced ones, as noted above), while Davis supported price caps, denounced the other solutions as too politically risky, and allegedly acted rudely.<ref>{{cite book | last = Eichenwald | first = Kurt | author-link = Kurt Eichenwald | title = Conspiracy of Fools | year = 2005 | edition = 1st | publisher = Broadway Books | location = New York | isbn = 0-7679-1178-4 | pages = [https://archive.org/details/conspiracyoffool00eich/page/408 408]–12 | chapter = 15 | url-access = registration | url = https://archive.org/details/conspiracyoffool00eich }}</ref> The contracts Davis signed locked Californians into high electric costs for the next decade.<ref>{{cite web|url=http://www.geoffmetcalf.com/davis_20010525.html |title=Governor Davis and the Energy Crisis |access-date=October 10, 2011 |url-status=dead |archive-url=https://web.archive.org/web/20111016005719/http://geoffmetcalf.com/davis_20010525.html |archive-date=October 16, 2011 }}</ref> As of October 2011 electric rates in California had yet to return to pre-contract levels.

=== Arnold Schwarzenegger ===
On May 17, 2001, future Republican governor [[Arnold Schwarzenegger]] and former [[Los Angeles]] Mayor Republican [[Richard Riordan]] met with [[Enron]] CEO [[Kenneth Lay]] at the [[The Peninsula Hotels|Peninsula Beverly Hills Hotel]] in [[Beverly Hills]]. The meeting was convened for Enron to present its "Comprehensive Solution for California," which called for an end to federal and state investigations into Enron's role in the California energy crisis.<ref>[http://www.projectcensored.org/publications/2005/13.html] {{webarchive|url=https://web.archive.org/web/20060814133208/http://www.projectcensored.org/publications/2005/13.html|date=August 14, 2006}}</ref><ref>{{cite web|url=http://www.democracynow.org/2003/10/6/schwarzenegger_accused_of_involvement_in_9b |title=Schwarzenegger Accused of Involvement in $9B California Swindle with Enron's Ken Lay |publisher=Democracynow.org |access-date=August 14, 2010}}</ref>

On October 7, 2003, Schwarzenegger was elected Governor of California to replace Davis. Over a year later, he attended the commissioning ceremony<ref>{{cite web|url = http://www.wapa.gov/newsroom/cct/2005/jan14/27no12.htm |archive-url = https://web.archive.org/web/20060924224547/http://www.wapa.gov/newsroom/cct/2005/jan14/27no12.htm |archive-date = September 24, 2006 |title = Western Area Power Administration |publisher=Closed Circuit newsletter |date=January 14, 2005 |author= Carolyn Hinkley|access-date=August 17, 2008}}</ref> of a new [[Western Area Power Administration]] (WAPA) 500 kV line remedying the power bottleneck on [[Path 15]].

=== Congressional response to the crisis ===
In the spring of 2001, House Government Affairs Energy Policy and Regulatory Affairs Subcommittee Chairman [[Doug Ose]] held a series of field hearings in California and Nevada, receiving testimony from [[California Public Utilities Commission|Public Utilities Commission]] Chair Loretta Lynch, FERC General Counsel Kevin Madden, [[California Independent System Operator|California ISO]] President and CEO Terry Winter and Central Valley farmers. During the hearings, the state and federal representatives cast blame on each other, but there was consensus that warning signals of the crisis were missed repeatedly.<ref>{{Cite web |last=Thompson |first=Don |title=House launches probe |url=https://www.recordnet.com/story/news/2001/04/11/house-launches-probe/50786172007/ |access-date=June 2, 2022 |website=The Stockton Record |language=en-US}}</ref>

=== Federal Energy Regulatory Commission ===

The [[Federal Energy Regulatory Commission]] (FERC) was intimately involved with the handling of the crisis from the summer of 2000. There were in fact at least four separate FERC investigations.<ref name="ferc-doc">{{cite report |url = http://www.ferc.gov/industries/electric/indus-act/wec.asp |title = Summary of FERC documentation relating to the Western Energy Crisis 2000–2001 |access-date=August 17, 2008}}</ref>
* The Gaming Case, investigating general allegations of manipulation of the Western energy markets.
* The Enron Western Markets Investigation, FERC Docket Number PA02-2, specifically investigating the involvement of [[Enron]] and other companies in manipulating the energy markets.<ref name="ferc-doc"/>
* The Refund Case, involving wide-ranging recovery of illegal profits made by some companies during the crisis.
* The Economic Withholding and Anomalous Bidding Case.<ref>Investigation of Anomalous Bidding Behavior and Practices in the Western Markets, 103 FERC ¶ 61,347 at 62,360 (2003).</ref>

In December 2005, the Commission filed a report with Congress on its response to the California Electricity Crisis,<ref name="ferc-report">
{{cite report |url = https://www.ferc.gov/sites/default/files/2020-05/comm-response.pdf
| title = The Commission's Response to the California Electricity Crisis and Timeline for Distribution of Refunds}}</ref> which stated that "to date, the Commission staff has facilitated settlements resulting in over $6.3 billion".

On August 17, 2013, the British Columbia company Powerex agreed to a $750 million refund as a settlement over charges of manipulating electricity prices during 2000.<ref>{{cite news|url = http://in.reuters.com/article/utilities-california-crisis-idINL2N0GH0WI20130816|archive-url = https://web.archive.org/web/20160105122152/http://in.reuters.com/article/utilities-california-crisis-idINL2N0GH0WI20130816|url-status = dead|archive-date = January 5, 2016| title = Canadian province settles California energy crisis case| access-date = August 17, 2013 | work=Reuters| date=August 16, 2013}}</ref>

== See also ==

{{stack|{{Portal|California|2000s}}}}
* [[Energy crisis]]
* [[List of power outages]]

== References ==

{{reflist|2}}

== External links ==

* [[Federal Energy Regulatory Commission]] (FERC) Final Report on Price Manipulation in Western Markets (March 23, 2003)
** [http://www.ferc.gov/industries/electric/indus-act/wec/enron/summary-findings.pdf Findings at a glance] {{Webarchive|url=https://web.archive.org/web/20060221111358/http://www.ferc.gov/industries/electric/indus-act/wec/enron/summary-findings.pdf |date=February 21, 2006 }}
** [https://web.archive.org/web/20050507173313/https://www.ferc.gov/industries/electric/indus-act/wec/chron/chronology.pdf Chronology in detail]
** [http://www.ferc.gov/industries/electric/indus-act/wec.asp Further documents, including detailed report]
* [http://www.mresearch.com/reports.html Reports on Enron and the California Energy Crisis] by McCullough Research – page includes many downloadable reports, some of which were presented as evidence during investigations into the causes of the crisis.
* Susan L. Pope, "[http://www.hks.harvard.edu/hepg/Papers/Pope_CA.price.spike.update_12-9-02.pdf California Electricity Price Spikes: An Update on the Facts]" (December 9, 2002) (Opposes the McCullough research and supports the view that the crisis was an outcome of genuine problems with supply and demand)
* [https://www.cbsnews.com/news/enron-traders-caught-on-tape/ Enron Traders Caught On Tape] – Gloating about manipulating California's energy market. (''[[CBS Evening News]]'')
* [https://web.archive.org/web/20040528122435/http://www.commondreams.org/headlines04/0518-05.htm Enron Tapes Hint Chiefs Knew About Power Ploys] – (''[[Los Angeles Times]]'')
* [https://web.archive.org/web/20040610164615/http://www.commondreams.org/headlines02/0507-02.htm Papers Show That Enron Manipulated Calif. Crisis] – (''[[The Washington Post]]'')
* [http://www.democracynow.org/2002/5/7/defying_corporations_defining_democracy_as_internal "Defying Corporations, Defining Democracy": As Internal Memos Reveal That Enron Drove Up Power Prices in California] – A talk to Author Richard Grossman (''[[Democracy Now!]]'')
* [http://www.democracynow.org/2003/10/6/schwarzenegger_accused_of_involvement_in_9b Schwarzenegger Accused of Involvement in $9B California Swindle with Enron’s Ken Lay] – (''[[Democracy Now!]]'')
* {{cite web |url=http://econ.ucsc.edu/faculty/lkletzer/borenstein_jepw02.pdf |title= The Trouble with Electricity Markets: Understanding California's Restructuring Disaster |archive-url=https://web.archive.org/web/20060905020641/http://econ.ucsc.edu/faculty/lkletzer/borenstein_jepw02.pdf |archive-date=September 5, 2006}}
* {{cite web |url=http://www.publicaffairs.water.ca.gov/dwr50thanniversary/cers.cfm |title= California Department of Water Resources 50th Anniversary Article on the 2001 Energy Crisis |archive-url=https://web.archive.org/web/20070403224128/http://www.publicaffairs.water.ca.gov/dwr50thanniversary/cers.cfm |archive-date=April 3, 2007}}

{{DEFAULTSORT:California Electricity Crisis}}
[[Category:2000 disasters in the United States]]
[[Category:2000 in California]]
[[Category:2000s energy crisis]]
[[Category:2001 disasters in the United States]]
[[Category:2001 in California]]
[[Category:Economic history of California|Electricity crisis]]
[[Category:Electric power in the United States]]
[[Category:Electricity economics]]
[[Category:Enron]]
[[Category:George W. Bush administration controversies]]
[[Category:Market failure]]
[[Category:Power outages in the United States]]
[[Category:Scandals in California]]
[[Category:Sempra Energy]]