Article at a glance:

The deregulation that wasn’t

What does California's energy crisis mean for other regions and countries that want to deregulate their energy markets? A recent survey of public-utility commissioners in the US showed that nearly 75 percent intended to halt their deregulation efforts as a result of the ongoing energy debacle. A reasonable reaction, perhaps, except that California's energy "deregulation" was anything but. In an Orwellian irony, California's deregulation effort actually increased the amount of regulation and enlarged the regulatory complex.

The take-away

Perhaps the only lesson governments should draw from the California energy crisis is that regulation, once in place, is like an obstinate lawn weed that grows back no matter how often you pull it out. To succeed, deregulation has to attack the old regulatory regime at the root.