Regulatory Failure in the California Electricity Crisis

The widely held view that FERC “failed” in its oversight of Western power markets is overly simplistic. It ignores the physical and political realities of the crisis. Above all, it ignores the fact that the crisis was solved not by FERC intervention but by vigorous state action that restored the balance of supply and demand. The real regulatory failure was that FERC and state policymakers were unable to work together to resolve the crisis.