blackout
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Power shortages. Rolling blackouts. Skyrocketing utility bills. California's 2000-2001 power disaster has made "energy" a national front-burner issue.

In "Blackout." FRONTLINE and The New York Times join forces to investigate the story behind the California energy crisis. Correspondent Lowell Bergman goes head to head with energy industry CEOs and state and federal officials to uncover what's at the heart of the growing energy crisis, and who's profiting. Among those interviewed for the one-hour documentary are: Vice President Dick Cheney; California Governor Gray Davis; Enron CEO Jeff Skilling; Curt Hebert, chairman of the Federal Energy Regulatory Commission(FERC); and consumer advocates.

"The bottom line is we've launched ourselves into a great social and economic experiment that no one knows for sure will work," says Bergman. "No one, either Democrat or Republican, opposed overturning the old regulated order, and now no one thinks it is possible to turn back before summer comes with projected heat waves, rate hikes, and possible blackouts."

Amid the growing energy crisis, this report tracks the emergence of a new kind of megacorporation: giant, national holding companies that trade electricity and gas much like any other commodity. With names like Enron, Dynegy, Reliant, and El Paso -- and with close ties to high-ranking Republican and Democratic officials -- these energy traders have seen their profits explode in recent years.

At the same time, California's electricity costs for the coming year may, by one estimate, reach $70 billion -- nearly 10 times what they were just two years ago. That fact prompted California Gov. Gray Davis to brand these energy giants "pirates."

It's a label that is hotly refuted by Jeff Skilling, CEO of energy trader Enron Corporation, which now ranks seventh on the Fortune 500 and is the largest business operating through the Internet today.

"We are working to create open, competitive, fair markets," Skilling says. "And in open, competitive, fair markets prices are lower and customers get better service. We are the good guys -- we are on the side of the angels."

Skilling, like many critics, blames the California crisis on the state's flawed 1996 attempt to deregulate the power industry. "Unfortunately, they agreed to a bad market structure," he says. "... [It] was like it was designed by the Politburo in the Soviet Union."

The program also explores why the federal government refused for months to intervene in the California crisis, as well as the rationale for dismantling the old system of utility regulation. In addition, "Blackout" examines the relationship between big power companies which have profited from deregulation and top government officials, including political appointees who run FERC.

In the end, some observers say this growing energy crisis could result in a rollback of deregulation and a grassroots push for more public power. "They can huff and they can puff and they can say what they want to ideologically," says David Freeman, energy advisor to Gov. Davis. "Private power has been an abysmal failure as far as the consumer is concerned in California in 2000 and 2001."

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