US lessons for energy industry restructuring: based on natural gas and California electricity incidences

During the regulation and deregulation processes, the US experienced, besides temporary price spikes, several unhappy incidences; natural gas shortage in mid-1970s, gas bubble in 1980s, California power crisis, and high natural gas price in 2000–2001. This paper focuses on the US natural gas and California electricity industries, especially on the above-mentioned four incidences. Through analyzing their causes and effects, this paper tries to deduce some lessons, which would be helpful to prevent and/or overcome other probable incidences in the US as well as in other countries in a process of deregulation or planning to introduce competition in their energy industries. Main lessons deduced are encouragement of investment, minimization of political consideration, transmission of price signal to all the market players, outlet for any market interference, diversification of trading options, and minimum ambiguity on responsibility between regulators as well as watching on general market situation and correcting its flaws in timely manner.