California Energy Crisis
Analysis of Market Manipulation
For two years Cambridge Finance Partners helped Duke Energy respond to allegations arising out of the California energy crisis of 2000 and 2001. The energy crisis was characterized by record prices and rolling blackouts and resulted in the bankruptcy of one of California’s three investor-owned utilities. Power generators and energy marketers were alleged to have caused the crisis by physically and economically withholding energy.
As part of this engagement, CFP analyzed numerous aspects of the Western energy markets including capacity utilization, pricing, and bidding behavior. We worked closely with both Duke and outside counsel to prepare extensive testimony and economic analysis given before the Federal Energy Regulatory Commission, the California Senate, and offices of the State’s Attorney General. At the conclusion of the engagement, lead outside counsel offered this endorsement: “On a matter of extraordinary length and complexity, Cambridge Finance Partners provided our client with outstanding service. Their ability to frame clear and compelling narratives from large amounts of data is impressive. I highly recommend them.”