$4-Bil Ripoff: Report Suggests Power Cos. Created Energy Shortage to Boost Profits

LOS ANGELES-In a report that confirms some Southland commercial property owners’ biggest fears, a study led by MIT, but paid for by energy giant Southern California Edison, says some other energy providers intentionally cut back on their power generation around the start of the summer to drive prices higher, a move that government regulators estimate may have cost commercial and California families a staggering $4 billion in higher utility bills.

GlobeSt.com began reporting in July that many Southland office buildings and other businesses were suffering power outages, as temperatures soared and electricity to many buildings was shut down. The power shortage knocked out thousands of computers, hundreds of elevators and even the cash registers at many convenience stores.

The new study, though funded by SCE, was led by the director of the highly regarded MIT Center for Energy and Environmental Policy Research. It finds that plant owners and electricity resellers were able to boost their profits dramatically at the start of the summer by cutting back operations at some plants, creating artificial shortages that allowed them to charge higher prices in California’s recently deregulated energy market.