For many decades, Americans have been able to take entirely for granted the continual supply of electricity to their homes and businesses. Recently, however, Californians have seen this supply evaporate when it is most needed.

With no earthquakes, ice storms or other physical causes, blackouts have occurred throughout the state. Knowledgeable commenters point to a variety of reasons, but to most people the culprit is man-made “deregulation.” What are the reasons for California’s problems, and, more importantly, could those problems be repeated here in Maine?

First, we must acknowledge that large price spikes are theoretically possible in Maine and New England. After all, here as in California, prices in the wholesale market for electricity are no longer subject to direct regulatory control. Having said that, however, there are enough major differences between the situation in California and Maine to give us a great deal of comfort. Here is a brief description of those major differences.

Supply and demand. California has seen large increases in demand for power over the last ten years with almost no new power plant construction. California’s load (demand for power) has increased 17 percent in the last 44 months. Its supply has not increased at all. Also, California has been less able than in the past to import power from neighboring states because the population in those states has increased dramatically in recent years, over 50 percent since 1990 in Nevada, for example. As a result, demand has recently outstripped supply and is the primary cause for the rolling blackouts.

Remember that power must be generated at the same time it is consumed because storage of electricity, unlike other commodities, is not yet commercially feasible. It is thus impossible for an electric grid to work if there is more demand than supply. By contrast, during a time when load growth in New England has been around 2 percent many new power plants have either been built or are under construction. Maine alone has twice as much generation as it uses, making it an electricity exporting state. In fact, more than 1,500 megawatts of new gas-fired units are either operating or about to operate here in Maine, at locations from Veazie to Westbrook.

Deregulation. California was the first state to deregulate the generation of electricity and they made mistakes that we have not repeated. The current problem is occurring in the deregulated wholesale market. In California, bulk power is bought and sold almost exclusively in a power exchange or a spot market. Utilities that supply power through a standard offer are prohibited from securing that power under long-term contracts, and are required to turn to this spot market in order to met the needs of retail customers. As a result, they have little ability to “hedge” against the ups and downs of that market and the effects of, for example, worldwide increases in oil and natural gas prices.

This, combined with a retail price cap imposed at the start of deregulation, has led to the prospect of utilities declaring bankruptcy. By contrast, though we also have a spot market, nearly 80 percent of New England’s power is bought and sold pursuant to long-term contracts. This includes Maine’s standard offer suppliers.

Hydropower supply. California imports about 25 percent of its electricity from neighboring states, some coming from the large federal dams in the Northwest. There are reports that the combination of lower-than-normal rainfall and regulations on salmon runs has kept these large hydro power stations from producing as much electricity as usual. This, combined with the increased demand for power in those states, has limited the ability of those dams to contribute to California’s power needs.

There are two factors we share with California. One is that the transmission grid in each area is old and can be stressed at times of peak use. It is exceedingly difficult to build new transmission lines because of the needed land and the opposition from landowners. As indicated above, however, Maine is a supply-exporting state, and any crimps in transmission are more likely to affect our neighbors to the south than to hit consumers at home.

The second factor we share with California is the potential that generators will “game” the system, either legally or illegally, in order to increase profits. While nothing has been proven, the US Department of Justice is reportedly now investigating large price increases that occurred in New England last spring and summer to determine if antitrust or other laws were broken. The same suspicions have been voiced in California.

With regard to forms of legal “gaming,” there are efforts under way in New England to amend the rules governing the wholesale markets in order to reduce the ability of generators to take advantage of customers during periods of tight supply.

All in all, California’s problems are unlikely to visit us here in the Northeast. There will be bumps in our road to effective retail competition for electricity, but the lights are going to be on when we hit them.

Stephen G. Ward is Maine’s public advocate.