Ok. I've read the article Bartholomew mentioned in his link. I strongly recommend that people read this article. DougR, I think it addresses many of the issues you have brought up. I would love to post the entire thing right here, but it's too long. So I'll just post an excerpt...

"Through it all, dereg apologists are having a hard time explaining why two California power companies were immune to the crisis: the Los Angeles Department of Water and Power and the Sacramento Municipal Utility District. Both are owned by the public, and both maintain heavy commitments to renewables and efficiency. In 1989 Sacramento voted to shut its one nuclear reactor, and has since pioneered a major shift to solar, wind and biomass energy, with heavy commitments to conservation.

During the crisis, rates charged by both companies have been stable. The two "munis" actually made money selling power to their embattled private neighbors, underscoring the fact that throughout the United States, public-owned power districts supply electricity cheaper and more reliably than the private utilities. The California crisis has already spurred grassroots movements in San Francisco, Davis and elsewhere to demand municipals of their own. "In the long run," says author Dan Berman, "public ownership is central to any real solution to the problems of the electric-utility grid."...

...Which leaves what the consumer/environmental community that opposed AB 1890 has been arguing for all along--renewables. The most notable new Western power plant is now stringing its way along the Oregon-Washington border. It consists of 450 windmills with sufficient capacity to power 70,000 homes. With construction under way in February, electricity could be surging out by December 31, a far faster construction timetable than for any other source. The fuel supply will be cheap, stable and clean. Environmental opposition will be nil.

Thanks to 15,000 windmills built in the 1980s under Governor Jerry Brown (now mayor of Oakland), California once produced 90 percent of the world's wind power. But the big utilities wanted little to do with them. Last year the world-leader's mantle slipped to Germany, which built the equivalent of a large reactor's capacity in wind power. Had California done the same, things might have been different. "The message is clear, " says Coyle. "The power supply needs to be controlled by the public. And efficiency and renewables work. Do we have to go through this again to relearn those lessons?""