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In the early part of the summer of 2001, California faced the dire prediction of hundreds of hours of outages and rolling blackouts. California narrowly avoided the worst-case scenarios because of larger than expected customer response to calls for conservation, an extremely cool summer in the West, and some rather heroic efforts on the part of the California Independent System Operator (CAISO). The economic downturn may also have contributed to a smaller than forecast electricity demand. Nevertheless, the basic infrastructure problem has not gone away. Reserve margins throughout the U.S. have shrunk from around 25% a decade or so ago to less than 10% today. Investment in ...