Ethics in the Energy Industry

The purpose of this paper is to examine the ethical issues faced by the energy industry before, during, and after the deregulation of the energy market in California. Part one will explain the ethical issues and how they came about. Part two will look at how several of the players in this industry have addressed these issues. In part three, I will critique the appropriateness of how the issues were addressed. In my analysis of these issues, I will focus on the following measurements:

• whether the industries initial approach to the issue was appropriate,

• whether the industry followed through appropriately as the issue developed;

• whether it industry has taken the necessary steps to avoid similar problems in the future.

The story of the California energy crisis is the story of a deregulation nightmare made worse by the unethical actions of several very powerful companies. This story is fraught with perils such as planning lapses, serious policy blunders, and warnings that came too late.

The overall effects of the energy crisis in California have been devastating. Johnson (2001) reported that the “experiment in deregulation has come at a staggering cost: $40 billion. That number inc

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This was first displayed by the utilities when the price of electricity skyrocketed and they launched a campaign to have the price cap declared illegal. These factors show that the industry’s initial approach to the issue of deregulation was inappropriate

There were a number of factors that were flawed in the market structure. Their hope was that this would allow them to back bill customers for the high wholesale costs, which was the very risk they had originally accepted in exchange for the billions in surcharges they’d pocketed in the beginning. Utility billing disputes increasing; Customers bringing

more complaints to state regulators. An examination of what happened in California during the period of deregulation and the resulting energy crisis, certainly leads us to a number of actions that constitute bad human conduct. The deregulation scheme was in their best interests and not the consumers.

As the deregulation issue developed, the industry did not follow through appropriately.

The lack of appropriate follow-through as the issue of deregulation developed was again shown by the policy blunders of Governor Grey Davis.

That’s when California Governor, Gray Davis tried to step in. ludes the $23 billion already paid by customers when rates were frozen at artificially high levels, and the $7.

Approximate Word count = 1213
Approximate Pages = 5 (250 words per page double spaced)

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