What was going on?The Californians famously boast that they have the sixth- largest economy in the world, and the statistics are certainly impressive: a state with only 36 million people has a GDP that is greater than China, some $1,392bn, and contributes $111bn to US exports. The final report on the crisis, which came out earlier this year, found 37 energy firms had engaged in market manipulation and ordered the return of $3.3bn (£2bn)to Californians.While this crisis was an early contributor to the unravelling of the Enron puzzle, more important to Californians was that their state had suddenly became the laughing stock of the world. It was Enron's role in bringing a little bit of the Third World to downtown LA that put the spotlight on sharp practices in the deregulated energy market. He quipped back quickly: "Fine, I'm from California." It was a timely reminder that the "Sunshine State" gave the US an early lesson in energy dis-economics Private affluence and public squalor. I thought of this neat summary of modern America when the great blackout hit New York on Thursday. "How are you coping?" I asked a Wall Street friend, conscious of 9/11 sensitivities.
Private affluence and public squalor. This will involve some short-term pain but it is better than endlessly repairing.". "It is now clear that we have to replace whole sections of the network. In London, for example, half of the 20,000-mile water main is more than 100 years old and a third is more than 150 years old. "This will not be insignificant and it will attract attention from the consumer groups."The problems with the water infrastructure are most acute in Britain's biggest cities, in particular London, Liverpool, Manchester and Birmingham.
Reversing the 12.5 per cent price cut is expected to be the least they will ask for. "This time customers are going to have to take more of the costs," said Mr Armstrong, who is also managing director of customer sales for United Utilities. Combined with a reduction in the rate of return permitted to the companies and a package of new environmental standards imposed by Brussels, this forced many water companies deep into debt.The companies' business plans delivered to the regulator on Friday set out a wish-list of things they would like Ofwat to do. In the previous price review the regulator imposed a 12.5 per cent cut on the industry.