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Feeling Powerless

Energy crises are doing more than making news and fueling fears of impending eco-doom; they're also really, really bad for business.

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This story appears in the April 2001 issue of Entrepreneur. Subscribe »

From higher prices at the gas pump and the electricity crisis in California to the soaring cost of natural gas in the cold-weather states, many entrepreneurs face a severe crisis of their own: whether their businesses can survive the unexpected, drastic increase in energy costs.

A few years ago, many thought deregulation would be an entrepreneurial opportunity rather than a hindrance, and California seemed proud to lead the way. But the natural gas shortage, combined with the failures of deregulation, resulted in an electricity crunch in California that stands as a warning to entrepreneurs in other states on the verge of deregulation. Besides California and Pennsylvania, which have fully enacted deregulation, more than 20 states have passed legislation or regulatory orders to allow for retail competition, according to Robert Schnapp, director of the electric power division of the Energy Information Administration.

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