“Deregulation and competition should set the stage for an unprecedented national referendum on the future of America’s energy policy—a vote up or down on nonpolluting ‘renewable’ energy sources: solar, wind, geothermal, biomass and hydroelectric power.”

—Bill Paul, founder and publisher of Earth Preservers, an environmental newspaper for children

Computer screens go blank. Traffic lights go out. Air conditioners switch off, store lights darken, and factory machines grind to a halt. California’s rolling blackouts—ordered in 2000 by the state’s power managers in an effort to conserve dwindling electricity supplies—cost the state millions of dollars. The blackouts also reinvigorated the debate about the promise of alternative energy sources, such as wind and solar power, to help California and the nation solve a deepening energy crisis.

Many analysts blame California’s energy crisis on...