Introduction: An extensive set of general rules and methods for regulating monopolies suppliers have been developed by the scientific world. The pros and cons of competition versus regulated markets are also discussed in detail. However, our understanding of the precise effect inducing competition on markets is relatively limited. The purpose of this essay is to explore this very matter, one which is particularly relevant in a key network industry like the electricity sector. An ideal example for examining the many consequences of deregulation is the electricity market in California. The US federal state of California became the initiator of liberalization when opening its strongly regulated electricity market to competition in 1996. In the last 50 years, the electricity industry in California has experienced its most radical changes and influenced many successors such as the European Union.