Policy
I'll submit that the California recall and last week's blackouts on the other coast have the same root cause - an inability to make effective policy to achieve desirable outcomes.

The desirable outcome in California is a well-governed state able to endure the vicissitudes of volatile economic changes without succumbing to fiscal crisis during downturns. The desirable outcome for our power grid is to provide safe, highly reliable power without interruption at the lowest possible cost. We've managed to achieve the exact opposite of the outcomes we desire. And the ultimate reason is poor policy.

The recall is simply a second-order effect of California's budget crisis. I'm no big fan of Gray Davis, but the recall does nothing to help solve the budget crisis. The California Journal does an excellent job of tracing the budget crisis down to it roots. “Crisis in California” identifies 5 reasons why things have gone wrong. All are examples of poor policy making. Taken together, they've created a disasterous situation. The biggest question is whether they can be effectively reformed. If not, “The doomsday question is whether Governor Gray Davis is being recalled for failing to govern a state that is no longer governable.”

A not-disimilar story - albeit over a longer period of time - unfolds if you take a look at the roots of the blackout. Since at least 1982, experts have warned that the electric grid's ability to meet its goal of uninterruptable service is becoming more and more compromised. There have been multiple warnings since 9-11. Yet little to no action has been taken. The reason, once again, is poor policy. Some excellent background information can be found here and some good free-market oriented policy discussion here.

Notice that on both of these issues, everyone can share the blame. It's a completely non-partisan failure by all concerned.