[LEMONS] 8.15.2003
Deregulation: Bad! a fair and balanced report on the northeastern power outages
Yesterday's catastrophic power outage was one of the most amazing spectacles I've ever seen on television. I couldn't help but feel a little solidarity with my East Coast brethren. After all, California is the Land of Blackouts.I know all about summer "snow days" and aimlessly wandering the streets until the juice switches on again. I was also reminded of a power failure we had here in 1998 (or perhaps '99), when power was knocked out to the whole city when a PG&E worker messed up a ground wire at a single power facility.
But for the most part, I know about blackouts thanks to the great
The New York Times reports:
The problem of preventing such power failures has been that, for the most part, no one has an incentive to invest billions of dollars in new wires, new towers and new transformers, which are often opposed by residential neighbors. The old utilities have sold off their power plants but still hold a highly regulated monopoly on the network of lines, and they would only invest in new transmission if state regulators would guarantee them rate increases to pay for it.
That is the last thing the regulators, who deregulated much of the industry in hopes of lowering rates, would be willing to do. The entrepreneurial power companies that have bought up power plants have decided against building new transmission lines that would compete with existing ones, possibly driving down transmission charges, and would, at most times, be nothing more than ``excess capacity.''(snip)
In promoting deregulation in the 1990's, advocates had visions of vast waves of electrons being wheeled around the country on short notice, from producers to distributors to consumers, in rapid, highly efficient response to shifting supply and demand. In reality, the transmission system limits the ability to do that, especially when it comes to pushing power into and out of some major urban areas.
The Washington Post also notes that some of the blame for yesterday's blackout can be laid at deregulation's doorstep:
The 1965 Northeast power blackout led to the creation of the reliability council, an advisory and watchdog group over the transmission system, said Peter Fox-Penner, a principal with the Brattle Group, a consulting firm advising utilities.
But the move toward deregulation has also exposed NERC's limitations, particularly its lack of enforcement powers to detect and stop generators from abusing the grid with unscheduled power deliveries. Yesterday's blackout will force attention back to the grid, Fox-Penner predicted.
"This will undoubtedly focus attention on the infrastructure, the need for investment in power grid and the best ways to attract investment in the grid," said Merribel Ayres, president of the Lighthouse Energy Group, a power industry consulting firm.
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