A Shock to the System
by Jeffrey St. Clair
August 19, 2003
"The Dark Ages: They haven't ended yet."
-- Kurt Vonnegut, Jr.
The most shocking thing about the reaction to the power outage that darkened the Northeast last week (aside from the spasm of self-congratulatory mewling of New Yorkers for surviving a whole 16 hours without electricity, as Baghdad enters its powerless fifth month) is that people were shocked that the lights went out.
Let's face it, blackouts happen. There's nothing new about that. Even New York City, whose citizens seem to view ever unsettling intrusion of reality as a test of their moral fibre as a community, goes dark with the regularity of the arrival of locusts. That's the nature of our gridded power system.
Of course, some things have changed. The intervals between system crashes are getting more frequent and the outages themselves more prolonged. And the explanations are becoming more convoluted. When they bother to explain at all.
We are days after the latest big event and no one really knows what happened. That's because no one's actually in charge of the chaotic system that shuttles power to half of the nation. Welcome to the world of laissez-faire electricity. Follow the blinking hand.
Here's all we really need to know: Something tripped. The current in the Erie Loop jolted backwards, feeding on itself in an act of electric cannibalism. It's an apt metaphor for the nation's electric system. So get used to it. Oh, yeah, and open your checkbook.
Some of us have been down this road before.
Much of the West went dark in August of 1996-though New Yorkers may have missed the great event. There seems to have been a news blackout on that power outage, which presaged the great California outages of 2002. It's too bad the press didn't look more closely at the causes of the 1996 blackout, which hit more than 2 million homes, because that meltdown in the power grid revealed the profound defects lurking in the system and how those inherent problems were exacerbated by the deregulatory frenzy of the 1990s.
You can see why the press bypassed the issue. Stories on utilities are about as exciting as a root canal. They are difficult to write and even more demanding on the readers, who are more inclined to wade through a story on genocide in Eritrea than to try to make sense of the political economy of the US electric power system. All in all, it's easier to keep people in the dark about such matters.
Plus, in the go-go 1990s electricity deregulation seemed to be the great bi-partisan project, promising consumer choice, lower rates and the opportunity to plug in to greener energy. Even environmental groups, such as EDF and NRDC, went along for the ride hawking the virtues of freewheeling companies such as Enron over the public utilities, which were portrayed as palsied dinosaurs in era of brawny dot.coms.
On the national political scene, Ralph Nader stood nearly alone in warning about the impending tragedy of jettisoning the system of regulatory mechanisms that had held the power companies in check for the past half-century in favor of a scheme that resembled a Vegas casino game. But with Clinton and NRDC backing the deregulatory mania, Nader was easily dismissed as a grumpy doomsayer.
Of course, in hindsight handing over the electrical power system to companies that have the moral sensibility of telemarketers and derivatives traders and then freeing them from most government oversight doesn't seem like the brightest idea.
When George Bush finally interrupted his swing of California fundraisers to enlighten us on the crisis, he described the Northeast blackouts as a "wake up call." For once he's right. But he was somewhat less forthcoming on precisely what are we waking up to. Namely, an ever dimmer future of blackouts, brownouts and rising electric rates. It's a scenario that Bush and his cronies helped broker. Pay more, get less. That's the cruel equation of deregulation.
Ironically, Bush has been helped somewhat by the skidding economy. With many factories idled, the demand for power has been relatively low since 2002. If the economy ever rouses itself from the doldrums, the nation's frail power system will be taxed even more and rolling blackouts may become a regular feature of American life, like those taunting tapes from Saddam Hussein and Osama bin Laden.
But at root this isn't a problem of demand. In fact, there's an overcapacity of electricity. When the lights went back on in the Northeast, they did so without one kilowatt coming from a nuclear power plant. All 21 had been shut down. Let's keep them that way.
No, it's not an energy crisis we face, but a crisis of accountability. Regulated monopolies were overthrown in the 1990s and replaced by unregulated monopolies who would much rather stuff their profits into dividends and gaudy executive bonuses rather than sink them into long term investments in an aging transmission grid.
In his brief speech, Bush, who mistakenly referred to the Northeast event as a "rolling blackout," also pointed to the anachronistic grid as a problem. "We'll have time to look at it and determine whether or not our grid needs to be modernized," mumbled Bush. "I happen to think it does, and have said so all along."
Hold on, Mr. President.
Far from always saying the electric grid needs to be modernized, in June of 2001 our amnesiac leader threatened to veto a bill in congress that would have appropriated $350 million to upgrade the transmission grid. However, Bush didn't have to resort to the veto. The Republican controlled House of Representatives voted the measure down twice, largely along party lines.
Bush delicately avoided any mention of the probable culprit in the grid crash: FirstEnergy, the Ohio-based utility. Bush's discretion is understandable. After all, on June 30 FirstEnergy's CEO, H. Peter Burg, hosted a fundraiser for Bush that netted his campaign more than $600,000. The featured speaker at the event was none other than Dick Cheney. The company's chief operating officer, Anthony J. Alexander, is also an old pal. Indeed, he was one of Bush's famous "Pioneers." He contributed $100,000 of his own to the 2000 Bush campaign and raised at least another $100,000. Other executives at FirstEnergy have contributed more than $50,000 to the Bush reelection bid. That kind of money may not talk, but it sure buys silence.
So now we know. The system has shorted out and there's no simple fix. Indeed, there may be no fix at all. And, more intriguingly, there's no political mechanism to demand or oversee an upgrade of system that nearly everyone agrees is broken. That's because the electric power safety net, erected after the power company scandals of the 1920s, was giddily cut loose during Clintontime. Like welfare, once the regulatory framework is dismantled it's gone for good. Score another one for Bill.
Today, there are scarcely any rules to follow and compliance with the few guidelines that remain is merely voluntary. There are no penalties levied when things go terribly awry. There's not even anyone to levy the fines. In many cities, public utility commissions, which once acted to restrain the baser instincts of electric utilities, have been abolished or simply stripped of all authority. Many of the power companies are now located far out of state. In Montana, electric power is delivered by a company headquartered in Philadelphia. In Portland, Oregon, power is provided by a bankrupt company from Houston, Texas, lately looted by its own executives: Enron. And on and on it goes.
The electrical system of post-regulatory America is a Hobbesian morass of open markets, emasculated regulators and predatory corporations who are supposed to be providing a basic human service but act as if they only owe allegiance to the bottom line.
Across much of America (though, perhaps, not midtown Manhattan), blackouts are a regular pre-planned event, courtesy of the electric companies. In the deregulated environment, low-income families have little recourse when the bills pile up and you have to choose between paying the water bill, the doctor bill or the power bill. A 2002 report by poverty researcher Dr. Meg Powers estimates that more than 27 million low-income families in America face electricity shut-offs every year. Imagine being laid off in Bush's wrecked economy and having to place your family at the beneficence of Enron, ConEd or Duke Power.
Instead of punishing the private power generators and utilities, Spencer Abraham, Bush's goofy secretary of energy, wants to penalize the customers who were hurt most by the blackout and the failed promises of cheaper rates made by the zealots of deregulation. "The grid's got to be upgraded and the consumers are going to have to be willing to pay for it," warned Abraham.
When it comes to energy policy, compassionate conservatism means keeping the public in the dark until they pony up the money to put the power companies in the black.
Jeffrey St. Clair is author of Been Brown So Long It Looked Like Green to Me: the Politics of Nature (Common Courage Press) and coeditor, with Alexander Cockburn, of The Politics of Anti-Semitism (AK Press). Both books will be published in October. He is coeditor of CounterPunch, where this article first appeared (www.counterpunch.org).