Dispatches > The Buzz

The weakest link

The chain reaction that led to the Northeast blackout seemed to have started in the most regulated link of the system; still, some in Congress seem eager for more regulation to remedy a problem that deregulation is better suited to fix

Issue: "Ten Commandments showdown," Aug. 30, 2003

There were 50 million victims in North America's biggest-ever power outage on Aug. 14: People stuck in elevators and subway cars. Mothers giving birth in darkened maternity wards. Travelers stranded in sweltering airports, waiting for baggage carousels that refused to turn.

But some policy experts fear the biggest victim of all may be the nation's long-term energy policy. From almost the first flicker of the lights, liberal critics were blaming the blackout on the deregulation of electric utilities. Without increased government oversight, they warned, additional massive blackouts are practically guaranteed. In the words of a spokesman for Public Citizen, Ralph Nader's consumer watchdog group: "Re-regulation is the solution we should be working for."

When Congress returns next month from its August recess, fixing the power problem will be near the top of its legislative agenda. "My concern is that Congress doesn't have any answers, but that they'll feel pressured to do something to show that they're aware of the problem," says Charli Coon, the Heritage Foundation's senior policy analyst for energy and the environment. "I assume the utilities will be portrayed as the bad guys. The message to the public will be, 'Utilities can't fix this, so Congress is going to protect you.'"

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Rep. Billy Tauzin (R-La.), chairman of the House Energy and Commerce Committee, has already announced his committee will begin looking into the blackout on Sept. 4. At about the same time, negotiators from both the House and Senate will begin meeting to reconcile their differing versions of a national energy policy. With the recent blackouts on everyone's mind, a new bill will probably emerge quickly as lawmakers scramble to react to the perceived crisis. "Unfortunately," says Ms. Coon, "when Congress reacts, it usually reacts with more regulation rather than less."

Ironically, though, the recent outage apparently started in one of the most heavily regulated aspects of the electricity business: power lines. While power plants themselves have been deregulated since the 1990s, increasing the nation's electric supply, the lines that carry that electricity are still a heavily regulated monopoly. Because the government limits what companies can charge for transmission, utilities have little incentive to upgrade the aging lines, even as they pour money into their more-profitable generating plants.

The result can be catastrophic. Early reports from the Aug. 14 blackout indicate two high-power lines near Cleveland were tripped off by unrelated causes. That sent extra power coursing into adjacent lines, which shorted out with the higher charge. When neighboring grids failed to seal off, they too overheated, sending the blackout surging from Michigan into Canada and back into New York.

Ms. Coon says there are intriguing proposals to make the transmission of electricity as competitive and efficient as the generation of electricity, but "that's not even on the radar screen of Congress right now"-especially so soon after the radar screens went blank.

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