If The Purchase Is Not Optional - Regulate That Industry

Posted on Thu, Aug. 21, 2003
Turn the regulation back on
By Molly Ivins
Creators Syndicate

It's the All-American Blame Game! A Finger-Pointing festival. A perfectly circular firing squad of "Told you so."

Bureaucrats perfecting their CYA moves. Politicians jumping on the opportunity to make points against the other guys. And so's your old man.

U.S. officials quickly blamed a Canadian plant for touching off the blackout mess. Mel Lastman, the clearly sleepless and exhausted mayor of Toronto, replied bitterly: "Tell me, have you ever heard the United States take blame for anything? This is no different."

It would be a refreshing change, would it not, if somebody just stood up and said, "My fault."

The early book has the great power outage of '03 beginning with FirstEnergy of Akron, Ohio.

But there has been no shortage of warnings that the grid was elderly, frail and inadequate, could short out, would short out, should short out at any time.

Those regulatory tigers at FERC (the Federal Energy Regulatory Commission), the guys who stood by doing nothing while California got ripped off for $45 billion, have in fact presciently warned that the Midwestern grid is a mess. So they get lots of points in the "I told you so" category. Not that they did anything about it.

The Clinton administration, in the person of the former energy secretary and now governor of New Mexico, Bill Richardson, is also in the clear, having tried to Do Something back in 1998, to the usual chorus of boos and jeers from the Republican Congress. This naturally did not stop Rep. Tom DeLay, the Exterminator, from blaming it all on the Demo-crats as soon the lights went out.

The Republican theme song is that if only Congress had passed Dick Cheney's perfectly darling National Energy Plan, this would never have happened.

The Cheney plan, hatched in secret with lobbyists from Enron and other players, is about producing more power, not transmitting it safely and reliably, so this may strike some as beside the point.

According to Public Citizen, the Cheney Plan "contains billions of dollars in handouts to nuclear, coal and oil companies, including some of the wealthiest corporations in the world. It would repeal time-honored consumer protection law and the Public Utilities Holding Company Act, and thus advance the destructive path of deregulation and encourage the same type of behavior that gave us Enron and the California energy crisis."

Among the bill's dumbest provisions: It re-authorizes the Price-Anderson Act, which caps the liability of nuclear operators in the event of an accident or attack, thereby making taxpayers liable for nuclear catastrophes (a great example of privatizing profits and socializing risks).

Now here's an interesting joker in the deck. Who do you suppose wanted FERC to expand its jurisdiction to cover all aspects of electricity transmission?

Why, Ken Lay of Enron. For the first two years of this administration, what Ken Lay wanted, Ken Lay got. In his famous memo to Cheney to deter FERC from imposing caps on wholesale power prices, so the California rip-off could continue, Lay also urged that FERC "develop reliability standards and enforce those standards" for the grid.

So guess what? Cheney's plan recommends that FERC "improve the reliability of the interstate transmission system" and "develop legislation providing for enforcement of a self-regulatory organization subject to FERC oversight."

In 2001, Lay had a come-to-Jesus session with Curtis Hebert, then chairman of FERC, saying that if he didn't get on board with Enron's program, he was gone.

So Hebert was replaced by Pat Wood, who came recommended by Lay. So did another FERC appointee, Nora Mead Brownell.

The White House then denied that Lay and Enron had any undue influence over national energy policy, which was certainly a big relief to everybody.

Before we all get lost forever in the finger-pointing, let me point out the fundamental question here. Given that our economy, security and basic services are totally dependent on the electric grid, do we really want to turn our electric system over to those who only seek short-term profits?

As Public Citizen argues, the blackout is "a strong argument against the electricity provisions in the federal energy legislation that would promote the kind of deregulation that brought us the West Coast energy crisis. These flawed policies are destined to worsen the dangers of overly centralized, profit-driven electric generation and distribution systems."

Or to point the finger up into the wind: Do we really have to suffer through another blackout or two before we re-regulate these guys?

Steve Benson
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