Why Power Outages And Blackouts May Become The New Normal

We used to have a lot of national systems that used to work and didn’t gouge consumers. Now we have “free market” everything, and life has changed for the worse. (Remember how cheap and reliable phone lines used to be?) Via Business Insider:

Carl Wood, a former commissioner of the California Public Utilities Commission, explained that for the next 60 years, “the local utilities controlled all the parts of the system,” so “it was very easy for them to predict how much power was going through the high-voltage lines.” The grid would rarely get overloaded, he said, “because it was all very controlled, very planned.” And since the primary goal of state regulators and local commissions was to deliver electricity to everyone, rather than gain a profit edge, the grid received regular preventive maintenance. “I was on a traveling maintenance crew, and we’d go from power plant to power plant,” Wood, who’s also a former Utility Workers Union of America organizer, recalled. “Every four years, every power plant was completely overhauled.”

But that system of local control over the grid began to erode in 1992 when Congress passed the federal Energy Policy Act. This policy established a wholesale energy market and deregulated power generation so new entities could enter into competition with the existing local utilities to sell the energy produced at their power plants. The government encouraged competition for the new market by incentivizing private utility companies while constricting existing utilities. Then in 1999, the grid was further deregulated when the Federal Energy Regulatory Commission called for the voluntary creation of regional transmission organizations across much of the US to “reduce the need for Commission oversight and scrutiny,” according to the federal order.

Driven by an ideological conviction after the Cold War that the future belonged to free and deregulated markets, these policies were designed to expand private markets into new frontiers. In reality, the laws created a complicated web of different private and public entities managing a chaotic electrical grid. In Ohio, for instance, residents buy their electricity from a private company like AEP, which generates electricity and distributes it to many parts of the state. AEP falls under the jurisdiction of PUCO, which regulates utilities services in the state. And then, depending on which part of the state someone lives in, the systems that transport high-voltage electricity to customers are coordinated by either Midcontinent ISO or PJM Interconnection, nonprofit organizations that oversee the movement of electricity across several states and operate a competitive wholesale electricity market. And all those groups fall under the regulatory umbrella of the North American Electric Reliability Corp. and FERC. This confusing tangle of acronyms isn’t unique to Ohio: If you point at a different spot on a US map, there will be a completely different string of equally convoluted private and public entities in charge of delivering electricity.

Sure, the privatizing pirates always tell us that deregulating “increases efficiency, spurs technological innovation, and lowers prices.” Have you seen any proof of that?

But instead of lowering costs or improving the grid, these policies caused energy prices in many areas to spike and led to artificial power shortages. Statewide spending on power in California went from $7 billion in 1999 to $28 billion in 2000 and led to the 2000-01 California electricity crisis, in which the energy company Enron created an artificial energy shortage to jack up prices. California’s artificial shortage eventually triggered a real crisis as multiple large-scale rolling blackouts gripped the state, affecting millions of residents for years. And reports suggest these profit-seeking schemes have happened in other places, too, though private-energy firms generally deny the claims.

Who, us? We’d jack the system just to make more money? We are INSULTED. (That you’re accusing us of doing that thing we’re doing.)

Capitalism only works when it’s heavily regulated. And it isn’t.

Why Power Outages And Blackouts May Become The New Normal

Leave a Comment