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How the politicians' deregulation binge caused this crisis
Free market blackout!

By Eric Ruder | August 22, 2003 | Page 16

THE POLITICIANS love to talk about protecting us from terrorism. But they didn't do a thing to protect us from the free market madness that caused the Great Blackout of 2003.

The power outage--the largest in U.S. history--apparently started in the Midwest, and then spread throughout eastern Canada and the northeastern U.S. Some 60 million people were left without electricity as utility companies took a full day and longer to get power back on line.

Blame focused on the Ohio utility FirstEnergy. Apparently, two of FirstEnergy's transmission lines failed, touching off the chain reaction that eventually brought down a huge part of the North American continent's electric grid.

"These guys are horrible," Harvey Wasserman, a well-known environmentalist and expert on energy issues, told Socialist Worker. "Their incompetence is exceeded only by their arrogance. In this case, they mismanaged the transmission lines, but they also own three nuclear plants, they're completely unresponsive to public input, and they don't care about anything except profit."

But whatever mismanagement FirstEnergy is guilty of, the whole utility industry--and their friends in the White House--deserve to share the blame. The reason why can be summed up in a single word--deregulation.

Throughout the 1990s, utility companies lobbied, pleaded and bullied their way into getting state and federal lawmakers to get rid of regulations and rules governing their industry. If only the free market were allowed to work without government interference, we were told, electricity could be provided more cheaply and efficiently.

Utilities would be forced by competition to become more efficient, and consumers would enjoy lower rates. But California's energy fiasco of a few years ago showed that the main beneficiaries of deregulation weren't ordinary people, but the utilities themselves.

Without government regulations, a few shadowy corporate giants--with now-notorious names like Enron--were able to manipulate supplies in order to create artificial shortages and gouge California consumers. The $65 billion that utility corporations stole from the state of California and its residents dwarfs the size of the state's massive budget deficit.

Deregulation also meant that corporations had an incentive to build power generation facilities, but that no one had an interest in investing in the transmission infrastructure to keep it in good condition. This was the cause of the most recent catastrophic system failure. When a couple of FirstEnergy's power lines went down, the rest of the transmission grid couldn't compensate--or disconnect--quickly enough. The result was a total meltdown, leaving millions to suffer in the summer heat.

Even before power was restored, some mainstream newspapers were rightly pointing the finger at deregulation mania as the source of the crisis. But leave it to the Bush administration to try to use the blackout to promote its free market agenda. Last weekend, Energy Secretary Spencer Abraham made the rounds to the Sunday talk shows, where he called on Congress to pass the administration's energy bill. This proposal is an environmentally toxic mixture of more drilling, more mining and more nuclear plants.

Also, Abraham said, "Bills that are before the Congress would include requirements [to] put incentives in place, and also open up the competition, so more people could get engaged in the building of transmission." Translation: even more deregulation!

"This is a clear form of psychosis," Wasserman says. "This blackout is a direct result of deregulation. It will happen again and again, and deregulation is the problem, not the solution."

The energy companies should be re-regulated--now--so that they can't wreck the utility system further. And renewable forms of energy--like solar and wind power--can provide an environmentally sound source of future power. We can't allow the Bush administration to hand out more windfalls at our expense.

The blackout they won't talk about

POWER OUTAGES have this city of millions scrambling to find ways to cope with the sweltering heat and undrinkable water supply. But the city is Baghdad, not New York.

The temperature is 115 degrees, not 90. And the blackouts have been going on for five months, not 24 hours.

Iraq was once one of the most developed economies in the Middle East. But a decade of economic sanctions and two U.S.-led wars have left a once-modern society in a pre-industrial state, with its power and sewage systems in a shambles.

In New York, the blackout created a spike in cases of diarrhea requiring hospital treatment. In Iraq under the sanctions, 5,000 children died every month--often from entirely preventable diseases and conditions such as diarrhea.

For Iraqis angry at Washington's broken promises, there was an understandable bitterness when news of the blackout reached them. "Let them taste what we have tasted," said Ali Abdul Hussein. "Let them sit outside drinking tea and smoking cigarettes waiting for the power to come back, just like the Iraqis."

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