Blackout 2003

posted to www.marxmail.org on August 16, 2003

4:11 PM Thursday afternoon. I am putting the finishing touches on a fiendishly complicated Java module that is part of an ambitious Intranet application due to go into production in September. Then my computer and the office lights go off. At first I assume that the problem is in the aging Teachers College building where my office resides, which periodically has problems with the air conditioning, etc.

When I cross Broadway and 120th Street to catch the bus home, I notice that the traffic lights are dimmed. Again, I assume that it is a localized disturbance--perhaps the result of a construction crew accidentally slicing a power line or something.

It is only when I get on the packed bus (the subways are not working) that I discover the scope of the problem. Passengers are relieved that it is not terrorism but I am not happy to discover that Bush administration generated hysteria at work.

When I get home, I have to walk up 13 floors in my high-rise building. Since I am that far up, I have no access to water which is sent to higher floors through electrical pumps. It is 90 degrees and humid outside and I become uncomfortable very quickly. I am also very unhappy that I can't flush the toilet--let's leave it at that.

I lie in bed sweating and reading Heather Cox Richardson's "The Death of Reconstruction". Listening to my Walkman, it appears that nearly all the FM radio stations are off the air except the NPR station, which is using the facilities of the Sirius network, a new company that provides commercial-free programming via satellite. NPR provides a combination of useful information and the sort of smarmy "public radio" commentary that compelled me to back the Pacifica struggle to the hilt.

The only other FM stations on the air are computerized pop music outlets that are the evil spawn of Clear Channel Inc. and other monopolies that FCC director Michael Powell (son of Colin Powell) is encouraging. The contrast between a paralyzed NYC and the disembodied stream of disco, urban soul and urban country coming from these stations is a study in cognitive dissonance. If I wrote a movie about a post-nuclear holocaust world, I'd include a scene, which features the hero or heroine standing in amazement at a radio in some rubble pouring out disco hits from one of these automated stations 30 years earlier.

I finally settle on WABC AM, the home of rightwing talk radio hosts like Rush Limbaugh. At least it is live and it features news conferences with the ruling class politicians in between cryptofascist chatter.

On Thursday night I tune into the Bachelor-Alexander show. As I have mentioned here previously, these are two of the oddest characters around. One is gay and the other is closeted, I would guess, but both are rightwing fanatics. Well Bachelor is and Alexander is a Joseph Lieberman Democrat--practically the same thing. On most nights the guests will be some retired General talking about how to stick it to the North Koreans, or the President of a Zionist organization, who is complaining about media bias against Israel. You get the picture. What I will never understand is why Bukharin biographer Stephen Cohen and his wife Katrina Vanden Heuvel are frequent guests (separately) on this open sewer. Well, maybe I do…

Needless to say, the topic of the evening on Bachelor-Alexander is the blackout. Their guest is John Loftus, the author of "The Secret War Against the Jews", who is on several times a week to talk about Al-Queda conspiracies and the like. (http://www.john-loftus.com/) But he is also no friend of the oil companies as this snippet from an article ("What Congress Does Not Know about Enron and 9/11") on his website should make clear:

"But, if the Taliban pipeline had been built, Enron might have owned some of the most valuable oil exploration sites in the world, and rescued itself from insolvency. Any White House insider who helped Enron would have gotten rich, filthy rich."

When they ask him for his explanation of what went wrong, his reply might have stunned the yahoo audience. He said, "It is all about Reaganomics" and then proceeded to explain that deregulation and privatization have made a mess out of the nation's electrical system. The hosts quickly changed the subject.

On Friday I listened to about as much Rush Limbaugh and Sean Hannity as I could stomach. The party line in these circles is that the Democrats are at fault. If they had voted for the President's energy bill, none of this would be happening. They are particularly incensed at Senator Hillary Clinton, who opened fire on the President within hours after the blackout. She accused him of not believing in the need for cheap, reliable electricity, which is typical Democratic Party blather. Take potshots without offering a credible alternative.

Limbaugh and Hannity both stress the value of the President's energy plan. Surprise-surprise. With all that oil in the Arctic National Wildlife Refuge (ANWR), how can any sensible person oppose drilling? I guess anybody who remembers the Valdez. They also wonder how anybody could oppose the construction of new nuclear power plants. I suppose that if 3-Mile Island and Chernobyl are not part of your vocabulary, then no problem.

When NY State Governor Pataki or NYC Mayor Bloomberg (my old boss at Salomon Brothers and a real scumbag) address press conferences, they both affirm that this should have not happened, especially after 1977. From what I can glean from John Loftus and some experts on the NPR talk shows, the problem was not totally unexpected. It appears that the electrical grid shared by the Northeast and a big chunk of Canada is a kind of network with something in common with the Internet. The power lines are like cables and the generators are like computer servers. The only problem is that much of the equipment is 50 years old. It would be like running the Internet on Kaypros.

From an economics standpoint, the blackout was almost unavoidable. With deregulation, you get an incentive to make profits off of the sale of energy but you get no incentive to upgrade equipment. Today the NY Times op-ed page (http://www.nytimes.com/pages/opinion/index.html) has articles by former Clinton Energy Secretary Bill Richardson and liberal commentator Robert Kuttner making useful points.

Richardson says:

Thursday's blackout shouldn't have come as a surprise. In 2001, the general counsel of the North American Electric Reliability Council declared, "The question is not whether, but when, the next major failure of the grid will occur." Indeed, as energy secretary I held a series of electricity reliability meetings around the country in 2000 in an effort to bring industry representatives, government regulators and citizens together to tackle this looming problem. Unfortunately, as a nation, we sometimes wait for a crisis before taking much-needed action.

The fact is that as our demand for electricity has increased, our infrastructure primarily the electrical grid that connects homes and businesses to power plants across North America has not kept pace. Investments by utility companies have been inadequate; they have not built enough transmission lines. As wholesale electric markets evolve, utility companies and other electric generators have greater incentive to stretch the grid to its limits to gain a competitive advantage. At the same time, state and federal officials continue to quarrel over who will be responsible for regulating the interstate grid.

Kuttner says:

In the search for the source of Thursday's blackout, the underlying cause has been all but ignored: deregulation. In principle, deregulation of the power industry was supposed to use the discipline of free markets to generate just the right amount of electricity at the right price. But electric power, it turns out, is not like ordinary commodities.

Electricity can't be stored in large quantities, and the system needs a lot of spare generating and transmission capacity for periods of peak demand like hot days in August. The power system also requires a great deal of planning and coordination, and it needs incentives for somebody to maintain and upgrade transmission lines.

Deregulation has failed on all these grounds. Yet it has few critics. Evidently, even calamities like the Enron scandal and now the most serious blackout in American history are not enough to shake faith in the theory.

Ten years ago, most public utilities were regulated monopolies. They were guaranteed a fair rate of return, based on their capital investment and costs. So the government compensated them for building spare generating capacity and maintaining transmission lines. Regulators, of course, sometimes made mistakes and the industry oversold technologies like nuclear power. Even so, in the half-century before deregulation, productivity in the electric power industry increased at about triple the rate of the economy as a whole.

However, the wave of deregulation that culminated in the late 1990's broke up the integrated utilities like Con Ed that once generated power in its own plants, transmitted it and sold it retail. It ushered in a new breed of entrepreneurial generating and trading companies. However, the prices the local utility companies could charge consumers remained partly regulated. The theory was that local utilities, no longer producing their own power, could negotiate among competing suppliers for the best price and pass the savings along to the consumer.

What you get from neither Richardson nor Kuttner is a sense of the *crisis* driving all this. For that you'd need to look at the writings of the late Mark Jones, who seems more prescient than ever with the war in Iraq and now the blackout. As Stan Goff said on the A-List, a listserv that Mark initiated to discuss exactly these problems, "I wish Mark were here to see this." Well, Mark may not be here, but his writings remain. I am assembling them into a web archive that should be a useful resource for figuring out where we are going. Whether you agreed with Mark or not, you have to admit that he forced you to think about these issues. That is his legacy in the long run.