Here is a balanced look at the problem. NEW YORK POST
GROSS GRID NEGLIGENCE
By NICOLE GELINAS
August 16, 2003 -- TWO nations in the Western Hemisphere suffered life- threatening and economy- debilitating power outages this year: the Dominican Republic and Argentina. Now, the United States can add itself to the short list of Third World countries that can't competently manage their power grids despite years of warnings and near misses.
Who's to blame? Almost everyone: Democrats and Republicans, coal-industry magnates and environmentalists, Dick Cheney and Eliot Spitzer.
Public- and private-sector officials have allowed a quasi-privatized power grid to fall into a permanent state of disrepair and decay, despite the fact that 100 percent reliable power is vital to our economy and to our national security.
Officials' early guess is that Thursday's power outage was due to a massive transmission-system failure originating at an upstate power complex. But the nation's power system is in such an abject state of suspended failure that it could have been anything that went wrong - transmission, generation or distribution.
The Northeast transmission grid is an aging mess. Northeastern states should have upgraded regional transmission capacity and technology 10 years ago, but private investors have been loath to invest in an industry in which repayment streams and regulatory regimes are murky at best.
Transmission investors also face bruising environmental battles before they can even think of constructing new power transmission lines.
Private investment teams have tried and failed several times over to run a new underwater transmission cable between Connecticut and Long Island. Well-to-do local residents on both sides of the Sound don't want power lines running near their homes - and they don't want anyone to build generation capacity near them, either.
Federal and regional regulators have fragmented a fragile national power grid to open it to competitive private investment, but they have never quite decided who is in charge and who is accountable. So, even when aging Northeastern power plants are up to the task of meeting increasing demand, decades-old transmission lines can't move needed and available power to its final destination in New York City.
But even if it was a transmission and not a generation failure that caused the blackout, the well-documented failure to invest in new generation plants could cause large-scale power failures in future summers.
Last year, one private-sector owner of some power-gen- eration assets upstate, NRG Energy, attempted a $300 million upgrade of an aging coal-burning power plant to increase power-supply reliability for seven northeast states. New York state Attorney General Spitzer immediately filed a lawsuit, charging that NRG and other upstate power owners had repeatedly violated environmental laws by completing upgrades without complying with current anti-emissions rules.
But NRG and other private-sector generators aren't really the heroes of the story. Power executives lucky enough to inherit decades-old, pollution-spewing coal-fired power plants have gone through every fine-print rule in the book, and written some of their own, to avoid complying with environmental regulations. They enjoy fat profit margins while owners of newer, cleaner plants must struggle under onerous rules.
New power companies have spent billions to build fleets of 21st-century, environmentally friendly gas-fired plants. But they can't compete on price with older coal burners, since natural gas is three to four times more expensive to burn than coal. Republicans, and some Democrats, espouse the free market, but refuse to level the playing field by forcing older power plant owners to upgrade their assets.
Company executives who wish to build new power plants also face well-organized opposition to new construction everywhere; environmentalists don't seem to care that new clean generation replaces old dirty generation. Two years ago, Con Ed built several modest-sized gas-fired plants around New York City only after a bruising public battle that pitted the utility against misinformed residents and political opportunists.
New clean-coal technology could vie with expensive natural gas to replace high-emissions coal burners. But clean-coal investors are squeezed by both the radical and reactionary sides of the power plant battle. Owners of older coal-burning plants don't want to give up their fat profit margins to compete on a level playing field with new clean-coal burners, while environmentalists just say no to all coal. (And just forget about new nuclear.)
When government has been friendly to the private power sector, the industry has squandered its good will without compunction. Greedy management slates and power traders at major energy firms have repeatedly taken advantage of opaque power-trading markets to make illegal profits and thus ruin the public trust - witness Enron and others' long season of fraudulent round-trip power trades executed to take advantage of constrained supply in the West.
The real question is not why we had an urban blackout, but why we didn't have one sooner.
A reliable grid is clearly vital to our national security. But, post-9/11, federal, state and local officials have done little to assure a steady supply of power. Vice President Cheney's much-heralded national energy blueprint, unveiled before 9/11, has gone nowhere since.
So system operators must run a grid so constrained that there is no margin of error. One minor fire, outage or missed computer signal can, as many have warned for five years, throw a whole region into chaos.
Government officials are already planning congressional hearings and regional summits to dissect the power failure of 2003. But, as on 9/11, it was left to New York City's first responders to confront the aftermath of a disaster that was long in the making.
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