Bush's Bogus Blackout Remedy

The president says the blackout was a 'wake-up call.' But on energy policy, he's still asleep at the wheel.

| Fri Aug. 22, 2003 2:00 AM EDT

George Bush has told reporters he views the Great Blackout of 2003 as a "wake-up call...an indication we need to modernize the electricity grid."

What's clear is that Team Bush sees this latest crisis as yet another golden opportunity. The September 11 attacks delivered a "trifecta," allowing George W. to boost his popularity (since squandered), rev up the military (now in quicksand) and shred the Bill of Rights (definitely shredded). The Blackout puts Bush in the hunt for another triple coup of wrong-headed policies: deliver more money to his favorite campaign contributors in the energy business, continue pushing deregulation, and hype fossil and nuclear fuels.

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The vehicle for doing all this is the Bush Energy Bill -- a true legislative SUV. The 2003 model featured big handouts to the utilities, the nuclear power industry and the gas-coal-oil drillers. The nuclear subsidy was about $8.5 billion in guaranteed loans for new construction. Showing rare backbone, Senate Democrats had this nightmare all but killed. But then they inexplicably agreed to pass last year's Energy Bill -- which is only slightly worse than the 2003 model. And, since some form of Energy Bill had passed both the House and the Senate, the whole mess was thrown to a Congressional conference committee.

Even before the blackout, Sen. Pete Domenici, the Republican chair of the Senate Energy and Natural Resources Committee and the GOP kingpin of the conference committee, had proclaimed that he would use the process to deliver a GOP wish list. Then, right on schedule, the grid crashed, compliments, it seems, of FirstEnergy Corp.

Based in Akron, FE is now the nation's fourth-largest utility, selling electricity to about 4.5 million people in Ohio, Pennsylvania and New Jersey. FE also owns and operates the Ohio Legislature, from which it took nearly $9 billion in subsidies in the late 1990s thanks to deregulation. FirstEnergy is the successor to Cleveland Electric Illuminating, the utility that attempted to strong-arm then-mayor Dennis Kucinich into selling off the city's municipal light system. When Kucinich refused, CEI and its banker allies pushed the city into default. Kucinich held firm, and the people of Cleveland still own Muny Light.

That FirstEnergy may have sparked the August 14 Blackout is pure political poetry. Company execs held a $600,000 Bush fundraiser in June, attended by none other than Dick Cheney. FirstEnergy President Anthony Alexander personally gave $100,000 for the Bush-Cheney inauguration, and served on the Energy Department's Transition Team.

Trifecta Point 1: More Money for the Grid

In Bush's spin, the technical culprit at the top of the list is the transmission grid. "The grid is old. It's aging. And the growth in electricity demand is tremendous, and we're not keeping up with it," Spencer Abraham told "Fox News Sunday."

He's right. This massive Rube Goldberg device is seriously obsolete. Gargantuan networks of huge towers strung with 20th-century wires carrying electricity thousands of miles is an inefficient absurdity. At least ten percent of the electricity produced is lost to the mere act of moving it around. The wires are dangerous to people and deadly to millions of birds. The system has delivered major blackouts in 1959, 1961, 1965 and 1977 in the East, and 1996 in the West.

Abraham says that upgrading the grid will cost $50 billion, and that ratepayers should pay for it all because "they're the ones who benefit." Interestingly enough, Congressional Democrats called for the same sort of upgrade just months ago, but their modernization bill was trashed and killed by Tom DeLay, who is now blaming the Democrats for the blackout.

Most importantly, while the grid can be patched up, it can never be "fixed."

That's because the essential premise behind the grid, which Bush wants to preserve and protect, is thoroughly obsolete. Bush wants to keep on generating power at central facilities with fossil and nuclear fuels and transmitting more and more of this juice over a rickety system that is supremely vulnerable to breakdown due to incompetence or sabotage.

The real future is with something Team Bush will never accept: decentralized production from renewable sources at the point of use -- meaning solar panels on rooftops, co-generators in basements, geothermal tubing sunk into the ground.

But such talk is unwelcome in this White House. Bush will use this crisis to dump billions of dollars into tinkering with the existing grid. All that money will go to campaign contributors, undoubtedly including FirstEnergy, and probably even including Halliburton -- if they can get back from Iraq in time.

Trifecta Point 2: Defend Deregulation

Blackouts in general cannot be blamed on deregulation alone -- the preservation of which is next on Bush's agenda. Prior to the (deliberately choreographed) California rolling blackouts of 2000-2001, the worst failures happened while the industry was still regulated. But a blackout of this astounding size and scope could only have come in a deregulated world. For so many utilities to let their systems crash over such a huge geographic area could only be accomplished by an absolutely dedicated lack of concern for anything except short term profits.

The industry is now trotting out free market types to say that the "real" cause of the blackout was "not enough deregulation." And that's clearly the Bush line, too: More, not less, "free market forces" will somehow fix the grid, when exactly the opposite is true.

Bush's prime target is the Public Utilities Holding Company Act (PUHCA), a New Deal bulwark restricting the ability of utilities to merge across state lines and requiring open public accounting for much of what they do. PUHCA was prompted by the utility merger-mania of the 1920s, which turned the power companies into rapacious monopolies and then saw them crash. The Act became the federal centerpiece of a regulatory agenda meant to split the difference between public ownership and private profiteering.

Introduced at the dawn of the electric power era, between 1895 and 1920, state-level regulation kept private utilities stable, relatively cheap, and somewhat accountable for about 80 years. But private utilities used regulation as a half-way measure to keep themselves from being taken over by angry consumers, who were given a regulatory agency to yell at.

California fired the first deregulatory shot in 1996, and a score of states quickly followed suit. Republicans poked giant holes in PUHCA. A new merger frenzy turned local utilities like Cleveland Electric Illuminating and Toledo Edison into multi-state monsters like FirstEnergy.

The final repeal of PUHCA is in both versions of the Energy Bill, now at Domenici's tender mercies. And Republicans also aim to void the last vestiges of state regulation. If that happens, another frenzy of mega-mergers will leave the entire continent with a tiny handful of bloated utilities that will buy and sell legislatures, media outlets, senators and representatives, exactly as they do power plants. Despite the free market rhetoric, no meaningful competition will emerge. Prices will rise and service will deteriorate even further, with more and more destabilizing blackouts engulfing larger and larger areas. And all this will be sold to the public in the name of preventing more blackouts.

Trifecta Point 3: More Mining, More Drilling, More Nukes

Finally, Bush is spinning this crisis to get more taxpayer dollars for his friends in the fossil/nuclear generating business. More supply is needed, they say, to satisfy ever-growing demand.

Never mind that coal is a massive polluter with a wide range of problems, and natural gas is in increasingly short supply. Never mind that nuclear plants are utterly worthless in this kind of crisis. Because they need back-up power to operate, nine reactors hooked up to the blacked-out grid were forced to shut down precisely when their energy was needed most. Bush's fortunes are thoroughly tied to the big utility companies, and to the mining and drilling companies that produce the fuel they burn, so the administration will continue to use the crises they generate to reward the guilty parties.

The Bush Plan does contain some small tax breaks for large-scale wind power, and the Energy Bill may emerge with some other green power trinkets. But don't expect any meaningful efficiency or conservation initiatives to cut into the 50% of generated energy that we waste. Saved energy is the cheapest form of "new" power -- the $50 billion Abraham wants to hand Bush campaign supporters to re-jigger the grid could be spent on efficiency. Or it could be spent on developing alternative sources of electricity. Either approach could seriously lighten the load on the overburdened grid.

This is no green fantasy. Last year, San Francisco passed a $100 million bond to put photovoltaic cells on its municipal buildings. A major array of such cells has already been installed on the rooftop of the massive Moscone Center complex. If this blackout had hit San Francisco, the lights there would have stayed on, thanks to this alternative source.

In California, San Francisco had to go it alone because, when the state Public Utilities Commission approved a renewable power plan in the 1990s, it was killed by the utilities. Those hundreds of green megawatts could have kept Enron and their Bushite cohorts from bankrupting the state.

Now, those same electric pirates are waiting greedily on the sidelines, cheering Bush's attempt to spin the blackout to their benefit, ready to leap at his offer to extort even more money from the nation. We have the technology to answer the real "wake-up call" sent by this blackout. The question is: Do we have the will?

It won't be easy to stop this latest Bush onslaught. But we have no choice.