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Utility deregulation possible villain { August 16 2003 } Original Source Link: (May no longer be active)
http://www.newsday.com/news/local/wire/ny-bc-ny--blackout-deregula0816aug16,0,2897586.story?coll=ny-ap-regional-wirehttp://www.newsday.com/news/local/wire/ny-bc-ny--blackout-deregula0816aug16,0,2897586.story?coll=ny-ap-regional-wire
Utility deregulation possible villain in blackout
By JOEL STASHENKO
Associated Press Writer
August 16, 2003, 3:00 PM EDT
ALBANY, N.Y. -- The power outage that washed like a tidal wave across the Northeast gave critics an opportunity to question anew the Pataki administration's deregulation of New York's utility industry.
Paul Tonko, a Democratic state Assemblyman and chairman of the Assembly's energy committee, suggested that New York moved too far, too fast in removing generations-old oversight on the regional monopolies of electric and natural gas utilities and the shift affected the capacity and maintenance of the electrical transmission system.
"We've contended as a committee and a (Democratic) majority that we need to move incrementally and do the checks and balances along the way," Tonko said. "We needed to see if the (free) market is developing. What about the delivery system? Are we dealing with bottlenecks? We need to be moving thoughtfully, carefully, step-by-step."
A Pataki spokesman said deregulation would ultimately be absolved of blame in the blackout.
"There are always those small-minded people who try to score political points in times of crisis," said Joe Conway. "It's sad and it's wrong and it's certainly no way to set public policy."
The failure of three transmission lines in northern Ohio was the likely trigger of the nation's biggest power blackout, the head of the North American Electric Reliability Council said Saturday.
Deregulation was designed to get utilities out of energy generation and into the power delivery business. Consumers were to have benefited by being able to shop around for the cheapest power _ like long distance telephone customers do. The free market would ultimately set the cost of power, not state regulators, and companies were to have profited.
However, neither choice nor significantly lower prices have yet developed for most consumers in New York, where electricity remains among the most expensive in the nation.
Rob Sargent, policy analyst for the National Association of State Public Interest Research Groups, contended deregulation is "potentially a culprit" in the blackouts.
"Look at a map where the states were most affected by this. ... All these states are deregulated," he said.
Anna Aurilio, legislative director for the U.S. Public Interest Research Group, said the nation should focus on modernizing its power systems.
"We do not need any more deregulation of the energy grid," she said.
Mohammed Safiuddin, professor of Electrical Engineering at the University at Buffalo, said a problem with New York's system is that while power generation is deregulated, power distribution _ the system of wires delivering electricity to consumers _ is not. He called the system "very inefficient."
Fred Zalcman, executive director of the Pace University Law School Energy Project near New York City, said deregulation has meant power being transmitted over longer and longer distances, and he contended that technological improvements in the system have not kept pace with new demands.
Pataki's former chief utility regulator, Maureen Helmer, denied that Thursday's blackout had anything to do with deregulation. Helmer, instrumental in helping Pataki carry out deregulation, insisted that in an environment of enhanced competition, energy companies put billions into infrastructure improvements _ money she said they might not have spent under the old regional monopoly system.
Sen. James Wright of Jefferson County, a Republican who chairs the Senate's energy committee, said he also could see no connection between the blackout and deregulation.
"I suspect that when all is said and done, it (the blackout) is going to have something to do with the mechanical operations of the system, and that has nothing to do with deregulation," Wright said.
Wright and other Republicans in the majority in the Senate supported the administration's approach of letting the Pataki-controlled state Public Service Commission deregulate the utility industry over the Democratic Assembly's objections.
Wright said he was in high school when the Great Blackout of 1965 occurred along the Atlantic Seaboard. "We were heavily regulated then and that didn't prevent the blackout," Wright said.
Deregulation has resulted in less oversight by the public over how utilities spend their money, said Charles Brennan, staff attorney for the consumer-oriented Public Utility Law Project in Albany.
"It has resulted in an environment in which generators have a great deal more freedom to act without a regulatory authority overseeing their actions," Brennan said. "That's the same for the construction and maintenance of the grid."
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Associated Press Writer Michael Hill contributed to this report from Albany.
Copyright © 2003, The Associated Press
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