It’s been two months since the Great Blackout of Summer ’03 and the culprit has now been identified. It’s us
According to the Energy Secretary, the problem is the transmission system, and the responsibility for that system belongs to the rate payer. We know this because the President, having implemented a state-based deregulation policy, freed utilities from having to invest rate payer funds into the transmission network. (On top of that, the bipartisan energy legislation working its way through Congress will once and for all free the Energy companies from the kinds of disclosure rules and investment requirements that made them responsible for the transmission system in the first place.)
Before the blame is completely transferred, however, lets look at where some of the confusion exists. In Ohio, there is a big utility company called First Energy that came together out of the merger of seven smaller regional companies. Unfortunately, a lot of people have had a lot of negative things to say about First Energy. For example, through the misfortune of a longstanding relationship with their unscrupulous accounting firm, Arthur Anderson, First Energy had to restate 2002 earning due to “irregularities.” Also, the company had a few small problems with their Davis-Besse nuclear reactor, including an incident where some boric acid ate through the reactor head and nearly caused a meltdown. That's in addition to the urgent warnings state regulators had been issuing about the region's transmission system.
Which leads us to last August, when one of First Energy’s well-run coal plants suddenly gave out, causing the company to suddenly withdraw twenty percent of the energy it sends to Michigan. We all know what happened after that.
The other bit of confusion in this whole situation involves the close ties between FirstEnergy, Congress and the Bush Administration. It started off with the company volunteering $100,000 to help pay for the presidential inauguration. From there, the company became a proud member of Vice President Cheney’s infamous energy task force. Then, in 2001-02, the company and its management spent almost $4 million in lobbying, as well as several million more in donations to Republican and Democratic candidates, as well as the Bush re-election effort.
So, now that we understand what all the confusion was about, when do we rate payers get to start paying for that new transmission system?