News Release

Assessing the Blackout: Interviews Available


Palast is coauthor of Regulation and Democracy (a book that includes analysis of power markets) and author of the best-selling The Best Democracy Money Can Buy. He said today: “Like some sort of mediaeval doctors bleeding their patient, the Bush administration keeps pushing for more deregulation when it’s been the problem — not the solution.”
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Director of Public Citizen’s Critical Mass Energy and Environment Program, Hauter said today: “Electric deregulation was the major factor behind the blackouts last week. Because deregulation replaced integrated resource planning — where states ordered local utilities to provide adequate infrastructure to serve consumers — with a market-driven profit motive, utilities have reduced their transmission-related investments by hundreds of millions of dollars over the last several years. This under-investment has been combined with deregulation’s huge new demands on transmission capacity that have strained the system. America’s transmission network was designed to service local markets — not the freewheeling, national market that deregulation has wrought. Deregulated energy traders and power plant owners now sell their electricity for the highest price, instead of having an obligation to serve local consumers…. The pending energy bill promotes the kind of deregulation that brought us the California energy crisis and the Midwest – East Coast blackout.”
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Masud managed the U.S. National Power Grid Study (1980) for the U.S. Department of Energy. He is author of a piece in today’s Christian Science Monitor entitled “Too Soon to Call for Grid Overhaul.” He said today: “President Bush tells us that ‘it’s a wake-up call’ and that ‘the grid needs to be modernized, the delivery systems need to be modernized.’ It’s much too soon to say what’s needed…. What we do know is the systems that are supposed to prevent this type of blackout didn’t…. As a last resort, the power system is designed to break into ‘islands’ with each island having sufficient electric generation to meet the needs of the consumers in that island. Apparently, this island operation did not take place…. It has little if anything to do with an antiquated grid or delivery system. Had the problem been rolling blackouts, one could have blamed either an antiquated delivery system or insufficient generation…. Deregulation itself [is] a misnomer. What really happened was that new laws and regulations were put in place, and a tried-and-true system that favored cost minimization was replaced with an untested system that favored profit maximization. It also fractured responsibility for the overall reliability of the system…. In fact, it is a wake-up call: rethink deregulation.”
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Media reports are indicating that last week’s blackout may have begun with FirstEnergy, the Ohio-based utility. Wasserman, who lives in Ohio, is author of The Last Energy War: The Battle Over Utility Deregulation. He said today: “FirstEnergy has a very long history, through its predecessor Cleveland Electric Illuminating, of holding northern Ohio hostage to its many failures. CEI blackmailed the city of Cleveland in an unsuccessful attempt to force then-mayor Dennis Kucinich to sell the city’s municipal-owned utility. Now, after possibly blacking out 50 million people, FirstEnergy wants to force back open a dangerous nuclear plant amid scandals over bad management and withholding information from the [U.S.] Nuclear Regulatory Commission.” [See:]

For more information, contact at the Institute for Public Accuracy:
Sam Husseini, (202) 347-0020; or David Zupan, (541) 484-9167