The Dimming Down of America

By Roberts, Wallace | The American Prospect, September 25, 2000 | Go to article overview

The Dimming Down of America


Roberts, Wallace, The American Prospect


SO FAR, ELECTRIC UTILITY DEREGULATION HAS BROUGHT US POWER SHORTAGES AND EXORBITANT PRICE HIKES.

Electricity became more valuable than gold this summer--or at least more valuable than finished aluminum ingots. At the beginning of June, 270 workers at Ormet Corporation aluminum plant in Hannibal, Ohio, were laid off for the summer when the company concluded that it was more profitable to sell the electric power normally used in its smelting operations than to manufacture aluminum. And that was true even after the company paid its workers benefits and supplemented their unemployment checks so that they took home 70 percent of their base pay.

They were the lucky ones. A few weeks later, Kaiser Aluminum, Georgia-Pacific, and a handful of other companies in Montana and Washington that use large amounts of electric power suspended operations, some for a week and some indefinitely. They laid off more than 2,500 workers when the wholesale price of electricity in the region jumped from 4.5 cents per kilowatt-hour to 90 cents. Those companies did not supplement their workers' unemployment benefits, and in mid-August Kaiser announced it had made a $40-million pretax profit selling the electricity it would have used in production.

In the strange new world of deregulated electric power, where competition was supposed to bring better service and lower prices, what we have instead is a serious lack of generating and transmission capacity and widespread manipulation of the wholesale markets--which together are bringing us frequent shortages, threats of blackouts, and mind-boggling summer prices.

California has been hit especially hard. On June 14, the San Francisco Bay Area suffered rolling blackouts to prevent the crash of the state's transmission system after one of its components became overloaded during a heat wave. That week, which saw temperature records set in many cities in the area, wholesale "purchasers of California power spent more than $1.2 billion for electricity, 300 percent more than they paid for the same period in 1999 and one-eighth of their cost for power for all of 1999," according to a special report to Governor Gray Davis released in early August. People in San Diego, whose electric utility company was the first in California to be deregulated and who were thus the first to see fully deregulated prices show up on their household utility bills, are throwing tomatoes at utility workers and demanding action from the state legislature.

But it's not only California that's suffering power shortages and price hikes. So far, 25 states have deregulated, and the changes nationwide are affecting even those that haven't. Demand in California is sucking power out of the Northwest. New Yorkers complained bitterly about July bills 40 percent higher than last year. New England and the mid-Atlantic states have come close to blackouts several times this summer, and last summer there were half a dozen blackouts in New York City, Chicago, Long Island, and New Jersey, and throughout Louisiana, affecting more than one million customers.

A reliable electric supply system is the quintessential requirement for twenty-first-century life, and it used to be that we could take it for granted. Now, however, as a consequence of what one former regulator has called "mindless deregulation," the U.S. power system is in danger of falling apart.

Under deregulation, utility companies still sell electricity to customers, but most are no longer allowed to own certain power plants. Instead, new wholesale power trading markets have been set up where the utilities can buy electricity from competing suppliers. In theory this is supposed to have all the advantages of a free market. In practice see San Diego.

These are the key factors driving the new deregulated system toward a reliability crisis:

* There is a genuine shortage of generation and transmission facilities in most regions of the country because utilities cut way back on construction projects eight years ago, after Congress passed the Energy Policy Act, setting deregulation in motion. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

The Dimming Down of America
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.