They rise on the prairies like iron giants standing guard over
the nation's electricity. The power towers march across America,
suspending in air a web of wire that links your home to virtually
every other in the continental United States. The North American
electrical grid is a fabulous structureby some measures, the
largest ever built by humans.
But the question, increasingly, is whether the accurate metaphor
is not one of impassive sentries protecting our power, but of gladiators
engaged in a tug-of-war over a scarce commodity. Or a fragile line
of dominos that can be taken down by an errant bolt of lightning.
Electricity shortages have afflicted major cities and small towns
across the country with disturbing regularity in recent years. Chicago
blackouts in the summer of 1999 contributed to the deaths of senior
citizens overcome by heat. Wisconsin blackouts closed down businesses
in 1997 and 1999. Copper mines in Montana suspended production this
past summer when electricity prices shot to historic highs. And
the drama that hit California this summer continues into winter
as state authorities declare emergencies in the face of high demand
and too little supply.
The shortages have a relatively brief history. In the 1990s, following
decades of building huge power plants and faced with overcapacity,
utilities spent little on new generation and less on transmission
grids. But unexpectedly strong economic growth during the decade
increased demand for electricity well above forecasts, and the power
grid is now straining to meet the demand.
In the midst of this has come a call for deregulation of the government-controlled
utilities that have long provided electricity to homes and businesses.
Proponents of deregulation say that competition in electricity will
lead to better investment decisions, greater innovation and more
efficient use of resources. Critics fear thatespecially given
current supply constraintsderegulation poses such high short-term
risks of price volatility and power shortages, that safeguards must
be created before even contemplating the longer-term promise of
market efficiencies. Proponents respond that supplies will remain
short until deregulation brings forth the incentives of the marketplace.
In the Ninth District, two statesMontana and Michiganhave
passed deregulation laws, but neither law has taken full effect.
Other states have moved slowly, worried that deregulation may be
promising more than it can deliver. And the power companies and
large consumers that most strongly support deregulation are having
to devise new strategies to push their agenda in an environment
that has come to regard deregulation as a question, not an answer.