Greg Palast knows who's to blame for the power outage last week - George W Bush and the evil power companies. Greg actually investigated some of them back in the day and found that they were cooking their books. Fast forward a few years, he says - the power companies learned their lesson, they backed GWB, and now they're forcing deregulation on an unsuspecting public. In the process - blackout.
Palast's initial story illustrates the main problem - I don't usually care if the companies from which I purchase products are cooking their books; I buy the product if it's high quality and low priced. Any accounting issues are between management and the firm's owners. In a completely deregulated electricity market, I wouldn't have to care about my electricity company's accounting either - if they set their price too high, I would simply purchase from another firm. Shouldn't Palast see that as a plus?
There are lots of problems with the electricity industry right now. The industry is stuck in a weird sort of limbo between natural monopoly regulation and a truly deregulated market. The transmission and distribution system has apparently been one of the casualties. We need to get to a much more decentralized (and deregulated) electricity industry as quickly as possible, both to avoid blackouts as well as to encourage more industry innovation and more efficient consumption. Hopefully the blackout will at least serve as an impetus for change.
Posted by Stephen Bronstein at August 17, 2003 10:30 PM