Sucheta Dalal :North America Trips On Lobbies (18 August 2003)
Sucheta Dalal

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North America Trips On Lobbies (18 August 2003)  

The truth, as it turns out once again, is more frightening than anything that Hollywood’s disaster movies can churn out. We saw it on September 11 when the Twin Towers collapsed into enormous clouds of dust. It happened again on Friday when large parts of the US reeled under a crippling power failure.

The world is shocked that this could happen to the only remaining super power. More surprising is the fact that over 36 hours later, the US has no explanation for the failure. What we have is the startling declaration by the governor of New Mexico and former Energy Secretary Bill Richardson that, “We’re the world’s greatest superpower, but we have a Third World electricity grid”. Even President George W Bush has conceded that to be the case.

But even third world, State-run electricity grids, manage to pin point the cause of failure in a matter of hours.

Look at what happened in a country with ostensibly better systems. Initially, the disaster was blamed on a lightning strike at a Canadian power utility; later it was attributed to a fire at a nuclear plant near Pennsylvania. When both these claims were disproved, the US and Canadian governments blamed each other for the outages. One said that failure occurred in New York and the other blamed it on Canada. For a while it was even speculated that fast-spreading Internet virus like the ‘W32/Blaster’ may have triggered the blackout. That rumour too has now been scotched.

Almost 36 hours later, USA Today reports that an electricity industry sponsored group is now pointing to the Lake Erie in Ohio as the trigger for the blackout. This too is being investigated. Also, the American and Canadian heads of State have now agreed to set up a joint investigation team to probe the cause of failure.

In the meanwhile, experts are wondering why emergency control systems did not start disconnecting consumers after the first losses of energy. New York governor George Pataki admitted to the press that the cascading problem ought to have been isolated, but it did not happen.

And that brings us to the nub of the problem. USA Today quotes a member of the federal agency that regulates transmission lines who said that the resumption of power also was being hampered because the “transmission system — our (power) highway — is so weak and so fragile.”

This means that when America should have concentrated on upgrading its transmission grid, it was busy succumbing to lobbying by private sector power companies to deregulate electricity distribution. With the result, it failed to invest in the transmission system and deregulation itself sparked off unprecedented fraud by utility companies.

Large American power generating companies worked with top law firms and accountants to successfully lobby the deregulation of power tariffs. The more brazen among them, like Enron Power Company even hawked their philosophy to a host of third world countries including India, with disastrous results.

In America, they had argued that deregulation of tariffs would allow consumers to get cheaper power; but it only led to outrageous scandal with power companies creating artificial shortages to drive up prices. It led to steep price increases, unprecedented profiteering and ultimately to rolling blackouts and brownouts in California.

A few voices are now beginning to question whether deregulation of the power industry played a part in Thursday’s disruptions. The Republicans and Democrats are already trading charges. Senator Hillary Clinton reportedly accused the Bush administration (on a Larry King show) of pushing deregulation and privatisation, and trying to undo the effort to provide a reliable and affordable energy system. And it is indeed a fact that President George W Bush is embarrassingly close to the oil and electricity industries. What remains to be seen is whether the US government, which is so much under the thumb of big business, will come up with an impartial investigation that attributes blame where it is due.

Curiously, ordinary Americans are much too relieved that the blackout is not linked to terrorist activity. The rest of the world is rushing off to check their own systems — Russia, Japan and Europe are certainly doing it. The Russians say that the US power failure is the “biggest in the history of world energy”, and has set up a team of experts to analyse what caused the outages. A spokesperson for RAO Unified Energy Systems of Russia (UES) said that they have asked the Americans for more detailed information on the disaster.

Fortunately, we in India do not have to worry about an American type power failure. Except Mumbai, it is a routine occurrence in the rest of the country and we are inured to the consequences. But there are still a couple of lessons to be learnt from the US crisis. First, that we should not blindly copy everything that is American, especially when it concerns policy matters, capital markets and economic deregulation. It is not always good for the system or in public interest. Secondly, one has to be careful about over-dependence on automation and technology.

Here is a quick run of what worked and what didn’t (technology-wise) during the power black. Unlike September 11, when New Yorkers remained connected to each other through cellphones, during their hours of terror, this blackout shut down the cellular networks. There was wide spread failure at base stations of cell companies after the back battery systems ran out of power. Although cellphones failed, Internet websites, barring minor disruptions have withstood the power failure. Experts say, “the Internet and major web sites have been engineered with redundancy and backup power systems to withstand power outages”. But that would have been of little help to New Yorkers and Canadians who were literally in the dark.

Ironically, as it happens during natural calamities and disasters in India, ham operators quickly sprang into action and remained connected. They provided communication support to the Red Cross Emergency Response Vehicles and even accompanied them on fire calls.

Finally, at this point of time, the biggest lesson from the American crisis seems to be that when big business dictates policy decisions, it leads to lopsided development.

-- Sucheta Dalal