Monday, August 16, 2004

One Year Later
I'll never forgot the date of the Northeast blackout of 2003, because my daughter was born in the middle of it. However, I have to wonder if others' memories are shorter, particularly those of the legislators, regulators, and utilities that all seemed so gung ho to rectify the problems that led to the largest power disruption in the country's history. That view is corroborated by articles such as this one in the Financial Times.

It's relatively easy to imagine a future power grid that is much more resistant to outages such as last year's. It could be the intelligent grid that some have likened to the Internet, with widespread two-way metering and seamless integration of a myriad of small generators, enabled by high speed computing. It might just be a more robust version of today's grid, with extra capacity added to key choke points and a larger generating surplus, or a mixture of the two. The hard part is actually getting there from where we are now.

Doing so will require greatly reduced uncertainty about the future regulatory framework, along with the prospect of returns that are attractive enough to lure capital away from other investment opportunities. That means Congress needs to enact an energy bill to replace the one that has been stalled for the last year, despite broad consensus that better energy policy is urgently required. It also means that local regulators must make electrical reliability a higher priority and create incentives for the grid operators and utilities to upgrade their systems.

That can only happen with strong public support and a willingness to set aside parochial concerns such as the interstate rivalry that bedeviled the new connector between Long Island and Connecticut, as well as a better process for addressing local concerns about infrastructure projects, rather than the current labyrinth of legal challenges that most such projects now face.

When you consider all the necessary preconditions, it's no wonder that little progress has been made since last August. This summer nature has been kind, with milder temperatures in the Northeast. But the combination of economic growth, which will drive up power demand, with more typical weather patterns will surely test the system again.

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