blackouts in California have made national headlines. To many
people, this situation is a little difficult to comprehend—California
is hardly a poor state. Even more odd, the problem only promises
to get worse during the upcoming summer heat. While the impact
of too little electricity and rising utility bills would seem
to have vast implications for the economy, the White House has
shown little inclination to get involved. FRONTLINE gathers
the complex strands of Blackout by talking to Governor
Gray Davis of California, Vice President Dick Cheney, federal
and state officials, and a number of Texas energy brokers from
Enron, Duke Energy, and El Paso.
There are two sides to this shadowy
tale. In interviews, Vice President Cheney, Chairman of Enron
Ken Lay, and FERC (Federal Energy Regulatory Commission) Chairman
Curt Herbert, all believe that the California energy crisis
has been overstated. They also believe that the root of the
current problem can be traced to F.D.R.’s regulation of the
power industry in the 1930s; through deregulation, the consumer
will eventually have more choices and lower prices. "The
rules of competition govern that economies work, that choice
works," says Herbert. "It’s why we’re American."
No one, though, wants to talk about why power prices have risen
from $40 to as much as $1900 per megawatt hour, or about Enron
and Duke Energy’s enormous profits, or about motions filed against
energy companies for manipulating market prices.
California’s electric bill went
from seven billion in 1999 to twenty-seven billon in 2000. Nettie
Hoge, executive director of The Utility Reform Network (TURN),
finds the idea that there is an energy shortage "preposterous."
"…[T]he new plant owners and the traders, like Mr. Lay’s
organization, looked at the data and figured out how to manipulate
the market." Deregulation meant that FERC, as opposed to
state commissions, would be the governmental body to make sure
rates were "just and reasonable" as called for in
the 1935 Power Act. But FERC has been slow to respond to complaints;
the organization has also done little to seek redress for over-billing
when it has been discovered (6.2 billion in California, though
FERC says that it only has jurisdiction over 1.3 billon). Many
attribute this reluctance to the current climate in Washington
and to the fact that Republicans received 80% of the 32 million
dollars donated by oil and gas companies during the last election.
California’s problem could soon
be New York’s, and many other states’, problem. Consumers, at
least in the short run, will take the brunt of deregulation,
whether that means blackouts or higher electric bills. Blackout
may not have solved the problem of whether or not deregulation
will eventually work; it does make clear, however, that energy
brokers like Enron and El Paso are getting filthy rich in the
interim. It is fascinating that these CEOs even agreed to talk
to FRONTLINE, because these men and women seldom come across
as defenders of the public’s best interests. Blackout is
another investigative victory for the FRONTLINE crew, helping
to make sense out of a complicated public issue.
Ronnie D. Lankford, Jr.
Blackout will air on June
5th at 10:00 P.M. on P.B.S. For more information
about FRONTLINE, go to www.frontline.org.
Review by Ronnie D. Lankford, Jr.