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Viewpoints. Power lines Date published: 12/14/2008
WASHINGTON --America's electricity infrastructure is bursting at the seams, as demand for juice outpaces the grid's capacity to accommodate the flow. Massive investment in new wires and transmission towers is necessary to avoid an increasing threat of system-wide failures of the sort that left 10 million in the Northeast without power during the summer of 2003, warns the North American Electricity Reliability Corporation, an industry watchdog.Yet even if the investment were forthcoming, expansion of the grid is hindered by legal challenges from property owners who don't want to live next to humming power lines that mar their landscapes and decrease the value of their homes. Endless court battles waste the time and money of both parties, while America's system of transmission towers and distribution lines becomes more tenuous. There is a better way. To meet our electricity needs without forcing citizens to live near unsightly electricity infrastructure, we must end the government's stranglehold on the electricity industry. The provision of electricity is one of the most regulated businesses in America. Government controls virtually every step of the process: Electricity generation is burdened by onerous permitting; utilities are bestowed government-mandated monopolies to transmit and distribute the juice; and prices for electricity must be approved by state commissions. In this regulatory model, conspicuous waste and inefficiencies persist because there is no mechanism for change. Absent competition in a real market, there is no incentive for the industry to alter its business model. LOGIC OF MARKET FORCES For example, in many areas of the country, electricity costs consumers the same amount of money whether they use it at 4 p.m. or 4 a.m., even though the cost of generation is much greater in the afternoon, when demand is higher. This defies logic. If electricity were priced in accordance with market forces, rather than government mandates, demand would decrease during peak hours when electricity was more expensive. Decreased peak demand, in turn, would diminish the need for new transmission towers and distribution poles.
Date published: 12/14/2008
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