WASHINGTON - April 5 - Statement by Wenonah Hauter, Director of Public Citizen’s Critical Mass Energy and Environment Program

While the final report of the U.S.-Canada Power System Outage Task Force concludes that errors and mismanagement at Ohio-based FirstEnergy, along with a lack of enforceable reliability standards, were the leading causes of the massive August 14, 2003, blackout, the report falls short of placing blame on the true culprit: electricity deregulation.

The task force found that the lack of enforceable reliability rules allowed companies like FirstEnergy to operate without a full picture of the reliability of the grid, and that no single independent entity had access to reliability data necessary to monitor system conditions. But the task force didn’t seriously assess the state of our country’s electricity restructuring. For example, while the report finds that one of the four main causes of the blackout was the failure of FirstEnergy to trim back trees, it does not address the primary reasons for this failure: (1) well-documented cutbacks in staff that follow utility mergers and are designed to cut costs and increase profits, and (2) the refusal to reduce energy loads even when overloads may cause sagging lines because, under deregulation, the highest profits are made during the times of highest demand.

The report also fails to address critical safety issues at the nation’s nuclear power plants, nearly two dozen of which shut down during the blackout. These issues include inoperable or malfunctioning emergency diesel generators that are necessary to prevent meltdowns and emergency sirens to alert the community surrounding reactors.

Our lawmakers should consider this report a warning and push for strong reliability standards, such as those in U.S. Sens. Jeff Bingaman’s (D-N.M.) and Maria Cantwell’s (D-Wash.) stand-alone reliability bill (S. 2236). Instead, the Senate Republican leadership today announced its latest creative endeavor in trying to pass the energy bill by attaching the energy bill’s tax package – which gives away more than $7 billion in tax breaks to the oil and gas industry – to the Foreign Sales Corporation (FSC) tax bill. This does nothing to solve the reliability problems outlined in the blackout task force’s report.

If the FSC bill passes with the energy tax provisions on its coattails, taxpayers will be stuck with a huge bill and no results. Next time the lights go out, consumers can blame the Senate for ignoring the real cause of the 2003 blackout.

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