Life in the Age of Electronics

Lights out!

Last week's (August 12, 2003) power blackout that hit eight U.S. states and Canada on the surface looks to be a power line failure in Ohio. The failure cascaded from there, affecting millions of people, and costing the stressed economy upwards of $6 billion. But the chain, or rather, the web of causality -- what really caused the problem -- stretches much farther than that.

Our economy, when you get down to it, operates according to a set of very basic laws. I'm not talking about judges-courts-police type laws. I'm talking about the kind of laws or rules that say how the parts of a process interact with each other. The law of gravity, for example, describes how two masses attract each other. Our economy is governed by the underlying rule that a capitalist must maximize profit -- make as much money -- as possible. If a capitalist fails to maximize profit, in an open market, another capitalist will come along and do that. And since capitalism is a competitive system, the successful capitalist will drive the unsuccessful one out of business.

Understanding this simple rule explains a lot about our economy. The electrical system is no exception. Maximizing profit has driven the deregulation of the power system. With no government rules, the basic law of capitalism can freely operate. For example:

"Unregulated utility affiliates and independent power companies built power plants far from their home markets, in parts of the country where demand is high or where there are plentiful supplies of natural gas -- to produce power -- as well as regulators likely to grant the necessary permits... This put an additional strain on parts of the transmission system." (Wall Street Journal, 8/18/03)

To complicate things, in deregulated markets, power companies have an incentive to run their generators at full capacity, loading up the transmission system since electricity can't be stored. And companies can seek out whatever electricity provider is offering the cheapest price at any moment, no matter how far away. This makes the links in the network -- the power lines and substations -- even more critical in tying together the huge regional electrical grids. But stringing new transmission lines isn't as profitable as making electricity. So electricity demand is up 35% over the past 10 years; but the carrying capacity of the country's high voltage electrical lines is up only 18%, according to the Electric Power Research Institute, an industry group. Can you hear the Final Jeopardy music swelling in the background? Or is it the theme from Jaws?

The Republicans and Democrats are falling over each other to cut taxes and regulations and transfer more money to the already rich (another way to maximize profits). Public services are privatized; and government oversight is cut back or eliminated -- let the market take care of it. The systems that we all depend on are put entirely in the hands of private capitalists. In turn, capitalists must obey the iron law that profit must be maximized. So private power companies set about cutting costs and moving money to places where the bucks are easiest to make. In the most deregulated markets, a crisis can be entirely driven by unrestrained capitalists, as in the Enron-manufactured California power crisis of 2000 - 2001.

So the conditions are set for disaster. Where and when disaster will strike exactly is impossible to predict, but it doesn't take a rocket scientist to determine that something bad will happen. Like they say about complexity theory: deterministic, not predictive. The interconnected system means that local problems, given such conditions -- selfish self-interest, deregulation, aging and overloaded infrastructure -- will cascade to global failure.

In the September, 2003 Wired: "Power Up! Twenty years from now, the whole world will be sharing electricity through one grid." Welcome to the future.

Jim Davis
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