Blackout Puts Energy Politics Front and Center

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The nation's worst blackout is putting energy -- especially upgrading high-voltage transmission lines -- back on Congress' radar. But resolving the problem could be difficult and expensive.

Regional conflicts, the controversy of electricity industry deregulation and concern about a power struggle between state regulators and those in Washington are among the issues that could sidetrack whatever might be needed to insulate the power system from future blackouts.

When Congress returns from its summer recess next month, it is expected to embrace actions that will require utilities to comply with tougher reliability standards, and faced sanctions if they do not.

There is strong bipartisan support for ending the industry's current freedom to accept such standards voluntarily.

The grid needs mandatory reliability standards, Energy Secretary Spencer Abraham (search) said Sunday as he made the rounds of the television talk shows.

Rep. John Dingell (search) of Michigan, senior Democrat on the House Energy and Commerce Committee, agreed "some teeth" are needed to enforce reliability requirements. But he said Congress should deal with that issue without getting bogged down in the debate over other, more controversial energy matters.

Even that may, in fact, be an accomplishment and reflect the new urgency in the aftermath of last Thursday's breakdown of the power grid that left all or part of eight states in the dark from Michigan to New York and southern New England.

"We've been trying for the last couple of years to get help from Congress to allow us to enforce reliability rules," said Michehl Gent, president of the North American Electric Reliability Council (search). His group was created after a major blackout hit the Northeast in 1965 to set such standards, but has no power to enforce them.

On the talk shows, Bush administration officials and leading lawmakers called for action to upgrade an aging, some say antiquated, power grid.

"What's clear is that if we don't have an upgraded transmission system, we're going to have more problems," said Abraham, adding that people are demanding more electricity, so "we need more transmission lines."

But he also acknowledged building new lines is politically difficult -- and expensive. Some estimates have put the cost of bringing the power grid up to date as high as $56 billion.

"Rate-payers obviously will pay the bill because they're the ones who benefit," Abraham said on CBS' "Face the Nation." He said ways must be found to give greater financial incentive to companies to invest in power lines.

Many energy experts believe the issue is more than building new lines and that management of the transmission system must be overhauled and streamlined. Others argue the whole idea of a competitive market in a commodity such as electricity should be re-examined because it puts too much strain on the power grid as electricity is traded around the country.

These issues are unlikely to be resolved soon.

Acknowledging the pitfalls, Dingell suggested that Congress push some essential things such as requiring reliability rules and deal with the other issues later. "My old daddy used to say `kill the closest snake first,"' he told "Fox News Sunday."

For three years, Congress has been grappling with a broad energy bill and its electricity provisions have been among the most contentious. Last year, the House passed a bill that included virtually nothing on electricity. Electricity provisions in bills that passed both the House and Senate this year, are now certain to be reworked.

The debate, however, is likely again to become muddled in conflict among regional interests, a reluctance of states to surrender power to the federal government, and differences between warring factions within the electric power industry itself.

For example, Congress has been reluctant to give the Federal Energy Regulatory Commission (search), or FERC, authority to take private land to build high-voltage power lines. Opponents to such action, including many western Republicans, see it as a surrender of a state's authority to Washington.

"We've got to do something about the right-of-way problem. Nobody wants a transmission facility in their back yard," said Rep. Billy Tauzin, R-La., the Energy and Commerce Committee chairman.

When FERC Chairman Pat Wood, a Republican appointed by President Bush, pushed a proposal to create a system of regional organizations that would manage the grid system, using uniform standards established in Washington, many lawmakers rebelled. They argued it would create a nationwide "one-size-fits-all" system.

The administration called for a three-year delay in the FERC plan, citing strong opposition from Southern states, who view it as an attempt to impose electricity deregulation and force higher electricity prices.

It "would mandate and force down the throats of regional areas of the country a federal approach to deregulation of the marketplace," Abraham said.

Wood has argued that his plan would for provide better management of the power system and allow electricity to flow more easily throughout the country. The cascading nature of the blackout last week provides "an object lesson" that the power grid needs regional coordination and planning and national operating rules, he said.