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Consumers Union Cautions Deregulation Proponents On Exploiting Largest Blackout In U.S. History

August 15, 2003
Rafael Ayuso (512) 477-4431


Blackout emphasizes need to better study deregulation’s impact on system reliability

Washington, DC – Yesterday’s massive blackout of the northeastern and midwestern United States and parts of Canada should serve as a wake up call for proponents of the misguided energy legislation now pending in Congress, according to Consumers Union, the non-profit publishers of Consumer Reports. Before the facts regarding exactly what happened and why are known, some are claiming that deregulation cannot be the cause. Consumers Union urges a thorough investigation that includes all possible contributing factors – including deregulation.
“This regrettable event should not be a springboard to further deregulation under the misleading banner of ‘modernization’,” said Adam Goldberg, a policy analyst in Consumers Union’s Washington office. “True modernization is not about leaving the electrical grid to the whims of the market, but making it work as a reliable public service,” he added.
“Proposals pending at the Federal Energy Regulatory Commission (FERC) and in Congress could exacerbate infrastructure problems, not fix them,” Goldberg said.
A problem with deregulation is that it still is unclear who is responsible for making sure enough electricity generating, transmission, and energy efficiency resources are developed to prevent market manipulation and maintain system reliability. Electricity is just too important to leave these decisions to the deregulated marketplace.
“The number one priority of our country’s energy policy should be ensuring that its rules minimize unacceptable price volatility and reliability risks for consumers. The pending federal legislation fails to address those issues,” Goldberg said.

Consumers Union, publisher of Consumer Reports magazine, is an independent nonprofit testing, educational and information organization serving only the consumers. We are a comprehensive source of unbiased advice about products and services, personal finance, health, nutrition and other consumer concerns. Since 1936, our mission has been to test products, inform the public and protect consumers.