America's Power System Is Powerless

smart-gridWhy “Smart Grid” Technology is Dumb

By William Yeatman and Jeremy Lott

America is a beacon of capitalism, so it can be jarring to discover one of its largest industries is a redoubt of socialism. State governments have been running the electricity business, currently a $330-billion-a-year industry, since Theodore Roosevelt pounded his White House bully pulpit.

Central planning of the electricity industry started during the Progressive Era, as is the case with many misguided policies. Early in the 20th century, intervention-minded progressives, such as Wisconsin’s Robert “Fighting Bob” La Follette, concluded that electric companies would consolidate into “natural” monopolies that preyed on consumers. This was a curious conclusion to reach at a time when electric companies were competing vigorously in many cities.

Their remedy for this theoretical drift toward natural monopoly was, incredibly, to establish real government-mandated monopolies. States created commissions with the regulatory power to outlaw competition among utilities and set the price of electricity for consumers. By the end of the Great Depression, almost all Americans bought their electricity from government-backed monopolies, and it remains so to this day.

The progressives reasoned that electricity providers couldn’t abuse consumers if they labored under the state’s thumb, but it’s far from that simple. Without competition, there is no spur for innovation, which is why electricity transmission and distribution–the system of wires, towers and poles that transmits electricity from the power plant to your home–haven’t changed much since the regulators stepped in.

That’s unfortunate, because while the power system remains frozen in time, American society as a whole has changed dramatically. The U.S. has become a wired nation, a people wholly dependent on reliable electricity to power their computers, phones and iPods. And America’s anachronistic electricity supply chain is failing to keep pace with demand. Massive blackouts in California (2005), Florida (2008) and the entire Northeast (2003) serve as stark reminders of the fragility of the U.S. grid.

Congress wants to overhaul the system by spending a king’s ransom on technologies that would give utilities the ability to moderate consumer demand–by, say, remotely turning down millions of thermostats during periods of peak use. In theory, this might avoid the supply crunches that can stress the system to the breaking point, leading to blackouts. Proponents call this a “smart grid” approach, but it’s really a stupid policy, especially when the U.S. could modernize the system without spending a penny from the government treasury.

Read the rest of this story at Forbes.

  • Paul Wenum

    Kool aid time.

  • Dan McGrath

    Comments beginning with “Rob’N’Hood’s rants and replies have been deleted for profanity and personal attacks. Stick to issues and we’ll all be better off. No profanity – no personal remarks!

  • Paul Wenum

    Thank you.

  • Rob N. Hood

    Thank goodness gracious!

  • Paul Wenum

    No comment

  • Rob N. Hood

    Yes, that’s good; stifle the “debate” and censor those you disagree with. Real democratic…

  • Paul Wenum

    Your statements are like a “bb in a boxcar.” No substance, all air. You cannot debate hot air. No further comment.

  • Rob N. Hood

    Not clever Paul. You are the non-debater. It is I who is the master debater. (did that get past Dan?!)

  • Rob N. Hood

    Oh, almost forgot… where is Enron when we need them to run our electrial grids efficiently and effectively??!! They did such a wonderful job in California, right? Hello, is this thing on?

  • paul wenum

    This is on, are you? Keep reading.i

  • Rob N. Hood

    Why don’t you comment about how great a private company did running things in CA.? Is that what you want? Cooperatives have been doing a wonderful job for a very long time- if it ain’t broke… Keeping the profit motive out of certain things is the smartest way to go, as Californians found out too late.

  • paul wenum

    How’s ACORN doing? By the way, profits for companies is what fuels the economy. Didn’t you take economics? Without profits you don’t stay in business. As to Enron, there are always bad apples. Look where they are now. Bernie Madoff included. How’s Freddie Mac and Fannie Mae doing? I guess their execs got large bonus’s for the fiasco they have put our country through. Thank the community reinvestment act for that fiasco. Bad lending equals bad losses. Quite simple actually.

  • Rob N. Hood

    I’m not against profit or real free-markets. But I’m against unregulated profit taking at the expense of the middle class tax payer. You’re not paying attention or purposefully keeping the dialogue dumbed down out of laziness or some other demented reason!? Anyway, some thing don’t need the profit motive behind to function better and some it is unethical in my opinion not to mention counter productive. Modern Socialism as it is practiced in many advanced countries is very successful at utilising both capitalism and socialism- to the great benefit of the middle class. it is you who needs to study “economics” buddy not me. Oh and the few bad apples thing- give me a break- there’s always a nice convenient excuse for the white collar predator in your right-wing world. Makes me sick.

  • paul wenum

    I make a small profit to pay my employees, what say you boy??? Like my Brother-in-law said that wrote three books with no college education, ” You will run into educated idiots in your lifetime.” I think I have met one talking to you. Enough said.

  • Rob N. Hood

    As I’ve said before ad nauseum you are not the problem Paul. (except for how you vote). You aren’t listening and it is you with the chip on his shoulder. Is there something wrong with you? Why do you sound like a broken record? I don’t remember the last time I truly insluted you on purpose. You call me an idiot. So who’s attacking whom? Really, guy, you are STUCK.

  • paul wenum

    I’m a “broken record” and will change who I am until I pass. Enough said.

  • Rob N. Hood

    THAT’s encouraging! Wow! Alrighty then… And you accuse me of not thinking. At least you’re honest now about your “thinking” process.

  • Paul Wenum

    Good night Robbie Boy.

  • paul wenum

    Remember Robby Boy, YOU NEVER VOTE! Get real!

  • Daniel kaylor

    Hey robin hood how’s that progressive goverment working in greese huh an spain with the rest of europe close behind

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