Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
Stock Market Correction Review - 26th Jan 20
The Wuhan Wipeout – Could It Happen? - 26th Jan 20
JOHNSON & JOHNSON (JNJ) Big Pharama AI Mega-trend Investing 2020 - 25th Jan 20
Experts See Opportunity in Ratios of Gold to Silver and Platinum - 25th Jan 20
Gold/Silver Ratio, SPX, Yield Curve and a Story to Tell - 25th Jan 20
Germany Starts War on Gold  - 25th Jan 20
Gold Mining Stocks Valuations - 25th Jan 20
Three Upside and One Downside Risk for Gold - 25th Jan 20
A Lesson About Gold – How Bullish Can It Be? - 24th Jan 20
Stock Market January 2018 Repeats in 2020 – Yikes! - 24th Jan 20
Gold Report from the Two Besieged Cities - 24th Jan 20
Stock Market Elliott Waves Trend Forecast 2020 - Video - 24th Jan 20
AMD Multi-cores vs INTEL Turbo Cores - Best Gaming CPUs 2020 - 3900x, 3950x, 9900K, or 9900KS - 24th Jan 20
Choosing the Best Garage Floor Containment Mats - 23rd Jan 20
Understanding the Benefits of Cannabis Tea - 23rd Jan 20
The Next Catalyst for Gold - 23rd Jan 20
5 Cyber-security considerations for 2020 - 23rd Jan 20
Car insurance: what the latest modifications could mean for your premiums - 23rd Jan 20
Junior Gold Mining Stocks Setting Up For Another Rally - 22nd Jan 20
Debt the Only 'Bubble' That Counts, Buy Gold and Silver! - 22nd Jan 20
AMAZON (AMZN) - Primary AI Tech Stock Investing 2020 and Beyond - Video - 21st Jan 20
What Do Fresh U.S. Economic Reports Imply for Gold? - 21st Jan 20
Corporate Earnings Setup Rally To Stock Market Peak - 21st Jan 20
Gold Price Trend Forecast 2020 - Part1 - 21st Jan 20
How to Write a Good Finance College Essay  - 21st Jan 20
Risks to Global Economy is Balanced: Stock Market upside limited short term - 20th Jan 20
How Digital Technology is Changing the Sports Betting Industry - 20th Jan 20
Is CEOs Reputation Management Essential? All You Must Know - 20th Jan 20
APPLE (AAPL) AI Tech Stocks Investing 2020 - 20th Jan 20
FOMO or FOPA or Au? - 20th Jan 20
Stock Market SP500 Kitchin Cycle Review - 20th Jan 20
Why Intel i7-4790k Devils Canyon CPU is STILL GOOD in 2020! - 20th Jan 20
Stock Market Final Thrust Review - 19th Jan 20
Gold Trade Usage & Price Effect - 19th Jan 20
Stock Market Trend Forecast 2020 - Trend Analysis - Video - 19th Jan 20
Stock Trade-of-the-Week: Dorchester Minerals (DMLP) - 19th Jan 20

Market Oracle FREE Newsletter

Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Corruption and Mismanagement See Much of the US Without Power

Politics / US Politics Jul 19, 2012 - 02:27 AM GMT

By: OilPrice_Com

Politics

Best Financial Markets Analysis ArticleAmidst record-high temperatures and a very anti-climactic 4th of July, power outages have left millions without air-conditioning and even water in rural areas where households rely on electric pumps. At least 52 people have died from heat and three million people are still without power.

No it's not Yemen, where power outages in the capital Sana'a have sparked a new round of protests. It's the United States of America, where corruption converges with a moribund electricity distribution system to produce increasingly frequent blackouts across the Midwest and East Coast.


A thunderstorm that struck the East Coast early last week left millions without electricity and power companies took days to restore power to about half of their customers. Four days after the storm, power was restored to 67% in the Northern Virginia suburbs and 61% in Baltimore, but Montgomery County, Maryland and parts of Washington, D.C. only managed to restore 43%, leaving over a million without electricity as temperatures soared above 100 degrees.

In the Midwest, there was less chance of blaming storms. In Michigan, for instance, an increasingly woebegone state, power outages are frequent. In counties near the capital, Lansing, hundreds of homes were without power for the 4th of July. Power was restored that evening, but lost again the following day. And this has been going on for some time.

Everyone would like to know why. The answer is simple, and three-fold: An outdated electricity distribution system, corruption and mismanagement.

Americans are now being told that keeping utility bills down means keeping maintenance of the country's dismal electricity distribution system to a bare minimum. According to the American Society of Civil Engineers, the entire system could collapse by 2020 without an immediate investment of $673 billion. Furthermore, experts say that brownouts and blackouts will end up costing more in the end than re-hauling the entire system.

The system cannot handle increasing demand, especially when the entire country is turning on the AC. Last week's brownouts and blackouts will become status quo.

In fact, as NPR quipped, "the basic principles of power delivery haven't changed much since Thomas Edison flipped on the first commercial power grid in lower Manhattan on Sept. 4, 1882."

According to the ASCE's engineers, more than 60% of the country's electricity transmission lines and power transformers are at least 25 years old, while 60% of the circuit breakers are more than three decades old.

This is to prepare Americans for higher utility bills in the future. But it also ignores the corruption and mismanagement that has allowed privately owned power companies to profit from bare-minimum maintenance and deregulation. There is no investment in infrastructure, no guarantees of service, and continually worsening standards of safety and maintenance.

It is an outmoded system of distribution compared to Europe's for instance, where power lines are buried underground. While this makes them more difficult to reach and harder to fix, they are also much less at the mercy of Mother Nature.

With that in mind, all eyes are on the Potomac Electric Power Company (Pepco), the utility company that provides power to Montgomery County, Maryland and parts of Washington, D.C. and which was rated last year by Business Insider as "the most hated company in America". Certainly, these past days and weeks have done nothing to help that rating.

According to OurDC, from 2008 to 2010, Pepco's profit earnings were $882 million, yet they paid no federal or state income taxes and instead received $817 million in tax refunds. At the same time, local authorities allowed Pepco to cut back on maintenance to save money.

There was an attempt last year to take Pepco to task, but the result was a very public slap on the wrist. An investigating commission found that Pepco was not conducting inspections of its sub-transmission and distribution lines even after storms. It also found that the company was about four years behind on the tree-trimming necessary to ensure that the local greenery is not interfering with power lines. Pepco was made to promise a 3% increase in reliability year-on-year (beginning only next year), and it was fined a one-time fee of $1 million for failing to fix problems that led to frequent outages.

Of course, no major changes were enforced and Pepco paid lip service to the situation by submitting a five-year plan for improvements that would cost around $300 million and be passed directly on to the consumer.

Burying power lines would cost between $5 and $15 million per mile. Pepco likes to point out that this would mean an increase in consumer power bills by about $107 per month. The consumer would no doubt like to point out that the power companies' greed and mismanagement, for which the consumer has long been footing the bill, should be rolled in to cover a large chunk of this cost.

As always, disunited, the consumer doesn't have a chance. The consumer will pay for power company greed and neglect unless there is some form Arab-Spring (American Summer) manifestation

Source: http://oilprice.com/Energy/Energy-General/From-Arab-Spring-to-American-Summer-The-Politics-of-Power-Outages.html

By. Jen Alic of Oilprice.com

© 2012 Copyright OilPrice.com- All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules