Frontlines

Do-nothing regulators scare off investment, raising prospects for yet another large-scale power failure.

Last summer's blackout is slowly fading from the radar screen. The silver lining that might have moved some to action has now tarnished.

In the first days after Aug. 14, the Department of Energy, the Federal Energy Regulatory Commission (FERC), state regulators, and industry executives all seemed to be heeding President Bush's warnings that the power outages "across the Northeast and Midwest are a 'wake-up call' to the antiquated state of the nation's electrical grid." Under the white-hot glare of the media spotlight, they all promised they would do something.

But eight months later, industry analysts see very little investment in new technology or infrastructure. Are we heading toward yet another disaster?

In fact, many of those I spoke with on the condition of anonymity at Infocast's 2004 Transmission Summit in late January echoed the alarming concern that a large-scale blackout could very well occur this year.

This will come as no surprise to those who have been watching policy development on electric transmission over the last few years. Utilities and potential investors have long said that regulatory uncertainty over regional transmission organizations and reliability policy continues to hinder investment. "Why invest in an asset that we may not own or control?" utility execs ask. "Where is the regulatory clarity?"