by Greg Palast

I can tell you all about the ne're-do-wells that put out our lights tonight. I came up against these characters -- the Niagara Mohawk Power Company -- some years back. You see, before I was a journalist, I worked for a living, as an investigator of corporate racketeers. In the 1980s, "NiMo" built a nuclear plant, Nine Mile Point, a brutally costly piece of hot junk for which NiMo and its partner companies charged billions to New York State's electricity ratepayers.

To pull off this grand theft by kilowatt, the NiMo-led consortium fabricated cost and schedule reports, then performed a Harry Potter job on the account books. In 1988, I showed a jury a memo from an executive from one partner, Long Island Lighting, giving a lesson to a NiMo honcho on how to lie to government regulators. The jury ordered LILCO to pay $4.3 billion and, ultimately, put them out of business.

And that's why, if you're in the Northeast, you're reading this by candlelight tonight. Here's what happened. After LILCO was hammered by the law, after government regulators slammed Niagara Mohawk and dozens of other book-cooking, document-doctoring utility companies all over America with fines and penalties totaling in the tens of billions of dollars, the industry leaders got together to swear never to break the regulations again. Their plan was not to follow the rules, but to ELIMINATE the rules. They called it "deregulation."

It was like a committee of bank robbers figuring out how to make safecracking legal. But they dare not launch the scheme in the USA. Rather, in 1990, one devious little bunch of operators out of Texas, Houston Natural Gas, operating under the alias "Enron," talked an over-the-edge free-market fanatic, Britain's Prime Minister Margaret Thatcher, into licensing the first completely deregulated power plant in the hemisphere.

And so began an economic disease called "regulatory reform" that spread faster than SARS. Notably, Enron rewarded Thatcher's Energy Minister, one Lord Wakeham, with a bushel of dollar bills for 'consulting' services and a seat on Enron's board of directors. The English experiment proved the viability of Enron's new industrial formula: that the enthusiasm of politicians for deregulation was in direct proportion to the payola provided by power companies.

The power elite first moved on England because they knew Americans wouldn't swallow the deregulation snake oil easily. The USA had gotten used to cheap power available at the flick of switch. This was the legacy of Franklin Roosevelt who, in 1933, caged the man he thought to be the last of the power pirates, Samuel Insull. Wall Street wheeler-dealer Insull creator of the Power Trust, and six decades before Ken Lay, faked account books and ripped off consumers. To frustrate Insull and his ilk, FDR gave us the Federal Power Commission and the Public Utilities Holding Company Act which told electricity companies where to stand and salute. Detailed regulations limited charges to real expenditures plus a government-set profit. The laws banned "power markets" and required companies to keep the lights on under threat of arrest -- no blackout blackmail to hike rates.

Of particular significance as I write here in the dark, regulators told utilities exactly how much they had to spend to insure the system stayed in repair and the lights stayed on. Bureaucrats crawled along the wire and, like me, crawled through the account books, to make sure the power execs spent customers' money on parts and labor. If they didn't, we'd whack'm over the head with our thick rule books. Did we get in the way of these businessmen's entrepreneurial spirit? Damn right we did.

Most important, FDR banned political contributions from utility companies -- no 'soft' money, no 'hard' money, no money PERIOD.

But then came George the First. In 1992, just prior to his departure from the White House, President Bush Senior gave the power industry one long deep-through-the-teeth kiss good-bye: federal deregulation of electricity. It was a legacy he wanted to leave for his son, the gratitude of power companies which ponied up $16 million for the Republican campaign of 2000, seven times the sum they gave Democrats.

But Poppy Bush's gift of deregulating of wholesale prices set by the feds only got the power pirates halfway to the plunder of Joe Ratepayer. For the big payday they needed deregulation at the state level. There were only two states, California and Texas, big enough and Republican enough to put the electricity market con into operation.

California fell first. The power companies spent $39 million to defeat a 1998 referendum pushed by Ralph Nadar which would have blocked the de-reg scam. Another $37 million was spent on lobbying and lubricating the campaign coffers of legislators to write a lie into law: in the deregulation act's preamble, the Legislature promised that deregulation would reduce electricity bills by 20%. In fact, when San Diegans in the first California city to go "lawless" looked at their bills, the 20% savings became a 300% jump in surcharges.

Enron circled California and licked its lips. As the number one life-time contributor to the George W. Bush campaign, it was confident about the future. With just a half dozen other companies it controlled at times 100% of the available power capacity needed to keep the Golden State lit. Their motto, "your money or your lights." Enron and its comrades played the system like a broken ATM machine, yanking out the bills. For example, in the shamelessly fixed "auctions" for electricity held by the state, Enron bid, in one instance, to supply 500 megawatts of electricity over a 15 megawatt line. That's like pouring a gallon of gasoline into a thimble -- the lines would burn up if they attempted it. Faced with blackout because of Enron's destructive bid, the state was willing to pay anything to keep the lights on.

And the state did. According to Dr. Anjali Sheffrin, economist with the California state Independent System Operator which directed power movements, between May and November 2000, three power giants physically or "economically" withheld power from the state and concocted enough false bids to cost the California customers over $6.2 billion in excess charges.

It took until December 20, 2000, with the lights going out on the Golden Gate, for President Bill Clinton, once a deregulation booster, to find his lost Democratic soul and impose price caps in California and ban Enron from the market.

But the light-bulb buccaneers didn't have to wait long to put their hooks back into the treasure chest. Within seventy-two hours of moving into the White House, while he was still sweeping out the inaugural champagne bottles, George Bush the Second reversed Clinton's executive order and put the power pirates back in business in California. Enron, Reliant (aka Houston Industries), TXU (aka Texas Utilities) and the others who had economically snipped California's wires knew they could count on Dubya, who as governor of the Lone Star state cut them the richest deregulation deal in America.

Meanwhile, the deregulation bug made it to New York where Republican Governor George Pataki and his industry-picked utility commissioners ripped the lid off electric bills and relieved my old friends at Niagara Mohawk of the expensive obligation to properly fund the maintenance of the grid system.

And the Pataki-Bush Axis of Weasels permitted something that must have former New York governor Roosevelt spinning in his wheelchair in Heaven: They allowed a foreign company, the notoriously incompetent National Grid of England, to buy up NiMo, get rid of 800 workers and pocket most of their wages - producing a bonus for NiMo stockholders approaching $90 million.

Is tonight's black-out a surprise? Heck, no, not to us in the field who've watched Bush's buddies flick the switches across the globe. In Brazil, Houston Industries seized ownership of Rio de Janeiro's electric company. The Texans (aided by their French partners) fired workers, raised prices, cut maintenance expenditures and, CLICK! the juice went out so often the locals now call it, "Rio Dark."

So too the free-market cowboys of Niagara Mohawk raised prices, slashed staff, cut maintenance and CLICK! -- New York joins Brazil in the Dark Ages.

Californians have found the solution to the deregulation disaster: re-call the only governor in the nation with the cojones to stand up to the electricity price fixers. And unlike Arnold Schwarzenegger, Gov. Gray Davis stood alone against the bad guys without using a body double. Davis called Reliant Corp of Houston a pack of "pirates" --and now he'll walk the plank for daring to stand up to the Texas marauders.

So where's the President? Just before he landed on the deck of the Abe Lincoln, the White House was so concerned about our brave troops facing the foe that they used the cover of war for a new push in Congress for yet more electricity deregulation. This has a certain logic: there's no sense defeating Iraq if a hostile regime remains in California.

Sitting in the dark, as my laptop battery runs low, I don't know if the truth about deregulation will ever see the light --until we change the dim bulb in the White House.

-----

http://www.zmag.org/Commentaries/donorform.htm

Palast is the author of the New York Times bestseller, "The Best Democracy Money Can Buy" (Penguin USA 2003) and the worstseller, "Democracy and Regulation," a guide to electricity deregulation published by the United Nations (2003, written with T. MacGregor and J. Oppenheim). See Greg Palast's award-winning reports for BBC Television and the Guardian papers of Britain at www.GregPalast.com. Contact Palast at his New York office: media@gregpalast.com.

To Frankenpower

Blackout Hits Parts of Eastern U.S., Canada
Emergency Power Crisis Aug 14 2003 5:00pm EST

More: Planetary Cycles Page

"We have no indication that there is any terrorism involved," said Bryan Lee, a spokesman for the Federal Energy Regulatory Commission (news - web sites) in Washington.

Power outages were reported in the New York metropolitan area, Detroit and Cleveland as well as in Toronto and Ottawa, starting shortly after 4:00 p.m. EDT (2000 GMT), witnesses said.

The blackout was caused by a failure at a Manhattan power plant that destabilized the power grid as far as Canada, Lee said.

Subways in New York came to a complete halt, leaving thousands of rush-hour commuters stranded underground in the dark. Traffic was at a standstill throughout the city and sidewalks were jammed as commuters headed home on foot. Power was out at all three of the New York area's major airports. There were no buses or commuter trains running, and cellular telephone service was disrupted.

"Everything is calm in this city. The New York City power grid was not damaged when it shut down, as it should," Mayor Michael Bloomberg said.

The outage struck nerves among New Yorkers, whose memories of the attacks of Sept. 11, 2001, still run strong, and people could be seen running through the streets of the city's downtown financial district toward the East River and Brooklyn Bridge.

"Scared," said Jeffrey Snop, of Queens, at the Times Square subway station. "It reminded me of 9/11 and stuff like that."

Bloomberg urged calm and said the greatest risk to New Yorkers was from overheating without air conditioning. The high temperature in New York City on Thursday was 92 degrees F (33 degrees Celsius), reported a few hours before the outage occurred.

CONGESTION AND CONFUSION

Times Square was in a state of confusion. The traffic lights were out, and police were directing the rush-hour flow on what is typically one of the most congested spots in the city.

The power outage hit most of the Canadian province of Ontario, shutting major cities including the Canadian capital Ottawa and Toronto.

In Toronto, Canada's largest city, the transit system ground to a halt. But both the Toronto Stock Exchange, the country's main bourse, and Lester Pearson Airport were operating on back-up power supplies.

In Detroit, headquarters to the largest U.S. automakers, many workers decided to go home after the lights suddenly went out, creating traffic gridlock in many streets and highways from the city core.

A wide swath of the city including the downtown headquarters of General Motors Corp appeared to be affected. The outage came on a day predicted to be one of the hottest of the summer.

A spokesman for Montreal's Dorval airport said all flights to blackout cities had been canceled.

Other airports without power included Detroit, Cleveland and Islip, New York, according to Southwest Airlines. A spokesman for the Homeland Security Department, set up after the Sept. 11 attacks, said they did not know the cause of the power outages and were investigating.

CNN reported an overload of the Niagara Mohawk power grid and outages as far away as Cleveland, Ohio.

The Oyster Creek nuclear power plant in Forked River, New Jersey was not functioning, according to people familiar with the plant's operation.

******* 10 nuclear power plants shut down ********

New York Gov. George Pataki declared a state of emergency and said officials thought the cause of the blackout was "a possible transmission problem from Canada to the U.S." There was no sign of terrorism, officials in New York and Washington said.

New York City Mayor Michael Bloomberg said it was likely the blackout started in the Niagara Falls area and quickly spread.

"It was probably a natural occurrence which disrupted the power system up there and it apparently for reasons we don't know cascaded down through New York state over into Connecticut, as far south as New Jersey and as far west as Ohio.

A senior law enforcement official, speaking on condition of anonymity, said the FBI (news - web sites) had determined the blackout was a "natural occurrence" and there was no evidence of terrorism, and that the Homeland Security Department agreed.

In New York, the blackout affected subways, elevators and airports, including John F. Kennedy and LaGuardia airports. Thousands of people streamed into the streets of lower Manhattan in 90-degree heat.

In Toronto, Canada's largest city, workers also fled their buildings after the blackout hit shortly after 4 p.m. EDT. There also were widespread outages in Ottawa, the capital. Traffic lights were out throughout downtown Cleveland and other major cities, creating havoc at the beginning of rush hour.

There were reports of outages in northern New Jersey and in several Vermont towns.

In Connecticut, Metro-North Railroad service was knocked out. Lights flickered at state government buildings in Hartford.

Every prison in New York state reported a loss of power and switched to backup generators, said James Flateau, a spokesman for the state Department of Corrections.

In Albany, N.Y., several people were trapped in elevators in Empire State Plaza, but most had been freed by 5 p.m. People in New York City lined up 10 deep or more at pay phones, with cell phone service disrupted in some areas. Mike Saltzman, a spokesman for New York Power Authority, a state-owned utility in White Plains, N.Y., said its two largest hydroelectric plants, including Niagara Falls and St. Lawrence-FDR, were operating.

He said he did not know the status of 18 other smaller plants.

The blackouts rivaled those in the West on Aug. 11, 1996, when heat, sagging power lines and unusually high demand for electricity caused an outage that affected 4 million customers in nine states, one of the most severe outages in U.S. history.

A blackout in New York City in 1977 left some 9 million people without electricity for up to 25 hours.

"There is no evidence of any terrorism at this point," said Michael Sheehan, deputy commissioner for terrorism of New York City's Police Department. "We've talked to Washington and there are rumors, but none of them pans out."

Top New York police officers gathered at the department's operations center downtown where the focus was on the ramifications of the blackout rather than its cause. "We're more concerned about getting the traffic lights running and making sure the city is OK than what caused it," a police spokesman said at the center.

In Cleveland, Olga Kropko, a University Hospitals labor and delivery nurse, said the hospital was using its back-up generators and had limited power. "Everyone is very hot because the air conditioning is off," she said. "Our laboring moms are suffering."

Police in Mansfield, Ohio, spread into the streets to keep traffic flowing. "A lot of officers are out there trying to make sure nobody gets hurt, to try to cut down on the accidents," said jail officer Randi Allen.

Bloomberg, on CNN, described New Yorkers as calm. He advised people to go home, open windows and drink liquids. "The good news is that in New York City, while we have lost all the power, Con Ed's facilities have shut down properly, which we have programmed them to do," he said. "We don't know when Con Ed can power up again but clearly it will take some time."

Four nuclear power reactors — two in New York and two in Ohio — reported they were shut down because of the loss of off-site power, according to the Nuclear Regulatory Commission in Bethesda, Md. They were the two Indian Point reactors in New York state, and the Perry and Fermi nuclear power plants in Ohio.

The North American Electric Reliability Council, an industry group responsible for monitoring the integrity of the system, said the power outages were "widespread and appear to be centered around Lake Erie, although they are affecting the entire eastern interconnection." "We do not know the cause at present but will continue to evaluate the situation," said Ellen Vancko, speaking for the council.

The Federal Aviation Administration (news - web sites) instituted airport ground stops at Cleveland, Kennedy, LaGuardia and Newark, N.J. That meant planes from other cities heading to those four airports could not take off. However, air traffic control facilities had backup power, and planes already in the air could land at those airports, said Laura Brown, speaking for the FAA.

At the Homeland Security Department, spokesman Brian Roehrkasse said federal officials were still gathering information and had not determined a cause.

The department "is working with state and local officials and the energy sector to determine the cause of the outage as well as what response measures may be needed to be taken," he said. He said everyone should "listen and heed the advice of the local authorities."

Update:
Massive LONDON Power outage causes chaos
Power is restored to London and the South East but the transport system is still struggling.

Insights page.....

What do you do if Stopped by Police?

The following argument has been used in at least three states (Pennsylvania, Ohio, and West Virginia) as a legal brief to support a demand for dismissal of charges of "driving without a license." It is the argument that was the reason for the charges to be dropped, or for a "win" in court against the argument that free people can have their right to travel regulated by their servants.

The forgotten legal maxim is that free people have a right to travel on the roads which are provided by their servants for that purpose, using ordinary transportation of the day. Licensing cannot be required of free people, because taking on the restrictions of a license requires the surrender of a right. The driver's license can be required of people who use the highways for trade, commerce, or hire; that is, if they earn their living on the road, and if they use extraordinary machines on the roads. If you are not using the highways for profit, you cannot be required to have a driver's license.

BRIEF IN SUPPORT OF NOTICE FOR DISMISSAL FOR LACK OF JURISDICTION

AMERIKKKA
Mediocre times produce the very worst that the world has to offer: Reagan, Bin Laden, Bush, Hussein, Sharon, and Blair. None but the feeble minded could draw inspiration from such a ghastly lineup of "leaders".