There apparently is some considerable debate among linguists about whether the old Chinese curse we all have heard about (May you live in interesting times!) is actually real, or an accurate translation. None-the-less, as my colleague Marty Rosenberg points out in his blog “Utilities and the Financial Meltdown + WSJ Musings." utilities are particularly vulnerable in the current credit/financial crisis, we do live in VERY interesting times.
When you consider everything environmentalists/legislators/the liberal media and everyone else is asking utilities to do, it’s easy for any non-special-interest-tied individual to see it’s just totally impossible,--even in a good economy. In a bad economy, these demands become absurd. They include:
· Rebuild an aged and marginally stable interstate transmission grid that never was designed to be an interstate grid in the first place, but has been forced into serving as one.
· Replace and refurbish distribution systems that in many places were installed 50 years ago. They weren’t updated regularly because utilities were building out to meet all the massively growing demand.
· Do all this work with an aging workforce that it is increasingly hard to replace and a much smaller one at that because of efforts over the last 20 years to replace people with technology and be more “productive.”
· Figure out some way to keep the lights on with demand exceeding 140,000 megawatts over the next 10 years and supply only projected at slightly more than 54,000 megawatts. Oh, and you can’t use coal or nuclear, which those same environmentalists oppose and block at every turn with the cooperation of activist judges.
· Undertake the largest restructuring of electric generation/delivery in history by eliminating CO2 based upon very debatable science, but intense environmental/political/media pressure.
· Install massively expensive “renewable” energy systems that won’t fly without massive government subsidies and which currently provide only about 3% of national demand and during periods when you don’t particularly need it.
· Manage to deal with mountains of regulatory mandates that only become more mountainous every time Congress meets.
· Stay afloat financially in a period when fuel and everything else costs much more, without raising residential rates into the stratosphere, something regulators won’t allow.
· And the list goes on and on….oh, and do that with only about $300 billion in annual revenues per year—a mere fraction of the trillions being spent like water in Washington.
Not only are utilities seemingly living out a Chinese Curse, they seem to be victims of another very old and clichéd image: They are like camels standing there waiting for that last straw that breaks their backs. When it lands, we’re all going to be in trouble. And the people who ultimately control what utilities can and cannot do—politicians—keep throwing straws around trying to defend themselves from the mess they have made in creating a quasi-socialist economy since the 1930s and then losing control of it. Don’t look to them for any solutions, just more problems and probably that last straw.
Interesting times, indeed. What did utility folks do to deserve this? Most of them are pretty nice people, and I know a lot of them. Right now a lot of them are just throwing up their hands and I don't blame them.
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