Columns:: Worth repeating

since 12/15/98

Columns::October 13, 2003

Worth repeating

Nobel Prize economist Vernon Smith of George Mason University spoke Oct. 1 in the Chapel, addressing the issue of power blackouts and their causes. Some excerpts:
“The neat thing about markets and the work they do is that what happens is pretty much unpredictable, because it depends upon the choices of hundreds of thousands of people.
“When the blackout hit, one of the concerns was--people didn’t know what the cause was at first--maybe it was a terrorist attack. What we were seeing is how really vulnerable our electric power system is to terrorist activity. And, in fact, if you were going to design an electric power system that maximizes vulnerability to a terrorist attack you can’t beat the one we’ve got. Because what happens? Suppose terrorists take out half of the energy supply in Chicago. Utilities in Chicago only have one option: they’ve got to cut off half the substations and each of those substations is serving some very high-value premium-quality uses of power as well as extremely low-value uses.
“And that’s what prices are for, and we have metering and switching and monitoring technology now to introduce that. Some systems here are protected--hospitals . . . and of course airports are protected. But in a massive blackout, you can even lose power in those places. . . .
“A more efficient and competitive price system at the retail level would give you two free lunches. One is less vulnerability to terrorist attack, because that’s going to be an automatic by-product of having a system that prioritizes power in a more cost-efficient sector. The other thing it will do is avoid more environmental degradation. It means we don’t need to build new transmission lines as early as we might otherwise. . . . ”

--Beth Roberts

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