Reliable power makes us strong
Wed, 10/12/2005
When we get up in the morning, we flip a switch and the lights go on; we turn a valve and shower in hot water; and we pop a bagel in the toaster.
Reliable and safe electricity is something we take for granted in America. We assume it will always be there and realize what we have only when the power goes out.
In Washington, low cost and reliable electricity is the foundation of our economy. It is the reason energy intensive industries from aluminum production to high-tech silicon wafer fabrication are located here. Electricity gives us a tremendous competitive advantage as long as rates don't continue to skyrocket.
That is not the case in other parts of the world. For example, India continues to struggle with an unreliable, inadequate and unsafe electrical grid for its 1.1 billion people.
According to The Economist, despite some growth in electricity generation over the past decade, brown-outs are a way of life in India, almost half the country is still without electricity, and where it is available, it is often on for only a couple hours a day.
Because of those problems, electricity is not a dependable energy source for India's industry, and it is of such poor quality that power surges routinely fry equipment. In fact, if a company plans to build in India today, it needs to build its own power plant, transmission lines, and distribution system.
The lack of dependable electricity isn't just an inconvenience, it is stunting India's efforts to become a world economic power.
Currently, 60 percent of India's power comes from coal, a situation likely to continue for the foreseeable future, but it is poor quality coal that produces clouds of pollution.
But perhaps India's biggest energy problem is political. In India, electricity is political capital. The federal government controls generation, while each of the country's 29 states controls distribution through state electricity boards which decide who gets the limited power that is available and at what rate.
Last year, one board gave free electricity to farmers in exchange for votes. Electricity Boards routinely overcharge industries for electricity and provide power at below market rates for residential customers (voters). In fact, India's industrial and commercial users get only 42 percent of the country's power but pay 70 percent of the revenue. When economic reformers in the capital city of Delhi attempted to restore balance to the system by raising residential rates on middle-class homeowners, they refused to pay their bills. As a result of this chaos, most of the boards are broke or in bankruptcy.
Thankfully, our nation has a strong power grid that produces a safe, consistent supply of electricity. Even though federal, regional and state commissions set rates and approve new power lines and generating plants, the system is relatively free of political influence.
The key to our continued success is to keep it that way and allow utilities to expand and improve to meet their forecast loads. That in itself gives America a competitive edge against its global competitors.
Don C. Brunell is president of the Association of Washington Business and can be reached at donb@awb.org