Power Play
May, 1971
The most serious, immediate threat to the environment--and to the consumer's pocketbook--comes from the developing cooperation between the fuel industry and the electric-power industry. If they have their way, and there are signs that they will, then the most harmful source of air pollution will go uncontrolled, along with our most monopolistic markets. The situation has become so critical that some responsible observers are beginning to use such unkind words as conspiracy and collusion. Vermont Senator George D. Aiken, one of Congress' watchdogs of the energy industry, was not accused of hysteria when he warned that what's happening constitutes "a very serious threat to political democracy," because "when you control energy--and oil interests now control coal and are on their way to controlling nuclear fuel--then you control the nation." Of specific concern, he said, is the evidence that "there is some group determined to get control of electrical energy in this nation." That would be a natural target for any group interested in controlling all of the nation's power systems--or in chain-reaction profits--because, if Montana Senator Lee Metcalf knows what he's talking about, "Electric power is by far the nation's largest industry. It's growing rapidly because it has a monopoly on an essential product. The electric utilities took the lighting business away from the gas utilities half a century ago. They appear to be on their way toward domination of the heating area as well. They are going into the real-estate and housing business in a big way. They are intertwined with the banking and insurance industries and have extraordinary force in politics, the educational system and the press." The concentration of the industry is impressive. The 212 largest private electric companies (as distinguished from public outfits like TVA, the rural electric co-ops and the municipals) are said to constitute about one eight of all investment in U. S. industry.
And from the environmentalists' point of view, the electric utilities area of paramount concern. The coal and oil they burn produce more than 50 percent of the deadly sulphur dioxide and nearly 30 percent of the particulates in air pollution of our cities--which is why Jerome Kretchmer, the Environmental Protection Administrator for New York City, can hardly be thought to exaggerate when he contends that "power versus the environment is the issue for the Seventies." (New York's sulphur-dioxide level is three times higher than the safe maximum set by Federal and state officials, and a heavy atmospheric inversion this summer could kick it up to a level that would kill enough people to ease the city's tight housing situation.)
Nothing unusual there. With an Amherst physicist claiming to have evidence that between 1000 and 10,000 lung-cancer deaths each year are caused by electric-power-plant emissions, and with some scientists now tentatively estimating that coal-burning power plants may be putting as much as 150 tons of the newest hazards, mercury, into the ecosystem each year, it's hardly surprising to find that Senator Edmund Muskie and other politicians rate power pollution at the head of the list of environmental plagues.
Aside from the various chemicals and dirty solids the industry dumps on us, the face of America has been permanently multilated by 67,000 miles of extra-high-voltage transmission lines strung across 1,300,000 acres of land--and, in all likelihood, by 1990 there will be 165,000 miles of lines hanging over the land. By 1980, the generating plants will be pirating one sixth of our fresh water as a cooling agent and returning it to the streams and lakes at such a heightened temperature that fish will have to swim for their lives. Algaeic scum will follow.
This continual degradation of what was once a green and pleasent land may be halted only by a massive public confrontation. The situation is neatly summarized by Lee C. White, former chairman of that laissez-faire fraternity, the Federal Power Commission: "It is perfectly evident that the dialog between the environmentalists and utilities is beginning to shift. The utilities are no longer being asked, 'Why don't you locate your plant in a site other than the one you have selected?' The question being asked today is, 'Can you justify the construction of an additional plant anywhere?'"
For several years it's been plain that if the electricutility companies were to escape stiffer regulations, they would either have to pour research money into developing more efficient and cleaner methods of production, or they would have to fight off reform by political lobbying, propaganda and threats. They chose the latter course.
Habitually, the power industry has skimped on research--even while mooching billions of dollars of Government research funds. One knowledgeable witness told the Senate Subcommittee on Fuels in 1970 that there are "only 14 Ph.D.S in the entire utility industry." Expert analysts have reported that all power companies together spend only twenty-three hundredths of one percent of their operating revenue for R & D, which proportionately is about one ninth what the Bell System spends for that purpose, and about one eighth as much as the utility companies lay out in advertising to persuade the consumer to use more of the power they often cannot provide.
Not wishing to break their habit of sloth, the big electric companies decided to fight reform regulations by other means. For this, they teamed up--conspired, connived, whatever word seems to fit--with the big oil, gas and coal companies. Their weapon was fear, based on distruptions of electric service.
Electricity we've got to have. In vertical cities, there is no substitute for an elevator. For the urban cave dweller, who lives in canyons no breeze ever penetrates, there is no alternative to an air conditioner. The gas furnace may compete with the coal or oil burner, but nothing competes with the light bulb.
Ever since the 1965 power distribution that plunged much of the Northeast into darkness, the residents of most of the larger urban centers of the country have been wondering when the elevators would stop against between floors. And there have been enough blackouts and brownouts--more than 50 nationwide in 1970, and a severe one in New York this past February--to keep the worry flourishing. Industry spokesmen instant that the crisis will last at least another five to ten years.
Because they peddle an absolutely essential commodity and because utilities are the only industrial monopoly protected officially by Federal and state governments, it's been quite easy for the electric-power companies to create a crisis situation in which they could successfully issue ultimatums: Let us charge the rates we wants to charge, or we will permit our equipment to deteriorate and we will not develope new sources of power--so there will be critical blackouts. Let us build our power plants on the steps of the city hall and string our transmission lines through national parks without protest from environmentalists, or we will permit so much of our operations to stop that normal life will be distributed and endangered.
A contrapuntal ultimatum has come from fuel companies, which want no restrictions on their profits or on their drilling and mining operations. In the fight for profits, both groups have appearently won. The fuels that go into the production of electricity have jumped in priced by as much as 130 percent in the past year. The electric-utility industry's income, which was 19.4 billion dollars for the 212 largest companies in 1968, is believed to have jumped a billion dollars a year since (continued on page 224) Power Play(continued from page 114) then. (It is difficult to be certain, for there is no central government office for collecting rate data.) But still at issue between the public and the electric moguls is the matter of environmental controls.
Utility officials are not very subtle about their threats. If environmentalists continue to interfere, says New York Consolidated Edison's chairman, Charles Luce, "eventually it will have an effect when you try to switch on the light." And a top official at Boston Edison said, "We can probably meet our demands in New England if no more states pass those anti-pollution laws." The fuel industry plays an equally obvious role in this psychological warfare. From Prudhoe Bay, Alaska, William Steif of the Scripps-Howard newspapers reports that in talking with a dozen of the nation's top oil executives, he learned that "the big oil companies are counting" on the possibility of blackouts caused by energy shortages to "brush aside objections of conservationists" to the construction of the highly controversial Alaskan pipeline.
When conservationists protested the proposal of some oil and gas companies to use Federal atomic devices for blowing up portions of the Rocky Mountains in their quest for 42 billion dollars' worth of new gas, Dr. Glenn T. Seaborg, chairman of the Atomic Energy Commission and a friend of the industry, warned: "Today's outcries about the environment will be nothing compared with the cries of angry citizens experiencing blackouts which could endanger the health and lives of their families."
The generator that sends electricity out one end is powered at the other by water, nuclear energy, coal, oil or natural gas. No conspiracy could depend on the first two, because water-powered generators supply 16 percent of our electricity, and at present the nuclear generators produce about two percent. The great sources are coal, oil and gas, and of these gas is the most important because it's virtually pollution-free. There is an insatiable demand for it.
And because there is such a demand, the gas producers two years ago "discovered" a shortage. Their objectives were to throw off FPC regulations, increase prices and get their hands on a larger share of the oil and gas of the outer continental shelf. Every trade magazine acknowledged that if gas prices were raised, the "shortage" would evaporate. Business Week flatly stated that the industry was shooting for a 60 percent price increase. Others estimated a 100 percent boost. Charles F. Wheatley, Jr., general manager of the American Public Gas Association (which is run by municipal gas distributors, at the other end of the commercial spectrum from Shell, Gulf and the rest, and is the most consumer-oriented sector of the industry), noted with apparent sarcasm that "the timing of the present asserted gas shortage is quite interesting," because the industry's chief lobbyist for a rate increase "has stated that he did not realize until late in 1968 or 1969 that there was any real gas shortage." Strange. Wheatley's suspicions were heightened by the remembrance that, though 1954 had been a banner year for drilling, "a similar [shortage] claim was made in 1955 when the industry sought passage of legislation to exempt producers from FPC regulation."
Many observers are convinced that the gas companies have plenty of reserves to meet the nation's needs but have simply capped the wells to await higher prices. Dr. Bruce Netschert, an economist with National Economic Research Associates, claims that 500 gas wells in the outer continental shelf off Louisiana have been capped. Michigan Senator Philip Hart, whose Antitrust and Monopoly Subcommittee has been investigating gas prices, says that Louisiana officials "have found 1100 gas wells shut in, mostly waiting for higher wellhead prices."
Gas prices are supposedly set by the FPC according to supply. But this is pretty much a farce, since the official supply is determined in secret session by the American Gas Association--a group of so-called competitors--who have consistently refused to disclose their records to the FPC. In other words, the FPC simply takes industry's word and is happy to do so. Says John Flynn, special counsel on the Senate Antitrust Subcommittee: "The way gas reserves are predicted through the A. G. A. is a serious antitrust question. It is a possible device for price-fixing."
What are the stakes? Joseph C. Swidler, chairman of the New York Public Service Commission, puts it this way: "There are probably some 1500 trillion cubic feet of gas in our underground resources. Each cent [increase on the price] per 1000 cubic feet thus represents 15 billion dollars for the consuming public." That's 15 billion dollars for a one-cent increase, yet, according to Flynn, "The FPC has been talking in terms of an 8- or 10-cent increase and industry wants 14 or 15 cents more."
Another assault on the consumer's peace of mind and pocketbook came via the marketers of residual fuel oil, which fires the furnaces that turn the generators that produce more than 90 percent of the electricity in the Northeast; oil figures heavily in electricity production in other areas as well, such as Florida. These days, residual oil is selling for twice the price it fetched a year ago. Industry spokesmen insist the oil is scarce for several reasons: Libya cut back on production. The big trans-Arabian pipeline has not been repaired since it was ruptured in Syria last year. There is a severe tanker shortage.
U. S. Congressman Silvio Conte, at hearings before the Subcommittee on Special Small Business Problems, got to mulling over those excuses and began to suspect that somebody was lying. The oil industry had begun complaining about a "shortage" and had started pushing up its prices in April 1970, but, said Conte, "The pipeline didn't break until May 3, 1970, and the Libyan cutback occurred sometime thereafter." Furthermore, the pipeline was shut down for 100 days during 1969, yet there was no claim of a shortage or any increase in prices that year. And finally, "Only about three percent of our [residual] oil is imported from the Middle East. The remaining 97 percent comes from Venezuela, Canada and our own domestic markets." And if Libya was curtailing production, wouldn't this free tankers for the Venezuelan run?
Putting it all together, Conte concluded: "The price had gone up by such a huge amount--in some cases as much as 130 percent on the East Coast--because, I felt, there was a conspiracy among the domestic oil companies, the producers, in making this oil scarce, so that the price could be increased.... Let me put it this way. It is either a conspiracy or a gross miscalculation by the oil companies. And I can't believe that the oil companies would miscalculate the situation, because they certainly have the finest backup force of any industry in the world, and they very, very seldom make a miscalculation."
Coincidentally with all that came a startling "scarcity" of coal and a sudden increase in its price. There were, as usual, suspicions of collusion, but nothing was done about it. Senator Hart acknowledged that testimony before his subcommittee raised serious questions as to "whether there has been a deliberate withholding of coal from the market place."
The railroad companies were doing their share by creating a shortage of coal cars. Many cars were allowed to stand idle rather than be used to deliver coal to the power plants. Everything was screwed up: One trainload of coal bound for New England stopped short and returned to the mine; rail officials claimed the rerouting was a computer mistake. And delivery of coal was sometimes delayed because the rail lines have allowed much of their equipment, including roadbeds, to deteriorate.
It was easy to contrive these shortages because ownerships of the different fuel industries are tightly interwoven. Within the past five years, eight of the ten largest coal-mining companies, which produce half the coal in the U. S., have been purchased either by oil companies or by mineral companies or other large "energy" corporations. Since the oil companies control natural-gas production, and since they also control 45 percent or more of the known U. S. uranium reserves, which of course gives them dominance over nuclear power, the production of electricity is pretty much a matter of their whim. Clearly, control of supplies and prices is in capable hands.
So critical is this threat of fuel monopoly that it has overshadowed other monopolistic trends. Too little attention has been paid, for example, to the interlocking banking relationships of the various industries that support the electric utilities. A House Banking Committee study shows that the 49 largest banks hold interlocking directorates with 36 of the largest electric companies, 28 gas companies, 15 coal-mining companies, 17 petroleum companies, 58 coal-carrying railroads, one oil-pipeline company and 27 companies supplying electrical transmission and distribution equipment.
The Mellon National Bank & Trust Company, for example, which holds 52 percent of all bank deposits in the Pittsburgh area, has three interlocks with the Consolidation Coal Company: a total of six interlocks with General Electric, Westinghouse and H.K. Porter, all suppliers of electric-transmission, lighting and wiring equipment: a total of five interlocks with the Penn Central, Pittsburgh and Lake Erie, Cleveland & Pittsburgh and Pittsbargh, Fort Wayne & Chicago railroads: four interlocks with the Gulf Oil Corporation; and a total of seven interlocking directorates with the Pennsylvania Power and Light Company, the Duquesne Light Company and the Monongahela Power Company of Ohio. All the biggest banks can show similar ties.
The point to keep in mind is that while a fuel monopoly can afflict our pocketbooks and our blood pressure, the linchpin that holds the over-all power conspiracy together and guarantees maximum profits for all concerned is the private electric-power monopoly. There are 40,000,000 households that use gas, but if the only issue were higher gas prices or a gas shortage, they could switch to other fuels--sometimes at great expense. If the only issue were higher coal prices or a coal shortage, the switch could be made to oil or gas. And if the developing oil-gas-coal monopoly made switching meaningless, the consumers could still fight it out without feeling panic, except that oil-gas-coal is electricity, and there is no switching from that.
Having passed through the panic factory, we come back to the simple, aggravating truth: There is no electricity shortage. In some densely populated areas, yes, there are shortages as the result of industry backwardness. But nationally there is no shortage, and the only problem is how to spread the existing power around.
Obviously, this is something the industry does not exactly like to have publicized. I believe I have read every important article on the power crisis printed during the past two years. Yet I cannot recall ever seeing anyone mention what Federal Power Commission chair man John N. Nassikas admitted in Congressional testimony just before 1970's winter demands set in that "the net dependable capacity of the 48 contiguous states is 326,667 megawatts, with an estimated peak demand of 257,419 megawatts." That leaves a reserve capacity--or surplus--of 27 percent, and "reserves of 15 to 20 percent are generally considered normal to guard against unexpected equipment failures and higher peak loads than predicted."
It would appear, then, that present concepts of "need" are cockeyed. The idea that New York City "needs" to build more generating facilities in Queens; or that the Los Angeles area "needs" a power plant at Malibu to continue the devastation of the beach already begun in that way at Playa del Rey, El Segundo, Redondo Beach, Alamitos Bay and Huntington Beach; or that the Chicago area "needs" more generating facilities along the Lake Michigan shore--solutions like these, with transmission technology being what it is today, are about as scientifically defensible as rubbing the scalp with parsley to cure baldness.
William E. Warne, a West Coast water-resources and energy consultant, voices from expertise what the local residents know from common sense: "[In such megalopolises as] Washington to Boston ... San Diego to Santa Barbara ... around southern Lake Michigan and elsewhere ... there are not now, and are not going to be later, places for twice as many power plants by 1980 or seven times as many by 2000"--as the electricity demands would seem to dictate building. "New York City simply cannot accommodate in its environs a multiplication of generating stations."
The best and easiest way to avoid new stations is to establish a national transmission grid. This is the only way to take advantage of the national electricity surplus, tying together all major sources of power production and power consumption. There are already regional grids and even a few important interregional grids, especially in the Far West; but these are not sufficient, as the experiences of the past few years clearly show. The national transmission picture is, as one Senate aide described it, "Like an interstate highway interspersed with gravel roads, detours and a few unbuilt bridges."
The idea of a national grid was first seriously proposed in the Thirties, but the private power lobby has always managed to prevent it from becoming a reality. Senator Muskie rightly blames the FPC for its failure to "face up to the needs for a national power network. We know how to build and regulate broadcast networks, sports networks, merchandising networks, food-distribution networks--but not a power network. And now we end up having hundreds of thousands of kilowatts of power unable to reach New York in an emergency because the necessary transmission lines have not been built." Yet for at least 15 years we have had the long-line transmission techniques to do the job.
If there are only two electric systems interconnected and one system loses 25 percent of its generating capacity because a turbine goes out, chances are that the combined systems will not have enough generating reserves to make up the deficiency. The result: blackouts, or at least brownouts. New York is supposedly backed up by the Pennsylvania-New Jersey-Maryland (P-J-M) Interconnection, but at the most crucial point in the summer of 1970 the backup P-J-M was itself riddled with so many problems that one fourth of its generating capacity was out of action. There were boiler explosions, boiler-tube ruptures (seven in all), an explosion in a pulverizer mill, a kinked turbine spindle and more. The situation was a total mess. The manufacturers of electric-power-plant equipment almost seem to be involved in a conspiracy of their own, for when they are not delivering needed equipment months late, what they are delivering is so shoddily made that it can almost be guaranteed to break down.
However, if you interconnect all the major systems, the combined spinning reserve would take care of any emergency. And if the country were tied together from coast to coast, there would be other great advantages resulting from the time and weather differentials. A summer evening's peak usage in New York puts a strain on Consolidated Edison's creaky equipment; but the West Coast, three hours behind, has not yet reached its peak usage and could bump surplus power to New York. Most power systems in the country are overloaded in summer because of air conditioning; some, such as the Pacific Northwest, have a winter peak and a summer surplus. These various systems could bump their seasonal surpluses around the country to meet demands elsewhere.
Much of a company's equipment can earn money only during peak-use periods, which is why the electric giants are so slow about buying needed equipment. With a national grid, this wasted capital outlay could be avoided.
The national grid would also be a way to achieve almost immediate relief from air pollution. Given a serious atmospheric inversion that traps dangerous levels of a utility's crud in the urban air, the company could simply shut down its generators and import the power it needs from systems in other parts of the country.
Not only is construction of the national grid possible; it could also be built quite swiftly and, as utility-equipment costs go, relatively cheaply. Robert O. Marritz, executive director of the Missouri Basin Systems Group, says that it would probably take no more than 1.6 billion dollars to build a grid with the main direct-current transmission lines running from the Pacific Northwest through the Wyoming-Montana coal fields to Chicago and then to New York, and the southern line running from Los Angeles to Four Corners (Arizona, Colorado, New Mexico and Utah), which already has a big generating complex, through the Little Rock area to the TVA and then north to New York. (The stringing of these long lines, incidentally, will of course ultimately reduce the need for additional regional lines.) The grid could be built, Marritz believes, in three years--compared with the minimum of five years needed to build a new power plant that essentially has only local usefulness.
We asked Kenneth Holum, who was assistant Interior Secretary for Water and Power Development for eight years under Kennedy and Johnson, if he agreed. He said he thought Marritz might be optimistic on the time needed to build a transmission system. Holum talks in terms of five or six years, but he conceded "Marritz is an engineer and I'm not."
Marritz is also more optimistic on the impact. With a national grid, he said, there would be no more blackouts or power shortages for decades, if just a moderately reasonable plant-construction program went along with it. Holum balked at predicting "no" blackouts or shortages, but he agreed that their possibility would be "exceedingly remote." On that, most experts would agree. So why hasn't the grid been built? That question cannot be answered fully without illustrating the atmosphere of the answer. On April 8, 1970. in a hearing before a Senate subcommittee, then--Interior Secretary Walter J. Hickel said something that would have been unusual for a Democratic Cabinet official but was downright spectacular for a Nixon appointee: "I think we need a national grid system." Hickel went on talking that way, and indicated that he wanted to be encouraged to say more. After the hearing he told reporters, "Some people think it's socialism, but it isn't."
Indeed, some people do think it is socialism. And some who think so were working within shouting distance of Hickel. Rumor has it that as soon as word of Hickel's heresy got back to the Interior Department, his Assistant Secretary for Water and Power Development, James R. Smith (who came to Washington from an executive post with the Northern Natural Gas Company of Omaha), hurriedly called together everyone at the policy level and assured them that Hickel hadn't really meant it--but if he had meant it, he, James R. Smith, friend of private enterprise, intended to resign. Some in the power industry believe Hickel's remark on the national grid helped bring about his downfall, but this may be a parochial suspicion.
Most private power executives hate and fear the idea of a national grid. When blackouts and brownouts struck the East Coast in the late summer of 1970, emergency supplies were wheeled into the New York area from as far away as the Tennessee Valley Authority. This leaning on the TVA--still a bête noire to the private power men--and the success of long-distance transmission caused deep concern among those who dread the national-grid specter. The PR offices of the major utilities began putting together anti-grid material, just in case.
There are several reasons for this opposition, aside from the fact that leaders of the private power industry simply don't like change. As we have already shown, there are tremendous profits in isolation. Most state regulatory bodies have so many other duties--overseeing road transport, railroads, elevators, phone companies, weighing stations--and have so few trained personnel that they couldn't regulate the power companies even if they wanted to. Texas has pushed isolation to the ultimate, refusing to have any interstate power ties, so that it is not subject to any supervision from the Federal Power Commission--and there is no state agency that regulates electric rates in Texas. As long as the enormously complex utility industry keeps its activities chopped up into fiefdoms, realistic regulation is bound to be impractical.
But there are other major reasons why the grid is opposed. If the nation were tied together in this way, the resources of the West would have to be acknowledged and--given a reasonable degree of public pressure--utilized, which would further explode the "fuel shortage" myth. One of the great, untapped sources of power in the U.S. is subterranean steam. If the steam trapped under the earth's crust--mostly in the West--were put to work turning turbines and generators, we would have an almost endless supply of electricity. Italy, Japan, New Zealand and Russia, among other countries, have been using steam to generate electricity on a massive scale for years.
Since 1960, geothermal energy has actually been turning generators in California and is so efficient a source that oil companies--Union and Standard and others--have been buying into the action all over California and Nevada. Some experts believe that there is enough reachable geothermal energy under California's Imperial Valley alone to meet the electricity needs of 20,000,000 people for decades at least. The important things about it are that it's cheaper than any power except hydroelectric, it does not incur the risks of nuclear installations, and it is nonpolluting.
Also looking West: Of the nation's 130,000,000 kilowatts of undeveloped hydroelectric power, 108,000,000 kilowatts are in that region, according to the Federal Power Commission; this is impressive even as a fraction of the present total generating capacity of the nation (about 300,000,000 kilowatts), and downright overwhelming, when one considers that it is about 13 times the power needed at the peak hour in New York City.
More to the immediate point, the West has immense reserves of fossil fuel. Never mind the shale-oil potential. Production methods for it are still too iffy. But one can speak practically of coal. It's there, it's easy to get at, it's relatively free of the kind of sulphur that pollutes the air. Sixty-four percent of the nation's low-sulphur coal is in the West, and only four percent of it is being mined.
The excitement that Western coal generates in some people can be detected from the claims of Senator Metcalf that "Montana coal has something like 100 times the energy source that the East Texas oil fields have. We can provide energy for America, all the energy, out of the coal fields of Montana for the next hundred years. We have that potentiality. In North Dakota and Wyoming it's the same. We could build up a mine-mouth power complex out there and set up transmission lines, and we could literally light America from Maine to Los Angeles."
Virtually all of the Western coal would have to be strip-mined, however, and there is nothing in the Western air that reforms corporations. There is no reason to expect Humble Oil, for example, to operate with more environmental decency when strip-mining its vast coal holdings in the West than its corporate brothers have shown in strip-mining the Eastern fields.
But even if conservation guarantees could be worked out, there is no assurance that full utilization of the Western sources of geothermal energy, hydroelectric power and coal would come about easily, because the Eastern establishment might not want to cooperate.
What has New York got to do with the development and transmission of power in the West? The answer to that touches one of the primary hang-ups in trying to establish the national grid. The big corporate guns of New York, who have helped create a situation of chronic crisis from which to draw maximum profit, dominate the national picture. Senator Aiken last year urged Congressional investigators to look into New England, where private utilities--which charge the highest rates in the nation--recently spent half a million dollars in a lobbying campaign to kill a public power project. "The interlocking directorships and the deals between various executives might provide some exciting antitrust material," he said. "It might also be well to take a very special look at the financing structure in control of this New England combine. It might be shown that scarcely a kilowatt can move in New England without the approval of a Wall Street investment firm."
Somewhat the same thing might be said about the West. A recent study of ten of the big private utilities in the West, selected at random from stock-ownership reports filed with the FPC, showed that a majority of the ten largest stockholders of each company were headquartered either in New York or Boston.
If we, as a nation of consumers, should ever manage to construct a national grid, we would have, in a sense, achieved industrial fission. Like nuclear fission, the achievement could become a force for either good or evil. It will be a most potent force for good if the high-voltage transmission lines that tie the nation together are owned and controlled by the Government and, like highways, available to any private or public utility company that wishes to use them. On the other hand, if the Government does not retain control over the national grid, it could become the most oppressive weapon ever offered a monopoly industry--in this case a monopoly interest that is becoming increasingly concentrated.
There were 1060 private utility corporations in 1945. Today there are 267. Serving as the best balance we have to the private companies are the 2010 public and 921 rural electric co-op systems. But if the national grid's transmission lines fell into the hands of the private utilities, they would doubtless bring the public systems under their domination even more than they have today. As it is, many of the public systems that must buy power from the privates are getting short shrift.
A memorandum uncovered accidentally in the summer of 1970 at a hearing before the Securities and Exchange Commission told of a two-day meeting in January 1968 at which 100 executives representing 66 private power companies got together in a Clayton, Missouri, motel to exchange advice and experiences on how to kill municipal and co-op electric systems. A leading role was taken by executives of the Edison Electric Institute, the private utilities' trade association. The good soldiers of capitalism discussed such tactics as refusing to sell power at wholesale prices to municipal power companies; lending money to communities with municipal plants, and then putting the squeeze on them; and refusing to let public utility companies come into pooling and joint power-supply arrangements.
This cutthroat attitude on the part of private utilities is not at all unusual. Arthur Jones, president of the Basin Electric Power Cooperative in Bismarck, North Dakota, one of the more aggressive populist outfits of the Midwest, says that if consumer-owned and public systems don't get to participate actively in the planning and ownership of the huge regional and interregional grids which are coming, "the people's basic electric-power supply eventually will be dominated by those few utilities that can manage to finance very large facilities.
"Domination of an electric grid by a few utilities and the domination of essential-fuel supplies by a few oil companies [will mean] price-fixing at the expense of the consumer and political control by large corporations."
He could have made that much stronger and still have been accurate. Price-fixing is achievable without the grid. With a private grid, what can't they fix? The monopoly of the telephone by A.T.&T. has been with us for years. The monopoly of the energy industry by a dozen major oil companies has been apparent, if less visible, for several years. If the national grid, which is surely inevitable, gets into the hands of the major electric companies, then the monopolistic control of all industrial essentials will have gone too far to reverse. On the other hand, if the people, through their Government, own and control the grid, industry may at least be stalemated in its bid for a strangle hold on both the sources and transmitters of electric power.
Like what you see? Upgrade your access to finish reading.
- Access all member-only articles from the Playboy archive
- Join member-only Playmate meetups and events
- Priority status across Playboy’s digital ecosystem
- $25 credit to spend in the Playboy Club
- Unlock BTS content from Playboy photoshoots
- 15% discount on Playboy merch and apparel