Southern Co. fought blackout fix

Utility doesn't want feds to take over grid system

Engineers at the Federal Energy Regulatory Commission warned — back in 1999, mind you — that a massive blackout was sure to occur. The only questions were where and when.

They even proposed a solution that might have prevented the power outage that left nearly 50 million Northeasterners in the dark last week.

But the energy regulators ran into a major obstacle — an Atlanta company well known around these parts as a massive roadblock to reforms on a whole slew of environmental and consumer issues. They ran into the political influence of the Southern Co.

Lobbyists for the giant utility, which owns Georgia Power, helped block a FERC proposal to create regional organizations that would have overseen the flow of electricity across state lines. Those Regional Transmission Organizations would be charged with operating, upgrading and maintaining the substations, transformers and transmission lines that make up an electric-power grid.

Newer equipment, firewalls between local networks and other upgrades would have prevented the meltdown in Ohio's grid, both industry and government energy experts are now saying.

Monopoly utilities currently maintain the grids in their own territories. Southern Co., which owns most power lines in Georgia, Alabama, Mississippi and parts of Florida, controls transmission from offices in Birmingham, Ala., and doesn't want to relinquish that power.

"Southern Co. probably has one of the better grids in the country, as far as the engineering and operation perspective. It's a control issue," says Georgia Public Service Commission Chairman Robert Baker. "Right now, in the Southern Co. footprint of where they operate, they are the 900-pound gorilla that controls who has access to the transmissions and how much it costs."

But, if a regional transmission organization took over control of the Southeast's grid, other companies could get easier access to Southern Co.'s turf. Those companies could transmit their electricity over the local grid, and confront Georgia Power and its sister companies with competition.

Southern Co. spokeswoman Laura Varn puts it in a much nicer way. The "issue we have with RTOs is making sure we can provide the same level of customer service and reliability," Varn says. "If it's [the grid] in the hands of a third party, we'd no longer have direct control over it."

The problem is that while Southern Co. wants to control its relatively well-maintained grid, the transmission system nationwide needs dire attention. And by opposing the nationwide reform, Southern is blocking a solution that might have prevented last week's blackout.

Regardless of who's right about the policy debate, Southern Co. dealt with the FERC proposal the same way it handles any problems that stand in the way of profit: with spin, high-powered lobbyists and big campaign contributions.

Southern Co.'s talking points on the RTO issue will sound familiar to any environmentalist that ever tried to push the company to clean up its power plants. The company doesn't want to go "rushing headlong" into an unproven program, and would rather the RTOs be "voluntary," not "mandatory."

The company's political influence was on full display last month, when Sen. Richard Shelby, R-Alabama, struck a deal with fellow Senate Republicans to postpone FERC's proposal to establish Regional Transmission Organizations, according to The Washington Post. Shelby, an Energy and Natural Resources Committee member, has sounded a lot like a Southern Co. executive, arguing that the FERC plan would lead to higher rates.

His puppet impression isn't surprising: During the last election cycle, Southern Co. executives, Southern employees and Southern subsidiaries' executives and employees gave Shelby $34,850 in campaign contributions, according to the Center for Responsive Politics.

The Alabama senator's maneuver to stall the FERC proposal prompted former Energy Secretary Bill Richardson, to argue Sunday on CBS's "Face the Nation" that the Bush administration should "eliminate that sweetheart deal that the Southern Co., a utility, has made in the Congress to delay the development of more robust transmission lines until the year 2007."

As if. White House officials already have sided against their own FERC chairman and with the Senate Republicans who struck a deal with Shelby. And Vice President Dick Cheney personally promised Shelby that he'd "aggressively pursue" a delay to FERC's proposal until 2007, according to Reuters.