posted on August 19, 2003 08:56:23 AM new
Now why am I not surprised
Blackout puts privatizers and deregulators on hotseat
FirstEnergy fallout may have huge political implications for
deregulation crusaders like George Bush and Ernie Eves
FirstEnergy, the Ohio company at the centre of last week's massive power blackout, has a long record of safety, operational and financial problems.
It also has close links to the Bush administration in Washington and a history of spending big on political lobbying while taking shortcuts with the public.
The company failed to report a shutdown two hours before the blackout last Thursday. The reason? It was not legally required to do so. Thus, other utilities remained blindsided when they might have taken action to prevent the biggest blackout in North American history.
Now FirstEnergy is scurrying for cover and so are politicians everywhere, not only those directly connected to it, like George Bush and Dick Cheney, but those indirectly associated with the blackout by virtue of their unbridled advocacy of privatization and deregulation.
In a single, dramatic stroke, the blackout switched off the power on 50 million North Americans and switched on a debate about the future of electricity and who should own and control it - government or private enterprise.
$1,044,807 in political donations
In 2002, FirstEnergy gave $1,044,807 to political parties — 70% to Republicans and 29% to Democrats — the 10th-largest amount contributed by an energy and natural resources company and the sixth-largest amount contributed by an electric utility, according to the Center for Responsive Politics. FirstEnergy spent another $2,259,975 on lobbying in 2002
In June, Peter Burg, the CEO of FirstEnergy, hosted a fund-raiser for Vice President Dick Cheney, raising $600,000 for the Bush re-election campaign.
(Anthony Alexander, president of FirstEnergy, was a member of the Bush administration's transition team when George Bush moved into the White House in January 2001.)
ABC News topped its national newscast Monday night with a report that FirstEnergy, based in Akron, cut back on workers who maintain its transmission lines and that its Ohio nuclear plant was shut down last year because of serious violations, including a hole the size of a football in in the top of the reactor vessel.
'Given a pass by regulators'
A petition to shut the reactor down was filed by Ohio Representative Dennis Kucinich, long a fierce critic of FirstEnergy and now a Democratic presidential candidate.
"In order to protect their stock position, they've made shortcuts on maintenance. They covered it up and they were given a pass by regulators," Kucinich says.
The same thing happened with the transmission lines that failed, he added. "They've got a transmission system that's long been in need of upgrading, and they haven't."
FirstEnergy owns seven subsidiary utilities in Ohio, Pennsylvania and New Jersey. It was formed in 1997 from the merger of Akron-based Ohio Edison, the Cleveland Electric Illuminating Co. and Toledo Edison. In 2001, it acquired General Public Utilities, which owned Pennsylvania Electric Co., Metropolitan Edison near Reading, Pa., and New Jersey Central Power and
Light.
The company has more than four million customers and ranks as the fourth largest privately-owned utility in the United States with annual revenues of $12 billion.
Profit first, safety second
"The mentality of the FirstEnergy senior management [is that] they place a higher regard for profit and power production than the safety of the public," says consumer lawyer Howard Whitcomb, a former FirstEnergy senior manager and a longtime of critic of the utility.
FirstEnergy officials complained Monday that the blackout resulted from a "very complex situation far broader" than factors within its own facilities. But that did little to quell the rising furore. The company remained the central focus of an intensive investigation into the crisis.
"... on the shores of Lake Erie, hours before the blackout, a cloud of ash and a big whooshing sound spewed out of the three chimney stacks at FirstEnergy's Eastlake coal-fired power plant as it shut down," the Cleveland Pain Dealer reported.
"Why the 680-megawatt plant went off line is still not clear .... The ash blanketed cars, homes and picnic tables in the village of Timberlake."
One thing is certain: before the dust settles, FirstEnergy is going to have a lot of explaining to do, and so are a lot of politicians on both sides of the Canada-U.S. border.
posted on August 19, 2003 09:12:29 AM new
FirstEnergy has record of financial, safety, pollution troubles
12:10 PM EDT Aug 19
DAFNA LINZER AND JOHN SEEWER
(AP) - FirstEnergy is suffering yet another blow.
The Ohio-based owner of power lines that may have triggered the largest power outage in U.S. history was found guilty of pollution in early August, warned about its staggering $12.5 billion US debt and forced to slash earnings estimates.
All this comes as the company is under scrutiny for safety at its nuclear plant, which has been the subject of congressional hearings and an investigation by the Nuclear Regulatory Commission.
The drain on the company's financing - stemming mostly from cleanup of the shuttered nuclear plant - could make it harder for FirstEnergy to tackle any financial fallout from the outage.
According to a preliminary analysis, FirstEnergy, which owns four of the first five lines that failed, was experiencing unusual "electric conditions" as much as four hours before the blackout hit Thursday, sweeping across eight states and parts of Canada.
"What happened on Thursday afternoon is much more complex than a few tripped power lines in our system," said Todd Schneider, a FirstEnergy spokesman.
Still, he said the company didn't consider shutting down lines before the blackout.
"At the time there was no reason to isolate it."
Efforts to nail down the source of Thursday's massive blackout have shifted to Ohio and FirstEnergy Corp., the country's fourth-largest investor-owned utility and No. 159 on the Fortune 500 list.
FirstEnergy said a system that is supposed to flash a red warning on computer monitors at the company's control centre was not operational when the lines began failing Thursday afternoon.
The North American Electric Reliability Council, which is investigating the outage, has focused on the likelihood of a combination of mechanical glitches and human failures as it tries to piece together second-by-second events during the hours before the widespread blackout, focusing on power lines in northern Ohio.
NERC, which was created after another major blackout in 1965 to monitor the power grid and set voluntary reliability standards, has said the problem appeared to have cascaded after the breakdown in the three high-voltage lines south of Cleveland in the area serviced by utilities owned by FirstEnergy.
The Akron-based company has 16 power plants and an annual revenue of more than $12 billion US with customers along an area that stretches from Ohio to New Jersey.
Although considered a utility, FirstEnergy operates as more of a conglomerate, handling many facets of the energy business from power plant operations to customer services. The company benefited enormously from deregulation of the industry - which is being blamed, in part, for failed efforts to overhaul the power grid and modernize the lines.
Its Davis-Besse nuclear plant east of Toledo was shut in February 2002 for maintenance. A month later, it was discovered that boric acid ate through much of a 15-centimetre-thick steel cap on the plant's reactor vessel.
The company, waiting a decision by the NRC before the plant can reopen, has been forced to purchase power elsewhere to make up for the halt in productivity at Davis-Besse. It has cost the company $450 million US since July for repairs and replacement power.
Troubles at the plant also caught the attention of Congress and the Environmental Protection Agency.
More problems began to pile up this summer.
On Aug. 7 a federal judge ruled that FirstEnergy violated pollution control laws when it rebuilt a power plant without installing state-of-the-art smog controls required under the Clean Air Act. A second trial will determine penalties.
The government argued the pollution from FirstEnergy and others winds up in the Northeast, where it causes acid rain and health problems.
Similar cases are pending against Columbus-based American Electric Power, Illinois Power Co., Duke Energy Corp. and Southern Co.
On the day of the court decision, Standard & Poor's held FirstEnergy's credit rating one notch above junk status but said the company's outlook remains negative, and that long-term debt should be reduced to $10 billion US by year-end.
In early August, FirstEnergy reported a second-quarter loss of $57.9 million, or 20 cents per share, due to special charges. FirstEnergy also said it would restate 2002 financial statements.
On Saturday, a top investigator said the failure of three transmission lines in northern Ohio likely started Thursday's blackout that stretched into the weekend.
Investigators were "fairly certain" that the problem started in Ohio, said Michehl Gent, head of the North American Electric Reliability Council. "We are now trying to determine why the situation was not brought under control."
The council is a non-profit, industry-sponsored group that oversees power line reliability.
Ohio regulators also said the blackout may have started in their state.
FirstEnergy executives spent the weekend in their offices to determine the extent of the utility's role in the outage. Lunches were brought in and entry into FirstEnergy's downtown brick headquarters was strictly controlled.
"We want to get to the bottom of this," said Schneider, the FirstEnergy spokesman.
He said the company is still investigating whether its warning system is working.
-
On the Net:
FirstEnergy: firstenergycorp.com
North American Electric Reliability Council: www.nerc.com
posted on August 19, 2003 09:27:31 AM new
The problem with this nation is that everyone wants to blame the other one if anything goes wrong. Lets see if you patriots out there can name this quote:
"UNITED WE STAND DIVIDED WE FALL"
The endless fighting and bickering about who is responsible for what is so insane. Just fix the damn power and stop making a political stand on every friggin event
posted on August 19, 2003 10:26:36 AM new
The North American Energy Reliability Council which tracks such things has determined that, including last week, there have been seven grid failures since the big one on November 9, 1965. None lasted for more than a day. Let's go to the blackboard: This is just long division, not quantum mechanics. The number of days between November 8, 1965 and August 14, 2003 is 13,793. The number of days in which some portion of the national power grid failed during that period is 7. Dividing 13,793 by 7 we get 0.000507504 Moving the decimal two places to the right (and rounding up) we get a failure rate of 51 THOUSANTHS of one percent. Stating it the other way, the power grid (which was described by former Secretary of Energy Bill Richardson as being like one in a 'third world country') has been up 99.949 percent of the time over the past 37 years." --Rich Galen
A liberal is a man too broadminded to take his own side in a quarrel.
Robert Frost
posted on August 19, 2003 01:00:20 PM new
You two zombies for Bush just don't understand do you? It isn't going to be fixed! But why let that little factoid stop these companies use something like this to enrich themselves, getting gov't grants and rate hikes, posing like they are "fixing" it. What happened to all the money the power companies charged Californians? Didn't pay for any upgrades, did it? But Kenneth Lay was able to retire from his bankrupt company withou pain, wasn't he...
But hey, I'm probably keeping you from your cross-burning meeting....
posted on August 19, 2003 01:38:52 PM new
gee melchy why all the venom and name calling? zombie? cross burners? is this what you do to people who don't agree with you?
Why are you so bitter? Sounds like you are almost jealous you are losing out on a piece of the greed pie.
You don't think power companies were making bucks under Clinton? I believe rates went out the roof when he was president too. Do you naively belief that the President is responsible for all the evil and wrong doers?
If you don't like this administration you are certainly entitled to your opinion and respectfully so. You may vote for another candidate the next term, this is the American way. But what is so dissappointing is your mudslinging at people who don't agree with you. You sound like the liberal version of Fox News. Why don't you seek higher ground when expressing your opinions, perhaps you could influence people instead of alienating them. Just a thought.
posted on August 19, 2003 04:30:53 PM new
TX PROUD, there is something familar about you. I can't quite put my finger on it...mmmmm....perhaps we have met before on some enchanted thread in the past? perhaps I am competely wrong.
posted on August 19, 2003 05:12:00 PM new
Not likely to be fixed as long as Bush is in office:
FirstEnergy has friends in high places
08/19/03
Sandy Theis, Stephen Koff and Mark Naymik
Plain Dealer Reporters
Among Ohio's powerful electric utilities, Akron's FirstEnergy Corp. generates the most political juice.
When state legislation threatened its financial health, the firm hired a state senator, a former Ohio House speaker and the governor's top aide.
For help with federal bills and regulations, it employs lobbyists whose previous bosses were U.S. presidents and heads of agencies that oversee the regulators.
It ranks sixth nationally in money spent by utilities on lobbyists. And its executives - from the CEO to in-house lawyers - have opened their wallets to politicians from Toledo City Council to the White House. Twenty-five executives have contributed a total of $33,500 to President Bush's re-election campaign so far, according to Political Money Line, a database service that tracks money in politics.
What has the company gotten in return for its political clout?
"Everything it ever wanted," said State Sen. Robert Hagan, a Youngstown Democrat who joined the chorus of critics demanding to know more about FirstEnergy's role in what caused North America's biggest blackout.
FirstEnergy spokesman Ralph DiNicola said the company "has a right to participate in the political process."
He noted that contributions made by executives fall within all the federal guidelines and are "recorded in all of the appropriate places." He termed the lobbyists a "team of experts" who have been hired to deal with complex federal and state regulations.
FirstEnergy appears well-positioned for its latest troubles. Records in Washington show that over the last year its lobbyists have included Joshua Rokach, a former Federal Energy Regulatory Commission lawyer who was involved in electrical transmission restructuring. FERC, which regulates the electricity grid, is involved in determining the cause of last week's power failure.
And on May 1, FirstEnergy retained Willkie, Farr & Gallagher to help it with "legislation relating to air pollution," according to the federal lobbying registration. Specifically working for FirstEnergy at the firm: Donald Elliott, general counsel of the Environmental Protection Agency under former President Bush, and Russell Smith, former Republican counsel to the House Energy and Commerce Committee. Smith's old committee has launched an investigation into what caused last week's multistate blackout.
Some authorities believe the trouble began at lines owned by FirstEnergy, and they note that government monitors have been increasingly troubled by strains on the system.
Gov. Bob Taft - still vacationing in Canada - isn't assigning blame for the blackout, and he issued a statement yesterday saying he hopes the crisis will prompt passage of energy legislation that has been stalled in Congress.
Yet Democrats and some consumer groups say they fear that FirstEnergy will use its political clout to stall meaningful reforms.
"The utility companies pretty much have free rein," said Hagan. "I don't have a lot of confidence that this will be resolved in a way to help the consumer."
His prediction, he said, is based on the company's legislative successes.
Its highest-profile victory came three years ago in Columbus, when Taft signed into law a bill designed to bring competition to the electricity market.
One of the bill's most contentious provisions allows FirstEnergy to bill its customers for past investments, mainly in its nuclear power plants. Consumer groups say that customers will be forced to pay $9 billion. FirstEnergy contends the figure is inflated, but it has refused to produce records documenting the true price.
Before the vote on the bill, the company enlisted some of the state capital's most influential lobbyists and consultants and showered elected officials with campaign donations.
A study by Citizen Action showed that Ohio's four largest electric utilities spent $604,235 on campaign donations between 1997 and 1998. FirstEnergy led the list of givers ($209,970). Taft led the list of receivers ($114,258.)
FirstEnergy began work on the deregulation legislation in the mid-1990s, hiring more than 20 lobbyists and a half-dozen consultants.
In 1997 - the same year the firm attempted to cut costs by laying off 400 employees - it spent $9.3 million on consultants, according to records filed with FERC. The total included money paid to Kingwood Consulting, founded by the late Paul Mifsud, who served as chief of staff to then-Gov. George Voinovich.
The firm paid Mifsud $453,700 over two years.
In addition to retaining Mifsud, the firm hired former House Speaker Vern Riffe, Summit County GOP Chairman Alex Arshinkoff and Roy Ray, a former state senator from Akron. Ray received $124,000 from FirstEnergy sister firm Ohio Edison, then introduced legislation favorable to the company.
An ethics investigation concluded that Ray had done nothing wrong.
Today the firm employs more than two dozen lobbyists in Columbus and Washington.
In April, it expanded its Washington lobbying stable to include the Federalist Group and its all-star Republican team: John Green, who previously ran Sen. Trent Lott's political action committee, the New Republican Majority Fund; Stewart Hall, former legislative director for Sen. Richard Shelby of Alabama; and Drew Maloney, former legislative director to House Majority Leader Tom DeLay.
FirstEnergy's Ohio lobbyists include Arshinkoff, who has close ties to President Bush, and former Ohio Democratic Party Chairman Jim Ruvolo, who is a native of Toledo.
With help from Ruvolo, Toledo City Council voted last summer to continue its dealing with FirstEnergy rather than switch to a competitor. Council members cast their votes after heavy lobbying - and a flurry of campaign donations - from Ruvolo and others affiliated with FirstEnergy.
The firm's political maneuverings date back decades, said Ashley Brown, a former member of the Public Utilities Commission of Ohio who is now executive director of the Harvard Electricity Policy Group at the Kennedy School of Government.
Brown said that when he joined the PUCO in 1983, he put together a list of the law firms retained by Cleveland Electric Illuminating, one of FirstEnergy's affiliates.
"The list was mind-boggling," Brown said. "Back then, you had sitting legislators on retainer to the company. It was amazing stuff."
Cheryl
Power to the people. Power to the people, right on. - John Lennon
