Power Stakes
Munson, Richard
Power Stakes THE POWER MAKERS by Richard Munson Rodale Press. 260 pp. $16.95. The electric utility industry is in trouble. Having sailed through a period in which consumption doubled every decade...
...Utilities may ultimately lose their monopoly over the use of transmission lines, which would allow for strong competition for power across great distances, and perhaps lead to cheap prices...
...In some areas, for example, utilities are entering a limited market where they and their customers can buy and sell electricity that is transmitted in the regional power grid...
...Control of the electric industry may be up for grabs...
...For The Power Makers, however, he put on his journalist's hat, interviewing utility executives, bankers, independent power entrepreneurs, and others...
...These independent producers have proliferated...
...Having sailed through a period in which consumption doubled every decade and bigger power plants meant reduced costs, the industry is now foundering in a sea of uncertainty and rate shocks...
...And it is made possible, in large part, by the Public Utility Regulatory Policies Act of 1978 (PURPA), which requires utilities to purchase power from independent producers at rates based on avoided costs to the utilities...
...This is in response to the kind of frustration felt by one steel company when it could not buy cheaper power from a nearby utility because the plant site was in another utility's territory...
...Norris prevailed when Congress created the Tennessee Valley Authority to bring cheap public power to rural and impoverished Appalachia...
...Cogeneration facilities, which produce steam heat as well as electricity, represent the biggest independent source of power production...
...In addition, most nuclear power plants under construction are projected to cost ten times their original price...
...Richard Munson's new book, The Power Makers, profiles an industry in transition...
...Munson believes that slowing down competition will aggravate the problems utilities currently face...
...Chances are even that one or more utilities will file for bankruptcy...
...John Dernbach (John Dernbach is a free-lance writer based in Harrisburg, Pennsylvania...
...One canning factory burns peach pits to produce steam to run the factory, uses the steam to produce needed electricity at the same time, and, thanks to PURPA, sells surplus electricity to the local utility...
...During the Cold War, hard-hitting advertisements associated public power with communist takeovers...
...Monthly utility bills have tripled since 1973, and in many places where new nuclear plants are planned to come on line, bills may double again...
...He lists publicly traded independent power producers and encourages readers to look into them...
...His brief profiles of many industry leaders add color and life to his assessment of the industry's condition...
...Perhaps Munson's future writing will answer such questions...
...Munson also suggests that utilities have weathered other challenges...
...Despite TVA and a 1935 law that controlled many of the worst practices of public utility holding companies, the utilities continued to prosper...
...Today's utilities," Munson writes, "are losing their monopolies to a new generation of electric entrepreneurs...
...In the 1920s and 1930s, Nebraska Senator George Nor-ris and other Progressive legislators fought for public control of the hydroelectric power available from the nation's rivers...
...Steady economic growth and the increasing efficiency of larger power plants through the 1950s and 1960s also helped the utilities in their fight against smaller public power companies...
...Competition is also beginning to occur in other ways...
...The result, though readable and insightful, is more descriptive than prescriptive...
...At the same time, Munson understands that competition may not be helpful to poor people, many of whom are already unable to afford their electric bills...
...The high cost of new plants and the declining cost of alternative sources are spurring competition...
...Public utility commissions are forcing utilities to swallow more of these costs, particularly where partially built nuclear plants are being abandoned...
...The reader is left wondering when and how competition can be expected to end increasing electric bills, and what can be done to accelerate competition without hurting poor people...
...In California, for example, power they supplied increased from 100 megawatts in 1982 to 1,659 megawatts in 1985...
...The impact of competition is just beginning to be felt...
...Uncertainties about future growth in demand and how to meet it have made planning a risky guessing game...
...Generating capacity has increased 50 per cent since the 1973 Arab oil embargo, but demand has increased only 20 per cent...
...Munson writes from his own experience...
...Some utilities are resistant, but they have no legal choice...
...Most of their power plants are small and can be built quickly...
...And it may not be beneficial to the environment...
...But Munson frequently states competing points of view without analyzing or evaluating them...
...Windmills, hydroelectric dams, and other sources are now producing electricity and selling it to utilities...
...Much of the difficulty is due to overbuilding of power plants...
...A former executive director of the Solar Lobby and the Center for Renewable Resources, he helped coordinate Sun Day in 1978 to promote alternative energy sources...
...Munson narrates the history of electric utilities and assesses the challenges they face, particularly increasing competition...
Vol. 50 • January 1986 • No. 1
