PBS documentary sheds light

Associated Press

As California's energy crisis casts a widening shadow, PBS' "Frontline" helps illuminate the issue with a high-wattage documentary.

•	'Frontline: Blackout' 10 tonight, PBS (KHET-11, 10 on Oceanic)

The hourlong film, with reporting by "Frontline" correspondent Lowell Bergman done in conjunction with the New York Times, airs tonight on PBS.

"Blackout" should be considered required viewing. Major players, ranging from power company chiefs to consumer advocates to Vice President Dick Cheney, make their case on energy policy.

Gov. Gray Davis and others grappling with California's flawed new system, which has inspired many states to put their own deregulation efforts on hold, are interviewed.

"Blackout" also touches on alleged machinations involving the Federal Energy Regulatory Commission that could affect how much, if at all, the federal government will weigh in on power prices, and renews questions about corporate influence on the Bush administration.

What ultimately emerges is a classic debate, framed in 2001 political realities, over whether an unfettered market is invariably the best approach or whether capitalism sometimes must bend to regulation.

Bergman is adamant about the importance of understanding a power industry that has undergone massive change.

"We've launched ourselves into a great economic and social experiment in the free market with a commodity that 65 years ago the country decided to put under heavy regulation because it was so vital," he said in an interview.

"We've gone into this experiment without having a full national debate about what the consequences could be," Bergman said. "It may all work out, but it's clear that we're at least in a transition period where a lot of people are going to pay the price."

In New York, for instance, blackouts are a possibility this summer and rate hikes of up to 40 percent a likelihood, Bergman said.

There are those striking it rich in this bold new world. "Blackout" opens on Houston's "energy alley," home to new-breed power companies including what the documentary calls the 800-pound gorilla, Enron Corp.

Enron, which has drawn attention because of chairman Kenneth Lay's close ties to President Bush, generates profits by serving as middleman between electricity makers and consumers.

The world's largest energy trader, Enron sees from $2.5 billion to $3 billion in purchases and sales a day, according to its chief executive officer, Jeff Skilling.

"We are doing the right thing," Skilling tells "Blackout." "We are working to create open, competitive, fair markets. ... We are the good guys. We are on the side of angels."

If that's true, Bergman says in the film, the good guys have been winning: The past year saw a "vast transfer" of wealth from energy consumers to power sellers and traders like Enron.

They are taking advantage of the end of an era: the federal regulatory system implemented by President Franklin D. Roosevelt in the 1930s to limit abuses by utility monopolies.

In the 1980s, "Blackout" tells us, free-market proponents began pushing for an end to regulation. In 1992, a federal law was passed that allowed for states to deregulate electricity.

There was broad but not unanimous support for such change.

"It's OK for the price of fur coats to go up and down. ... It's not OK for the oxygen of life in this high-energy civilization," David Freeman, the former Los Angeles Department of Water and Power head and now state energy czar, tells "Blackout."

Mark Cooper, director of research at the Consumer Federation of America, who notes there have already been price spikes in electricity in the Midwest and New England, says the outcome speaks for itself.

"How do we go from $40 a megawatt for capacity in a regulated system to $1,000 in a deregulated system, and you're telling me I'm better off?" Cooper asks in the documentary.

Enron's Lay weighs in on the other side.

"I've yet to see any system in the world ... that over time does a better job of setting prices and allocating supplies than a competitive market," Lay says.