Thursday, May 25, 2006

The Echo of the Shot Heard Round the World

So Kenny Boy Lay and Little Jeffy Skilling got busted. It's about damn time. The Enron scandal, and all its associated scandals, were a shot heard round the world in terms of business and politics. Enron's gaming the system in California had effects even as far away as here in Ontario. I remember it vividly...

At the time when California was going through rolling blackouts and suchlike stuff as a result of Enron and friends' gaming the system to drive prices up, our dearly beloved ex-Premier, Mike Harris, was going on the media all the time broadcasting the prevailing spin that the California problems were the result of lack of generation capacity and that the ostensible stagnation in power plant construction in California (causing the shortages) was because the system was not deregulated and privatised enough to "incentivise" the private sector to build more power plants.

From there, he claimed that Ontario was likewise short of generation capacity, and that we were sure to have the same sort of problems if we didn't take immediate action. However, for the record, Ontario has a publicly-owned power utility, then called Ontario Hydro.* While he didn't manage to privatise the electrical supply, he did manage to deregulate the rates (which has never made sense to me in the context of a publicly-owned utility in the first place), and they've been rising ever since.

What's that Bartcop likes to say? If someone makes a "mistake" that puts money in their pocket, look for them to make that same "mistake" over and over again?

So Harris' logic was that if we wanted to avoid generator shortages, we should immediately sell off Ontario Hydro at fire-sale prices (he tried and failed, especially after a debacle with a British company running one of our power plants into the ground), including the transmission lines, and then the private sector would be magically willing to build more power plants and lower rates at the same time, thus sparing us from California's tragic fate.

Of course, it was obvious to anyone with half a brain who was willing to listen to more than the official line on the subject at the time (ok, friends in California didn't hurt, either) that Enron and pals were gaming the power grid for fun and profit, mostly profit, so that added another layer of absurd, greedy mendacity to Harris' little plan. We often speculated how much he stood to make from the proposal, as there was no other reason for it -- it wasn't like Ontario Hydro was particularly dysfunctional, and where I grew up, you say, "if it ain't broke, don't fix it," and he had his heart set on fixin' what wa'ant broke. Generations of Roman philosophers, Deep Throat, Bartcop, and I all came to the same conclusion in similar circumstances: Follow the money.

A little cynicism is often a good thing, and schadenfreude feels so nice. Wading around in Harris' wingnut logic years after the fact is somewhat akin to bathing in ditch liquour, though.


Post-It Note: The reason I'm so emphatic above about transmission lines is that I have a deeply-held belief that one should keep one's public infrastructure under the thumb of one's Beneficent State, rather than auctioning it off to the highest private-sector bidder, where it immediately gets turned over to the profit motive. Power transmission lines (as well as generation utilities) are infrastructure.

Similarly, the value of transmission lines and other similar systemic components is becoming clearer and clearer to me as I study streetcars and light rail systems. Historically, the areas where streetcars and light rail have and had done the best were in areas where there were guaranteed rights-of-way and/or dedicated trackage, so the streetcars or light rail weren't dependent on traffic movement. More on this later, which will be the first installment of a much bigger project to appear in print shortly. Stay tuned...

* Ontario Hydro: "Hydro" is regional Canadian slang for "electricity," largely because for a long time, the largest single share of electricity generated in the areas where the slang appeared was hydroelectric.


Anonymous milo bloom said...

Ontario is lucky that Harris didn't manage to push privatization of electrical services through, unlike Ralphie over here in Alberta. (Or Ontario was more vigilant and aware than Alberta - it's very possible :)) Everyone but big business here has gotten the shaft on that deal.

10:30 AM  
Blogger Interrobang said...

I'm not sure what it was, except that there were nearly riots. That never stopped Harris from doing anything before, but we won that one, somehow.

I used to live in Alberta in the 1970s, and I remember it having a lot of programmes that one would think of as being "left" things, like can and bottle recycling, and really good medical care -- what the hell happened to you guys?!

3:04 PM  
Blogger spocko said...

I'm actually interested in your infrastructure insights. It may sound boring to some people, but how projects get set up and implemented are actually very intense. Did you ever read Cadillac Desert? It is about all the damns and waterway deals in California, especially LA.

I think some of the movie Chinatown was based on the stories that the book laid out. Fascinating stuff.

2:33 AM  
Anonymous milo bloom said...


It sounds like you were here in the days of Peter Lougheed being premier. For a Progressive Conservative, he was nothing like Ralph.

It's really been since Ralph Klein became premier (1994ish) that more right wing stuff like privatization of government departments (social services, road maintenance, etc.) has become the norm here. Education and health care budgets were hacked and slashed in the name of balancing the budget in the mid-to-late-90s, and despite the fact that we are now debt-free, funding levels have yet to be restored to their former levels (as far as I know).

Some good stuff still gets done in spite of the provincial government - we still have recycling programs, and the city of Edmonton actually has one of the world's largest composters, which cuts down on the amount of household waste going into our landfills by 60%.

Overall, I guess it's a better place to live when oil prices are high than low!

6:28 PM  

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