Experts Assess Deregulation as Factor in '03 Blackout

Twenty-five months after a blackout darkened cities from New York to Toronto and Detroit, the Energy Department and its Canadian counterpart held their first public technical discussion on the episode Thursday to talk about one factor widely considered to have been behind it: the deregulation of the electric system.
Engineers, government officials and executives said at the meeting that amid its restructuring the industry needed further changes to reduce the frequency of blackouts as utilities that formerly generated power, transmitted it and delivered it were broken up into separate entities of competing businesses.
"The most serious mistake we can make is pretending that markets do things that they do not do," said Kellan Fluckiger, executive director of the electricity division at the Alberta Department of Energy. "Markets allocate risk, they allocate capital, they provide price signals. Markets do not have a conscience, they do not provide social policy, and they do not do things they are not paid to do."