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Bloomberg's Blackouts

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Bloomberg's Blackouts

New York Post June 29, 2007
Urban PolicyOther

MAYOR Bloomberg called Wednesday's short East Side and Bronx blackout a "minor inconvenience," just after he declared that the subways aren't crowded, despite the fact that the chief of the state-run Metropolitan Transportation Authority is pleading "there's no room at the inn."

In fact, New York City faces real problems here - ones it can't fix without the mayor taking the lead.

Even if Wednesday's blackout was just a lightning-strike fluke, it's a reminder that the city's physical infrastructure, including its power- and people-transportation systems, is severely strained.

Both the city's electricity and subway infrastructure were built decades ago, when the city had fewer people, and used less power.

Consider: Over the past decade, Gotham's electricity use is up more than 20 percent. Anyone who rides the subway can see why: More people on the trains, and more of them with electricity-consuming iPods in their ears. Indeed, over that same last decade, New York developers have built more than 150,000 new homes, equivalent to a new modest-sized city. That's 150,000 new "customers" for Con Ed.

For now, at least, we're likely not facing a power-generation crisis. And before we do face one, there's a straightforward fix: Politicians can create a more welcoming environment for the competitive power generators that build the plants, and they'll build more of them. (Of course, New York pols may still screw it up.)

The real problem - much harder to solve - is that once generators produce the power, they sell it to Con Ed, which transmits and then distributes it to customers, like apartments and office buildings.

And Con Ed behaves more like a quasi-government agency than a competitive private-sector company, although it has elements of both. To wit: It can't just raise prices whenever it needs money to invest in its system; it must apply to the state for a rate hike.

Just this week, before the blackout, Con Ed got a tongue-lashing from the City Council for having proposed a nearly 12 percent rate hike.

The company needs that money to invest in its five-year, $7.5 billion project to expand and upgrade its distribution and transmission assets in New York and Westchester - its biggest construction undertaking in 30 years. But Con Ed applying for a rate hike is much like the MTA moving to enact a fare hike, even when it badly needs the cash - it's just as much a political-pandering process as a rational planning and investment process.

Nor does Con Ed have any incentive to do an amazing job, beyond (hopefully) investing enough money in its overstressed systems to keep the lights on. If the company is super-efficient and makes profits above a certain amount, it has to give much of those profits back to its customers.

So state and city officials are uncomfortable supporting Con Ed's rate-hike request even when it's obvious that Con Ed needs to invest in its network. And they're reluctant not just because voters don't like paying more, but also because they're never quite sure that the company will use the money efficiently if it knows there's always more where that came from. (Not that elected officials are such experts in using money wisely, either.)

It's the mayor's job to fix this dysfunctional situation, and soon. Just as Bloomberg should be the one person in New York who should care the most that the city's vital public-transportation system is straining at the seams, he should worry the most whether New York can keep its lights on (all the time, preferably) or not.

The mayor's in a good position to be an honest broker between Con Ed and city and other public officials, making sure the company has the money it needs to keep the power on, even if customers don't like it, and pledging to those customers that he'll do what he can to make sure Con Ed uses that money wisely.

But to do that job, Bloomberg must care whether Gotham's vital infrastructure is up to par now, and five years from now - not in 2030. The first step to a solution is at least admitting that the subways are overcrowded, and that any blackout in the nation's biggest city, even a flaky one, is a serious thing, not a minor inconvenience.

This piece originally appeared in New York Post