On August 14th, blackouts crippled the Canadian province of Ontario and the eastern United States, making it the largest power failure in American history: over 50 million people and more than 9,300 square miles were affected. Then, on August 28, London was plunged into darkness. One month later, Italy's entire electrical grid shut down. These highly visible blackouts have called into question a global trend in the electric power industry. Whatever one calls it—"de-regulation", "competition" or "liberalization"—the notion, at its core, is that certain elements of the electric supply industry can better meet national energy goals if existing monopolies are weakened and some levels of competition is introduced.
An international consensus has been built around the idea that sustainable energy policy should be based on three pillars: 1) competitive markets (where markets are possible) are superior to monopolies; 2) adequate private capital must be available to build infrastructure; and 3) governments must institute sound regulatory and energy policies. Indeed, virtually all Organization for Economic Cooperation and Development (OECD) member-countries allow competition in their electric utility markets. At the same time, the efficacy of these changes is now being called into question as states reevaluate their security situations and infrastructure vulnerability in the wake of September 11, 2001, and the recent blackouts.
