'Where's the Juice?' Demands New Tech Central Station Columnist Freese; Argues Regulators Drain Away Electricity Resources Crucial for New Economy.

Business Editors

WASHINGTON--(BUSINESS WIRE)--Oct. 24, 2000

Investors be warned: Regulators are threatening the New Economy by strangling Old Economy's production of electricity, argues former USA Today Editorial Page writer Duane Freese this week. Freese recently joined Tech Central Station as a columnist; his ground-breaking column is available at www.techcentralstation.com.

Says Freese, "The New Economy's primary interface with the old comes down to one thing - electricity. And this summer's brownouts and blackouts from San Francisco to Detroit expose how vulnerable the New Economy is to lack of production from the old."

Investors spooked by soaring oil prices should also be wary because, Freese notes, the Energy Information Administration says energy needs will require the equivalent of 1,200 new power plants producing some 360 gigawatts of more power over the next 20 years. Yet "rather than building up the nation's power supply, regulators seem bent upon tearing it down."

Freese reports a fundamental conflict between the Energy Department and the Environmental Protection Agency. He quotes Energy Secretary Bill Richardson before Congress last March as saying, "While demand for electricity is soaring. ... The reliability of our electric grid is, at times, faltering mainly because policymakers haven't kept pace with rapid changes in the electric-utility industry." Freese agrees, pointing to the EPA's suit against seven electric utilities claiming that routine maintenance they performed on their plants violated the Clean Air Act, and to their harsh regulation of new coal-fired plants - which keeps old, dirtier plants open.

Says Freese, "In the usual way government works in which one hand ignores what the other is doing, the Energy Department has promoted the development of clean coal technology even as the EPA has gone to war against the substance. More than $5 billion has been invested.

Freese cites an Energy Department brochure, "The Investment Pays Off," put out just as the EPA began suing utilities last fall, which proclaims: "The pioneer power systems introduced (in the Clean Coal Technology Program) have laid the foundation for a new generation of power systems responsive to worldwide concern about global climate change."

The column points to a serious warning to investors: the federal government's stance toward power generation is yet another high hurdle for the New Economy to cross.

Freese was an editorial page editor and writer for USA Today for 13 years. He is also an adjunct scholar at the Lexington Institute. For the rest of his article, log onto www.TechCentralStation.com, the website that covers the convergence of politics, technology and investing.