Jason Leopold: Three Years After The NE Blackout

Three years ago this week, a devastating blackout left 50 million people in the dark in the Northeastern United States and parts of Canada for nearly three days, forced the closure of the New York Stock Exchange, resulting in a $10 billion economic loss, and proved that our domestic infrastructure is vulnerable to even minor accidents and human error.

Today, the US power grid - three interconnected grids made up of 3,500 utilities serving 283 million people - still hangs together by a thread, and its dilapidated state is perhaps one of the greatest threats to homeland security, as opposed to, say, that vial of lip gloss in your purse or the bottle of shampoo in your travel bag.

The slightest glitch on the transmission superhighway could upset the smooth distribution of electricity over thousands of miles of transmission lines and darken states from Ohio to New York in a matter of seconds, bringing hospitals and airports to a standstill and putting an untold number of lives at risk.

According to George Gross, a University of Illinois at Urbana-Champaign professor of electrical and computer engineering who specializes in utility policy, a serious lack of investment in the power grid continues to put reliability at risk and is the "Achilles heel" of the country's electric system.

"The August 2003 blackout was a wake-up call for the country to upgrade its transmission grid system," Gross said. "But the truth is that very few major transmission projects have been constructed and, as a result, transmission capacity has failed to keep pace with the expansion of power demand."

Immediately following the August 14, 2003, blackout President Bush said publicly that he would see to it that the nation's aging power grid would quickly be updated in order to avoid future blackouts and to handle the increase in demand.

Severe power shortages and rolling blackouts have become a daily occurrence around the country over the past few years as the antiquated power grid is continuously stretched beyond its means - mainly a result of electricity deregulation - whereby power is sent hundreds of miles across the grid to consumers by out-of-state power companies instead of being sent directly to consumers by their local utilities, which is what the grid was designed for.

For the most part, power companies maintain grid reliability by following voluntary guidelines designed by the power industry, just like the voluntary emissions limits that the fossil-fuel industry says it upholds. Last year, Congress passed an energy bill that required mandatory standards that included monetary penalties, but the rules are months away from being finalized.

The US-Canadian task force that investigated the August 2003 blackout found numerous violations of the voluntary standards, and concluded that utilities botched routine monitoring of transmission lines and failed to trim trees along transmission passageways.

Still, in the three years that have passed since the worst blackout in US history blanketed the Northeast, nothing substantial has been done to overhaul the power grid, and that puts reliability in jeopardy, and lives at risk, as demonstrated by the dozens of scattered blackouts in the month of July throughout the nation this summer - one of the hottest on record.

Since July, all seven of the country's regional grid operators that monitor power flow throughout the nation reported record electricity consumption as temperatures increased. Blackouts struck many parts of the country during the month of July, not because of a shortage of supply, but because the dilapidated power grid could not handle the amount of electricity that was sent back and forth across the transmission lines.

Demand for electricity is expected to increase by 45 percent by 2025, according to the North American Electric Reliability Council, a power industry-funded organization that was named by federal regulators last month as the new watchdog group in charge of overseeing the rules for operating the nation's power grid.

Last year, US peak demand for electricity grew by 7.7 percent over the summer of 2004, with double-digit growth in the Northeast and the Midwest regions. New England saw a 4 percent increase, on top of last year's 11 percent increase. New York also experienced a 4 percent increase, following a 13 percent increase last year.

"In some cases, demand has reached levels that were not expected for another three or four years," said Jone-Lin Wang, a senior director at Cambridge Energy Research Associates. "Very hot weather tends to cause more incidents of equipment failure in the distribution systems. Although the bulk power system provided adequate supply, extreme heat and surging demand put the distribution systems through extreme stress, leading to some equipment failures and localized power outages."

But neither the Bush administration nor federal lawmakers have developed a comprehensive plan to handle, at the very least, the annual increase in demand. Blackouts will likely become more frequent in areas like New York and New England, Wang said.

"We are concerned about New England because there is nothing in the pipeline, but some small renewable projects and wind," Wang said in an interview earlier this month with Reuters. "New England is in trouble."

The 2003 blackout led to calls for spending of up to $100 billion to reduce severe transmission bottlenecks and increase capacity so the transmission lines can carry additional electricity from power plants to homes and businesses.

But investment in the grid has lagged, and progress has been slow.

"Demand growth is forecasted to be 20 percent between 1998 to 2008, but the increase in transmission capacity is still below 5 percent," Gross said. "The need to strengthen the existing transmission infrastructure, to expand it and to effectively harness advances in technology constitutes the single most pressing challenge for the country's electricity system."

Craig Baker, senior vice president of American Electric Power Co., the Columbus, Ohio, utility that operates the nation's largest private transmission system, told the Wall Street Journal last month that federal intervention may help, but there's still the question of who will pay for the billions of dollars needed to build transmission lines.

"We're all looking at massive transmission expenses," he said.

Jason Leopold is former Los Angeles bureau chief for Dow Jones Newswire. He has written over 2,000 stories on the California energy crisis and received the Dow Jones Journalist of the Year Award in 2001 for his coverage on the issue as well as a Project Censored award in 2004. Leopold also reported extensively on Enron's downfall and was the first journalist to land an interview with former Enron president Jeffrey Skilling following Enron's bankruptcy filing in December 2001. Leopold has appeared on CNBC and National Public Radio as an expert on energy policy and has also been the keynote speaker at more than two dozen energy industry conferences around the country.

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