Jason Leopold: Dark Days Ahead

One of the biggest failures of George W. Bush's presidency has been his administration's total disregard of the nation's power infrastructure - an issue that is a larger threat to homeland security than the impending attack on US soil by al Qaeda-type terrorists for which we've been issued murky warnings over the years.

On Monday, the North American Electric Reliability Council, an organization funded by the power industry, and that was named by federal regulators in July as the new watchdog group in charge of overseeing the rules for operating the nation's power grid, issued a grim report that confirmed an investigative story first reported by Truthout in August: three years after a devastating blackout left 50 million people in the dark in the Northeastern United States and parts of Canada for nearly three days, and forced the closure of the New York Stock Exchange, nothing substantial has been done to overhaul the country's dilapidated power grid.

"The adequacy of North America's electricity system will decline unless changes are made soon," said Rick Sergel, president and CEO of the North American Electric Reliability Council. "Our economy and quality of life are more reliant on electricity every day, yet the operation and planning for a reliable and adequate electricity system is becoming increasingly difficult. The transmission system requires additional investment to address reliability issues and economic impacts. Expansion and strengthening of the transmission system continues to lag demand growth and expansion of generating resources in most areas."

Today, the US power grid - three interconnected grids made up of 3,500 utilities serving 283 million people - still hangs together by a thread. 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.

Immediately following the blackout on August 14, 2003, President Bush said publicly that he would see to it that the nation's aging power grid was quicklyupdated in order to avoid future blackouts and to handle the increase in demand. Congress called for spending of up to $100 billion to reduce severe transmission bottlenecks and increase capacity so the transmission lines could carry additional electricity from power plants to homes and businesses. But the money that would have funded a reliable power grid was spent on the wars in Iraq and Afghanistan.

Since the 2003 blackout, neither the Bush administration nor federal energy regulators appointed by the president have developed a comprehensive plan to handle, at the very least, the annual increase in demand. As a result, blackouts will likely become more frequent in areas like New York and New England, NERC said in its report.

"The August 2003 blackout was a wake-up call for the country to upgrade its transmission grid system," said George Gross, a University of Illinois at Urbana-Champaign professor of electrical and computer engineering who specializes in utility policy, in an interview in August. Gross added that a serious lack of investment in the power grid is the "Achilles heel" of the country's electric system. "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. 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," he said.

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 still 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.

The neglect of the nation's transmission grid will likely have long-term repercussions, 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.

In fact, severe power shortages and rolling blackouts will now become a daily occurrence around the country over the next few years, according to NERC, because the antiquated power grid will be 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. Separately, a report by the Edison Electric Institute, the association for the country's investor-owned utilities that account for roughly 60 percent of the nation's power, says that a decade after the nation's electricity sector was opened to competition it has failed to produce the guaranteed savings consumers were promised when the idea was first proposed to federal and state lawmakers by, ironically, Enron's Jeffrey Skilling and the late Ken Lay.

While deregulation has proven to be a disastrous experiment, on the power supply front, the situation is even worse, particularly for the Northeast, Midwest, and Western United States, according to the NERC report,.

"Demand for electricity is expected to increase over the next ten years by 19 percent in the U.S., but confirmed power capacity will increase by only 6 percent," the agency stated in its report. "Capacity margins are projected to drop below minimum target levels in Texas, New England, the Mid-Atlantic area, the Midwest, and the Rocky Mountain area, in the next two to three years, with other portions of the Northeastern U.S., Southwest, and Western U.S. falling below minimum target levels later in the period. In Canada, projected margins are adequate except in Western Canada, where additional resources will be needed as soon as 2008."

Jone-Lin Wang, a senior director at Cambridge Energy Research Associates, a power industry think-tank, said in August that New England will likely experience a period of extended blackouts and power emergencies over the next few years because the increase in demand is not being addressed.

"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 with Reuters in August. "New England is in trouble."

"In some cases, demand has reached levels that were not expected for another three or four years," she said. "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." Wang said.

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 a 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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