Kathleen Davis, Associate Editor
I’ve heard enough reports about the blackout to write a book. We all have. At this point, we’ve all heard so much that each and every one of us could be interviewed as potential experts just from the coverage on CNN alone.
But, all the interviews and audio reports—and even the steep mountain of marketing material that has descended upon me like ash since the blackout—have taught me two major lessons. First, the general public outside of this industry wants someone to blame, and they want that someone to blame right this instant. Second, the specified public within this industry (and in related industries) are lining up to say “I told you so” in record numbers.
Hang ’em high
The most oft-repeated question from reporters these days is about whether FirstEnergy should accept the blame for the largest blackout in U.S. history. (Since we’ve only had power itself for about 100 years, I find the extensive use of the phrase “in U.S. history” in all these blackout reports rather amusing.)
In fact, even though the North American Electric Reliability Council (NERC), at press time, had not released a final report on the cause of the blackouts—and even though a number of other companies, including American Electric Power, Consumers Energy and Con Edison were also impacted—FirstEnergy remains first in line for the public lynching.
What FirstEnergy spokesman Mark Durbin noted when I called him directly a few days after the blackout is that no one is sure exactly what caused the outage, and it is quite possible that the FirstEnergy lines that first tripped in this outage were merely the first impacted by another cause. He echoed the company’s recently released statement on the subject when he also stated that the company was, of course, investigating the incident thoroughly.
Indeed, both NERC and the Midwest Independent System Operator (MISO), have also been very careful to not lay specific blame since the incident. And, it may, in fact, take months for an actual cause—or series of causes, which is what many insiders suspect—to be determined.
FirstEnergy has been understandably sensitive about these accusations since the blackout first came to light, putting out a number of releases over the first week between Aug. 14 and Aug. 21, most of which followed a “it could also be this problem” format.
“From the preliminary data we are gathering—and based on what others are providing—it is clear that the transmission grid in the Eastern Intercon-nection, not just within our system, was experiencing unusual electrical conditions at various times prior to the event,” their Aug. 18 statement said.
“Contrary to speculation, these unexplained conditions were detected as early as noon on Thursday in the broad region, not just within our system,” it concluded. Click here to view timeline of events.
In an earlier statement, the company admitted that Unit 5 of the Eastlake Plant in Eastlake, Ohio tripped off, and, additionally, that some of their transmission lines tripped out later in the afternoon of Aug. 14. But, they were careful to point out that MISO indicated that there were a number of other transmission line trips in the region outside of FirstEnergy’s system. Additionally, indications to FirstEnergy at that time were that the company’s system was stable. Therefore, no isolation of FirstEnergy’s system was called for.
Was that the proper decision for FirstEnergy? Well, obviously hindsight is 20/20.
However, what has been repeatedly brought up in the general media is that FirstEnergy’s alarm system was not working. That has, of course, been verified by the company. What is rarely added to these reports is that FirstEnergy’s computerized system for monitoring and controlling its transmission and generation system was operating, along with MISO’s monitoring system.
No matter how much additional information FirstEnergy disseminated to the press about the lack of known cause for this outage, on the Monday following the blackout their shares “plunged as much as 14 percent,” according to Reuters. Merrill Lynch chopped its rating of the company down to neutral from its previous buy status, and pointed directly to the company’s “involvement in the blackout” as its reasoning, additionally labeling the blackout itself a “black eye for the electric utility industry.”
In a statement that could be interpreted as an effort to quell cascading blame in this situation, MISO stepped forward in the week after the blackout to “outline” what the agency really does for the region. Buried in between block notes about how they verify information about members via an electric “tag” and how much time they spend analyzing historical and future conditions is a note about their monitoring activities. While they admit in the statement that part of their job is to monitor “MW moving across the system, transaction impact on the system, regional outage and load information, and weather,” the agency is quick to point out—in the very next sentence, in fact—that their reliability coordinators “are in communication with member coordinators to ensure the safe, reliable operation of the grid.”
MISO president and CEO Jim Torgerson reiterated this one-degree of separation during his Aug. 21 press briefing, stating that MISO’s “responsibility as a reliability coordinator is to communicate with utilities on the status of transmission lines for the goal of maintaining the flow within preestablished limits.”
But, MISO really has few worries about mainstream media or the general pubic, who has pretty much established the definition of their devil in the form of FirstEnergy. In the race to crank out blackout stories, it has become too difficult to sort MISO from NYISO, NERC from FERC. And few mentions of MISO have popped up on general radar, but the bedraggled—at this point—Ohio energy company was still the first name on everyone’s lips at press time.
“Having come less than an inch from potential radiation leakage from Davis-Beese [sic], they’ve now succeeded in blacking out eastern North America, a much more impressive feat,” wrote Dorothea Matthews, Glenn Reynolds and Andy Devries, analysts from CreditSights who were quoted in The New York Times.
“We told you” parts I, II, and III
While the outside world is pretty much staked out around FirstEnergy with torches not yet lit, the picture inside the power industry (and its related analysts and consultants) isn’t any less frenetic. The finger-pointing hasn’t ceased to exist; it’s just changed general direction.
Click here to enlarge image
Amazingly enough, the most prominent reaction in the industry after this blackout wasn’t curiosity about cause or details about effects. Instead, it was a giant Greek chorus of “We told you so,” although not always aimed at the same audience.
Click here to enlarge image
“The transmission grid power outage of August 14 has confirmed what industry experts have predicted for some time, that it was just a matter of time before our aging transmission system failed with catastrophic results,” said Ross Malme, chairman of the Peak Load Management Alliance (PLMA). (PLMA and the International Energy Agency have a short meeting on grid reliability and demand-side solutions slated for Sept.)
“The cost of this failure in financial terms is measured in billions of dollars, but the real cost in terms of public outrage and loss of confidence in our electrical system may be far greater,” he added.
The Center for the Advancement of Energy Markets (CAEM) pointed to one of their 2002 reports in joining the chorus.
“CAEM has been waving a red flag about the nation’s aging electric transmission infrastructure, and Thursday’s blackout is a vivid demonstration of its vulnerability and the need for policies that support infrastructure modernization,” Ken Malloy, CEO of CAEM stated on Friday, Aug. 15.
Malloy also observed that there is “plenty of blame to go around.” CAEM’s released noted that this blackout was the result of “a bipartisan failure, obscured by fetishes with oil imports and climate change.”
“Energy industry executives have been short-sighted, disorganized, and parochial,” the statement continued.
Think tank officials with the Rocky Mountain Institute (RMI) released a statement as early as Thursday evening—the day of the blackout—saying the outage was “unfortunate but entirely predictable.” They went on to state that RMI “has warned of the weakness of the grid for years, notably via the Institute’s founders’ 1982 book.”
R.J. Rudden Associates re-released two earlier reports from their archives, which they stated “describe a lack of clear and coordinated government policy on transmission system development and a pattern of industry-wide under-spending on electric transmission and distribution infrastructure,” although their CEO noted that it would be “unfair to place all or even most of the blame for this fall off in investment solely on the shoulders of the utilities.”
Even the highest investigator on the team wasn’t above chiming in. During a Friday, Aug, 15 conference call—in between statements that he was “embarrassed” this happened on his watch—NERC CEO Michehl Gent was, rather gently, led into revealing that NERC had been working on tougher teeth for enforcement for years and that, had NERC been given this power, a blackout like the one the day before could have been avoided.
And, additionally, The New York Times dredged up NERC’s “2003 Reliability Assessment” and pointed out—mostly to the benefit of NERC being the last word in “I told you so”—that the report foretold that the Midwest was the most susceptible to facing “large unanticipated power flows” through the summer.
All this finger-pointing—from the general public, the mainstream media, analysts and industry insiders alike—does little to address the actual problem, however: that the T&D side of the industry could use a $50 billion to $100 billion booster shot. And, all the blame that’s been floating to the surface seems only a thinly disguised game of “hot potato” with utilities, industry leaders, the federal government and the American consumer all vying to get out of this game without the buck stopping there.
Editors’ note: This information on the blackout was current as of press time for the September issue, August 25, 2003.