Note to our readers: You are about to read one of the most exhaustive pieces of writing, reporting and research ever compiled about the problem with America's grid system. We hope it causes you to think and react to a difficult situation that needs national resolve and attention now.

Looking back …

The Great Northeast Blackout of November 9, 1965 began at 5:16 p.m.

The event started at the Ontario-New York border, near Niagara Falls.

A single transmission line from the Niagara generation station tripped.

Within 2.5 seconds, five other transmission lines became overloaded and tripped, isolating 1,800 MW of generation at the Niagara Falls station.

After their isolation, the generators became unstable and tripped off-line.

The northeast power system became unstable and separated into isolated power systems within 4 seconds.

Outage and islanding occurred throughout New York, Ontario, most of New England and parts of New Jersey and Pennsylvania.

Most islands went black within in 5 minutes, due to imbalances between generation and load.

The massive blackout left 30 million people without electricity for as long as 13 hours.

That day, November 9, 1965 President Lyndon B. Johnson was prompted to write to the Chairman of the Federal Power Commission…

“Today's failure is a dramatic reminder of the importance of the uninterrupted flow of power to the health, safety and well-being of our citizens and the defense of our country.

“This failure should be immediately and carefully investigated in order to prevent a recurrence.

“You are therefore directed to launch a thorough study of the cause of this failure. I am putting at your disposal the full resources of the federal government and directing the Federal Bureau of Investigation, the Department of Defense and other agencies to support you in any way possible. You are to call upon the top experts in our nation in conducting the investigation.

“A report is expected at the earliest possible moment as to the causes of the failure and the steps you recommend to be taken to prevent a recurrence.”

Now… 38 years later…August 14, 2003

• 4:11 p.m. ET…Time of the blackout.

• 9 seconds…Time it took for the cascade to collapse the grid.

• 300 MW…a report says a surge of 300 MW suddenly moved east on the grid, then reversed direction and moved west, adding to the amount on the grid, for a total of 500 MW.

• 24,086 sq.km. …total area affected by the blackout.

• 50,000,000…number of people affected in the United States and Canada.

• 1,500,000…estimated number of people in Cleveland without water.

• 7,600,000 gallons…amount of water trucked into Cleveland by the National Guard on Friday, August 15.

• 400…estimated number of flights cancelled in North America Friday, August 15.

• 300…number of people who camped out in overnight at the New York Stock Exchange.

• 50 to 60 years…average age of the North American power grid.

• $50-$100 billion…estimated cost of modernizing the North American power grid.

• 100…number of power plants shut down.

• 22…number of nuclear power plants shut down.

• 36 hours…average time it takes a nuclear power plant to restart.

So there you have it, two separate incidents…the immediate impact of the collapse of the northeast grid system in 1965 and again in 2003.

As you will read in the following pages near unanimity is emerging on the need to fix the grid…beginning now.

Jose Delgado president of American Transmission Co., in an interview you'll read says, “The grid was designed to operate for integrated utilities with limited trading. It was not designed for original market. And then in 1996, we opened up the original market on a network that was not designed for it. The fact that it was designed for integrated companies means that there are some very significant gaps in the network from a regional perspective. They impeded the operation of the system. It makes a lot of the local portions of the transmission system inadequate that were once perfectly adequate.”

“The system was highly stressed, says Calpine Corp's executive vice president Jim Macias. “Fragmented planning has led to a hodgepodge of connections.”

Building more transmission lines is one strategy that is being bantered about but that could prove expensive, time consuming and unpopular in communities across the country. “Another suggestion has been to boost existing wire to carry more power with high temperature superconductors and the use of digital technology that can be used for faster switching of grid controls,” notes Lynne Kiesling, an economist and energy expert at Northwestern University.

But then who is going to ante up for these improvements that some estimate could total $100 billion. Will the investment come from the utilities?

Murray Weidenbaum, an economist at Washington University says in an article in this issue, “Transmission has been badly underfinanced. Every study since the August 14 fiasco has come up with that conclusion. It has fallen between the cracks. No one was paying attention.”

According to FERC Chairman Pat Wood the reason that investment in the grid has been so inadequate, “Nobody knew after competition came along how they were going to get their money back. Secondly, a utility that also owns wires but also owns generation may not want to upgrade its grid because its competitors on the generation may benefit.”

Another one of the big problems is identifying what authority should the states retain overseeing the power grid. And what power is needed to be held by the FERC.

Currently FERC has responsibilities to: a. Approve rates for wholsesale sales of electricity and transmission in interstate commerce for jurisdictional utilities, power marketers, power pools, power exchanges and independent operators; b. Oversight of the issuance of certain stock and debt securities, assumption of obligations and liabilities and mergers; c. Review of officer and director positions held between top officials at utility companies and certain firms with which they do business; d. Review of rates set by the federal power marketing administrations; e. Review of exempt wholesale generator status; f. Certification of qualifying small power production and cogeneration facilities.

“The state siting authorities have generally worked to get needed transmission built,” FERC Chair Wood says. “The one rub comes if you've got transmission that benefits a broader region than just one state. Empirical evidence has shown that can be worked around. FERC should have some sort of backstop authority in cases where those projects don't go forward so that they get a hearing at the federal level. We might also decide that they shouldn't go forward because of the environmental or landowner concerns just like we do in natural gas. But you know, if there is a regional project that needs to happen, it ought to be looked at on a regional benefits and cost basis.”

Edison Electric Institute recommends a series of steps to solve the reliability/power outage dilemma.

1. An electric reliability organization with Federal Energy Regulatory Commission oversight should be created to develop and enforce mandatory reliability rules and standards that are binding on all electric companies and market participants. Currently electric company compliance with NERC standards is voluntary and is not subject to government oversight.

2. The U.S. tax code should be amended to provide enhanced accelerated depreciation (from 20 to 15 years) for electric transmission assets, similar to the tax treatment governing other major capital assets Currently, transmission assets receive less favorable tax treatment than other critical infrastructure and technologies. In addition, Congress should ensure that electric companies that sell or otherwise dispose of their transmission assets into a FERC-approved regional transmission organization (RTO) or independent transmission company (ITC) do not suffer penalties.

3. FERC and the states should utilize innovative transmission pricing incentives including higher rates of return, to attract capital to fund needed investments in transmission.

4. FERC should be given backstop transmission siting authority to help site transmission lines in “interstate congestion areas” designated by the Department of Energy (DOE), if states have been unable to agree or move forward.

5. The transmission permitting process on federal lands should be reformed and simplified designating DOE as the lead agency to coordinate and set deadlines for the federal government and permitting process.

We at Transmission & Distribution World are hoping that the built up cresendo of concern will prompt the industry to make the capital investment necessary, develop new technologies, implement the innovations that currently exist and spur some new thinking and changes in federal laws that have been in place for too too long. It would seem that the solutions are in front of the electric utility industry and the Congress. What's wrong with sounding a national call to action.

In the words of LBJ… “Today's failure is a dramatic reminder of the importance of the the uninterrupted flow of power to the health, safety and well-being and defense of our citizens and the defense of our country.”