Blackout Exposed Vulnerability of Nation’s Electrical Power System

Posted September 19, 2003 at 9:55am

More than a month has passed since the largest blackout in U.S. history left six million people in Michigan, and many more millions in other states and Canada, in the dark and at risk. While a bi-national team of investigators is working to determine the exact cause of the outage, my job as a public official is to do all I can to make sure this failure does not occur again.

As governor, I do not set the rules for supplying electric power, but I am the one who protects the peace when the lights go out. That is why I’m urging Congress to quickly strengthen federal electricity reliability rules to prevent a future blackout of this scale.

Estimates put the direct cost of this emergency to state and local government at more than $20 million. Commerce was also affected, with at least 70 manufacturing companies forced to shut down and lost wages projected to reach $1 billion. But the outage was more than simply an economic inconvenience; it also created a potentially devastating health and safety emergency. Thankfully, in Michigan and across the nation, what could have been a true calamity was held in check by the incredible and selfless drive of countless emergency workers and first responders.

The recent blackout exposed how vulnerable we are as a nation to an unreliable and antiquated electrical power system. While experts have not yet nailed down the blackout’s precise cause, a growing consensus has pegged the lack of enforceable reliability standards as a major first step in patching the problem with our power grid.

Currently, no one is accountable for the reliability of our electrical system. As the chairman of the Federal Energy Regulatory Commission stated recently, “Right now, there is no federal regulatory authority over reliability.”

This is simply unacceptable, a message I delivered to the House Energy and Commerce Committee earlier this month. I called on Congress to immediately pass a stand-alone bill that will provide enforceable reliability standards for the nation’s transmission system. This could mean giving more regulatory teeth to the North American Electric Reliability Council or to FERC. It could also mean putting a higher priority on making regional transit organizations work effectively.

I’m pleased that Members in both parties have begun to address the issue at hand. Unfortunately, energy bill conferees are currently crafting legislation that would combine new electric reliability protections with other highly controversial measures, which are likely to doom and or significantly delay its passage.

Also troubling is a Congressional effort under way to block FERC’s ability to strengthen the grid. Under the patchwork of regulated, deregulated and restructured state systems, electric reliability absolutely depends on a clear, consistent and fair set of transmission rules.

Even before Energy Secretary Spence Abraham’s blackout investigation is complete, Congressional leaders and the White House are trying to freeze FERC’s authority to ensure competitive, open, fair and reliable markets. FERC should not be given a Congressional blank check, but it is the agency best prepared to respond to wholesale electric problems and oversee the growth of still-emerging regional wholesale power markets.

While I do believe that mandatory reliability standards should be immediately enacted in stand-alone legislation, if Congress passes comprehensive energy legislation, it must provide several features to ensure reliability and protect ratepayers:

1. Require accountability: We simply need to know who is responsible for what. Accountability is a first step toward ensuring reliability in our grid.

2. Ensure price predictability and stability: Clearly, steps need to be taken to strengthen consumer protections in electricity pricing.

Currently, federal rules do not prevent unfair price gouging in wholesale electric sales, and they do nothing to protect families, businesses and the retail prices they pay. No family — not just those living on fixed or low incomes, although they are particularly vulnerable — can budget for wildly changing or perhaps even doubling or tripling home energy bills.

3. Encourage investment in the power grid: We must do more to ensure the national power grid is capable of handling the energy needs of our country. Whether that means additional power lines or the development of new technologies that allow for more efficient distribution, it is clear that we need a transmission system that provides an appropriate level of investment in improvement and maintenance. A poorly maintained power grid is not only an inconvenience when it fails; it is truly a threat to the safety and health of millions of Americans.

4. Respecting state authority: The administration and House majority conferees have championed pre-emption of state and local line siting decisions by providing too little time for state review and allowing federal reconsideration of virtually any decision a utility does not like. Congress should not dismantle states’ ability to meaningfully address environmental and economic concerns when determining where power lines are placed.

The blackout of 2003 will be long remembered for massive disruptions, threats to public safety and the environment, loss of commerce and costs to taxpayers. It will also be remembered for the public’s remarkable calm, cooperation and acts of heroism large and small.

Now it’s Congress’ turn — and citizens nationwide are counting on their political leaders to deliver a bill that enacts mandatory and enforceable standards and restores public confidence in the reliability of our electric system.

Jennifer Granholm (D) is governor of Michigan.