Tuesday, August 09, 2005

Blackout of August 14, 2003

This is one version and thorough account of what went wrong in the midwest and eastern portions of the country. You'll pardon my being two years late. I stumbled upon this by accident and just assumed the blackout occured on non-managerial grounds.

Power Plays
"Politics, not lack of power, is to blame for the great American blackout," wrote the Economist on August 21. While cautioning that "not all the facts are in," researchers at Cambridge Energy Research Associates (CERA), a private energy consulting firm, have tentatively concluded that the massive power blackout of August 14 began with a series of failures by First Energy, a power conglomerate created from the merger of Toledo Edison, Cleveland Electric, Ohio Edison, Pennsylvania Power, Pennsylvania Electric, Metropolitan Edison and Jersey Central Power & Light. The nation's fourth largest investor-owned electric system, according to its web site, First Energy has been cited previously for plant mismanagement and accounting irregularities.

First Contributors Have a History
First Energy executives are among Bush's top campaign fundraisers. First Energy President Anthony Alexander was a member of the "Pioneers" -- the Bush campaign group composed of individuals who raised at least $100,000 each during the 2000 campaign. As a member of the Republican National Committee's Team 100, Alexander raised $250,000 in 2000, and personally donated $100,000 toward Bush's inauguration events. Alexander also served on the Bush energy transition team. And on June 30 of this year First Energy's chairman, H. Peter Burg hosted a $1,000-a-plate dinner at the Akron Hilton that raised $600,000 for Bush's 2004 campaign. In 2001-2002 First Energy executives contributed more than $1 million to federal candidates, with over 70% going to Republicans, placing the firm in the top ten political contributors from the electric utility industry. First Energy also spent $3.8 million lobbying Congress and the administration in 2001-2002.

In the 70s, Democratic presidential candidate Dennis Kucinich confronted one of First Energy's predecessors, Cleveland Electric (CEI), when it sought to undermine the City of Cleveland's ability to operate a municipal electric system, Muny Light. Muny Light provided power to streetlights and many city facilities, and to residential customers in parts of Cleveland at a savings of 20 - 30% over CEI. In a precursor to schemes that Williams and Enron would use later in California, CEI worked to prevent Muny Light from buying power from other suppliers, and then tripled the rates it charged. When Muny Light began to lose money as a result of CEI's schemes, CEI cited Muny Light's deteriorating financial condition as as evidence supporting their contention that the city should sell Muny Light to CEI. With the aid of local media that, in Kucinich's words, "received substantial advertising revenues from CEI," CEI succeeded in convincing Cleveland's mayor and city council to sell Muny Light in 1976. Kucinich, who held the elected office of Municipal Court Clerk at the time, organized a campaign to prevent the sale, and ran for mayor of Cleveland on the issue. He won and canceled the sale.

Two years later Cleveland Trust, Ohio's largest bank, informed Kucinich that it would not renew 15 million in loans taken out by his predecessor, unless he agreed to sell Muny Light to CEI. The bank offered $50 million in new credit if Kucinich would agree. Kucinich refused, and the City of Cleveland defaulted. Kucinich lost the election in 1979. Later it would emerge that Cleveland Trust that Cleveland Trust held a substantial interest in CEI, and that the firms had four directors in common. Kucinich's decision was vindicated in 1993 when Muny Light, now renamed Cleveland Public Power, announced the largest expansion of any municipal power system in the country.

First Failures
Fast forward ten years. At about 2pm on August 14, 2003 First Energy's 550-megawatt coal-fired Eastlake power plant east of Cleveland, OH, shut down. An hour later a single transmission line near Cleveland went out of service. By themselves, these incidents should have been routine. According to CERA Senior Consultant Hoff Stauffer, "they're designed to be able to withstand that kind of event without any problem." But those events were only the beginning.

The control room alarm system, which ordinarily would have notified operators of the generation and transmission problems, apparently did not work. With a transmission line unavailable, power that might have traveled along it flowed onto other lines, which heated up -- "as anticipated," says Stauffer. Also anticipated is that overheated power lines sag, which First Energy's did. But not anticipated was that one of the lines would sag into a tree. "That tree was not supposed to be there," Stauffer observed dryly, and so a second power line went out of service. At this point First Energy was experiencing four simultaneous problems, "and systems are not designed to be able to withstand that without some kind of blackout to at least some of their load," said Stauffer.

The American Electric Power (AEP) system to the south and the PJM to the east, successfully disconnected from First Energy, thereby protecting the supply of electricity to the Midwest, including Chicago, and to the east, including most of Pennsylvania, New Jersey, and Maryland. "But," the New York Times's Richard Glanz and Andrew Revking wrote, "the severing of the two crucial Ohio lines was the equivalent of suddenly damming an onrushing stream: the flow had to divert to find a way to reach the Cleveland area." The power flowed into Indiana, Michigan, and back into Ohio. As a result, within a few seconds power in a grid serviced by the International Transmission Company (ITC) in lower Michigan went from a modest 200 megawatts to nearly 2000. At the same time, power that had been flowing from ITC to Ontario began to flow the other way, into northern Ohio. This caused instability in ITC's system, which took plants and transmission lines in eastern Michigan out of service, eventually causing a blackout in Detroit.

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