The US-Canada power outage task force has released its interim report on the August blackout. Siân Green looks at the implications of the report for FirstEnergy.

The US-Canada Task Force investigating the August blackout has concluded that the outage could have been prevented. In its interim report, the Task Force says that although a number of factors contributed to the blackout, it was started and perpetuated by events in an area of Ohio served by FirstEnergy Corp.

The blackout on August 14, 2003 affected an estimated 50m people and 61 800 MW of electric load across the midwest and northeastern USA, and Ontario, Canada. The blackout began at around 4pm EDT and power was not restored for two days in some parts of the US, while Ontario suffered rolling blackouts for more than one week after the event.

While the major conclusion of the report is that the blackout was preventable, it also says that once the problem grew to a certain magnitude, nothing could have been done to prevent it from cascading out of control. And while the finger of blame for the initial problems leading to the outage is pointed squarely at FirstEnergy, the report has highlighted concerns with the Midwest Independent System Operator (MISO).

According to the Task Force, the blackout was initiated when three high voltage transmission lines operated by FirstEnergy short-circuited and went out of service when they came into contact with trees that were too close to the lines. FirstEnergy’s control room alarm was not working properly – a fact that the control room operators were unaware of. The control room operators therefore took no action to prevent the problem from growing.

FirstEnergy, whose seven electric utility operating companies comprise the nation’s fourth largest investor-owned electric system, has said that it believes the Task Force’s report is inadequate. “We believe that the interim report does not adequately address the underlying causes of the outage,” said FirstEnergy president and chief operating officer Anthony J. Alexander. “By focusing its analysis on a few selected events, the conclusions reached don’t address the complexity and magnitude of operations on the interconnected grid.”

FirstEnergy 345 kV line flows on 14 August 2003
Click here to enlarge image


The company admits that it was experiencing problems with its computer systems on August 14, but does clearly not want to shoulder the blame for that: “After an extensive analysis, we … identified a previously undetected flaw in vendor software that resulted in the loss of an alarm function, affecting our operators’ understanding of events,” said Alexander.

FirstEnergy points to a key factor that it feels has not been addressed by the Task Force’s report: that its transmission network was being asked to perform in ways for which it was not designed. “Our transmission system was designed and built to provide reliable service to our customers, not to be a superhighway for long-distance transactions,” said Alexander. “Yet, on August 14, the margins built into our system for serving our customers were being drained by those transactions, with little or no reactive power support to the grid for those sales. The Task Force’s solution to this problem would be to interrupt local customers to allow for long-distance bulk power sales.”

The Task Force has, says FirstEnergy, failed to take into account factors such as high power flows to Canada, system frequency variations, low voltages throughout the day, low reactive power output from Independent Power Producers and unavailability of individual generators or transmission lines. “If the Task Force fails to consider in its final report these regional, underlying and contributory causes of the outage, an opportunity will have been missed to implement the changes necessary to update the transmission infrastructure to reliably accommodate the needs of local and broad regional markets,” stated Alexander.

FirstEnergy will have to wait to see if the Task Force decides whether to take these factors into consideration in its final report. A shift in this direction would certainly help reduce the liabilities faced by FirstEnergy, which has so far had three lawsuits filed against it for its role in the blackout.

According to Marshall Nadel, utilities practice leader with insurance company Aon in the USA, there are no known cases in the US where a utility has been publicly found liable for damages in respect of failing to supply electricity to customers.

“If someone in the USA were looking to fault a utility for not supplying electricity and take legal action against them, then it raises a big question,” says Nadel. “The challenge is that to find a utility [in the USA] negligent for not providing electricity, they have to be found grossly negligent in a court.

“The reason for this is that all of the jurisdictions in which the utilities operate give them a tariff agreement which says that they are not liable for failure to supply electricity unless they are found to be grossly negligent, in other words they have to have done something extraordinary that caused a problem.”

For that reason, it is difficult for consumers to have recourse against utilities, says Nadel. “Ultimately, the courts will decide, but we think that the gross negligence threshold is something that is hard to break,” he adds.

The lawsuits against FirstEnergy could take two or three years to reach a conclusion. It is also conceivable that the utility will file claims against its software vendor. Subrogation – where an insurer tries to recover the costs of a claim by finding fault in another party – is common practice in the insurance industry, according to Nadel.

Following publication of the report, FirstEnergy was quick to outline measures that it would take to prevent a repeat of the problems that led to the blackout. It said that it will spend 36 per cent more, or $465m, to improve reliability.

FirstEnergy will adopt a “zero-tolerance” policy towards outages caused by trees, involving the dispatch of more trimming crews and offering incentives to employees who help prevent such power failures. It also plans to enhance operating system security and alarms, and improve monitoring and operator training.