August 14, 2008 -- Five years after the worst blackout in U.S. history, the country has strengthened the reliability of the electricity grid. But new challenges in demand, investment and energy resources leave the system vulnerable to another large-scale failure, experts and government officials say.
"The events that led to the 2003 blackout are now much less likely to occur," said Richard Sergel, president and CEO of the North American Electric Reliability Corporation, the nongovernmental agency overseeing reliability enforcement of utilities. But, he added, "We worry that we won't be able to meet consumer needs without a significant investment of infrastructure."
A joint U.S.-Canada task force concluded that a combination of human error, equipment failure and inadequate monitoring throughout the northeast were responsible for the 2003 outage which left approximately 50 million people across eight states and Ontario without power. The blackout also resulted in about $6 billion in business losses.
ABC News' Brian Ross first reported how the outage began when trees hit a power line along Akron-based First Energy's line. Further ABC News investigation found that First Energy had a long record of troubling safety, operational and financial problems.
Union workers complained the company had cut back on maintenance and transmission lines at other facilities. And its Ohio nuclear plant had to be shut down in 2002 because safety violations were so serious, including a football-sized hole in the top of the reactor vessel.
First Energy has said that the task force's report overemphasized the company's culpability in the power failure and that there were weaknesses in multiple companies across the grid. Since the 2003 outage First Energy has said it upgraded its computer systems, training and tree-trimming.
That outage sparked a serious transformation of the electricity market. The biggest change was the development of federal oversight for the reliability of major transmission lines and generation plants through the Energy Policy Act of 2005.
That law gave the Federal Energy Regulatory Commission authority to develop reliability standards and impose fees on those utilities that fail to meet them - a power it delegated to NERC.
The list of new standards is lengthy but they include requirements that companies do more to prevent trees from hitting power lines and maintain greater power back up to prevent small outages from spiraling. It made training for system operators mandatory and required that regional agencies coordinate planning and operation between utility companies, instead of the haphazard communication that existed in 2003.
Last June, these standards became mandatory. The agency has already forced many utilities to fix violations. Only two were severe enough to require a fine, both at least in part for failing to take care of vegetation too close to power lines.
Already there has been an up tick in investment in new transmission lines and development along the electric grid.
"We've made it national and we've made it mandatory with enforceability through fines," said Scott Hempling, executive director of the National Regulatory Research Institute, which tracks the electricity regulation and market. "That gives everyone cause for optimism."
Not everyone is so sanguine. Harrison Clark, a longtime electricity consultant believes that another blackout is a certainty. "It's just a too big and complex of a machine to have things not go wrong," he said. "The question is will it be on the scale of the northeast blackout in 2003. Is there less chance? Probably there is."
Indeed, key problems remain. A growing population and boom in the use of electronics is projected to keep demand - and therefore the need for infrastructure - soaring. The expansion of renewable energies may also require added transmission lines, particularly because most of those resources, such as wind, are located in far flung areas without adequate infrastructure. And these developments will likely face local or other opposition, experts say.
Peak demands are also expected to exceed resources across many regions in just a few years, NERC's annual report last year noted. Part of the problem, the report stated is "a focus solely on short-term planning does not result in the efficient design and construction of the grid of the future."
And that development comes at a hefty cost. The Edison Electric Institute, an association of private utilities projects that demand will increase 30 percent by 2030 and will require an estimated $1.5 trillion investment.
Indeed, a recent NERC survey of industry professionals put aging infrastructure and limited new construction as "the number one challenge to reliability – both in likelihood of occurrence and potential severity."
Changes in the industry have also put more strain on transmission lines. New technology and a more competitive and larger market of utility companies means that power is often generated far from the consumers. As a result, more electricity has to travel farther along the transmission lines to reach consumers, which lowers the excess power capacity along these lines and gives operators a smaller margin of error in the event of even a small outage or problem, experts say.
Other concerns remain. Outages caused by vegetation growing into transmission lines still occur with more frequency that regulators would like. An aging workforce has raised questions about finding trained replacements in time, the report noted.
And, FERC Chair Joseph Kelliher said that current regulation does not provide enough protection for regulators to act quickly enough against cyber crime.
What's more, even though everyone views the new regulatory scheme as a positive step, they do not solve everything. "The standards themselves aren't always black and white," Clark said."It's not a perfect science."