UMUC HSMN 610 Homeland Security Management

The Blackout of 2003

Analysis and Recommendations
27 July 2009

.
 Contents

1.0 Introduction ........................................................................................................................................2

1.1 Study Summary................................................................................................................................................2
1.2 Purpose, Content/Executive Summary, Thesis................................................................................................2
1.3 Conclusions and Recommendations ...............................................................................................................2
2.0 Background .........................................................................................................................................2
2.1 What happened?...............................................................................................................................................3
3.0 Analysis ................................................................................................................................................4
4.0 Solution ................................................................................................................................................7
5.0 Conclusion ...........................................................................................................................................9
5.1 Summary of Findings and Recommendations.................................................................................................9

HSMN 610 Paper

1.0 Introduction
1.1 Study Summary
The blackout of August 14, 2003 was at first glance, caused by an overloaded power line
that came into contact with a tree. However, this event is the tip of the iceberg as regards
underlying problems with the electricity infrastructure of the United States as it stands today.
The electricity infrastructure is outdated and electricity demand continues to grow. Utility
companies and their employees lack adequate training about their responsibilities and lines of
communication. There is already a lack of funding for the strain imposed on the electricity
infrastructure from electricity demand increases, let alone to fix an old system. A “smart grid”
could do what humans cannot: it could fix itself almost instantaneously.
1.2 Purpose, Content/Executive Summary, Thesis
The purpose of this report is to deduce the causes of the blackout that occurred on August
14, 2003 in the northeastern United States in order to prevent future blackouts. Information
about the nation’s electricity infrastructure in presented, including how it operates, where
responsibilities lie, and whether or not more blackouts can be averted. We hypothesize that
increased funding for a “smart grid” could strengthen the electricity infrastructure of the United
States, although much of this funding will come from the consumer. Further, such renovation of
the infrastructure could take more than a decade, yet a “smart grid” is necessary. A “smart grid”
would be self-correcting, and therefore limit the costs incurred from blackouts; as well, the
“smart grid” would lessen the impact of natural disasters and terrorist attacks on the electricity
infrastructure.
1.3 Conclusions and Recommendations
The United States needs to make upgrading the electricity infrastructure of this nation a top
priority. Electricity demand is increasing with no end in sight. Even the most qualified and
highly trained operators will not be able to respond to a breach in electricity continuity quickly
enough to stop a blackout or contain one to the immediate area. As demand for electricity
increases, fluctuations of electricity use may increase as well, making manual electricity load
balancing even more challenging. Although the costs of a “smart grid” are daunting, we
conclude that the costs of blackouts are even more austere. The power grid needs to be self-
correcting in order to virtually eliminate the chances of blackouts; operators and utility providers
need to be trained and held accountable regarding their responsibilities, including their
communication responsibilities.
2.0 Background
On August 14, 2003, at approximately 4:15 EDT, the United States experienced a
blackout in which nearly 45 million people in eight states and ten million people in Canada lost
electrical power (U.S.-Canada Power System Outage Task Force, 2004, p. 1). This was the
worst blackout in the history of the United States in terms of people affected, geographic area,
and cost. The total economic cost of the blackout was estimated to be between $7 and $10
billion dollars (Saha, 2004, p. 2). The affected states included Ohio, New York, Maryland,
Michigan, New Jersey, Vermont, Connecticut, and Pennsylvania. In the end, at least 21 power
plants in the US were taken off line or tripped due to the outage (Audet, 2003).

HSMN 610 Paper Page 2

 To understand the cause of the blackout it is important to understand something about the
electricity, and the electricity generation, transmission, and distribution system in the United
States. It is also necessary to understand how the production, distribution, and supply of
electricity is managed in North America. The North American electricity system is massive, and
most of it is over 50 years old. This electrical infrastructure is one large interconnected system
of electricity plants, and over 200,000 miles of transmission and distribution lines. This
complex system serves over 334 million people, and has approximately 211,000 miles of high-
voltage transmission lines connecting over 15,000 power plants to consumers. (North American
Electric Reliability Council, 2009) This system crosses state and national boundaries and is
governed by a complex set of federal, state, and local laws and regulations, and also by a
complex series of regional governing organizations. This massive system is known as the
“power grid.”
Reliable operation of the power grid is challenging because of the complexity of the
system and the properties of electricity. Electricity flows at close to the speed of light and cannot
be stored. It also cannot be controlled in the distribution lines by valves like water can.
Electricity always flows through the path of least resistance. Because of this it must be used the
instant it is produced. So, the grid and its operators must always balance power supply and
demand to maintain scheduled voltages (generally 120 volts). If this balance is not maintained,
power fluctuations will occur. Any significant overload of a power line, or underload/overload
of a generator, can cause damage to very expensive power generating equipment, so the power
grid is disconnected if a serious imbalance is detected, and this causes outages. (U.S.-Canada
Power System Outage Task Force , 2004, p. 7) Many of these power generation systems linked
up together become a “Balancing Area”, in which the balancing authority matches generation
with customer demand, and the transmission operator monitors the flows over the transmission
system and voltages at substations.
These balancing areas are defined by the electricity meters at their boundaries, which
measure the power flowing into and out of the area. These areas are connected to each other by
“tie lines.” The North American Electric Reliability Corporation (NERC) is the overseeing
organization responsible for ensuring the reliability of the electrical power system in North
America. To do this, NERC develops and enforces reliability standards; assesses adequacy
annually via a 10-year forecasts and winter and summer forecasts; monitors the bulk power
system; and educates, trains, and certifies industry personnel. NERC is a self-regulatory
organization, subject to oversight by the U.S. Federal Energy Regulatory Commission and
governmental authorities in Canada. (North American Electric Reliability Council, 2009).

2.1 What happened?

On August 14, 2003, a major power transmission line run by First Energy in Ohio was
experiencing a heavy load of electricity. At around 3 PM a First Energy 345-kV transmission
line tripped out of service because the lines had grown heavy with the heat and were contacting
overgrown trees (U.S.-Canada Power System Outage Task Force , 2004, p. 106). Single outages
such as this pose a risk because they can lead to fluctuations. As noted, fluctuations are bad
because any great overload of a power line or underload/overload of a generator can cause hard-
to-repair and costly damage. Because of this sections of the power grid are disconnected if a

HSMN 610 Paper Page 3

serious imbalance is detected. Every disconnection must be accompanied by action from other
members of the balancing area though to maintain the power supply to consumers and minimize
dangerous fluctuations. That is why any incident which causes a disruption in any part of the
grid must be reported to other members of the balancing area immediately so that they can take
action to remediate the problem and eliminate any risk to the overall grid.
On August 14, when First Energy’s transmission lines started to trip out of service, their
monitoring system did not perform correctly and notify technicians of the issue. These
monitoring systems are Supervisory Control and Data Acquisition (SCADA) systems that collect
data from sensors throughout the grid and send this data to a central operating office. Shortly
after this the first entire power plan went offline as a safety measure due to fluctuations. This
interrupted the equilibrium of the entire grid, and a cascading effect occurred where all other
members of the grid balancing area who did not disconnect in time also went offline due to
massive power fluctuations. In the final analysis it was determined that First Energy was not
compliant with many of the Federal Energy Regulatory Commission (FERC) regulations. Their
operational monitoring equipment was not adequate to alert operators regarding important
deviations in operating conditions and the need for corrective action, and their estimation and
contingency analysis tools were not used to assess system conditions. These two failures,
combined with inadequate tree trimming, led to the blackout of 2003 which caused between $6
and $10 billion in economic damage. (Saha, 2004, p. 2)
3.0 Analysis
A month after the blackout occurred, NERC’s Board of Trustees issued a letter for near-
term actions to protect electricity reliability (Glotfelty, 2004, p. 4). At the time of its writing,
NERC was assisting the U.S.-Canada Joint Task Force in investigating the causes of the blackout
(North American Electricity Reliability Council, 2003, para. 1). The latter was the first step
toward mitigating future blackouts, and it listed several practical recommendations to
organizations for staying within regional reliability council standards and established good utility
practices. NERC further requested that appropriate entities report back to them within 60 days
regarding the status of their electrical systems as well as any necessary corrective actions (North
American Electricity Reliability Council, 2003, para 3).
NERC’s main recommendations included ensuring sufficient voltage support for reliable
operations; improving reliability communications; reporting system failures to control room
personnel and establishing automated methods for failure alerts; establishing emergency action
plans to safeguard systems; training personnel for emergencies so they may react promptly and
efficiently; and that high voltage transmission lines were maintained such that they were free of
vegetation and other obstructions (North American Electricity Reliability Council, 2003, pp. 1-
3).
In December 2003, FERC directed FirstEnergy to evaluate the characteristics and
weaknesses of its Cleveland-Akron service area since FirstEnergy and the East Central Area
Reliability Council (ECAR) lacked proper understanding of how the service area operated and
hadn’t operated the area at appropriate voltage levels (Federal Energy Regulatory Commission,
2004, pp. 6-8). FERC was also aware of faulty vegetation management as a contributing factor
to the August 2003 blackout and shared that information with FirstEnergy and ECAR (Federal

HSMN 610 Paper Page 4

Energy Regulatory Commission, 2004, p. 7). FERC’s direction to FirstEnergy for remedial
evaluation and action was to be completed by June 20, 2004 (Glotfelty, 2004, p. 4).
Then, in February, 2004, NERC issued fourteen requirements to the electric industry that
modified existing operating rules and practices to make them “clearer, less ambiguous, and more
enforceable” (Federal Energy Regulatory Commission, 2004, p. 7). The final Blackout Report
was issued on April 14, 2004. Per the report’s recommendations, FERC held a technical
conference with the Department of Energy and Natural Resources Canada in order to improve
electricity reliability standards (Federal Energy Regulatory Commission, 2004, p. 8).
The meetings surrounding the aftermath of the blackout resulted in the identification of
several issues that needed correction, including improved operator training with an emphasis on
emergency preparadness; clarification of roles, responsibilities, and authorities regarding
operations; NERC monitoring capabilities; vegetation management; minimum requirements for
real-time tools and operators; and technical upgrades necessary for future power-grid efficiency
(Glotfelty, 2004, p. 5).
Unfortunately, comprehensive training of electricity utility employees, clarification of
current electricity policy, and clearing of vegetation from power lines will not be enough to
ensure the reliability of our nation’s power supply and avoid future blackouts. Even if operators
are highly skilled in balancing electrical loads, they will not be able to act quickly enough to
avert another blackout by shifting loads to lines that can handle them. Our electrical
infrastructure is being taxed to the limit; there has been a 20% increase in demand for electricity
since 1999, with only a 7% increase in transmission capacity (Amin & Schewe, 2007, p. 63).
The Energy Policy Act of 2005 was the first Congressional legislation toward the
modernization of the U.S. electrical grid. It requires that states consider the use of “smart-
metering technologies for residential and small commercial customers” (Nahigian, 2008, p. 14).
According to Amin and Schewe (2007), the rapid increase in demand for electricity on a 50-year-
old electrical grid will inevitably lead to more blackouts; that is, unless smart-grid technology is
implemented (see Figure 1).
The likelihood of another blackout is high. Although steps have been taken toward fixing
weaknesses in the electrical system, such as improved training and physical maintenance, the
nation’s growth and demand for electricity is exceeding the capabilities of the current grid.
Increased vigilance on the parts of FERC, NERC, and utility companies may temporarily lessen
down-time due to power failures, however, the aging electrical grid must be updated such that
the system itself can monitor loads and switch them almost instantaneously as needs arise. In
2007, Congress pushed for the modernization of the energy grid in the Energy Independence and
Security Act (EISA) by providing private industry “with the confidence needed to invest in and
work toward the realization of the Smart Grid and the optimization of its capabilities” (Nahigian,
2008, p. 14). The Act also indicates that the federal government would provide incentives to
private industry in the form of funding (Nahigian, 2008, p. 14).
According to Nahigian (2008, p. 14), however, private industry players are apprehensive
about undertaking the overhaul in light of legislation for a carbon tax, which if passed, will place
them under heavy financial burdens. The Smart Grid initiative could, in that case, provide tax
incentives to utility companies and private industry for down-stream carbon reductions, such as
those resulting from plug-in electric cars (Nahigian, 2008, p. 14).

HSMN 610 Paper Page 5

 Though Jeffrey Daigle, chief electrical engineer at the Pacific Northwest National
Laboratory calls the blackout a “once in 10 years event,” other experts note that the rising
demand for electricity and declining money spent on US transmission lines could result in more
frequent blackouts (see Figure 2) (Amin & Schewe, 2007, p. 63; Walsh, 2008, para. 4).

Figure 1 (Adapted from Amin & Schewe, 2007, p. 63).

HSMN 610 Paper Page 6

 Figure 2 (Adapted from Amin & Schewe, 2007, p. 62).

4.0 Solution
A blackout of the same magnitude of the one in 2003 appears to be imminent, judging
from the data already mentioned. Therefore, possible solutions are already circulating among
agencies and leaders in the federal government. The most popular among these is the “smart
grid”, which is being heavily championed by the Obama administration. At first glance, the
proposed plan for implementing a “smart grid” seems to be an obvious and simple solution.
However, it is much more complex than simply upgrading a control system or installing new
software. The evolution of the current power grid has been slow and nearly nonexistent;
therefore, a major transition such as this will be sure to have severe growing pains.
One of the main advantages of the “smart grid” is that it will be a self-healing
infrastructure. The current grid system is heavily reliant upon operators reacting to information

HSMN 610 Paper Page 7

being streamed to them on a delay. The new grid would be able to react to power overloads,
nearly instantaneously, without waiting for a human operator to close off the affected area before
it spreads. Delayed flow of information in the currently grid frequently results in a chain reaction
that overloads surrounding grids when one grid is in peril, and subsequently, a blackout.
According to Scientific American, “A self-healing smart grid- one that is aware of
nascent trouble and can reconfigure itself to resolve a problem- could reduce blackouts
dramatically, as well as contain the chaos that could be triggered by terrorist sabotage,” (Grant,
Starr & Overbye, 2007, p. 62). The new grid would not only eliminate more of the human error
affecting the current grid system, but also allow the nation to be better protected from outside
attack. With real time information and look-ahead simulations the “smart grid” would arm
operators with the tools to better prevent blackouts. As previous terrorism attacks have proven, it
is not always wise or possible to wait for a person to make the decision that stops a breach
(Grant, 2007).
The “smart grid” is not just a theory, as it has been tested in a small, controlled area. The
experiment has been a huge success. The smart grid itself does not pose a problem as most critics
can agree that this new technology is exceedingly more reliable and more secure than the
currently outdated system in place. The true opposition lies in the economic cost and the difficult
transition that would surely become an issue when making the switch. From a technical
standpoint the transition could be managed, however, from the industry’s perspective the change
would be going against 50 years of what they know. It would involve extensive re-training of
nearly the entire workforce currently in place. Also, historically, the power industry has not
made large investments in research and new technologies. “EPRI estimates that that testing and
installation across the entire U.S. transmission and distribution system could run $13 billion a
year for 10 years- 65 percent more than the industry is currently investing annually,” (Grant,
2007, p. 67). From the industry’s point of view, the only option would be to raise rates for
consumers. This would result in the American people paying for the grid in two ways; their taxes
and their electric bills.
The implementation of a “smart grid” is likely to be at least a decade in the future,
however, there are several changes that can be made much sooner with significantly less cost to
consumers and citizens. In the Final Report on the August 2003 Blackout produced by the U.S.-
Canada Power System Outage Task Force numerous actions were outlined that can be taken that
would require the industry to act responsibly and improve the current grid system. First, the
authors call the U.S. congress to action by urging them to enact legislation that would better
enforce the current regulations in place by invoking financial penalties on offenders, (U.S. –
Canada Power System Outage Task Force, 2004, p. 148). They also request a more structured
funding system for NERC; commissioning independent bodies to monitor reliability standards;
and to “commission an independent study of the relationships among industry restructuring,
competition, reliability,” (U.S. – Canada Power System Outage Task Force, 2004, p. 149) to
name a few.
Although it is apparent that there are a significant number of improvements that can be
made on the current grid system, they are only temporary solutions. In an age when the U.S. has
numerous enemies it is unwise to leave such a critical part of the nation in a vulnerable state.
Although the investment in a “smart grid” is a hefty one, it pales in comparison to the economic
losses incurred from blackouts and the potential security risk to the nation. Immediate action

HSMN 610 Paper Page 8

should be taken on improving the current grid as recommended by the task force, but the best
long term solution presented thus far is the “smart grid”. It is time for the country to no longer be
reactionary, but to be proactive and innovative by implementing a “smart grid” that would
improve the quality of service for consumers, the condition of the environment, and protect one
of its most valuable infrastructures.

5.0 Conclusion
5.1 Summary of Findings and Recommendations
The blackout that took place on August 14, 2003 was not the first of its kind nor will it be
the last if significant changes are not made quickly. The blackout was not a result of the error of
one person or one electrical company, but rather a culmination of relaxed compliance standards,
inefficient maintenance, and a lack of investment in new technologies. Despite the fact that the
blackout was initially sparked by a branch touching a sagging electrical line, another incident
similar to this is inevitable because the current grid system is extremely outdated.
The United States can no longer rely on private industry to maintain or revive the current
electricity infrastructure. It has been neglected for too long, and it is now necessary for the
government to take action. A properly functioning power grid is not merely a matter of
convenience, but more importantly, a matter of national security and a vital part of the national
and global economy.
Although the federal government has taken several steps towards more closely regulating
and analyzing the current grid system, a newer smarter grid is necessary to bring the electrical
industry into the modern world. The proposed “smart grid” is the newest and best option
available to the country. Although the financial cost will be somewhat daunting, the benefits of a
significantly better functioning grid greatly outweigh the burden on national spending. Over time
if the “smart grid” lives up to its expectations it can pay for itself. It is impossible to accurately
measure the benefits of a smart grid as safety from a cyber attack is not easily quantifiable. The
benefits to the environment and electricity consumers are much easier to predict.
By implementing a “smart grid” America will take a step towards maintaining her place as
a global leader. In today’s world one must be an innovator to stay ahead, and when a clear
opportunity for improvement presents itself it should not be passed over. The federal government
and private industry need to join together the make the country a leader in conservation,
technological innovation, and prevention and security. The smart grid should merely be the first
step of many to make the United States a safer and more resilient nation.

HSMN 610 Paper Page 9

References

Audet, J. (2003, August). The Power Factor, Retrieved July 18, 2009, from
http://www.quarterly-report.com/energy/blackout_2003.html
Amin, M., & Schewe, P. F. (2007, May). Preventing blackouts. Scientific American, pp. 60-67.
Electripedia (2004). Power Plants Retrieved June 30, 2009, from
http://www.electripedia.info/power_plants.asp
Federal Energy Regulatory Commission. (2004). Report to the United States Congress from the
Federal Energy Regulatory staff: FERC use of the grid reliability appropriation for fiscal
year 2004. Retrieved June 25, 2009, from http://www.ferc.gov/industries/electric/indus-
act/reliability/reliability-rpt-fnl.pdf
Glotfelty, J. (2004). Electric reliability: A national priority. Retrieved June 26, 2009, from
http://www.hks.harvard.edu/hepg/Papers/glotfelty.reliability.1.Mar.04.pdf
Grant, P. M. , Starr, C., & Overbye, T.J. (2007). Blackout. Scientific American, pp. 61-67.
Nahigian, K. R. (2008, June 30). The smart alternative: Securing and strengthening our nation’s
vulnerable electric grid. The Reform Institute, Reform Brief. Retrieved June 28, 2009,
from http://www.reforminstitute.org/uploads/publications/Smart_Grid_Final.pdf
North American Electric Reliability Corporation. (2003). Near-term actions to assure reliable
operations. Retrieved June 28, 2009, from
http://www.nerc.com/docs/docs/blackout/NERC-Quick-Actions-List-BOT-FINAL.pdf
North American Electric Reliability Council. (2009). Understanding the Grid. Retrieved July
17, 2009, from http://www.nerc.com/page.php?cid=1|15
Saha, B. (2004). (2004). The Economic Cost of the Blackout An issue paper on the Northeastern
Blackout, Retrieved July 1, 2009, from
http://www.icfi.com/Markets/Energy/doc_files/blackout-economic-costs.pdf
United States Department of Energy. (2008). The smart grid: an introduction. Retrieved July 5,
2009 from http://www.oe.energy.gov/smartgrid.htm
U.S.-Canada Power System Outage Task Force. (2004). Final report on the August 14, 2003
blackout in the United States and Canada: Causes and Recommendations. Retrieved July
5, 2009, from https://reports.energy.gov/BlackoutFinal-Web.pdf
Walsh, B. (2008, August). Can we prevent another blackout? Retrieved June 28, 2009, from
http://www.time.com/time/health/article/0,8599,1831346,00.html

HSMN 610 Paper Page 10