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CNN Live Sunday
Blackout Aftermath: Business and Politics
Aired August 17, 2003 - 10:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
FREDRICKA WHITFIELD, ANCHOR: It is 10 a.m. in Cleveland and Detroit, 9 a.m. in Crawford, Texas. I'm Fredricka Whitfield at CNN's global headquarters. This is CNN LIVE SUNDAY.
For nearly 60 million people who endured North America's largest blackout, the power is back on, but in some parts it's far from back to normal.
Many restaurants across the region still have a lot of empty tables, supermarket shelves are bare, food spoiled. In Detroit the western-most edge of the affected area, power officials are cautioning residents and businesses to conserve power now that it's back on.
In Cleveland and Detroit tap water is still being boiled for drinking or cooking. That advisory could be lifted later on today.
So what caused the blackout? At first, blame was placed in Canada. Now this morning electric officials say it appears three failed transmission lines in Ohio may to be blame.
CNN's Kathleen Koch joins us from New York with more on the investigation -- Kathleen.
KATHLEEN KOCH, CNN CORRESPONDENT: Fredricka, there are a lot of questions this morning about these power lines in northern Ohio that apparently went down in the hour before the big blackout started.
They failed one after another over a 40-minute period, starting at just 3:06 p.m.
Now a red warning was supposed to flash on computer monitors in the control center of First Energy Corporation, which operates and controls these lines. However, that alarm, this red warning, was broken and First Energy knew that. There was a backup alarm, a back up sort of a monitor that was in a regional power pool, a non-profit pool that also monitors electricity in the region, but these outages were not in a normally problem prone area so a spokesman says they don't know if anyone there noticed these outages.
So shortly then after 4 p.m. these incredible surges, power surges and drops, pulsed through the entire regional grid and suddenly, one by one, transmission lines and power plants from the U.S. to Canada began shutting down, tripping off and the blackout began.
Of course, governors in many of these affected states are outraged at how little has been done to address the vulnerability of the power grid.
(BEGIN VIDEO CLIP)
GOV. JIM MCGREEVEY, NEW JERSEY: We have the most powerful economy in the world, yet considering the fragility of our energy infrastructure; this is a time to recognize the importance of R&D investment. When we reflect that much of the R&D, the technology within our energy grid is 30, 40 and certain remote cases 50 years old, you simply cannot have an Internet economy based upon Edsel technology.
(END VIDEOTAPE)
KOCH: Energy Secretary Spencer Abraham says the Bush administration is putting teams of investigators in the fields, starting today, to try to sort out just what happened and prevent that from occurring again, massive blackouts.
Officials do say that there is still the possibility we could have more rolling outages. But they say that they are only going to resort to that sort of thing as a rationing measure if for some reason there is a surge in demand that the still fragile system can't meet -- Fredricka.
WHITFIELD: And Kathleen, if now they have some idea on pinpointing the cause, what's the first step in starting to fix it?
KOCH: You know, that's still very unclear right now, and investigators at the North American Electric Reliability Council that was formed in the '60s after that big blackout in '65, they were supposed to prevent that. They say they are going to just at the start have to sift through some 10,000 pages of reports on all the problems that occurred throughout this entire region. Couldn't begin to get a handle on how it happened and then figure out what to do next. So it will be months.
WHITFIELD: All right. Kathleen Koch from New York, thanks very much.
Well, from Long Island to Michigan this historic blackout is perplexing and costly. CNN's Kathleen Hays explores how expensive it's been.
(BEGIN VIDEOTAPE)
KATHLEEN HAYS, CNN CORRESPONDENT (voice-over): From shuttered shops to dark theaters and empty restaurants, it's clear retailers took a big hit from the blackout of 2003.
Starbucks said 600 of its 5,000 stores were forced to close when the power went out and by Saturday a spokesman said they were still not operating at 100 percent capacity.
Some stores may never recoup their blackout losses. Others may try to make up for it with special sales. DANA TELSEY, BEAR STEARNS: But overall, you still have lost sales that will never be made up. When we'll know, come Labor Day weekend when we'll see the discounts throughout there, how big those discounts go.
HAYS: Outside retailing, a spokesman for UPS, which delivers 13.5 million packages a day, said employees were still working to get rid of backlogs.
Airlines suffered losses in the millions as flights were grounded.
And together, the big three automakers saw a third of their plants shut down on Friday, which means thousands of cars did not roll off the assembly line.
But there are silver linings in the dark blackout clouds. Automakers had excess inventories before the blackout. Those are leaner now. And bars that stayed open made money throughout that dark night, as did retailers who were mobbed by customers buying flashlights, batteries and extra bottles of wine.
DIANE SWORK, BANKONE CORPORATION: One of the ironies of catastrophes like this is they inadvertently create economic activity because like grocers, food spoiled. They have to order new food. Lobsters on ice, no longer frozen on ice, need to be replaced. And we see a lot of economic opportunity come from it. In a broader sense this may actually also accelerate.
HAYS: A blip on the radar screen. That's how economists are assessing the impact of the blackout of 2003.
A bigger worry is, what if steps aren't taken to make sure the power grid doesn't break down again. Because if one lesson has been learned, it's that you can't keep running the economy when the lights go out.
Kathleen Hays, CNN financial news, New York.
(END VIDEOTAPE)
WHITFIELD: In fact, the Bush administration is vowing that the search for answers in this blackout is, quote, "the highest possible priority." It's the focus of a joint U.S.-Canadian investigation.
CNN White House correspondent Suzanne Malveaux is in Crawford, Texas, where, on his working vacation, President Bush has been very critical of the power grid -- Suzanne.
SUZANNE MALVEAUX, CNN CORRESPONDENT: Well, Fred, it really gives a good indication of how this debate is going to play out in Congress over the nation's energy policy when you take a look at the talk shows and how it's playing out this morning.
Now, one of the most controversial proposals is a plan by the Federal Energy Regulatory Commission. And essentially they're saying they want to create these regional groups that would control the delivery of power across state lines. They would also oversee overhauling the transmission system.
Now, essentially this would take authority away from the states. There are many in Congress who disagree with that, and they say that they will not pass the president's energy policy unless that particular plan is frozen.
Well, this morning Secretary of Energy Spencer Abraham confirmed that the administration is, in fact, going to delay this regulation plan, to freeze it, to get that legislation through.
(BEGIN VIDEO CLIP)
SPENCER ABRAHAM, SECRETARY OF ENERGY: There's very different viewpoints on first proposal, depending on each region of the country. And the notion that Washington's going to force down the throats of all the regions of the country some type of mandatory Washington- written approach, is one that I think a lot of people have difficulty with.
(END VIDEO CLIP)
MALVEAUX: Well, this morning, critics are saying that this goes against the idea that they're actually going to improve the power grid system, that they're going to overhaul the system. But the secretary saying that there are other aspects of the bill that would actually encourage those improvements, more investment in the power grid system -- Fred.
WHITFIELD: All right. Suzanne Malveaux in Crawford, thank you.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
Aired August 17, 2003 - 10:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
FREDRICKA WHITFIELD, ANCHOR: It is 10 a.m. in Cleveland and Detroit, 9 a.m. in Crawford, Texas. I'm Fredricka Whitfield at CNN's global headquarters. This is CNN LIVE SUNDAY.
For nearly 60 million people who endured North America's largest blackout, the power is back on, but in some parts it's far from back to normal.
Many restaurants across the region still have a lot of empty tables, supermarket shelves are bare, food spoiled. In Detroit the western-most edge of the affected area, power officials are cautioning residents and businesses to conserve power now that it's back on.
In Cleveland and Detroit tap water is still being boiled for drinking or cooking. That advisory could be lifted later on today.
So what caused the blackout? At first, blame was placed in Canada. Now this morning electric officials say it appears three failed transmission lines in Ohio may to be blame.
CNN's Kathleen Koch joins us from New York with more on the investigation -- Kathleen.
KATHLEEN KOCH, CNN CORRESPONDENT: Fredricka, there are a lot of questions this morning about these power lines in northern Ohio that apparently went down in the hour before the big blackout started.
They failed one after another over a 40-minute period, starting at just 3:06 p.m.
Now a red warning was supposed to flash on computer monitors in the control center of First Energy Corporation, which operates and controls these lines. However, that alarm, this red warning, was broken and First Energy knew that. There was a backup alarm, a back up sort of a monitor that was in a regional power pool, a non-profit pool that also monitors electricity in the region, but these outages were not in a normally problem prone area so a spokesman says they don't know if anyone there noticed these outages.
So shortly then after 4 p.m. these incredible surges, power surges and drops, pulsed through the entire regional grid and suddenly, one by one, transmission lines and power plants from the U.S. to Canada began shutting down, tripping off and the blackout began.
Of course, governors in many of these affected states are outraged at how little has been done to address the vulnerability of the power grid.
(BEGIN VIDEO CLIP)
GOV. JIM MCGREEVEY, NEW JERSEY: We have the most powerful economy in the world, yet considering the fragility of our energy infrastructure; this is a time to recognize the importance of R&D investment. When we reflect that much of the R&D, the technology within our energy grid is 30, 40 and certain remote cases 50 years old, you simply cannot have an Internet economy based upon Edsel technology.
(END VIDEOTAPE)
KOCH: Energy Secretary Spencer Abraham says the Bush administration is putting teams of investigators in the fields, starting today, to try to sort out just what happened and prevent that from occurring again, massive blackouts.
Officials do say that there is still the possibility we could have more rolling outages. But they say that they are only going to resort to that sort of thing as a rationing measure if for some reason there is a surge in demand that the still fragile system can't meet -- Fredricka.
WHITFIELD: And Kathleen, if now they have some idea on pinpointing the cause, what's the first step in starting to fix it?
KOCH: You know, that's still very unclear right now, and investigators at the North American Electric Reliability Council that was formed in the '60s after that big blackout in '65, they were supposed to prevent that. They say they are going to just at the start have to sift through some 10,000 pages of reports on all the problems that occurred throughout this entire region. Couldn't begin to get a handle on how it happened and then figure out what to do next. So it will be months.
WHITFIELD: All right. Kathleen Koch from New York, thanks very much.
Well, from Long Island to Michigan this historic blackout is perplexing and costly. CNN's Kathleen Hays explores how expensive it's been.
(BEGIN VIDEOTAPE)
KATHLEEN HAYS, CNN CORRESPONDENT (voice-over): From shuttered shops to dark theaters and empty restaurants, it's clear retailers took a big hit from the blackout of 2003.
Starbucks said 600 of its 5,000 stores were forced to close when the power went out and by Saturday a spokesman said they were still not operating at 100 percent capacity.
Some stores may never recoup their blackout losses. Others may try to make up for it with special sales. DANA TELSEY, BEAR STEARNS: But overall, you still have lost sales that will never be made up. When we'll know, come Labor Day weekend when we'll see the discounts throughout there, how big those discounts go.
HAYS: Outside retailing, a spokesman for UPS, which delivers 13.5 million packages a day, said employees were still working to get rid of backlogs.
Airlines suffered losses in the millions as flights were grounded.
And together, the big three automakers saw a third of their plants shut down on Friday, which means thousands of cars did not roll off the assembly line.
But there are silver linings in the dark blackout clouds. Automakers had excess inventories before the blackout. Those are leaner now. And bars that stayed open made money throughout that dark night, as did retailers who were mobbed by customers buying flashlights, batteries and extra bottles of wine.
DIANE SWORK, BANKONE CORPORATION: One of the ironies of catastrophes like this is they inadvertently create economic activity because like grocers, food spoiled. They have to order new food. Lobsters on ice, no longer frozen on ice, need to be replaced. And we see a lot of economic opportunity come from it. In a broader sense this may actually also accelerate.
HAYS: A blip on the radar screen. That's how economists are assessing the impact of the blackout of 2003.
A bigger worry is, what if steps aren't taken to make sure the power grid doesn't break down again. Because if one lesson has been learned, it's that you can't keep running the economy when the lights go out.
Kathleen Hays, CNN financial news, New York.
(END VIDEOTAPE)
WHITFIELD: In fact, the Bush administration is vowing that the search for answers in this blackout is, quote, "the highest possible priority." It's the focus of a joint U.S.-Canadian investigation.
CNN White House correspondent Suzanne Malveaux is in Crawford, Texas, where, on his working vacation, President Bush has been very critical of the power grid -- Suzanne.
SUZANNE MALVEAUX, CNN CORRESPONDENT: Well, Fred, it really gives a good indication of how this debate is going to play out in Congress over the nation's energy policy when you take a look at the talk shows and how it's playing out this morning.
Now, one of the most controversial proposals is a plan by the Federal Energy Regulatory Commission. And essentially they're saying they want to create these regional groups that would control the delivery of power across state lines. They would also oversee overhauling the transmission system.
Now, essentially this would take authority away from the states. There are many in Congress who disagree with that, and they say that they will not pass the president's energy policy unless that particular plan is frozen.
Well, this morning Secretary of Energy Spencer Abraham confirmed that the administration is, in fact, going to delay this regulation plan, to freeze it, to get that legislation through.
(BEGIN VIDEO CLIP)
SPENCER ABRAHAM, SECRETARY OF ENERGY: There's very different viewpoints on first proposal, depending on each region of the country. And the notion that Washington's going to force down the throats of all the regions of the country some type of mandatory Washington- written approach, is one that I think a lot of people have difficulty with.
(END VIDEO CLIP)
MALVEAUX: Well, this morning, critics are saying that this goes against the idea that they're actually going to improve the power grid system, that they're going to overhaul the system. But the secretary saying that there are other aspects of the bill that would actually encourage those improvements, more investment in the power grid system -- Fred.
WHITFIELD: All right. Suzanne Malveaux in Crawford, thank you.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
