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Lou Dobbs Tonight

Blackout Investigation Continues; Reuters Cameraman Killed in Iraq

Aired August 18, 2003 - 18:00   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.


LOU DOBBS, HOST: Tonight: The heat wave in France has claimed 5,000 lives. Chris Burns will report from Paris.
The power is on, but what caused the nation's worst blackout? Who's responsible? We talk with a CEO of the company that manages the mid-Atlantic state transmission grid.

The recall election may be recalled because the ACLU thinks too many Californians may not be able to read their ballots.

And our special report tonight on America's "Shaky Foundations." Bill Tucker on our power gridlock.

ANNOUNCER: This is LOU DOBBS TONIGHT for Monday, August 18. Here now, Lou Dobbs.

DOBBS: Good evening.

Tonight, new questions about what triggered the worst blackout in this country's history. Officials today said there were numerous voltage swings in the Midwest power system hours before the regional blackout. Until now, the investigation has focused on power lines in Ohio, power lines that tripped about one hour before the grid failed. Tonight, it is clear that no one knows yet what caused the big blackout of 2003.

We begin our coverage with John Zarrella in Cleveland, Ohio -- John.

JOHN ZARRELLA, CNN MIAMI BUREAU CHIEF: Lou, that's exactly right.

No one knows what caused it and no one knows why safeguards built into the system didn't kick in to isolate the problem. The focus had been on these four transmission lines owned by FirstEnergy, a holding company based in Akron, Ohio. And that still remains somewhat the focus, because that is the only real physical evidence at 3:06 Eastern time of where things began.

But, late this afternoon, FirstEnergy reported that, from their own investigation, they say they have seen power swings, power voltage surges and anomalies in the transmission grid outside of their own area that started as early as noon. And there is another report emerging from another organization that monitors transmission flow, saying as well that they noticed in their monitoring systems also these energy fluctuations earlier in the day.

So, at this point, what remains unclear, completely unclear, is if what happened in -- with the four transmission lines were the cause and the first cause of the blackout or if they were a consequence of other events that were taking place at other places. So it doesn't seem to be at this point, Lou, any clearer, any closer to any answers as to what happened and when it happened -- Lou.

DOBBS: John, thank you very much -- John Zarrella reporting from Cleveland, Ohio.

This new week began with no reports of any major business disruptions as a result of the blackout. But, in Detroit, residents there were boiling water all weekend because the power outage shut down their water pumps. Today, health officials said it is no longer necessary to boil water in Detroit, because tests show it is now safe to drink.

The blackout will most certainly hurt some businesses, but there will be relatively little impact on the bottom line of most.

Peter Viles reports.

(BEGIN VIDEOTAPE)

PETER VILES, CNN CORRESPONDENT (voice-over): Like a New York subway train rumbling back into service, the nation's economy shook off the impact of last week's shocking power failure. On Wall Street, stocks actually rallied.

ALAN KRAL, TREVOR, STEWART, BURTON & JACOBSEN: That which doesn't kill you makes you stronger. I mean, this economy, this part of the country, got through something pretty tough last week. And I think the fact that it got through it so well is actually a plus for the market.

VILES: Economists continued to liken the blackout to a severe storm, short in duration, unlikely to knock the economy off its track, in part because it happened late in the week during the summer. Auto production resumed in Detroit, General Motors and Ford reopening the 42 plants that shut down Thursday.

DIANE SWONK, CHIEF ECONOMIST, BANK ONE: A lot of the automakers were about to go into a two-week shutdown anyways. And so some workers did lose wages as a result of the earlier long weekend than they expected, but were expecting to go off work. And that may mean that they come back a day earlier, depending on how the production schedules run. But this wasn't a peak time for a lot of economic activity, so it didn't interrupt quite as much.

VILES: Wal-Mart, which briefly shut down 200 stores, said the blackout had -- quote -- "no material impact on sales or earnings." Home Depot and Lowe's both did a strong business selling generators and other emergency supplies. Grocers continued the process of replacing spoiled meats and dairy products. And the lights stayed out where they're supposed to, in the movie theaters. In fact, box office receipts slaughtered year-ago numbers, say slaughtered because the top draw was the slasher movie "Freddy Vs. Jason." And fears that gasoline prices would spike nationally proved unfounded. Gasoline futures actually fell slightly in New York trading, the only disruptions in Phoenix, long lines there due to a pipeline problem.

(END VIDEOTAPE)

VILES: It's difficult to put a price tag on these kind of events, but guesstimates are running in the low single-digit, billions, somewhere from $1-$5 billion. That's certainly a lot of money, $1 billion. But remember, the government just mailed out $14 billion in those child tax refund checks. So, in the economy right now, the main trend is still stimulus.

DOBBS: Stimulus and everybody recovering quickly from inconvenience.

Pete, thanks -- Peter Viles.

Well, lawmakers have been quick, of course, to pass judgment on just what is wrong with this country's electricity industry. But they've done very little to suggest ways to break the political deadlock in Washington that's delayed the Bush administration's energy plan.

Lisa Sylvester reports from Washington.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): It's a hodgepodge electrical system that experts say is not easy to fix. Lines transmitting electricity have become overburdened.

During the 1990s, deregulation was the trend, as private companies took over the jobs of state-run utilities. But that stalled with the California energy crisis two summers ago and the Enron debacle. What Congress does now is an open question, but some sort of action seems certain.

REP. ED MARKEY (D), MASSACHUSETTS: Congress is a stimulus- response institution. And there's nothing more stimulating than 50 million people without air-conditioning and their lights out, protesting that they want a solution to this problem.

SYLVESTER: Because of last week's massive outages, there's now new momentum in Congress to approve a final energy bill that could include drilling in the Alaska Refuge. Democrats want to deal with the current crisis independently. The Bush administration says it should not be separated out.

SPENCER ABRAHAM, ENERGY SECRETARY: And the only way to really address our energy challenges is to do it comprehensively. That's why we need to pass a bill that is comprehensive, not salami slices one at a time. SYLVESTER: What's more, members of Congress disagree on how to upgrade the transmission system and who should pay for it. The Federal Energy Regulatory Commission, or FERC, wants states to give up control over transmission lines to regional grid operators that would oversee the delivery of power and upgrades to the system. But states that enjoy the lowest electricity rates don't want that to happen.

JERRY TAYLOR, CATO INSTITUTE: Power prices in Kentucky are pretty low compared to power prices elsewhere. If you see upgrades in transmission capability, what you're going to find is that that cheap power is bid away to the highest bidder. And that means that the current low-cost power that Kentuckians gain are now gained by people elsewhere.

(END VIDEOTAPE)

SYLVESTER: President Bush wants to delay FERC's proposal for three years. Instead, the administration wants to impose mandatory reliability standards and to give companies incentives to build additional transmission lines -- Lou.

DOBBS: Lisa, thank you very much -- Lisa Sylvester from Washington.

While various parts of this country's infrastructure are obviously in dire need of repair, Iraq's infrastructure is under attack. Firefighters today put out a huge fire on the main oil pipeline to Turkey after it was blown up by saboteurs. It will take at least five days to complete repairs to that pipeline. Workers in Baghdad today repaired a water pipeline that was badly damaged by a bomb. The explosion led to the shutdown of a water treatment plant that supplied water to about four million people in Baghdad.

The U.S. Army today began an investigation into the death of a television journalist who was killed by U.S. troops in Iraq. Military officials said it was a tragic mistake that was made in the heat of the moment.

Pentagon correspondent Barbara Starr has the story for us -- Barbara?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Lou, the cameraman Mazen Dana for Reuters, 43 years old, was killed on Sunday, apparently when a U.S. soldier mistook his camera for a shoulder- launched weapon.

The cameraman had been working at a prison west of Baghdad, where there had been a mortar attack the day before. He and a number of other journalists had gone to the prison to record the aftermath. This was Mazen Dana, as we say, 43 years old.

We have a graphic to show you comparing a camera on a cameraman's shoulder with a shoulder-fired weapon. This is how some of these mistakes tragically happen. I think -- I'm sorry. I guess we don't have that graphic for you. But these circumstances have happened in battles before, where soldiers accidentally do mistake a camera for a shoulder-fired weapon.

However, Mazen Dana was a very experienced videographer. Other journalists in the area say that they had taken some of the typical measures. In these types of incidents, journalists are very careful to wear civilian clothing, to mark their vehicles, so there can be no mistake.

We also have some video to show you from the prison that day, when there were the -- these were the very last minutes, the very last pictures recorded by Mazen Dana. These are the pictures he took. You can see his camera falling to the ground. And his sound man talked afterwards about the very difficult circumstances of what happened.

(BEGIN VIDEO CLIP)

NAEL AL-SHYOUKHI, REUTERS CAMERAMAN: I looked. I saw the American soldiers around us. And I spoke to the -- screamed to the same soldier who shot him: Why did you shoot him? We are TV. You see him with the camera. Why do you shoot him? And I told him, you shot him. Please stop the bleeding. He's bleeding too much.

(END VIDEO CLIP)

STARR: Now, according to witnesses in the area, what apparently happened is, again, they were filming in the area. They got back in the car. When the tack convoy approached, they -- Mazen Dana stepped out of the car, it is reported, and began filming. And, of course, that's when this apparent mistake occurred.

Mr. Dana was an ethnic Palestinian. He had worked for Reuters for many years, Lou, mainly in the West Bank in the city of Hebron, where he had been beaten and attacked and had won international press awards for his work in that area. A Pentagon official said the matter remains under investigation, that it was a very high-stress situation for U.S. soldiers. They're going to endeavor, they say, to find out what happened and try and make sure it does not happen again -- Lou.

DOBBS: Tragic mistake, Barbara. Thank you.

The president is putting a time limit now on the deployment of U.S. troops in Liberia. What about that can you tell us?

STARR: Well, apparently, the president has given an interview to Armed Forces Radio and television network. And we are told, in that interview, he has now said that he expects U.S. forces to be out of Liberia by October 1, that they will be replaced by what is known as blue-helmeted U.N. forces.

This has been the strategy that the U.S. has been pursuing all the way along. They want to make sure that the peacekeeping effort in West Africa is really, truly led by the West African military forces, with the backing of the United Nations. U.S. Marines do remain on standby, of course, offshore Liberia at the moment, but the president saying they will be out of there within the next several weeks, four to five weeks, and replaced by U.N. troops -- Lou. DOBBS: And, of course, Barbara, the United Nations had said they needed at least until October to be able to put in a peacekeeping force on the part of the United Nations.

Barbara, thank you very much -- Barbara Starr from the Pentagon.

The Pentagon next month will carry out a joint naval exercise in the Coral Sea northeast of Australia. That naval exercise will focus on the interdiction at sea of arms and other material transported to and from North Korea. The timing of the Pentagon announcement is a not-so-subtle message to North Korea. Today's announcement comes one week before six-nation talks in China about North Korea's nuclear program begin.

Still ahead here tonight: It was a dramatic domino effect. And we're not talking about the blackout, but a record-breaking display. We'll continue to follow the progress of the world's biggest domino display.

Also ahead: The heat wave in France claims thousands of lives as the French government makes a shocking concession. Chris Burns will report live from Paris.

And America's "Shaky Foundations," a series of special reports this week on the dire state of this nation's infrastructure. Tonight, Bill Tucker on the national electric power grid, after the worst blackout in American history.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: A stunning admission from the French government today. It said as many as 5,000 people may have died from the 10-day heat wave. That's 2,000 more than the previous report. The crisis today cost the French surgeon general his job.

Chris Burns reports from Paris.

(BEGIN VIDEOTAPE)

CHRIS BURNS, CNN CORRESPONDENT (voice-over): Residents fill the dining room at a Les Efel (ph) retirement home in Paris, minus eight of their housemates, who perished in the heat wave. During 10 days of searing desert temperatures, it was too sweltering to eat here. One after the other, the elderly died in their rooms, too hot, too weak to move.

"Helpless," says 92-year-old Charlotte Helbert, when asked how she felt. An assistant manager, speaking off camera, says help from the government's health emergency declared a week into the heat wave was too little too late. She says it took sometimes several hours to get medical help, the result, a death toll estimated in ever-more staggering proportions. The government now acknowledges up to 5,000 could have died. Some estimate, it could go even higher. DOMINIQUE DISSARD, PFG FUNERAL SERVICES: And on the total, August, it could be between, I would say, 5,000 and 7,000 more than normal.

BURNS (on camera): This is an absolute catastrophe, isn't it?

DISSARD: Absolutely, yes.

BURNS (voice-over): With funeral homes overflowing, the government requisitioned this huge refrigerated warehouse in the sprawling Regis (ph) food storage depot south of the capital. About 150 bodies have been stored here so far. Six temporary funeral parlors were built inside to accommodate grieving families. The smell of death hangs heavy in the cold air.

(on camera): Officials say this warehouse has the capacity to take in 2,000 bodies. And even with the cooler weather in recent days, officials say it will take up to two more weeks to bury the dead they have now.

(voice-over): The conservative government of Prime Minister Jean-Pierre Raffarin is trying to fight off criticism the state-run health care system was overwhelmed. But as the estimated death toll mounted, the crisis took its first official casualty. Surgeon General Lucien Abenhaim, director of health services, resigned. Some officials say, enough of the blame game, that it's time to fix the system.

JUDITH BOURGEOIS, FRENCH RED CROSS: For some time, the government was reacting by trying to train more nurses and employ more nurses. But it's true that there is a problem.

BURNS: Little comfort for those who already lost loved ones and neighbors in a country that has long prided itself on its social services.

(END VIDEOTAPE)

BURNS: And little comfort for the leftist opposition, which is demanding the resignation of the health minister himself. And they're demanding a widespread investigation of exactly what happened and why -- Lou.

DOBBS: Chris, the role of health officials and the medical care centers there, in addition to the hospitals, 35-hour work weeks. Is there anything to the initial reports that there simply weren't enough people there because of the short hours?

BURNS: Absolutely. There's a lot to do with that, in fact, Lou, a combination, really.

August is the month when much of the country is on vacation and virtually shuts down. They do cut back on the number of employees there. But there also have been cutbacks by the government because of budget cutbacks. And the government also blames the previous socialist government for instituting that 35-hour work week that did reduce the number of employees working. So there's plenty of blame to go around. And this is where some people are saying, including the Red Cross, saying, look, put this polemics behind you, get together and fix the system now -- Lou.

DOBBS: And the weather, at least, high temperatures are abating, are they not?

BURNS: Absolutely.

I think the temperatures lately in the last few days have gotten down into the 80s, so still a bit toasty, but really tolerable. But this is a country that -- where, like in the rest of Europe, does not have air-conditioning for the most part. They're not used to those high temperatures that there might be in some parts of the United States.

So that came as a real shock. People were not prepared. A lot of people didn't even have fans. And that's been very, very difficult. I live in Frankfurt. I tried to buy a fan last week. They're all sold out -- Lou.

DOBBS: Well, Chris, better luck this week. And we thank you very much -- Chris Burns reporting from Paris.

Well, despite the hot temperatures this summer, California has avoided the energy problems, the crisis, that plagued it in the past. That state has made a number of changes since an energy crisis caused rolling blackouts just two years ago.

Casey Wian reports from Los Angeles.

(BEGIN VIDEOTAPE)

(BEGIN VIDEO CLIP, "THE TONIGHT SHOW WITH JAY LENO")

JAY LENO, HOST: But, see, it's really true what they say about California. See, all the popular stuff starts here first, and then gradually filters down to the rest of the country, like the power outages. We had them last year. Oh, now everybody's doing it.

(LAUGHTER)

LENO: Detroit, Cleveland, New York, now, they have to have one. It's so last year. Please.

(END VIDEO CLIP)

CASEY WIAN, CNN CORRESPONDENT (voice-over): Six days of rolling blackouts in early 2001 remain material for comedians. The state has made significant progress toward fixing its electricity problems.

Dozens of new plants capable of powering six million homes have been built. California is now expected to enjoy an electricity surplus for up to five years. Even Governor Gray Davis, struggling to defeat a recall, stemming in large part from his handling of the electricity crisis, went on "LARRY KING LIVE" while the Northeast was dark to tout his state's success.

GOV. GRAY DAVIS (D), CALIFORNIA: We're a lot better prepared than we were three years ago. We have a lot more capacity.

WIAN: California also has adopted incentives for conservation and diversification, including a mandate that 20 percent of the state's power come from renewable energy, such as hydro, solar, and geothermal, within 10 years. But weaknesses remain, and, as in the Northeast, they lurk mainly in the transmission grid. At least a half-billion dollars worth of upgrades are in progress.

RICHARD KATZ, CALIFORNIA ENERGY ADVISER: I don't think anywhere is immune from an act of God or immune from something like that happening. But where we're in better shape in California is, we have much more redundancy in our system, so we can isolate problems.

WIAN: Meanwhile, Californians continue to pay up to $45 billion in higher electricity rates. Federal energy regulators have recommended more than $3 billion in rebates from energy producers accused of market manipulation. Another $6 billion has been saved through renegotiated contracts.

(END VIDEOTAPE)

WIAN: Some of the money, such as a half-billion dollars owed by Enron, is gone for good. However, Southern California Edison customers this month saw their first rate decrease since the beginning of the electricity crisis three years ago -- Lou.

DOBBS: Casey, thank you very much -- Casey Wian from Los Angeles.

A different kind of energy crisis in Arizona today. In Phoenix, motorists are forming long lines at gasoline stations, after safety concerns shut down a pipeline that delivers much of that city's fuel. Gasoline is being delivered by truck from Tucson, but some motorists desperate for fuel are paying nearly $2.5 dollars for a gallon of regular, unleaded gasoline.

Coming up next: another sniper on the loose. Police in West Virginia are hunting a killer. Art Harris will have the report for us from Charleston, West Virginia.

Flashbacks to Florida: why the California recall election could be delayed over, you guessed it, punch card ballots. Bob Franken will have the report from Los Angeles.

And a young woman topples a two-decade-old record, more of our continuing coverage of dominoes.

Much more still ahead. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Still ahead: tracking a killer, three people dead. Police are looking for a sniper. Tonight, Art Harris is in Charleston, West Virginia. He will have the very latest for us on the manhunt -- that story and more coming up next.

(COMMERCIAL BREAK)

DOBBS: Authorities in West Virginia are looking for a dark- colored, full-size pickup truck in the investigation of a series of sniper attacks. Three people have been shot and killed, all of those people killed near convenience stores over the past eight days.

Art Harris reports.

ART HARRIS, CNN INVESTIGATIVE CORRESPONDENT: Police believe they're looking for someone local who knows the country roads, possibly a homegrown killer, but so far have only a vague description of an overweight white male in a dark pickup.

(BEGIN VIDEO CLIP)

DAVE TUCKER, KANAWHA COUNTY SHERIFF: Investigation has determined that we would like to find a dark-colored or maroon full- size truck, possibly an F-150.

(END VIDEO CLIP)

HARRIS: The mayor drives a large dark pickup. And so do at least two police officers. They're all too common here in rural West Virginia. So the question is, do police have too few clues or too many?

(BEGIN VIDEO CLIP)

TUCKER: We do have 100 leads. And every lead is being covered. During this, as I mention leads, there are suspects arrived through this investigation. And we are actively pursuing those.

(END VIDEO CLIP)

HARRIS: But no one is in custody yet. So the sheriff again warned people, when they go out to gas stations and convenience stores, to be careful, especially at night -- Lou.

DOBBS: Art, give us, if you will, some reference here. Are the three convenience stores at which those three people killed, are they near one another?

HARRIS: They are. One is about 10 miles apart. The other is about 12 miles. That's why they think it's probably someone who knows the roads, because he would have to get in and out. And a couple of them, Lou, are very narrow, two-lane blacktops that lead into a main artery. So these are places that you would have to know well.

DOBBS: At least initially, Art, authorities were saying they suspected a sniper. In each case, has the same caliber of bullet been used?

HARRIS: Ballistics match, they say, two of the shootings and possibly all three, Lou. What's interesting is, they have not found any shell casings at the scenes of the crime. So they're theorizing that the shot was taken from inside a vehicle -- Lou.

DOBBS: And I guess, Art, the next question is, is there some reason that the police have to suspect that it is not a single sniper in this case? Because they have gone to some lengths to say they suspect it's a sniper.

HARRIS: Well, they haven't yet ruled out connections between the victims. They're doing that as we speak, canvassing the neighborhoods on bicycles. And they will come back. And once they've ruled people out, they will determine if it's a lone gunman, a sniper who's acting randomly, or if the killer knows his victims -- Lou.

DOBBS: Art, thank you very much -- Art Harris reporting from Charleston, West Virginia.

In Texas, Baylor University officials are investigating an audiotape that apparently includes Baylor's former basketball coach encouraging players to lie in the case of Patrick Dennehy. On the audiotapes, Dave Bliss tried to coax players into telling police that Dennehy paid for his tuition by selling drugs. Bliss allegedly hoped that story would refute allegations that he had given Dennehy money to pay for Dennehy's tuition, that in violation of NCAA regulations.

Dennehy was found murdered last month. His former teammate, Carlton Dotson, is charged with his murder.

In California, the judge in the Scott Peterson murder trial will not allow cameras in court during a preliminary hearing next month. The Stanislaus County judge today said televising the hearing is not necessary to the trial process and would only hurt the victims' families. During the hearing, prosecutors will, for the first time, present evidence that they've collected against Peterson, who is charged with killing his wife, Laci, and their unborn son last Christmas Eve.

Summer is entering its final month. And there are fewer than expected cases of West Nile virus. We report that to you tonight, only two weeks after there were indications that this year could well be worse than last year's record pace. Colorado has been the hardest- hit state. At least seven people have died from West Nile virus. Almost 250 people in Colorado are known to have the virus. That's more than half of what is now the nationwide total. West Nile has killed four other people around the country, two of them in Texas, two others in Alabama.

The American Civil Liberties Union is asking a federal judge to postpone the California recall election. The ACLU claims voting machines in six California counties will not be updated before the scheduled October 7 election, and the ACLU says the old machines could disenfranchise millions of minority voters.

Bob Franken is live in Los Angeles and has the latest for us -- Bob.

BOB FRANKEN, CNN NATIONAL CORRESPONDENT: The latest is that Judge Steven V. Wilson, after an afternoon of arguments, has said that he will have a hearing by the day -- or, excuse me, a ruling by the day after tomorrow on whether he should delay the California recall.

The ACLU, as you pointed out, said that because there was a certainty almost that people in the six most populous counties of the state who still use the discredited punch card machines will perhaps not have their votes counted, that it would be unfair. A case of political equality, said the ACLU attorney, Mark Rosenbaum. But it's going to surprise just about everybody who watched if the judge rules in his favor. He continuously expressed skepticism, saying that most of the case law says that before discrimination, constitutional violations can be claimed, it has to be shown that the discrimination was intentional.

And the judge went on to say, "Can't it be argued that there is a greater interest in the citizens of California having their voices heard?" He said "there is seemingly gross dissatisfaction," which would probably be the least argued statement that the judge made all day. As for the claims that there is going to be a massive miscount on these particular counties, a representative of the state from the attorney general's office, said that that is strictly speculation.

As I said, the judge said he'd rule by Wednesday because he knows that there's going to be an appeal no matter which side loses. As the judge put it, somebody's going to be unhappy -- Lou.

DOBBS: Bob, the judge's concern here is for the -- and the ACLU's concern, rather, is for minority disenfranchisement. On what basis?

FRANKEN: Well, the Voting Rights Act -- there are actually two parts of this. The ACLU claimed a constitutional violation because some votes would be less equal than others. That is to say, a violation of the Equal Protection Clause.

The second part of the ACLU's claim is that under the Voting Rights Act minorities, people of color and people who are disadvantaged have to get equal treatment, and that as a result of the fact that they are concentrated in the six counties that it is also a violation of the Voting Rights Act.

So there's two parts of it. And the judge, as I said, expressed skepticism. I should point out that judges have this wonderful habit of sometimes not tipping their hand in the courtroom. But, as I said, he would surprise everybody because of his continuously skeptical questions to the ACLU's attorney and virtually no questions for the other side.

DOBBS: And these punchcard ballots have been used in California for how long?

FRANKEN: They've been used for just about as long as they've been available. Of course, we know they became discredited during the Florida election. This very same judge ruled that by the March election they needed to be replaced. However, the judge said that was only part of a consent decree. There should not be too much reliance on that, that what he ruled about the March election did not necessarily apply to the election that would come up October 7. DOBBS: It's tempting to say almost only in California, but of course, two years ago we were saying only in Florida.

Bob Franken, thank you very much.

Tonight's quote comes from a California gubernatorial candidate.

"If some of the governor's minions would stop trying to undercut my efforts, we would have the possibility of having a win-win position on the ballot."

That from Lieutenant Governor Cruz Bustamante, who is, by the way, leading in a recent poll over Arnold Schwarzenegger and the other candidates.

When we continue, America's, "Shaky Foundations." Our series of special reports this week on the nation's infrastructure in jeopardy. Bill Tucker begins our series with -- what else? -- electricity. And Phillip Harris, the chairman and CEO of PJM Interconnection, the company that controls the electricity for much of the Mid-Atlantic region, joins us to tell us how his organization staved off a blackout.

And living off the grid. Alternatives to major energy sources seemed like a pretty good idea as recently as last Thursday and Friday. Jan Hopkins will report on the possibilities.

And world domination. Hundreds of thousands of dominoes. You're watching them topple a 19-year-old record. We're going to watch them throughout the hour as we continue.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Tonight, we begin our series of special reports on this country's "Shaky Foundations."

The American Society of Engineers gives the country's roads, communications and energy infrastructures all failing grades. That means the world's only superpower is now operating at a third world level.

Tonight, we begin our series with a look at the infrastructure of electricity.

Bill Tucker reports.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNNfn CORRESPONDENT (voice-over): Thee national power grid is a myth. Instead, there's a patchwork of interconnecting electrical utilities which was never designed or intended to supply a national thirst for electrical power. The grid was originally just a connection between neighboring utilities allowing them to share power. GOV. BILL RICHARDSON (D), NEW MEXICO: It's a very old system. It's an antiquated system. It's a system that has not had refurbishing in a long time.

TUCKER: In fact, it's been neglected. From 1979 through 1999, electrical demand escalated while investment in electrical transmission infrastructure fell by half.

More than two years ago, the North American Electric Reliability Council warned of the danger ahead. The Bush administration warned of overtaxed transmission lines in its energy plan. The warnings went unheeded.

CLARK GELLINGS, ELECTRIC POWER RESEARCH INSTITUTE: Now is the time to raise the issue. I think it's also time to start looking at the power delivery system we have in the United States and really getting serious about both upgrading it and modernizing it. Most every industry in this country has revolutionized itself through the use of communications sensors and computational ability except the U.S. power industry.

TUCKER: There are a myriad of excuses why the upgrades haven't happened. Cost is the No. 1 reason -- $50 billion over 10 years is the generally agreed upon number. Utilities are reluctant to spend that money because of rules limiting their rate of return on their investments. But the bottom line is clear.

SPENCER ABRAHAM, ENERGY SECRETARY: Well, the companies pass those costs along, as you well know. And so the question is, Does it get paid for out of tax dollars or does it get paid for as part of a system? And the system is designed, needs to be designed in a way that provides sufficient revenue to do that.

TUCKER: The power companies would also like to see the federal government step in on a process known as the siting (ph) process. Having federal regulators make final rulings where power transmission lines can go rather than fighting with local communities for years over projects that may or may not be constructed.

Everyone likes for their TV and refrigerator to work. No one wants a tower in their backyard.

BILL BRIER, EDISON ELECTRIC INSTITUTE: The whole attitude of electricity is it's out of sight out of mind. You flip a switch, we're very, very reliable, 99 percent. And so everybody's happy until, you know, something like this happens.

(END VIDEOTAPE)

TUCKER: Now, there is technology being developed which will allow lines to increase the amount of electricity they can carry, but the technology of transmission is hard pressed to keep up with our hunger for power. Demand is expected to rise by 50 percent over the next 22 years -- Lou.

DOBBS: Bill, thank you very much. Bill Tucker. Later this week, in our series of special reports, "Shaky Foundations":

(BEGIN VIDEOTAPE)

DOBBS (voice-over): Tomorrow night, drinking water endangered. There's not enough water, and it isn't always safe to drink.

And our nation's dams. Thousands are crumbling. Can anything be done?

Danger on wheels. The nation's highways and rails.

America's great disconnect. How reliable are our telephones, computers, and the Internet?

All part of our series of special reports this week, "Shaky Foundations."

(END VIDEOTAPE)

DOBBS: And tonight's thought is on something we've learned from the blackout.

"Great emergencies and crises show us how much greater our vital resources are than we had supposed." That from psychologist and philosopher William James.

When we continue -- one major power company managed to keep the lights on for millions of its customers in the Eastern Seaboard. Bill Harris, the chairman and CEO of PJM, will tell us how. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Our next guest is head of a power pool that controls electricity in much of the eastern part of the country. Phillip Harris is the chairman and CEO of PJM Interconnection, who tonight joins us from Valley Forge, Pennsylvania. Good to have you with us.

Now, your organization, the regional transmission organization, was able to stop the spread of the blackout to your customers across, what is it, six, seven western states.

How were you able to do that?

PHILLIP HARRIS, CHMN & CEO, PJM INTERCONNECTION: Well, I think it gets back to the history here. The public policy makers, the states, the governors back when we were designing our system in the early '90s, decided that we had to have a reliable system. So we developed regional planning protocols that allowed us to make the investments necessary to continue the upgrades. We also decided that we would do a lot of planning, rehearsals, drills, scheduling, and so forth to be able to prevent the very thing that happened.

DOBBS: Well, there are some people tonight in Detroit, New York, Connecticut, Ohio, they're hearing Phillip Harris talk and are saying, well, I hope to goodness that our people are also rehearsing those problems and preparing for crisis.

Do you believe they have been?

HARRIS: Well, they have. I think one of the problems we have is the asymmetry in the rules. Even though everybody has a standard, not everybody applies the same protocols. In our region we realize electricity's like a giant ecological system. One thing affects everything else. So we plan regionally. We rehearse regionally over a broad regional area. We have procedures drills for testing relays and all of these sorts of devices that would enable to you sectionalize and isolate a problem when it occurs.

DOBBS: Now, Phil, as you know, immediately the Canadians were blaming the United States and specifically the Niagara Mohawk grid. Then there was some blame of officials in Canada on the part of some other electricity companies in the Midwest. Now we're focusing on three or four power lines in Ohio.

Do you know, do you have a strong suspicion as to what caused this blackout?

HARRIS: Well, we were going to get some good indications, but really, it isn't the cause. Something fails on the electrical grid every day. A transmission line fails, a generating plant fails. The question here is why did it spread, why didn't it isolate itself and sectionalize itself just to the local area that was having the problem? It's the cascading effect that needs to have a lot of real hard questions answered and some good questions to dig into this, and it's going to take time. There are just thousands of bits of information that have to be analyzed and looked at, and that's going to take days.

Well, you told us your organization manage to stave off and to staunch, if you will, all of the problems of this blackout that would have taken down your system.

The question is, I guess, really is how much do you believe that the national grid is at risk here given the problems we saw that began last Thursday?

HARRIS: Well, I think that there are some very serious problems. I think the problem is the energy policy passed in 1992, and we're 11 years now still in the transition. Congress has to step up. We have to decide where the jurisdictional issues lie. We need to have clean bills, allow those in public policy decision-making roles to address these tough public problems. We need to have regional planning protocols so you can plan over a large region. It is an ecological system. One thing affects everything else, as we saw with this blackout. So we need to be able to look at things broadly and regionally so we can optimize the right resources. And we need to have certainty so that people can make some investments into this transmission system.

DOBBS: We've heard numbers as large as $50 billion. You've just heard the energy secretary start talking about the issues as to whether we pay for that as taxpayers or we pay for that as consumers.

What do you see as the solution?

What do you see as the cost?

HARRIS: I don't think it's that high. If we look at the Mid- Atlantic and the East Coast area we serve from Washington, D.C., Philadelphia, it is a tremendous vital and important area. What we've seen is we've made about $800 million of transmission investment over the past six years. Most of that investment is into upgrades, substation upgrades and equipment upgrades. And what we're finding is there's no need for a major transmission line in this area. And I dare say that's true elsewhere. Now, while there are some key lines that need to be made, there's a tremendous value proposition from just upgrading existing equipment. There's also a real need to increase our information technologies. Electricity travels at the speed of light, and information technologies can help us do a much better job.

DOBBS: And the big question is now is it time for reregulation of the electrical industry -- the electricity industry in this country?

HARRIS: Well, again, the critical test is the test of use, and for six years now we've been running competitive wholesale markets. And the facts are saying that our grid is more reliable now than it was under the old regime of a regulated market. And if you look at certainly the events of last week, we operated competitive markets, the prices stayed stable, and was able to stop a blackout. Again, I think the test use shows competitive markets, good regional planning will work for the value of the citizens of this country.

DOBBS: Phil Harris, we thank you very much for being with us here.

HARRIS: Thank you.

DOBBS: When we continue, more and more Americans are choosing alternative energy sources wherever they can. Jan Hopkins reports on those who were off the grid during the worst blackout in our country's history. Stay with us.

(COMMERCIAL BREAK)

DOBBS: During the blackout, some people still had lights. They had power and cool air circulating through their homes. Jan Hopkins now reports on alternatives to the grid.

(BEGIN VIDEOTAPE)

JAN HOPKINS, CNNfn CORRESPONDENT (voice-over): While the rest of New York City was dark Thursday night and residents sweltered in the heat, the people who live in the 2,800 apartments at the Penn South complex in Manhattan were comfortable.

MATTHEW ANTON, RESIDENT: We were just fine right here at Penn South. We had air conditioning, we had lights. The elevators worked. Lights were on in the lobby, air conditioning was on in the lobby.

HOPKINS: Penn South has been off the power grid since the 1980s, the complex deciding to go it alone.

BRENDAN KEANY, GENERAL MANAGER: We were purchasing electric from ConEd, and it was -- became very, very expensive. So we made the decision to get off the ConEd grid and generate our own power. And we've been doing it successfully since 1986.

HOPKINS: Last year, the complex saved half a million dollars by generating its own power supply. Others around the country are beginning to take note.

PROFESSOR GABE MILLER, NEW YORK UNIVERSITY: It started a few years ago, especially in California, during the energy crisis there. But it's really spread around the country.

HOPKINS: Equity Office Properties, which owns 700 office buildings around the country, is installing special power generation equipment at 12 of its buildings, so it doesn't have to depend on the grid for power anymore. And homeowners took it upon themselves to stock up on generators at places like Costco and Home Depot.

(on camera): Off-grid power generation is itself a business. The electric utility in Detroit has a subsidiary that is making equipment for factories and buildings. Several Home Depot stores, for example, are customers. They have their own power systems, and that allowed them to be open in the blackout -- Lou.

DOBBS: Proving it works. All right. Jan, thank you very much.

Well, after the blackout apparently a lot of people went to the movies. At the box office this weekend, two of Hollywood's most notorious villains slashed their way to number one. "Freddy Vs. Jason" shocked audiences and executives alike. The low-budget teen thriller grossed $36 million in box office receipts. New Line Cinema spent about $30 million to make the movie. "S.W.A.T." dropped to second place. "Open Range," "Freaky Friday" and "Uptown Girls" followed over the weekend.

When we continue, we'll take a look at some of your thoughts on the power failure, who's responsible and who's not. And we're watching thousands of dominoes knock over a world record. You don't want to miss that. Stay with us.

(COMMERCIAL BREAK)

DOBBS: On Wall Street, stock prices climbed today. The Dow Jones Industrials tonight is at a 14-month high, in fact. The Dow today gained almost 91 points. The Nasdaq rose 37, almost 37.5 points. The S&P up just over 9 points. Christine Romans is here with the market and a pretty good day.

CHRISTINE ROMANS, CNNfn CORRESPONDENT: It really was. Industrials really ruled this rally here today. The Dow was the best performer... DOBBS: Industrials?

ROMANS: Industrials. Can you believe it? The S&P reaching as high as 1,000 today. So far in what is typically, they keep telling us, Lou, the worst month of the year for stocks, it's actually been modestly strong. The Dow, S&P and the Nasdaq are all higher this month.

There was a power play for several of the Dow stocks. Turbines maker GE rose almost 4 percent. Honeywell and Caterpillar both make diesel generators. Both rose about 3 percent. In fact, several of the industrials on the Dow hit multi-year highs today. And the overall number of new highs on the Big Board perked up, 223 highs, only 19 lows.

The retailers rallied after strong lows earnings, and bullish comments about August sales from Wal-Mart. Lou, Wal-Mart sales in the northeast were quite strong despite the blackout. Same for Target.

But the blackout did hurt FirstEnergy. It tumbled 9 percent. It was the fourth most active stock at the Big Board on 10 times more volume than usual.

OK. So Lou, now that the blackout is over, watch out for the companies that use it as an excuse for higher costs, poor sales. Some companies undoubtedly will have legitimate, you know, reasons for the blackout to hurt them, but remember SARS? After a while on Wall Street we joked that SARS really stood for "sudden acute revenue shortfall," because companies that had no business warning about SARS were.

DOBBS: A convenient rationalization, if you will, at hand. Christine, thank you very much.

ROMANS: You're welcome.

DOBBS: Christine Romans.

Well, let's take a look at some of your thoughts. Hugh Gray of Madison, Alabama wrote to say: "Trouble ahead? You bet. This latest outage demonstrates the need for the government to immediately prioritize major reconstruction projects to supply the overtaxed infrastructure. National security should be the priority."

Matt of Huntington Beach, California wrote: "Make these privately profitable utilities pay for their own mistakes, upgrades, irresponsibility. These over-deregulated companies will just turn around and bilk us for unreasonable profits like in California. Let me coin the phrase "re-regulation."

William Hamilton of Holiday, Florida said: "Imagine if GM, Ford and Chrysler announced they needed to upgrade to be able to build their 2004 autos and that they wanted the American people to pay for the new assembly lines."

Gary Sterling of Virginia wrote in with his own poll suggestion. He asked that "Would you be willing to pay increased taxes to improve the power grid? No. We have already paid for the power. Why should we pay more taxes to bail out another corporate mishandling of the balance sheets?"

Jim Guelde of Meeteetse, Wyoming, and I hope that's close to the pronunciation, said: "What's all the fuss about being without electricity for a few days? Hell, the Iraqi people have been doing without it for years. Are they made of stouter stuff than Americans?" You know the answer to that.

Karen Dicker of Los Angeles wrote: "How can the USA improve its failing infrastructure when the federal government spends our money, such as $1 billion a month on building Iraq's, Liberia's, and letting jobs go away from the USA?"

Steve French of Michigan asks: "If nobody knows how the blackout started, why is everybody so sure it wasn't terrorism?"

And Pauline Davis of Manteo, North Carolina wrote: "I think the blackout could be called divine intervention. Since it happened, I haven't heard Arnold Schwarzenegger's or Kobe Bryant's name mentioned, and that's wonderful."

We love hearing from you. Send us your thoughts. Loudobbs@cnn.com.

And finally tonight, a 24-year-old Chinese woman toppled a 19- year-old record for the longest solo domino display. Molly Hai-wa (ph) set up and tipped over more than 300,000 of these dominoes. It took her nearly seven weeks to set up the dominoes. And as you probably noticed throughout this hour, it took them about four minutes to knock them all down.

That's our show for tonight. For all of us here, good night from New York. "LIVE FROM THE HEADLINES" is next.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com





in Iraq>


Aired August 18, 2003 - 18:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LOU DOBBS, HOST: Tonight: The heat wave in France has claimed 5,000 lives. Chris Burns will report from Paris.
The power is on, but what caused the nation's worst blackout? Who's responsible? We talk with a CEO of the company that manages the mid-Atlantic state transmission grid.

The recall election may be recalled because the ACLU thinks too many Californians may not be able to read their ballots.

And our special report tonight on America's "Shaky Foundations." Bill Tucker on our power gridlock.

ANNOUNCER: This is LOU DOBBS TONIGHT for Monday, August 18. Here now, Lou Dobbs.

DOBBS: Good evening.

Tonight, new questions about what triggered the worst blackout in this country's history. Officials today said there were numerous voltage swings in the Midwest power system hours before the regional blackout. Until now, the investigation has focused on power lines in Ohio, power lines that tripped about one hour before the grid failed. Tonight, it is clear that no one knows yet what caused the big blackout of 2003.

We begin our coverage with John Zarrella in Cleveland, Ohio -- John.

JOHN ZARRELLA, CNN MIAMI BUREAU CHIEF: Lou, that's exactly right.

No one knows what caused it and no one knows why safeguards built into the system didn't kick in to isolate the problem. The focus had been on these four transmission lines owned by FirstEnergy, a holding company based in Akron, Ohio. And that still remains somewhat the focus, because that is the only real physical evidence at 3:06 Eastern time of where things began.

But, late this afternoon, FirstEnergy reported that, from their own investigation, they say they have seen power swings, power voltage surges and anomalies in the transmission grid outside of their own area that started as early as noon. And there is another report emerging from another organization that monitors transmission flow, saying as well that they noticed in their monitoring systems also these energy fluctuations earlier in the day.

So, at this point, what remains unclear, completely unclear, is if what happened in -- with the four transmission lines were the cause and the first cause of the blackout or if they were a consequence of other events that were taking place at other places. So it doesn't seem to be at this point, Lou, any clearer, any closer to any answers as to what happened and when it happened -- Lou.

DOBBS: John, thank you very much -- John Zarrella reporting from Cleveland, Ohio.

This new week began with no reports of any major business disruptions as a result of the blackout. But, in Detroit, residents there were boiling water all weekend because the power outage shut down their water pumps. Today, health officials said it is no longer necessary to boil water in Detroit, because tests show it is now safe to drink.

The blackout will most certainly hurt some businesses, but there will be relatively little impact on the bottom line of most.

Peter Viles reports.

(BEGIN VIDEOTAPE)

PETER VILES, CNN CORRESPONDENT (voice-over): Like a New York subway train rumbling back into service, the nation's economy shook off the impact of last week's shocking power failure. On Wall Street, stocks actually rallied.

ALAN KRAL, TREVOR, STEWART, BURTON & JACOBSEN: That which doesn't kill you makes you stronger. I mean, this economy, this part of the country, got through something pretty tough last week. And I think the fact that it got through it so well is actually a plus for the market.

VILES: Economists continued to liken the blackout to a severe storm, short in duration, unlikely to knock the economy off its track, in part because it happened late in the week during the summer. Auto production resumed in Detroit, General Motors and Ford reopening the 42 plants that shut down Thursday.

DIANE SWONK, CHIEF ECONOMIST, BANK ONE: A lot of the automakers were about to go into a two-week shutdown anyways. And so some workers did lose wages as a result of the earlier long weekend than they expected, but were expecting to go off work. And that may mean that they come back a day earlier, depending on how the production schedules run. But this wasn't a peak time for a lot of economic activity, so it didn't interrupt quite as much.

VILES: Wal-Mart, which briefly shut down 200 stores, said the blackout had -- quote -- "no material impact on sales or earnings." Home Depot and Lowe's both did a strong business selling generators and other emergency supplies. Grocers continued the process of replacing spoiled meats and dairy products. And the lights stayed out where they're supposed to, in the movie theaters. In fact, box office receipts slaughtered year-ago numbers, say slaughtered because the top draw was the slasher movie "Freddy Vs. Jason." And fears that gasoline prices would spike nationally proved unfounded. Gasoline futures actually fell slightly in New York trading, the only disruptions in Phoenix, long lines there due to a pipeline problem.

(END VIDEOTAPE)

VILES: It's difficult to put a price tag on these kind of events, but guesstimates are running in the low single-digit, billions, somewhere from $1-$5 billion. That's certainly a lot of money, $1 billion. But remember, the government just mailed out $14 billion in those child tax refund checks. So, in the economy right now, the main trend is still stimulus.

DOBBS: Stimulus and everybody recovering quickly from inconvenience.

Pete, thanks -- Peter Viles.

Well, lawmakers have been quick, of course, to pass judgment on just what is wrong with this country's electricity industry. But they've done very little to suggest ways to break the political deadlock in Washington that's delayed the Bush administration's energy plan.

Lisa Sylvester reports from Washington.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): It's a hodgepodge electrical system that experts say is not easy to fix. Lines transmitting electricity have become overburdened.

During the 1990s, deregulation was the trend, as private companies took over the jobs of state-run utilities. But that stalled with the California energy crisis two summers ago and the Enron debacle. What Congress does now is an open question, but some sort of action seems certain.

REP. ED MARKEY (D), MASSACHUSETTS: Congress is a stimulus- response institution. And there's nothing more stimulating than 50 million people without air-conditioning and their lights out, protesting that they want a solution to this problem.

SYLVESTER: Because of last week's massive outages, there's now new momentum in Congress to approve a final energy bill that could include drilling in the Alaska Refuge. Democrats want to deal with the current crisis independently. The Bush administration says it should not be separated out.

SPENCER ABRAHAM, ENERGY SECRETARY: And the only way to really address our energy challenges is to do it comprehensively. That's why we need to pass a bill that is comprehensive, not salami slices one at a time. SYLVESTER: What's more, members of Congress disagree on how to upgrade the transmission system and who should pay for it. The Federal Energy Regulatory Commission, or FERC, wants states to give up control over transmission lines to regional grid operators that would oversee the delivery of power and upgrades to the system. But states that enjoy the lowest electricity rates don't want that to happen.

JERRY TAYLOR, CATO INSTITUTE: Power prices in Kentucky are pretty low compared to power prices elsewhere. If you see upgrades in transmission capability, what you're going to find is that that cheap power is bid away to the highest bidder. And that means that the current low-cost power that Kentuckians gain are now gained by people elsewhere.

(END VIDEOTAPE)

SYLVESTER: President Bush wants to delay FERC's proposal for three years. Instead, the administration wants to impose mandatory reliability standards and to give companies incentives to build additional transmission lines -- Lou.

DOBBS: Lisa, thank you very much -- Lisa Sylvester from Washington.

While various parts of this country's infrastructure are obviously in dire need of repair, Iraq's infrastructure is under attack. Firefighters today put out a huge fire on the main oil pipeline to Turkey after it was blown up by saboteurs. It will take at least five days to complete repairs to that pipeline. Workers in Baghdad today repaired a water pipeline that was badly damaged by a bomb. The explosion led to the shutdown of a water treatment plant that supplied water to about four million people in Baghdad.

The U.S. Army today began an investigation into the death of a television journalist who was killed by U.S. troops in Iraq. Military officials said it was a tragic mistake that was made in the heat of the moment.

Pentagon correspondent Barbara Starr has the story for us -- Barbara?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Lou, the cameraman Mazen Dana for Reuters, 43 years old, was killed on Sunday, apparently when a U.S. soldier mistook his camera for a shoulder- launched weapon.

The cameraman had been working at a prison west of Baghdad, where there had been a mortar attack the day before. He and a number of other journalists had gone to the prison to record the aftermath. This was Mazen Dana, as we say, 43 years old.

We have a graphic to show you comparing a camera on a cameraman's shoulder with a shoulder-fired weapon. This is how some of these mistakes tragically happen. I think -- I'm sorry. I guess we don't have that graphic for you. But these circumstances have happened in battles before, where soldiers accidentally do mistake a camera for a shoulder-fired weapon.

However, Mazen Dana was a very experienced videographer. Other journalists in the area say that they had taken some of the typical measures. In these types of incidents, journalists are very careful to wear civilian clothing, to mark their vehicles, so there can be no mistake.

We also have some video to show you from the prison that day, when there were the -- these were the very last minutes, the very last pictures recorded by Mazen Dana. These are the pictures he took. You can see his camera falling to the ground. And his sound man talked afterwards about the very difficult circumstances of what happened.

(BEGIN VIDEO CLIP)

NAEL AL-SHYOUKHI, REUTERS CAMERAMAN: I looked. I saw the American soldiers around us. And I spoke to the -- screamed to the same soldier who shot him: Why did you shoot him? We are TV. You see him with the camera. Why do you shoot him? And I told him, you shot him. Please stop the bleeding. He's bleeding too much.

(END VIDEO CLIP)

STARR: Now, according to witnesses in the area, what apparently happened is, again, they were filming in the area. They got back in the car. When the tack convoy approached, they -- Mazen Dana stepped out of the car, it is reported, and began filming. And, of course, that's when this apparent mistake occurred.

Mr. Dana was an ethnic Palestinian. He had worked for Reuters for many years, Lou, mainly in the West Bank in the city of Hebron, where he had been beaten and attacked and had won international press awards for his work in that area. A Pentagon official said the matter remains under investigation, that it was a very high-stress situation for U.S. soldiers. They're going to endeavor, they say, to find out what happened and try and make sure it does not happen again -- Lou.

DOBBS: Tragic mistake, Barbara. Thank you.

The president is putting a time limit now on the deployment of U.S. troops in Liberia. What about that can you tell us?

STARR: Well, apparently, the president has given an interview to Armed Forces Radio and television network. And we are told, in that interview, he has now said that he expects U.S. forces to be out of Liberia by October 1, that they will be replaced by what is known as blue-helmeted U.N. forces.

This has been the strategy that the U.S. has been pursuing all the way along. They want to make sure that the peacekeeping effort in West Africa is really, truly led by the West African military forces, with the backing of the United Nations. U.S. Marines do remain on standby, of course, offshore Liberia at the moment, but the president saying they will be out of there within the next several weeks, four to five weeks, and replaced by U.N. troops -- Lou. DOBBS: And, of course, Barbara, the United Nations had said they needed at least until October to be able to put in a peacekeeping force on the part of the United Nations.

Barbara, thank you very much -- Barbara Starr from the Pentagon.

The Pentagon next month will carry out a joint naval exercise in the Coral Sea northeast of Australia. That naval exercise will focus on the interdiction at sea of arms and other material transported to and from North Korea. The timing of the Pentagon announcement is a not-so-subtle message to North Korea. Today's announcement comes one week before six-nation talks in China about North Korea's nuclear program begin.

Still ahead here tonight: It was a dramatic domino effect. And we're not talking about the blackout, but a record-breaking display. We'll continue to follow the progress of the world's biggest domino display.

Also ahead: The heat wave in France claims thousands of lives as the French government makes a shocking concession. Chris Burns will report live from Paris.

And America's "Shaky Foundations," a series of special reports this week on the dire state of this nation's infrastructure. Tonight, Bill Tucker on the national electric power grid, after the worst blackout in American history.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: A stunning admission from the French government today. It said as many as 5,000 people may have died from the 10-day heat wave. That's 2,000 more than the previous report. The crisis today cost the French surgeon general his job.

Chris Burns reports from Paris.

(BEGIN VIDEOTAPE)

CHRIS BURNS, CNN CORRESPONDENT (voice-over): Residents fill the dining room at a Les Efel (ph) retirement home in Paris, minus eight of their housemates, who perished in the heat wave. During 10 days of searing desert temperatures, it was too sweltering to eat here. One after the other, the elderly died in their rooms, too hot, too weak to move.

"Helpless," says 92-year-old Charlotte Helbert, when asked how she felt. An assistant manager, speaking off camera, says help from the government's health emergency declared a week into the heat wave was too little too late. She says it took sometimes several hours to get medical help, the result, a death toll estimated in ever-more staggering proportions. The government now acknowledges up to 5,000 could have died. Some estimate, it could go even higher. DOMINIQUE DISSARD, PFG FUNERAL SERVICES: And on the total, August, it could be between, I would say, 5,000 and 7,000 more than normal.

BURNS (on camera): This is an absolute catastrophe, isn't it?

DISSARD: Absolutely, yes.

BURNS (voice-over): With funeral homes overflowing, the government requisitioned this huge refrigerated warehouse in the sprawling Regis (ph) food storage depot south of the capital. About 150 bodies have been stored here so far. Six temporary funeral parlors were built inside to accommodate grieving families. The smell of death hangs heavy in the cold air.

(on camera): Officials say this warehouse has the capacity to take in 2,000 bodies. And even with the cooler weather in recent days, officials say it will take up to two more weeks to bury the dead they have now.

(voice-over): The conservative government of Prime Minister Jean-Pierre Raffarin is trying to fight off criticism the state-run health care system was overwhelmed. But as the estimated death toll mounted, the crisis took its first official casualty. Surgeon General Lucien Abenhaim, director of health services, resigned. Some officials say, enough of the blame game, that it's time to fix the system.

JUDITH BOURGEOIS, FRENCH RED CROSS: For some time, the government was reacting by trying to train more nurses and employ more nurses. But it's true that there is a problem.

BURNS: Little comfort for those who already lost loved ones and neighbors in a country that has long prided itself on its social services.

(END VIDEOTAPE)

BURNS: And little comfort for the leftist opposition, which is demanding the resignation of the health minister himself. And they're demanding a widespread investigation of exactly what happened and why -- Lou.

DOBBS: Chris, the role of health officials and the medical care centers there, in addition to the hospitals, 35-hour work weeks. Is there anything to the initial reports that there simply weren't enough people there because of the short hours?

BURNS: Absolutely. There's a lot to do with that, in fact, Lou, a combination, really.

August is the month when much of the country is on vacation and virtually shuts down. They do cut back on the number of employees there. But there also have been cutbacks by the government because of budget cutbacks. And the government also blames the previous socialist government for instituting that 35-hour work week that did reduce the number of employees working. So there's plenty of blame to go around. And this is where some people are saying, including the Red Cross, saying, look, put this polemics behind you, get together and fix the system now -- Lou.

DOBBS: And the weather, at least, high temperatures are abating, are they not?

BURNS: Absolutely.

I think the temperatures lately in the last few days have gotten down into the 80s, so still a bit toasty, but really tolerable. But this is a country that -- where, like in the rest of Europe, does not have air-conditioning for the most part. They're not used to those high temperatures that there might be in some parts of the United States.

So that came as a real shock. People were not prepared. A lot of people didn't even have fans. And that's been very, very difficult. I live in Frankfurt. I tried to buy a fan last week. They're all sold out -- Lou.

DOBBS: Well, Chris, better luck this week. And we thank you very much -- Chris Burns reporting from Paris.

Well, despite the hot temperatures this summer, California has avoided the energy problems, the crisis, that plagued it in the past. That state has made a number of changes since an energy crisis caused rolling blackouts just two years ago.

Casey Wian reports from Los Angeles.

(BEGIN VIDEOTAPE)

(BEGIN VIDEO CLIP, "THE TONIGHT SHOW WITH JAY LENO")

JAY LENO, HOST: But, see, it's really true what they say about California. See, all the popular stuff starts here first, and then gradually filters down to the rest of the country, like the power outages. We had them last year. Oh, now everybody's doing it.

(LAUGHTER)

LENO: Detroit, Cleveland, New York, now, they have to have one. It's so last year. Please.

(END VIDEO CLIP)

CASEY WIAN, CNN CORRESPONDENT (voice-over): Six days of rolling blackouts in early 2001 remain material for comedians. The state has made significant progress toward fixing its electricity problems.

Dozens of new plants capable of powering six million homes have been built. California is now expected to enjoy an electricity surplus for up to five years. Even Governor Gray Davis, struggling to defeat a recall, stemming in large part from his handling of the electricity crisis, went on "LARRY KING LIVE" while the Northeast was dark to tout his state's success.

GOV. GRAY DAVIS (D), CALIFORNIA: We're a lot better prepared than we were three years ago. We have a lot more capacity.

WIAN: California also has adopted incentives for conservation and diversification, including a mandate that 20 percent of the state's power come from renewable energy, such as hydro, solar, and geothermal, within 10 years. But weaknesses remain, and, as in the Northeast, they lurk mainly in the transmission grid. At least a half-billion dollars worth of upgrades are in progress.

RICHARD KATZ, CALIFORNIA ENERGY ADVISER: I don't think anywhere is immune from an act of God or immune from something like that happening. But where we're in better shape in California is, we have much more redundancy in our system, so we can isolate problems.

WIAN: Meanwhile, Californians continue to pay up to $45 billion in higher electricity rates. Federal energy regulators have recommended more than $3 billion in rebates from energy producers accused of market manipulation. Another $6 billion has been saved through renegotiated contracts.

(END VIDEOTAPE)

WIAN: Some of the money, such as a half-billion dollars owed by Enron, is gone for good. However, Southern California Edison customers this month saw their first rate decrease since the beginning of the electricity crisis three years ago -- Lou.

DOBBS: Casey, thank you very much -- Casey Wian from Los Angeles.

A different kind of energy crisis in Arizona today. In Phoenix, motorists are forming long lines at gasoline stations, after safety concerns shut down a pipeline that delivers much of that city's fuel. Gasoline is being delivered by truck from Tucson, but some motorists desperate for fuel are paying nearly $2.5 dollars for a gallon of regular, unleaded gasoline.

Coming up next: another sniper on the loose. Police in West Virginia are hunting a killer. Art Harris will have the report for us from Charleston, West Virginia.

Flashbacks to Florida: why the California recall election could be delayed over, you guessed it, punch card ballots. Bob Franken will have the report from Los Angeles.

And a young woman topples a two-decade-old record, more of our continuing coverage of dominoes.

Much more still ahead. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Still ahead: tracking a killer, three people dead. Police are looking for a sniper. Tonight, Art Harris is in Charleston, West Virginia. He will have the very latest for us on the manhunt -- that story and more coming up next.

(COMMERCIAL BREAK)

DOBBS: Authorities in West Virginia are looking for a dark- colored, full-size pickup truck in the investigation of a series of sniper attacks. Three people have been shot and killed, all of those people killed near convenience stores over the past eight days.

Art Harris reports.

ART HARRIS, CNN INVESTIGATIVE CORRESPONDENT: Police believe they're looking for someone local who knows the country roads, possibly a homegrown killer, but so far have only a vague description of an overweight white male in a dark pickup.

(BEGIN VIDEO CLIP)

DAVE TUCKER, KANAWHA COUNTY SHERIFF: Investigation has determined that we would like to find a dark-colored or maroon full- size truck, possibly an F-150.

(END VIDEO CLIP)

HARRIS: The mayor drives a large dark pickup. And so do at least two police officers. They're all too common here in rural West Virginia. So the question is, do police have too few clues or too many?

(BEGIN VIDEO CLIP)

TUCKER: We do have 100 leads. And every lead is being covered. During this, as I mention leads, there are suspects arrived through this investigation. And we are actively pursuing those.

(END VIDEO CLIP)

HARRIS: But no one is in custody yet. So the sheriff again warned people, when they go out to gas stations and convenience stores, to be careful, especially at night -- Lou.

DOBBS: Art, give us, if you will, some reference here. Are the three convenience stores at which those three people killed, are they near one another?

HARRIS: They are. One is about 10 miles apart. The other is about 12 miles. That's why they think it's probably someone who knows the roads, because he would have to get in and out. And a couple of them, Lou, are very narrow, two-lane blacktops that lead into a main artery. So these are places that you would have to know well.

DOBBS: At least initially, Art, authorities were saying they suspected a sniper. In each case, has the same caliber of bullet been used?

HARRIS: Ballistics match, they say, two of the shootings and possibly all three, Lou. What's interesting is, they have not found any shell casings at the scenes of the crime. So they're theorizing that the shot was taken from inside a vehicle -- Lou.

DOBBS: And I guess, Art, the next question is, is there some reason that the police have to suspect that it is not a single sniper in this case? Because they have gone to some lengths to say they suspect it's a sniper.

HARRIS: Well, they haven't yet ruled out connections between the victims. They're doing that as we speak, canvassing the neighborhoods on bicycles. And they will come back. And once they've ruled people out, they will determine if it's a lone gunman, a sniper who's acting randomly, or if the killer knows his victims -- Lou.

DOBBS: Art, thank you very much -- Art Harris reporting from Charleston, West Virginia.

In Texas, Baylor University officials are investigating an audiotape that apparently includes Baylor's former basketball coach encouraging players to lie in the case of Patrick Dennehy. On the audiotapes, Dave Bliss tried to coax players into telling police that Dennehy paid for his tuition by selling drugs. Bliss allegedly hoped that story would refute allegations that he had given Dennehy money to pay for Dennehy's tuition, that in violation of NCAA regulations.

Dennehy was found murdered last month. His former teammate, Carlton Dotson, is charged with his murder.

In California, the judge in the Scott Peterson murder trial will not allow cameras in court during a preliminary hearing next month. The Stanislaus County judge today said televising the hearing is not necessary to the trial process and would only hurt the victims' families. During the hearing, prosecutors will, for the first time, present evidence that they've collected against Peterson, who is charged with killing his wife, Laci, and their unborn son last Christmas Eve.

Summer is entering its final month. And there are fewer than expected cases of West Nile virus. We report that to you tonight, only two weeks after there were indications that this year could well be worse than last year's record pace. Colorado has been the hardest- hit state. At least seven people have died from West Nile virus. Almost 250 people in Colorado are known to have the virus. That's more than half of what is now the nationwide total. West Nile has killed four other people around the country, two of them in Texas, two others in Alabama.

The American Civil Liberties Union is asking a federal judge to postpone the California recall election. The ACLU claims voting machines in six California counties will not be updated before the scheduled October 7 election, and the ACLU says the old machines could disenfranchise millions of minority voters.

Bob Franken is live in Los Angeles and has the latest for us -- Bob.

BOB FRANKEN, CNN NATIONAL CORRESPONDENT: The latest is that Judge Steven V. Wilson, after an afternoon of arguments, has said that he will have a hearing by the day -- or, excuse me, a ruling by the day after tomorrow on whether he should delay the California recall.

The ACLU, as you pointed out, said that because there was a certainty almost that people in the six most populous counties of the state who still use the discredited punch card machines will perhaps not have their votes counted, that it would be unfair. A case of political equality, said the ACLU attorney, Mark Rosenbaum. But it's going to surprise just about everybody who watched if the judge rules in his favor. He continuously expressed skepticism, saying that most of the case law says that before discrimination, constitutional violations can be claimed, it has to be shown that the discrimination was intentional.

And the judge went on to say, "Can't it be argued that there is a greater interest in the citizens of California having their voices heard?" He said "there is seemingly gross dissatisfaction," which would probably be the least argued statement that the judge made all day. As for the claims that there is going to be a massive miscount on these particular counties, a representative of the state from the attorney general's office, said that that is strictly speculation.

As I said, the judge said he'd rule by Wednesday because he knows that there's going to be an appeal no matter which side loses. As the judge put it, somebody's going to be unhappy -- Lou.

DOBBS: Bob, the judge's concern here is for the -- and the ACLU's concern, rather, is for minority disenfranchisement. On what basis?

FRANKEN: Well, the Voting Rights Act -- there are actually two parts of this. The ACLU claimed a constitutional violation because some votes would be less equal than others. That is to say, a violation of the Equal Protection Clause.

The second part of the ACLU's claim is that under the Voting Rights Act minorities, people of color and people who are disadvantaged have to get equal treatment, and that as a result of the fact that they are concentrated in the six counties that it is also a violation of the Voting Rights Act.

So there's two parts of it. And the judge, as I said, expressed skepticism. I should point out that judges have this wonderful habit of sometimes not tipping their hand in the courtroom. But, as I said, he would surprise everybody because of his continuously skeptical questions to the ACLU's attorney and virtually no questions for the other side.

DOBBS: And these punchcard ballots have been used in California for how long?

FRANKEN: They've been used for just about as long as they've been available. Of course, we know they became discredited during the Florida election. This very same judge ruled that by the March election they needed to be replaced. However, the judge said that was only part of a consent decree. There should not be too much reliance on that, that what he ruled about the March election did not necessarily apply to the election that would come up October 7. DOBBS: It's tempting to say almost only in California, but of course, two years ago we were saying only in Florida.

Bob Franken, thank you very much.

Tonight's quote comes from a California gubernatorial candidate.

"If some of the governor's minions would stop trying to undercut my efforts, we would have the possibility of having a win-win position on the ballot."

That from Lieutenant Governor Cruz Bustamante, who is, by the way, leading in a recent poll over Arnold Schwarzenegger and the other candidates.

When we continue, America's, "Shaky Foundations." Our series of special reports this week on the nation's infrastructure in jeopardy. Bill Tucker begins our series with -- what else? -- electricity. And Phillip Harris, the chairman and CEO of PJM Interconnection, the company that controls the electricity for much of the Mid-Atlantic region, joins us to tell us how his organization staved off a blackout.

And living off the grid. Alternatives to major energy sources seemed like a pretty good idea as recently as last Thursday and Friday. Jan Hopkins will report on the possibilities.

And world domination. Hundreds of thousands of dominoes. You're watching them topple a 19-year-old record. We're going to watch them throughout the hour as we continue.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Tonight, we begin our series of special reports on this country's "Shaky Foundations."

The American Society of Engineers gives the country's roads, communications and energy infrastructures all failing grades. That means the world's only superpower is now operating at a third world level.

Tonight, we begin our series with a look at the infrastructure of electricity.

Bill Tucker reports.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNNfn CORRESPONDENT (voice-over): Thee national power grid is a myth. Instead, there's a patchwork of interconnecting electrical utilities which was never designed or intended to supply a national thirst for electrical power. The grid was originally just a connection between neighboring utilities allowing them to share power. GOV. BILL RICHARDSON (D), NEW MEXICO: It's a very old system. It's an antiquated system. It's a system that has not had refurbishing in a long time.

TUCKER: In fact, it's been neglected. From 1979 through 1999, electrical demand escalated while investment in electrical transmission infrastructure fell by half.

More than two years ago, the North American Electric Reliability Council warned of the danger ahead. The Bush administration warned of overtaxed transmission lines in its energy plan. The warnings went unheeded.

CLARK GELLINGS, ELECTRIC POWER RESEARCH INSTITUTE: Now is the time to raise the issue. I think it's also time to start looking at the power delivery system we have in the United States and really getting serious about both upgrading it and modernizing it. Most every industry in this country has revolutionized itself through the use of communications sensors and computational ability except the U.S. power industry.

TUCKER: There are a myriad of excuses why the upgrades haven't happened. Cost is the No. 1 reason -- $50 billion over 10 years is the generally agreed upon number. Utilities are reluctant to spend that money because of rules limiting their rate of return on their investments. But the bottom line is clear.

SPENCER ABRAHAM, ENERGY SECRETARY: Well, the companies pass those costs along, as you well know. And so the question is, Does it get paid for out of tax dollars or does it get paid for as part of a system? And the system is designed, needs to be designed in a way that provides sufficient revenue to do that.

TUCKER: The power companies would also like to see the federal government step in on a process known as the siting (ph) process. Having federal regulators make final rulings where power transmission lines can go rather than fighting with local communities for years over projects that may or may not be constructed.

Everyone likes for their TV and refrigerator to work. No one wants a tower in their backyard.

BILL BRIER, EDISON ELECTRIC INSTITUTE: The whole attitude of electricity is it's out of sight out of mind. You flip a switch, we're very, very reliable, 99 percent. And so everybody's happy until, you know, something like this happens.

(END VIDEOTAPE)

TUCKER: Now, there is technology being developed which will allow lines to increase the amount of electricity they can carry, but the technology of transmission is hard pressed to keep up with our hunger for power. Demand is expected to rise by 50 percent over the next 22 years -- Lou.

DOBBS: Bill, thank you very much. Bill Tucker. Later this week, in our series of special reports, "Shaky Foundations":

(BEGIN VIDEOTAPE)

DOBBS (voice-over): Tomorrow night, drinking water endangered. There's not enough water, and it isn't always safe to drink.

And our nation's dams. Thousands are crumbling. Can anything be done?

Danger on wheels. The nation's highways and rails.

America's great disconnect. How reliable are our telephones, computers, and the Internet?

All part of our series of special reports this week, "Shaky Foundations."

(END VIDEOTAPE)

DOBBS: And tonight's thought is on something we've learned from the blackout.

"Great emergencies and crises show us how much greater our vital resources are than we had supposed." That from psychologist and philosopher William James.

When we continue -- one major power company managed to keep the lights on for millions of its customers in the Eastern Seaboard. Bill Harris, the chairman and CEO of PJM, will tell us how. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Our next guest is head of a power pool that controls electricity in much of the eastern part of the country. Phillip Harris is the chairman and CEO of PJM Interconnection, who tonight joins us from Valley Forge, Pennsylvania. Good to have you with us.

Now, your organization, the regional transmission organization, was able to stop the spread of the blackout to your customers across, what is it, six, seven western states.

How were you able to do that?

PHILLIP HARRIS, CHMN & CEO, PJM INTERCONNECTION: Well, I think it gets back to the history here. The public policy makers, the states, the governors back when we were designing our system in the early '90s, decided that we had to have a reliable system. So we developed regional planning protocols that allowed us to make the investments necessary to continue the upgrades. We also decided that we would do a lot of planning, rehearsals, drills, scheduling, and so forth to be able to prevent the very thing that happened.

DOBBS: Well, there are some people tonight in Detroit, New York, Connecticut, Ohio, they're hearing Phillip Harris talk and are saying, well, I hope to goodness that our people are also rehearsing those problems and preparing for crisis.

Do you believe they have been?

HARRIS: Well, they have. I think one of the problems we have is the asymmetry in the rules. Even though everybody has a standard, not everybody applies the same protocols. In our region we realize electricity's like a giant ecological system. One thing affects everything else. So we plan regionally. We rehearse regionally over a broad regional area. We have procedures drills for testing relays and all of these sorts of devices that would enable to you sectionalize and isolate a problem when it occurs.

DOBBS: Now, Phil, as you know, immediately the Canadians were blaming the United States and specifically the Niagara Mohawk grid. Then there was some blame of officials in Canada on the part of some other electricity companies in the Midwest. Now we're focusing on three or four power lines in Ohio.

Do you know, do you have a strong suspicion as to what caused this blackout?

HARRIS: Well, we were going to get some good indications, but really, it isn't the cause. Something fails on the electrical grid every day. A transmission line fails, a generating plant fails. The question here is why did it spread, why didn't it isolate itself and sectionalize itself just to the local area that was having the problem? It's the cascading effect that needs to have a lot of real hard questions answered and some good questions to dig into this, and it's going to take time. There are just thousands of bits of information that have to be analyzed and looked at, and that's going to take days.

Well, you told us your organization manage to stave off and to staunch, if you will, all of the problems of this blackout that would have taken down your system.

The question is, I guess, really is how much do you believe that the national grid is at risk here given the problems we saw that began last Thursday?

HARRIS: Well, I think that there are some very serious problems. I think the problem is the energy policy passed in 1992, and we're 11 years now still in the transition. Congress has to step up. We have to decide where the jurisdictional issues lie. We need to have clean bills, allow those in public policy decision-making roles to address these tough public problems. We need to have regional planning protocols so you can plan over a large region. It is an ecological system. One thing affects everything else, as we saw with this blackout. So we need to be able to look at things broadly and regionally so we can optimize the right resources. And we need to have certainty so that people can make some investments into this transmission system.

DOBBS: We've heard numbers as large as $50 billion. You've just heard the energy secretary start talking about the issues as to whether we pay for that as taxpayers or we pay for that as consumers.

What do you see as the solution?

What do you see as the cost?

HARRIS: I don't think it's that high. If we look at the Mid- Atlantic and the East Coast area we serve from Washington, D.C., Philadelphia, it is a tremendous vital and important area. What we've seen is we've made about $800 million of transmission investment over the past six years. Most of that investment is into upgrades, substation upgrades and equipment upgrades. And what we're finding is there's no need for a major transmission line in this area. And I dare say that's true elsewhere. Now, while there are some key lines that need to be made, there's a tremendous value proposition from just upgrading existing equipment. There's also a real need to increase our information technologies. Electricity travels at the speed of light, and information technologies can help us do a much better job.

DOBBS: And the big question is now is it time for reregulation of the electrical industry -- the electricity industry in this country?

HARRIS: Well, again, the critical test is the test of use, and for six years now we've been running competitive wholesale markets. And the facts are saying that our grid is more reliable now than it was under the old regime of a regulated market. And if you look at certainly the events of last week, we operated competitive markets, the prices stayed stable, and was able to stop a blackout. Again, I think the test use shows competitive markets, good regional planning will work for the value of the citizens of this country.

DOBBS: Phil Harris, we thank you very much for being with us here.

HARRIS: Thank you.

DOBBS: When we continue, more and more Americans are choosing alternative energy sources wherever they can. Jan Hopkins reports on those who were off the grid during the worst blackout in our country's history. Stay with us.

(COMMERCIAL BREAK)

DOBBS: During the blackout, some people still had lights. They had power and cool air circulating through their homes. Jan Hopkins now reports on alternatives to the grid.

(BEGIN VIDEOTAPE)

JAN HOPKINS, CNNfn CORRESPONDENT (voice-over): While the rest of New York City was dark Thursday night and residents sweltered in the heat, the people who live in the 2,800 apartments at the Penn South complex in Manhattan were comfortable.

MATTHEW ANTON, RESIDENT: We were just fine right here at Penn South. We had air conditioning, we had lights. The elevators worked. Lights were on in the lobby, air conditioning was on in the lobby.

HOPKINS: Penn South has been off the power grid since the 1980s, the complex deciding to go it alone.

BRENDAN KEANY, GENERAL MANAGER: We were purchasing electric from ConEd, and it was -- became very, very expensive. So we made the decision to get off the ConEd grid and generate our own power. And we've been doing it successfully since 1986.

HOPKINS: Last year, the complex saved half a million dollars by generating its own power supply. Others around the country are beginning to take note.

PROFESSOR GABE MILLER, NEW YORK UNIVERSITY: It started a few years ago, especially in California, during the energy crisis there. But it's really spread around the country.

HOPKINS: Equity Office Properties, which owns 700 office buildings around the country, is installing special power generation equipment at 12 of its buildings, so it doesn't have to depend on the grid for power anymore. And homeowners took it upon themselves to stock up on generators at places like Costco and Home Depot.

(on camera): Off-grid power generation is itself a business. The electric utility in Detroit has a subsidiary that is making equipment for factories and buildings. Several Home Depot stores, for example, are customers. They have their own power systems, and that allowed them to be open in the blackout -- Lou.

DOBBS: Proving it works. All right. Jan, thank you very much.

Well, after the blackout apparently a lot of people went to the movies. At the box office this weekend, two of Hollywood's most notorious villains slashed their way to number one. "Freddy Vs. Jason" shocked audiences and executives alike. The low-budget teen thriller grossed $36 million in box office receipts. New Line Cinema spent about $30 million to make the movie. "S.W.A.T." dropped to second place. "Open Range," "Freaky Friday" and "Uptown Girls" followed over the weekend.

When we continue, we'll take a look at some of your thoughts on the power failure, who's responsible and who's not. And we're watching thousands of dominoes knock over a world record. You don't want to miss that. Stay with us.

(COMMERCIAL BREAK)

DOBBS: On Wall Street, stock prices climbed today. The Dow Jones Industrials tonight is at a 14-month high, in fact. The Dow today gained almost 91 points. The Nasdaq rose 37, almost 37.5 points. The S&P up just over 9 points. Christine Romans is here with the market and a pretty good day.

CHRISTINE ROMANS, CNNfn CORRESPONDENT: It really was. Industrials really ruled this rally here today. The Dow was the best performer... DOBBS: Industrials?

ROMANS: Industrials. Can you believe it? The S&P reaching as high as 1,000 today. So far in what is typically, they keep telling us, Lou, the worst month of the year for stocks, it's actually been modestly strong. The Dow, S&P and the Nasdaq are all higher this month.

There was a power play for several of the Dow stocks. Turbines maker GE rose almost 4 percent. Honeywell and Caterpillar both make diesel generators. Both rose about 3 percent. In fact, several of the industrials on the Dow hit multi-year highs today. And the overall number of new highs on the Big Board perked up, 223 highs, only 19 lows.

The retailers rallied after strong lows earnings, and bullish comments about August sales from Wal-Mart. Lou, Wal-Mart sales in the northeast were quite strong despite the blackout. Same for Target.

But the blackout did hurt FirstEnergy. It tumbled 9 percent. It was the fourth most active stock at the Big Board on 10 times more volume than usual.

OK. So Lou, now that the blackout is over, watch out for the companies that use it as an excuse for higher costs, poor sales. Some companies undoubtedly will have legitimate, you know, reasons for the blackout to hurt them, but remember SARS? After a while on Wall Street we joked that SARS really stood for "sudden acute revenue shortfall," because companies that had no business warning about SARS were.

DOBBS: A convenient rationalization, if you will, at hand. Christine, thank you very much.

ROMANS: You're welcome.

DOBBS: Christine Romans.

Well, let's take a look at some of your thoughts. Hugh Gray of Madison, Alabama wrote to say: "Trouble ahead? You bet. This latest outage demonstrates the need for the government to immediately prioritize major reconstruction projects to supply the overtaxed infrastructure. National security should be the priority."

Matt of Huntington Beach, California wrote: "Make these privately profitable utilities pay for their own mistakes, upgrades, irresponsibility. These over-deregulated companies will just turn around and bilk us for unreasonable profits like in California. Let me coin the phrase "re-regulation."

William Hamilton of Holiday, Florida said: "Imagine if GM, Ford and Chrysler announced they needed to upgrade to be able to build their 2004 autos and that they wanted the American people to pay for the new assembly lines."

Gary Sterling of Virginia wrote in with his own poll suggestion. He asked that "Would you be willing to pay increased taxes to improve the power grid? No. We have already paid for the power. Why should we pay more taxes to bail out another corporate mishandling of the balance sheets?"

Jim Guelde of Meeteetse, Wyoming, and I hope that's close to the pronunciation, said: "What's all the fuss about being without electricity for a few days? Hell, the Iraqi people have been doing without it for years. Are they made of stouter stuff than Americans?" You know the answer to that.

Karen Dicker of Los Angeles wrote: "How can the USA improve its failing infrastructure when the federal government spends our money, such as $1 billion a month on building Iraq's, Liberia's, and letting jobs go away from the USA?"

Steve French of Michigan asks: "If nobody knows how the blackout started, why is everybody so sure it wasn't terrorism?"

And Pauline Davis of Manteo, North Carolina wrote: "I think the blackout could be called divine intervention. Since it happened, I haven't heard Arnold Schwarzenegger's or Kobe Bryant's name mentioned, and that's wonderful."

We love hearing from you. Send us your thoughts. Loudobbs@cnn.com.

And finally tonight, a 24-year-old Chinese woman toppled a 19- year-old record for the longest solo domino display. Molly Hai-wa (ph) set up and tipped over more than 300,000 of these dominoes. It took her nearly seven weeks to set up the dominoes. And as you probably noticed throughout this hour, it took them about four minutes to knock them all down.

That's our show for tonight. For all of us here, good night from New York. "LIVE FROM THE HEADLINES" is next.

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