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Interview With Adrian Moore

Aired August 15, 2003 - 15:09   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.


JOHN KING, CNN ANCHOR: Let's talk more now about the possible causes of this blackout with Adrianne Moore.
He studied power problems, as executive director of the Reason Public Policy Institute. He joins us now from Los Angeles.

Sir, from everything you've heard, any sense of how this happened?

ADRIAN MOORE, REASON FOUNDATION: Well, we still don't know exactly what the single cause was that set off this chain reaction. What we do know is that something broke somewhere in the grid and the systems that were in place that are supposed to prevent it from spreading like this did not work. So one level of problem we've got is our safety systems that are -- isolate these kind of problems didn't work. And as the press comments we just heard revealed, we also have a lot of questions about why the grid is so overstressed and vulnerable to these kind of problems.

KING: But why is the grid so overstressed, and why, if the president says he's been talking about this, and if his predecessor, administration, the energy secretary, Bill Richardson, says he's been talking about this, why has nothing been done?

MOORE: Well, it's a slow process. We have actually been moving in the right direction, we have just been moving very slowly. For about 15 years, we've been slowly deregulating the electricity markets in the United States to go from the old very centralized almost Soviet-style regulated monopolies to a competitive electricity market, where people are going to be able to pick who they buy their electricity from and companies are going to compete to provide electricity.

Since we're only halfway, we have this kind of mutated monster, where we're neither fish nor foul, and that makes us very vulnerable. And the biggest problem in this particular case is that, during this transition, the federal regulators did not adjust the incentives for investing in transmission. So the rate of return that a company could get for building new power lines didn't adjust when the economy was booming. You can make so much more money putting that money in the market, the stock market, than you could by doing power lines. No surprise, they invested in the stock market instead of in power lines.

KING: But Adrian Moore, people say the system overtaxed, the system overstressed, overcapacity. Are we talking about what the average homeowner might know, at least in an old home? You are pluging in the toaster oven and the hair dryer at the same time, or is this something much more traumatic?

MOORE: It's much more traumatic. When we're talking about the transmission grid that goes across state lines and moves electricity from region to region, we're using a lot more electricity. We heard the numbers just a few minutes ago that demand for electricity is growing twice as fast as our transmission capacity to move it around. And eventually, you run into trouble when that happens.

We're not building the infrastructure fast enough because we haven't adjusted the incentives to build the infrastructure as fast as we change the structure of the marketplace. So people don't know that. They don't know when they plug two things that they are creating a problem, because it doesn't affect their electricity bill or the cost they pay.

KING: Adrian Moore, one quick question. Everyone says this was not a terrorist act, but did the bad guys learn anything about the vulnerability of our system yesterday?

MOORE: Right. Yes, I'm afraid they did. I mean, it does show that our systems to isolate these kind of problems don't work as well as they should, and we are going to have to jump on that. And it also shows that, while everybody is very quick to say it's not a terrorist attack, they don't know exactly what caused it. So they really don't know that's the case, even though I don't think that any of us believe that it is.

KING: More study to be done there, of course, by the federal and state and local governments. Adrian Moore, we need to end it there today. Thank you very much for joining us on LIVE FROM.

MOORE: Thank you.

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







Aired August 15, 2003 - 15:09   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JOHN KING, CNN ANCHOR: Let's talk more now about the possible causes of this blackout with Adrianne Moore.
He studied power problems, as executive director of the Reason Public Policy Institute. He joins us now from Los Angeles.

Sir, from everything you've heard, any sense of how this happened?

ADRIAN MOORE, REASON FOUNDATION: Well, we still don't know exactly what the single cause was that set off this chain reaction. What we do know is that something broke somewhere in the grid and the systems that were in place that are supposed to prevent it from spreading like this did not work. So one level of problem we've got is our safety systems that are -- isolate these kind of problems didn't work. And as the press comments we just heard revealed, we also have a lot of questions about why the grid is so overstressed and vulnerable to these kind of problems.

KING: But why is the grid so overstressed, and why, if the president says he's been talking about this, and if his predecessor, administration, the energy secretary, Bill Richardson, says he's been talking about this, why has nothing been done?

MOORE: Well, it's a slow process. We have actually been moving in the right direction, we have just been moving very slowly. For about 15 years, we've been slowly deregulating the electricity markets in the United States to go from the old very centralized almost Soviet-style regulated monopolies to a competitive electricity market, where people are going to be able to pick who they buy their electricity from and companies are going to compete to provide electricity.

Since we're only halfway, we have this kind of mutated monster, where we're neither fish nor foul, and that makes us very vulnerable. And the biggest problem in this particular case is that, during this transition, the federal regulators did not adjust the incentives for investing in transmission. So the rate of return that a company could get for building new power lines didn't adjust when the economy was booming. You can make so much more money putting that money in the market, the stock market, than you could by doing power lines. No surprise, they invested in the stock market instead of in power lines.

KING: But Adrian Moore, people say the system overtaxed, the system overstressed, overcapacity. Are we talking about what the average homeowner might know, at least in an old home? You are pluging in the toaster oven and the hair dryer at the same time, or is this something much more traumatic?

MOORE: It's much more traumatic. When we're talking about the transmission grid that goes across state lines and moves electricity from region to region, we're using a lot more electricity. We heard the numbers just a few minutes ago that demand for electricity is growing twice as fast as our transmission capacity to move it around. And eventually, you run into trouble when that happens.

We're not building the infrastructure fast enough because we haven't adjusted the incentives to build the infrastructure as fast as we change the structure of the marketplace. So people don't know that. They don't know when they plug two things that they are creating a problem, because it doesn't affect their electricity bill or the cost they pay.

KING: Adrian Moore, one quick question. Everyone says this was not a terrorist act, but did the bad guys learn anything about the vulnerability of our system yesterday?

MOORE: Right. Yes, I'm afraid they did. I mean, it does show that our systems to isolate these kind of problems don't work as well as they should, and we are going to have to jump on that. And it also shows that, while everybody is very quick to say it's not a terrorist attack, they don't know exactly what caused it. So they really don't know that's the case, even though I don't think that any of us believe that it is.

KING: More study to be done there, of course, by the federal and state and local governments. Adrian Moore, we need to end it there today. Thank you very much for joining us on LIVE FROM.

MOORE: Thank you.

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