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CNN Sunday Morning

Interview With Vijay Vaitheeswaran

Aired August 17, 2003 - 07:30   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.


KYRA PHILLIPS, CNN ANCHOR: Well, let's talk now about the lessons learned from this blackout and what needs to be done to avoid another massive outage.
Vijay Vaitheeswaran is the author of a forthcoming book, "Power to the People." He's an energy correspondent for "The Economist" magazine. He joins us this morning from New York.

Good morning, V.J.

VIJAY VAITHEESWARAN, THE ECONOMIST: Good morning.

PHILLIPS: Well, this was quite a wake-up call, wasn't it?

VAITHEESWARAN: It certainly was. Those are the words President Bush used in talking about the need to modernize the electricity grid. And that experts that have been looking at this have been saying this for years, but I think every American would agree, we need to do something about this problem.

PHILLIPS: Well, you say, you know, this has been talked about for so many years. It really has. Even what happened in California with the deregulation, I mean, this is something that's always been on our minds. We're always running the stories about these alternative measures. And now it takes something like this finally get the political system moving again. It always seems to happen this way, doesn't it?

VAITHEESWARAN: Absolutely. In a sense, what happened in California was the alarm clock going off for the first time. Unfortunately, politicians hit the snooze button and went back to sleep. This time, we don't have that option.

PHILLIPS: All right, so what is going to happen this time? Now that it's at the forefront, it's on the political agenda, what are some of the next steps we're going to see?

VAITHEESWARAN: Certainly in the short term, we're going to get a technical answer to what happened and how and exactly why the system failed. We're getting a pretty good clue about the causes in Ohio and some of the nuts and bolts of why the system failed.

But I think the engineers and the technical experts need to make their decisions on exactly why it was such a catastrophic failure first.

PHILLIPS: Well...

VAITHEESWARAN: Well, I would say even whatever they say, it's already clear that Congress is going to be weighing in when it comes back from recess with some energy legislation. And that's really the longer term solution.

PHILLIPS: Let's talk about some of the long term solutions. I mean, you wrote the book, Vijay, "Power to the People." There have been so many scientists, inventors, these types, engineers, talking about answers or solutions and alternative methods. What are some possibilities now?

VAITHEESWARAN: Sure. I mean, in essence, this was a result of the vulnerability that already existed and has for over a decade. The America's -- transmission grid, it's amazing in one sense. It makes our modern society possible. But in another sense, we've neglected it for a couple of decades. In the last 10 years or so, we spent less investing in updating and upgrading our grid than a small country like Britain did during the same time, after adjusting for the smaller size of that country.

And the reason, you ask well, why is that? And the reason is that when Britain did electricity deregulation, thanks to Margaret Thatcher, they got it right. They got the clear rules of the road. And investors were told, look, you invest in the grid, we're going to give you incentives to make lots of money back and to innovate. And reliability was given a special premium.

In the U.S., we did it exactly the opposite. As California and the power crisis showed, we have sort of a halfway house, where the rules aren't very clear. And investors and utilities don't have a very strong incentive to put money into upgrading the grid. And that's the problem. It's a political problem. We're caught in kind of a halfway house in terms of deregulation.

PHILLIPS: Everything comes down to politics and money, Vijay.

VAITHEESWARAN: Absolutely.

PHILLIPS: Vijay Vaitheeswaran -- I hope I said that correctly.

VAITHEESWARAN: Yes, that's fine.

PHILLIPS: Very good. All right. Pick up his book, "Power to the People" or check out his articles in "The Economist." Thank you so much, Vijay.

VAITHEESWARAN: It's a pleasure.

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







Aired August 17, 2003 - 07:30   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: Well, let's talk now about the lessons learned from this blackout and what needs to be done to avoid another massive outage.
Vijay Vaitheeswaran is the author of a forthcoming book, "Power to the People." He's an energy correspondent for "The Economist" magazine. He joins us this morning from New York.

Good morning, V.J.

VIJAY VAITHEESWARAN, THE ECONOMIST: Good morning.

PHILLIPS: Well, this was quite a wake-up call, wasn't it?

VAITHEESWARAN: It certainly was. Those are the words President Bush used in talking about the need to modernize the electricity grid. And that experts that have been looking at this have been saying this for years, but I think every American would agree, we need to do something about this problem.

PHILLIPS: Well, you say, you know, this has been talked about for so many years. It really has. Even what happened in California with the deregulation, I mean, this is something that's always been on our minds. We're always running the stories about these alternative measures. And now it takes something like this finally get the political system moving again. It always seems to happen this way, doesn't it?

VAITHEESWARAN: Absolutely. In a sense, what happened in California was the alarm clock going off for the first time. Unfortunately, politicians hit the snooze button and went back to sleep. This time, we don't have that option.

PHILLIPS: All right, so what is going to happen this time? Now that it's at the forefront, it's on the political agenda, what are some of the next steps we're going to see?

VAITHEESWARAN: Certainly in the short term, we're going to get a technical answer to what happened and how and exactly why the system failed. We're getting a pretty good clue about the causes in Ohio and some of the nuts and bolts of why the system failed.

But I think the engineers and the technical experts need to make their decisions on exactly why it was such a catastrophic failure first.

PHILLIPS: Well...

VAITHEESWARAN: Well, I would say even whatever they say, it's already clear that Congress is going to be weighing in when it comes back from recess with some energy legislation. And that's really the longer term solution.

PHILLIPS: Let's talk about some of the long term solutions. I mean, you wrote the book, Vijay, "Power to the People." There have been so many scientists, inventors, these types, engineers, talking about answers or solutions and alternative methods. What are some possibilities now?

VAITHEESWARAN: Sure. I mean, in essence, this was a result of the vulnerability that already existed and has for over a decade. The America's -- transmission grid, it's amazing in one sense. It makes our modern society possible. But in another sense, we've neglected it for a couple of decades. In the last 10 years or so, we spent less investing in updating and upgrading our grid than a small country like Britain did during the same time, after adjusting for the smaller size of that country.

And the reason, you ask well, why is that? And the reason is that when Britain did electricity deregulation, thanks to Margaret Thatcher, they got it right. They got the clear rules of the road. And investors were told, look, you invest in the grid, we're going to give you incentives to make lots of money back and to innovate. And reliability was given a special premium.

In the U.S., we did it exactly the opposite. As California and the power crisis showed, we have sort of a halfway house, where the rules aren't very clear. And investors and utilities don't have a very strong incentive to put money into upgrading the grid. And that's the problem. It's a political problem. We're caught in kind of a halfway house in terms of deregulation.

PHILLIPS: Everything comes down to politics and money, Vijay.

VAITHEESWARAN: Absolutely.

PHILLIPS: Vijay Vaitheeswaran -- I hope I said that correctly.

VAITHEESWARAN: Yes, that's fine.

PHILLIPS: Very good. All right. Pick up his book, "Power to the People" or check out his articles in "The Economist." Thank you so much, Vijay.

VAITHEESWARAN: It's a pleasure.

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