Power Grid Politics

In the wake of the great blackout of 2003, there are powerful worries that it could happen again. But regional conflicts and fear about electricity deregulation could prevent quick action on improving an antiquated and fragile transmission system.

"Utility companies don't face mandatory reliability standards; in other words they can overload without penalties," said New Mexico Gov. Bill Richardson, former Energy Secretary in the Clinton administration.

Critics say there were calls to update the aging power grid several years ago and to create rules for those who operate it. An energy plan was sent to Congress back in 2001, but no action was taken, reports CBS News Correspondent Scott Rappaport.

"Unfortunately it takes these kinds of crises to bring about productive action. I hope now we'll have Congressional action," said the current Energy Secretary, Spencer Abraham.

Energy experts have pinpointed the culprit that put 50 million people in the dark last week: three faulty transmission lines at an Ohio plant.

But power officials still aren't sure why the problems in Cleveland weren't contained and why the outage spread to seven other states, and into Canada.

"You can't have a city like New York depending on far away energy, energy produced as far away as Ohio, and allow one state to have weaker standards than another," said Rep. Billy Tauzin, R-La., chairman of the House Energy and Commerce Committee.

While utilities and state governments are stuck in a power struggle over how to prevent massive outages in the future, energy officials admit the ultimate fix will likely come at the cost of the consumer.

"Ratepayers obviously will pay the bill because they're the ones who benefit," Abraham said on CBS' "Face the Nation." He said ways must be found to give greater financial incentive to companies to invest in power lines.

Some estimates have put the cost of bringing the power grid up to date as high as $56 billion.

Many energy experts believe the issue is more than building new lines and that management of the transmission system must be overhauled and streamlined. Others argue the whole idea of a competitive market in a commodity such as electricity should be re-examined because it puts too much strain on the power grid as electricity is traded around the country.

These issues are unlikely to be resolved soon.

Acknowledging the pitfalls, Rep. John Dingell of Michigan, senior Democrat on the House Energy and Commerce Committee, suggested that Congress push some essential things such as requiring reliability rules and deal with the other issues later. "My old daddy used to say 'kill the closest snake first,'" he told "Fox News Sunday."

The debate is likely to become muddled in conflict among regional interests, a reluctance of states to surrender power to the federal government, and differences between warring factions within the electric power industry itself.

For example, Congress has been reluctant to give the Federal Energy Regulatory Commission, or FERC, authority to take private land to build high-voltage power lines. Opponents of such action, including many western Republicans, see it as a surrender of a state's authority to Washington.

"We've got to do something about the right-of-way problem. Nobody wants a transmission facility in their back yard," said Tauzin.

When FERC Chairman Pat Wood, a Republican appointed by President Bush, pushed a proposal to create a system of regional organizations that would manage the grid system, using uniform standards established in Washington, many lawmakers rebelled. They argued it would create a nationwide "one-size-fits-all" system.

The administration called for a three-year delay in the FERC plan, citing strong opposition from Southern states, who view it as an attempt to impose electricity deregulation and force higher electricity prices.

It "would mandate and force down the throats of regional areas of the country a federal approach to deregulation of the marketplace," Abraham said.

Wood has argued that his plan would for provide better management of the power system and allow electricity to flow more easily throughout the country. The cascading nature of the blackout last week provides "an object lesson" that the power grid needs regional coordination and planning and national operating rules, he said.