Nov. 19 (Bloomberg) -- FirstEnergy Corp.'s failure to adequately monitor its electric transmission system or to keep trees from touching power lines led to the largest blackout ever in North America, a government report showed.
The Akron, Ohio-based utility owner neglected to stabilize its power system before the Aug. 14 blackout and didn't notify nearby utilities of a looming emergency, a U.S.-Canada task force said in its report. The blackout spread from Ohio to New York, knocking out power in an area with 50 million electricity customers and costing up to $10 billion.
The 134-page report published today by U.S. Energy Secretary Spencer Abraham and his Canadian counterpart, Herb Dhaliwal, cited four violations by FirstEnergy of standards for power- system reliability and said the regional transmission group overseeing FirstEnergy's lines failed to detect crucial failures or to alert others.
``This blackout was largely preventable,'' Abraham said at a press conference in Washington, D.C. ``However, once the problem grew to a certain magnitude, nothing could have been done to prevent it from cascading out of control.''
Three FirstEnergy power lines were short-circuited and went out of service when they came in contact with overgrown trees, Abraham said. The company's computer system for monitoring power lines wasn't working properly, which made operators unable to respond to events that escalated into a cascading blackout over eight U.S. states and parts of Ontario, he said.
FirstEnergy spokesman Ralph DiNicola wasn't immediately available for comment.
No Enforceable Standards
The absence of enforceable reliability standards for the nation's power-transmission system may limit the ability of the government to impose punishments for violations of the industry's voluntary rules, Abraham said.
Mandatory standards, which are a feature of the U.S. energy policy bill passed by the House of Representatives yesterday, would have helped prevent the blackout, Abraham said.
Shares of FirstEnergy fell 64 cents, or 1.9 percent, to $33.35 at 3:06 p.m. in New York Stock Exchange composite trading. The stock plunged 9.3 percent on Aug. 18, after the company said four of its high-voltage lines and a power plant failed in the hours before the blackout. Since then, they have risen almost 21 percent.
FirstEnergy 6.45 percent notes maturing in November 2011 fell 1.09 cents on the dollar to $1.064, according to Trace, the bond price reporting service of the National Association of Securities Dealers. The yield rose 1.6 basis points to 5.45 percent. A basis point is 0.01 of a percentage point.
Midwest Failure
The Midwest Independent Transmission System Operator, which was responsible for helping to stop the spread of the failures, was cited for failing to notify system operators in other regions of potential problems, and for having inadequate monitoring capability.
``MISO was hindered because it lacked clear visibility, responsibility, authority and ability to take the actions needed in this circumstance,'' the task force said in the report.
At least 263 power plants with more than 531 individual generating units shut down during the blackout, according to the report.
FirstEnergy may have prevented the blackout from spreading had it cut supplies of at least 1,500 megawatts, or enough to supply about 1.2 million homes, around Cleveland and Akron, at 3:46 p.m., the report said.
The investigation found ``no evidence'' that Canadian utilities contributed to the blackout, Dhaliwal said at the press conference. ``The cause was in Ohio,'' he said.
There was no evidence of sabotage or foul play as a cause for the blackout, Abraham said.
