In their final report on the 14 August blackouts in the northeastern USA investigators stated that the power industry’s disregard of rules intended to ensure the reliable flow of electricity ‘contributed significantly’ to the blackout in eight US states and Canada which caused between $4 billion and $10 billion worth of damage.

Another major outage could happen unless reliability regulations, with clear penalties for violators, are put in place, according to the 238 page report issued by the US-Canada Power System Outage Task Force. Among 46 necessary actions it recommended more independence for the private industry-sponsored group (NERC) that writes voluntary requirements for power grids. “The report makes clear that this blackout could have been prevented and that immediate actions must be taken in both the United States and Canada to ensure that our electric system is more reliable,” energy secretary Spencer Abraham said.

An interim report in November from the task force outlined many problems, but Congress has so far failed to address them. The Bush administration and many lawmakers agree on the need to end the industry’s regulation of itself but attempts to have the government take the lead in imposing reliability standards have become casualties of broader disagreements over energy legislation.

This concluding report said that none of the information received during the past four months had changed the validity of its interim findings in November, namely that the blackout should have been prevented; that it originated with power line problems in Ohio; and that the outages rapidly cascaded because of communications problems, faulty equipment and inadequate training. The final report, as did the earlier one, levelled much of the blame at Ohio-based FirstEnergy Corp., which it said failed to adequately recognise or respond to problems on three of its Ohio lines. Investigators also found inadequate monitoring of events by the regional grid system operator. FirstEnergy has contended that the grid problems were more widespread. And the final report also said investigators found additional violations of reliability requirements and institutional and performance deficiencies beyond those identified in November.

“First and foremost, compliance with reliability rules must be made mandatory with substantial penalties for non-compliance,” said Spencer Abraham and Canadian natural resource minister John Efford, who led the task force. John Dingell, (Democrat, Dearborn) of the House committee on energy and commerce said that the joint report further strengthens his bill calling for mandatory rules. Dingell said in a statement “There is no justification for continuing to hold reliability reform hostage to comprehensive energy legislation.”

The power industry has many voluntary checks aimed at preventing blackouts. They are administered by the private organisation NERC, but it lacks the authority to hand down penalties. Many reliability rules were ignored and the NERC could not do much about it, investigators have found. The task force recommended finding new ways to fund the council and its regional affiliates to ensure their independence from the parties that they oversee.

“The most important message that the nation, the electric industry and its regulators should take away from this report is this: the August 14 blackout and every major regional blackout that preceded it dating back to 1965 could have been prevented if clear, common-sense reliability measures had been followed,” said Pat Wood Ill, chairman of the US Federal Energy Regulatory Commission.

An earlier report issued by FERC found that the blackout started when a FirstEnergy line was struck by a tree branch. Technology glitches then kept FirstEnergy from taking steps to stop the blackout before it spread. Alison Silverstein, senior policy advisor to chairman Wood, said that the blackout could have been contained in Ohio. “If FirstEnergy would have shed 100 MW of’ electricity in Cleveland before 4:05 that afternoon…the blackout would have not occurred” she said.

There is no agency to enforce NERC standards, nor any mandatory requirement for simple maintenance such as how tree branches should be cut so they don’t interfere with power lines. Nor is there necessarily any basis for litigation where supply fails through lack of ordinary maintenance. Detroit Edison for example might have a case against FirstEnergy, but officials said no decision had been made on whether the company will sue.

The loss of power caused havoc to every kind of industry from automotive plants that had to scrap parts to a Detroit food company which suffered heavy losses when 1200 machines stopped and food corrupted. The company had been waiting for the final report to see whether it could claim some of its losses – the insurance company had refused to pay unless the supply failure turned out to be the fault of Detroit Edison.

Separately, the Michigan Public Service Commission, which regulates the state’s electric industry, has ordered all utilities to check all power switches on their systems. The report found that some relays had switched off during the power outage even though they did not overload. This is not thought to have contributed to the outage, but the problem concerned regulators and prompted the call for inspections. Utilities have a 10 May deadline to perform the checks.