This is a partial transcript of The Big Story With John Gibson, August 18, 2003, that has been edited for clarity. Click here to order the complete transcript.

JOHN GIBSON, HOST: Is the blackout a red flag that our power grid is outdated and congested? And what is keeping this type of downward spiral from happening again?

Joining us now, Hoff Stauffer, who is a senior consultant for Cambridge Energy Research (search) Association. Mr. Stauffer, that's today's big question. Is a $50 billion system overhaul the answer?

HOFF STAUFFER, CAMBRIDGE ENERGY RESEARCH: Probably not. We saw that number appear in public, oh, late last year, and we understood the analytic basis for it. And the analytic basis is not very good. So, we have started a study to figure out what the real answer is.

GIBSON: You know, this is a curious thing, Mr. Stauffer. All the media reports say that we have a creaky old, third world (search) — or at least antiquated system — out there in the grid. And yet when you talk to the people who work in this business, they say, “No, no, this is a highly complex machine that gets a lot of money spent on it. The last thing you could call it is antiquated. Why that discrepancy in those two opinions?”

STAUFFER: Well, first off, I agree with the people that say that the transmission grid is actually well designed and well operated. And I don't know where the evidence comes for the other point of view.

GIBSON: How about 50 million people being out of power?

STAUFFER: Well, we can talk about how that happened, which is an important and interesting story.

GIBSON: Well, okay. Sure. And we can. Do we know?

STAUFFER: I think we know elements of it. And I think it is important to understand. We know that it probably started in Ohio with the outage of a line that may or may not have been associated with the outage of a power plant. These kinds of things happen all the time.

GIBSON: Yes, but why does it kick everything else off?

STAUFFER: Well, in order to have it kick everything else off, you have to have more than one bad thing happen. You had a line go out. That's a bad thing. But the grid is designed to deal with that. In addition, you had the alarms not working in the control room. That's a second bad thing. Third bad thing was that the power went on to other lines — as was anticipated — heated up, as was anticipated, and began to sag, as was anticipated. Unfortunately, one of them sagged into a tree. That tree wasn't supposed to be there. Now you had four bad things happen all at once and you had a big problem.

GIBSON: Let me put it this way. There's 50 million people who depend on power from everything from lights to opening hotel doors. You couldn't even get into your hotel room in New York. Is it fair for the American people to expect a fail-safe system that will not knock off eight states and 50 million people?

STAUFFER: I think it is absolutely fair. Let's look first at what went right, because when First Energy (search) started to have trouble — that's the utility in northern Ohio — the utility south of that, American Electric Power (search), cut itself off instantly and automatically. And that saved the Midwest, that saved Chicago, that saved St. Louis, that saved perhaps Minneapolis. That worked the way it was supposed to work. Similarly, the region called PJM, which is Pennsylvania, New Jersey and Maryland, they were interconnected with First Energy and they isolated themselves, too. They had no problems. They were also connected with New York. They had no problems. That saved Philadelphia, that saved Baltimore, that saved Washington. That worked the way it was supposed to. What didn't work the way it was supposed to was between Ohio and Michigan. We don't know why yet. But had it worked the way it was supposed to, Michigan would have been OK.

GIBSON: Right. Mr. Stauffer, thanks very much. I guess we can start with that alarm system that wasn't in play that day. Appreciate it. We'll talk to you again.

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