JCP&L: A History of Service Interruptions

Think the grumbling about JCP&L’s service (here and here) started with Hurricane Irene or 2011’s October snowstorm?

Think again. GPU, the holding company for JCP&L 12 years ago, was getting complaints over a blackout in the summer of 1999:

In the first case of its kind in New Jersey, Judge Paul F. Chaiet of Superior Court ruled last Tuesday that customers of G.P.U., the electric company for central and northwest Jersey, can join a class action seeking damages for outages caused by the July 4 heat wave.

The lead plaintiff in the case is Madeline Muise of Fair Haven who was without electricity for three days.

North Monmouth County and coastal areas in Ocean County were hardest hit by the heat wave, said Frank S. Gaudio, a Red Bank lawyer handling the suit, who said he was looking for anyone who was without electricity then.

G.P.U. has blamed the power outages on the failure of two transformers, and has said it is taking steps to prevent similar problems. The company is considering whether to appeal the judge’s ruling.

GPU was then acquired by FirstEnergy, which remains the corporate parent of JCP&L today. FirstEnergy was right at the heart of the massive blackout of 2003:

The US-Canada Power System Outage Task Force, which investigated the massive August 14, 2003, blackout that affected eight states and a Canadian province, released its interim report that November and a final report the following year. The initial report found that FirstEnergy violated four voluntary standards set by the North American Electric Reliability Council and stated that the blackout was largely caused by FirstEnergy’s failure to set up proper communication and monitoring procedures for its transmission assets. The report also cited the company’s failure to trim trees, which caused several major transmission lines in its service territory to short-circuit during the incident.

The final report did not lay any additional blame on the utility, but stated that the blackout could have been prevented if utilities had followed voluntary reliability standards. FirstEnergy paid a total of $90 million to settle federal lawsuits over its involvement in the blackout, as well as other securities and derivative issues, without admitting any wrongdoing. FirstEnergy faced a formal SEC investigation into financial restatements (in 2003) and an extended nuclear power plant outage (2002-04); the investigation was not related to the blackout and was an extension of an informal SEC inquiry.

Here’s an interesting letter from an anonymous JCP&L employee following the blackout:

It is telling that as revelation after revelation appeared regarding the mismanagement and deceit involving events both before and after the discovery of the hole at [the nuclear power plant] Davis-Besse and then the sorry state of the distribution system in New Jersey resulting in sporadic blackouts affecting millions over the Fourth of July weekend this summer, that FirstEnergy stock prices continued to rise. The stock prices only went down after announcements that profits were lower than expected due to accounting changes. After the blackout, the prices plunged briefly, but then recovered to roughly the level where they were before the blackout. By the only barometer that FirstEnergy management accepts they are doing a good job. There is no reason to think they will change nor will there be much pressure on them from the only group they respect, the investors, for them to change.

People with more experience and knowledge of the electric utility business than I had predicted a blackout, although not so soon. The conditions are all still there, nothing has changed and it is unlikely that much will soon enough to prevent more blackouts in the future. Just as the Bush administration’s War on Terror has increased terror and reduced freedom, the forces of the capitalist system will most likely continue to require the deterioration of the electric grid’s infrastructure with results similar to what we saw on August 14, 2003.

Wait a minute… a hole in a nuclear plant?!

On March 5, 2002, maintenance workers discovered corrosion resulted in a football-sized hole in the reactor vessel head of the Davis-Besse nuclear power plant in Oak Harbor, Ohio, according to a U.S. Nuclear Regulatory Commission fact sheet on the incident.

The commission kept the plant shut down until March 2004, and imposed its largest fine, more than $5 million, against FirstEnergy for actions that led to the damage, according to the NRC fact sheet.

FirstEnergy paid another $28 million in fines through a settlement with the U.S. Department of Justice, according to the NRC fact sheet.

Seventeen months after the hole was found, a blackout affected an area with an estimated 50 million people and left some parts of the United States without power for up to four days, according to an international report on the August 2003 blackout.

The U.S.-Canada Power System Outage Task Force’s final report, issued by Natural Resources Canada and the U.S. Department of Energy, cited four groups of causes for the blackout.

They included FirstEnergy’s failure to adequately manage tree growth near transmission lines, and the utility not recognizing or understanding the deteriorating condition of its system, according to the report.

There’s little doubt that JCP&L is going to be investigated following their response to Sandy, even if Chris Christie, GPU’s former lobbyist, is happy with the performance. The central question in that investigation may be whether or not First Energy actually followed through on its promises to upgrade its system.

Leave a Comment

Your email address will not be published. Required fields are marked *