SECRETARY ABRAHAM:   Good afternoon.  I want to thank everybody for joining us today for an update on our investigation into the causes of last week's power blackout.  I've got a statement to read which outlines some of the steps that we're taking, and then we'll go to some questions.

    Clearly, we all recognize, and President Bush especially recognizes, that we owe our citizens an explanation of what happened.  Last Friday, he and Prime Minister Chretien agreed to establish a joint task force to look into exactly how the blackout of last week occurred, why it spread to such a large area, and identify ways to keep such an event from ever happening again.

    Joining me as the co-chair of the task force will be my counterpart in Canada, the Minister of Natural Resources, Herb Dhaliwal.  The two of us have been in contact since late last week.  Our offices have already been working together to begin putting in place a plan of action, and we'll be having our first formal meeting tomorrow, in the City of Detroit.

    As we reported over the weekend, we have not waited for the meeting to initiate activities.  I've already ordered Department of Energy investigators into the field to begin collecting information and interviewing appropriate individuals at the utilities, the North American Electric Reliability Council, as well as the independent systems operators.  We will use all the resources at our disposal, including the numerous experts in this area on our staff here at the Department of Energy, and the resources of our network of national laboratories during the course of this investigation.  That work is already under way, so that we can find the answers which we need as quickly as possible and begin implementing any solutions called for.

   As part of the overall U.S.-Canadian investigation, the North American Electric Reliability Council, or NAERC, which administers our voluntary standards for electric transmission reliability, has agreed to work with the task force and to forego its own investigation of the incident.

    In addition to cooperation from NAERC, we also have received pledges of cooperation from the independent system operators in the affected areas and from executives of electric companies serving the affected regions.

    Yesterday, I conducted a conference call with a number of the chief operating officers and chief executive officers of power companies whose plants or service areas were impacted by Thursday's outage.  These leaders offered their full support in helping us gather in the information that will be needed in conducting this review.

    We also conducted another conference call yesterday with executives of the North American Electric Reliability Council and with representatives of the independent system operators who control the flow of electricity along the transmission grid and manage the transactions of our wholesale power markets.

    It is important that all parties preserve relevant data so that it may be made available for review and inspection, and we are pleased that these regional groups have agreed to support the investigation fully.

    We already have seen many theories abound about what might have led to the outage or been factors in it.  But at this point, we believe the prudent course is to gather and analyze the relevant information to make sure that we have a complete picture of what happened before we begin any public discussion or commentary.  It's important that we withhold judgment until all of the facts are in.

    This investigation is about making sure that the vital infrastructure that delivers electricity to the homes and businesses of our two countries is as secure and efficient and reliable as it can be.  We will identify the actions that are needed to accomplish that and then initiate those actions as quickly as we can.

    Whatever the cause of last week's blackout, we know that much work lies ahead of us in bringing our transmission system up to 21st century standards.  The electric transmission grid is quite possibly the most vital piece of infrastructure which we have.  Reliable electric power is the lifeblood of the economy for both the United States and Canada.  It is more than just a personal convenience.  It's essential to the health and safety of our citizens.  We owe our citizens an explanation of this incident and an assurance that steps will be taken to address the cause.

    And so we're looking forward to the meeting with our Canadian counterparts tomorrow and to moving ahead with this very important task.

    While we perform our work on the task force, our department will also continue to work to secure passage of a comprehensive energy bill.  Yesterday I had the opportunity to talk to both the House and the Senate Energy Committee chairs--Chairman Tauzin and Chairman Domenici.  And, as the president said earlier today, both chairmen are very confident that an energy bill will pass and that mandatory reliability standards will be included in the final bill.

    With that, I'd be happy to take a few questions.

    QUESTION:  Mr. Secretary, last week five lines either owned or co-owned by First Energy and AEP went down.  What can you tell us about those lines going down?  Was that a cause of problems elsewhere, or indeed was that the cause of what --

    SECRETARY ABRAHAM:  As I've said, we have just initiated this investigation, this independent investigation, starting over the weekend.   I think it is way too early to engage in the kind of speculation about the role that any particular incident that took place had on either the overall problem or part of it.

    You know, there have been, as I indicated in my statement, a number of rumors, a lot of speculation as to what happened, who might be at fault.  There's time to deal with those issues. 

What I think the American public wants, what I'm sure the citizens of Canada want is a comprehensive and thorough investigation before we determine precisely what happened and what we need to do about it.  And so we will conduct that thorough investigation before we speculation on any particular issue that came up.

    QUESTION:  Can you give us a sense of the scope of that investigation, what you expect it to encompass?

    SECRETARY ABRAHAM:  Well, we've already sent investigators out.  Literally hundreds of people are already working on this.

    QUESTION:

    SECRETARY ABRAHAM:  Well, in total, I mean, literally hundreds of people that are part of this department or connected to other agencies that are going to be involved in this.  We've had a working group in place literally since Thursday afternoon.  We've got people in the field who are already out at various sites, both at ISOs as well as at NAERC.  You know, the data that we're looking at and that is going to be thoroughly analyzed is largely in a finite number of locations, and so a lot of the people are there.  But we also have at our disposal a tremendous talent bank here in this department, including the folks who work in our national laboratories.  And so we'll be involving them, as appropriate, in analyzing the information as well.

    QUESTION:   Seeing that mandatory reliability standards have been in the energy bills for years now but have been bogged down by ANWAR, CAFE standards, everything else, would you call for a stripping and just a bare-bones bill on the transmission grid issues to get them through?

    SECRETARY ABRAHAM:  Actually, you know, the electricity title of the energy legislation that has been worked on the last two years has typically been the most complicated and difficult area.  I think there's kind of a misconception that seems to be going around right now that somehow there's a tremendous amount of consensus on the electricity issues and that everything else is complicated.  In truth, I think anybody who's followed it closely knows just how challenging a compromise a final piece of legislation on just the electricity issues alone is.  And so I think it's really a mistake to have anybody think that you could somehow strip out those provisions.

    But the broader issue is really this:  You know, whether it's the California blackouts that we had the day we took office -- this year's challenge we've been working on, to address the problem of inadequate storage of natural gas or the occasional price spikes that we see with regard to energy commodities, every time one of these things happens, it should be a reminder to us that this energy sector is very interrelated and that we need comprehensive legislation to deal with all of it, for the American public to be reassured that we've got energy security for the 21st century, that they're not going to have to continually deal with crises of one sort or another.

    It would be a huge mistake to just take one part of the energy bill or the energy sector and pass legislation dealing with it, because all of these areas require our attention.  I'm very confident that Congress will get this job done.

    You know, the other thing that I've been a little frustrated by is the implication that somehow this legislation can't move quickly in a comprehensive way.  I think both--from my calls yesterday, both Chairman Pete Domenici, Chairman Billy Tauzin are ready to roll up their sleeves, as our their conferees, and get this job done.  And I think they should be given a chance to.

    QUESTION:  Yeah, well, your investigation, will it look at broader issues, such as the role that deregulation may have played in stressing the grid, over-stressing the grid?  I'd like your thoughts on that particular question--

    SECRETARY ABRAHAM:  Well, you know, at this point, the scope of our investigation begins with an analysis of what happened specifically last week.  I think everybody has been engaged in a speculation about why systems that should have--you know, circuit-breaking kinds of actions that should have isolated the problem didn't function right, questions have abounded as to where it started, and so on.  Our first and principal initial goal is to figure out what went wrong.  Where that leads us in terms of recommendations remains to be seen, and I think it's clearly too early to be thinking about solutions until you, essentially, figure out what the problem was.  And that's putting--obviously we don't want to put the cart ahead of the horse.

    So first and foremost, we want to quickly ascertain, you know, exactly what went wrong, and then we'll see where that leads in terms of policy.

    QUESTION:  Well, just to follow up--

    SECRETARY ABRAHAM:  Well, let's let other folks here-- We'll come around again.  Yes?

    QUESTION:  How long do you think the investigation will take, and have the Canadians asked, or have you offered an apology for initially pointing the finger at Canada as the cause of the problem?

    SECRETARY ABRAHAM:  I didn't point a finger at anybody.

    QUESTION:  Well, the U.S.--different U.S. officials did--

    SECRETARY ABRAHAM:  Well, I'm not aware of anybody connected to our government who pointed a finger at anybody, and I think the fact that we're working together, the fact that the prime minister and the president so quickly moved to put a joint effort together, demonstrates that we recognize the strong interrelationship between our energy sectors.  Energy minister--Natural Resources Minister Herb Dhaliwal and I have worked together very effectively on other projects.  We have a North American Energy Working Group with the U.S., Canada, and Mexico that has been very successful.  So I think that we've already demonstrated that we recognize our inter-dependence and we intend to take advantage of our mutual knowledge and expertise to solve these problems.

    QUESTION:  There are some people who say that you know basically what happened and who did it, but it's the enormous liability issues that are holding you back, making you check and re-check and make sure you're right.  Is there anything to that?

    SECRETARY ABRAHAM:  No, there isn't.  I mean, we just launched what will be the independent task force investigation this weekend.  We haven't even had the first meeting.  There is by no means a resolution in my mind or anybody that's working as part of this effort on the U.S. side and, to my knowledge, the Canadian side as well, as to where the problem is.  We will not be constrained by any kind of concerns about those sorts of issues.  I mean, our job is to find out what went wrong.  Other agencies may play a role ultimately in--you know, in this, and we expect the Nuclear Regulatory Commission to play a role, we expect the Federal Energy Regulatory Commission to play a role.  And what ramifications there are, I think, remain to be seen.  And again, I'm not going to speculate.  But there is no effort on our part at this point to hold back this investigation or to hold back ultimately the findings that we come up with.

    QUESTION:  Mr. Secretary, over the weekend you made comments in regard to a desire to delay the Federal Energy Regulatory Commission's standard market design.  And I was wondering if that is something that you're talking with the House and Senate about, or is that your professional opinion on how it is, or is that the administration's position?

    SECRETARY ABRAHAM:  Well, let me put that briefly into context.  Obviously, there are a lot of components to the electricity title of the energy bill, and there are different ones on each side of the Capitol.  This administration's top priorities, the ones which represent the implementation of our national energy plan, include, first and foremost, the need for mandatory reliability standards and for investment in expanding our transmission grid.  Those components are priorities, and we intend to do everything we can to make sure that an energy bill passes and that it includes the priorities that were addressed in our energy plan.

    Obviously, other issues are at play, too, and FERC's proposal, whether, you know, it's delayed or not, is one of the other topics that will be discussed.  To my knowledge, there have been no new discussions as to how that will be proceeded on.  But it's my understanding that the folks at FERC are prepared to have discussions with the members in the conference as well as the broader House and Senate membership to see if there's a way to come up with a final bill that begins to address the kinds of objectives that FERC has.

    The administration, just to reiterate, has always supported the concept of regional transmission organizations.  There's a distinction, obviously, between moving towards those in a voluntary fashion versus a mandated fashion.  My understanding is that all parties involved are prepared to have discussions to see if we can't come up with a final bill that works.

    QUESTION:  You said in your press release that NAERC has agreed to forego its investigation and roll in with you guys.  NAERC, of course, has been in the forefront of letting us know what little there is to know; they've had a number of briefings.  What does this mean, and does that preclude them from going public with findings as it goes along?  Could you elaborate a little bit on what that means?

    SECRETARY ABRAHAM:  Well, I think that, you know, my conversations with the elected officials that I've talked to and others in the affected areas has been that there needs to be ultimately an independent investigation and one investigation; there needs to be one ultimate finding, or one ultimate set of findings.  We've had very positive conversations with NAERC.  We applaud their efforts to do what they've done so far.  And they're going to continue doing their work, they're just going to roll that effort into this broader independent inquiry that we've undertaken.  At the end of the day, we think the people of this country, of Canada, all the people affected certainly deserve to have one final authoritative on what we believe happened.

    QUESTION:  If I could just take a follow-up, my understanding, I've been told by some people that you anticipate having an interim report on this about mid-September.  Is that accurate, and what is your time frame?

    SECRETARY ABRAHAM:  No, I think that there's been a lot of dates.  We've speculated about putting time frames into this.  And I'll tell you what my time frame is.  We're going to do this as effectively as we can in as short a time frame as we can.  People deserve answers as quickly as we can give them and they deserve action to make sure this doesn't happen again, as soon as possible.  And I am committed to a full and thorough investigation.  I'm committed to making sure we do that in as timely a fashion as we can, and--we at the Department of Energy--the president is committed to making sure that we take whatever actions our investigation yields or suggests, to make that no one has to encounter problems like this in the future.

    QUESTION:  Over the weekend, Mr. Secretary, you mentioned on public television that you would support going slower on FERC's grid plans.  I just wanted to ask if you still stood by those comments--

    SECRETARY ABRAHAM:  I think I've answered that question as far as I can.  What I said was that in the discussions through the Senate in the final passage of the bill, it included these provisions that would have, you know, delays in that.  We intend, you know, to, as I said before, encourage all the parties to work together to get the bill done, and that may--may or may not involve changes on that.  Obviously, the House has a different position than the Senate.  But what I think is important is, as I said, I know that FERC's interested in trying to find a way to get to a final bill and I think all the other parties will be as well.

    QUESTION:  Mr. Secretary, is the Department of Homeland Security involved in your investigation?  And what is the interest in the security aspect of all this?

    SECRETARY ABRAHAM:  Well, obviously, as you know, to this point there's been no evidence of any intentional action being involved in this or precipitating this blackout.  The Department of Homeland Security has a key role to play, and they will be part of the task force on our side.  We welcome the contribution they'll be making.

    QUESTION:  Does it suggest that more work needs to be done to protect the security of the--

    SECRETARY ABRAHAM:  Well, again--look, from day one, or I should say from September 11th, certainly, forward, the security of our energy infrastructure has been a priority of this administration, a priority of the Department of Homeland Security, and a priority, certainly, of our department as well, although each of us have different roles to play.  And whether it's the physical security or issues that relate to cyber security, they continue to be top priorities for us.

    QUESTION:  Since the power failures, there's been a lot of talk about the need for mandatory reliability standards and investment in the transmission grid.  For the average consumer, bottom line, does that mean higher power bills in the future?

    SECRETARY ABRAHAM:  Well, you know, it's first of all important for people to understand the interrelationship between a congested grid and high power bills today.  You know, in May of 2002, we conducted, or completed a national grid study that I know a lot of the folks in this room have seen.  If you delve into the details, what we discovered was that currently in the typical rate payer's bill, about 80 percent of what they pay is for generation, about 10 percent is distribution, about 10 percent is to offset the costs related to transmission.  But what we discovered in that study was that, because of congestion in the transmission grid that exists today, energy costs are higher for people because of the congestion and the resulting challenges it poses.  And I would direct folks' attention to that because it's a very revealing piece of information.

    So in our judgment, improving and modernizing the transmission grid, in terms of net dollars and net rates paid by consumers, has the potential to more than offset the cost of the transmission.  But right now, we've not had the kind of investment that we think -- certainly insufficient right now to meet the demands that we foresee in the grid over the next 20 to 30 years, and we hope that the passage of an energy bill, including the various proposals that relate to investment and relate to PUHCA repeal, will provide the kind of foundation for that transmission investment.  And when it happens, I think what people will see is that the elimination of the congestion brings down the cost of generation.