Case | HBS Case Collection | March 2004 (Revised June 2004)

Blackout: August 14, 2003

by Thomas R. Eisenmann and Ryland Matthew Willis

Abstract

On August 14, 2003, an electricity blackout cascaded throughout the northeastern United States and Canada. Describes the structure, technology, and economics of the electric utility industry and how gradual deregulation beginning in the 1970s placed unprecedented, and unintended, stress on the transmission grid. Discusses the government's role in trying to mitigate congestion along transmission lines and facilitate improved planning and operational coordination through the establishment of independent system operators and regional transmission organizations. Also describes the recent financial performance of the electricity industry, the potential costs of modernizing the U.S. transmission infrastructure, and the role of political contributions in shaping regulation.

Keywords: Technology; Performance Improvement; Infrastructure; Energy Sources; Business and Government Relations; Networks; Emerging Markets; Failure; Economics; Utilities Industry; Canada; Northeastern United States;

Citation:

Eisenmann, Thomas R., and Ryland Matthew Willis. "Blackout: August 14, 2003." Harvard Business School Case 804-156, March 2004. (Revised June 2004.)