US markets to stay open despite blackouts

New York's financial markets plan to open today despite the power outages that paralysed the city in the biggest electrical blackout in US history.

As Americans experienced what Iraqis have to put up with every day, New York's financial exchanges had no intention of shutting down. In any case, the American stock exchange, the New York stock exchange and Nasdaq reported minimal interruption after the close of trading yesterday.

All the exchanges and big financial institutions have back-up power systems, which were extensively reviewed after the September 11 attacks, allowing them to conduct business as usual in the event of a crisis.

Other businesses, however, were hit, with the airlines, already struggling with the worst ever crisis in the industry, an immediate casualty. British Airways cancelled five flights from Heathrow to north America, affecting some 1,400 passengers, including services to New York, Philadelphia, Toronto and Montreal. At Germany's Frankfurt international airport, incoming US flights were delayed by up to seven hours.

In New York city, where lights came back on in parts of midtown Manhattan and other boroughs and suburbs before dawn, millions faced a morning rush hour without subway service and no timetable for full restoration of power. In Michigan, some customers may have to endure a weekend without electricity. It is just as well that the power outage occurred in August, a slow time for business because of the holidays.

In Detroit, DTE Energy, whose customers include the three biggest US carmakers, asked businesses to treat today as a weekend. Fewer than half of the company's 11,000 employees were coming to work because of widespread outages.

While terrorism was swiftly ruled out by President George Bush, industry and government experts blamed a system of interconnected grids that has not been upgraded to meet a rise in power demands.

Bill Richardson, energy secretary during the Clinton administration, said that the blackout underscored the need for congress to require national standards for the reliability of the electric power system.

"In my view we're the world's greatest superpower but we have a third world electricity grid," Mr Richardson said. "We have antiquated transmission lines. We have an overloaded system that has not had any new investments and we don't have mandatory reliability standards on utilities, which caused this problem."

National standards, he added, "are needed to prevent utilities from having more power than they can absorb. It's as simple as that."

Larry Brown, an official with the Edison Electric Institute, cited three reasons for the lack of upgrading: the cost, environmental opposition and the unwillingness of communities to have such facilities near their homes.

"Things like this can wake people up to the reality that society relies on electricity, and expects electricity to be reliable. But reliability depends on facilities," he said.

The blackout hit shortly after 4pm yesterday, causing the loss of 61,000 megawatts of power, more than twice that of any previous north American outage, according to the North American Electric Reliability Council.

The office of the Canadian prime minister, Jean Chretien, initially blamed lightning striking a plant near Niagara Falls, New York. It later said that the problem started at a plant in Pennsylvania.

The power failure shut nuclear plants and wreaked havoc. In New York, thousands poured out of subway cars that had ground to a halt, emerged from stuck lifts, began long walks home or rested in local bars and restaurants.