Thank you, Chairman Thornberry, Chairman Camp, and Members of the Committee for the opportunity to testify today before your committee.

My name is Colonel Michael C McDaniel, and I serve as the Assistant Adjutant General for Homeland Security for the Michigan National Guard. As such, I serve as the Homeland Security Advisor to Michigan’s Governor, Jennifer M Granholm.

Based on my understanding of the focus of this committee’s interests, my narrative of the events of 14-16 August, 2003 will focus on the interdependencies of our infrastructure, and the communications between state, local, and federal agencies. I will then discuss some of the issues that surfaced during our response to the blackout, and potential resolution of them.

On Thursday, August 14, 2003, at approximately 4:15 p.m., a massive power outage struck the Niagara-Mohawk power grid in the Northeast US and Ontario causing blackouts from New York to Michigan. Within minutes, much of southeast Michigan and mid-Michigan was without power, including the major metropolitan areas of Detroit, Ann Arbor, and Lansing.

Approximately 60 percent of Michigan’s entire population, or more than 2.2 million households, was affected by the outage, requiring state agencies and local governments to utilize extensive emergency protective measures in order to insure their health, safety and welfare.

Collectively, the State of Michigan and local governments expended $20.4 million on emergency measures to save lives, protect public health, and prevent damage to public and private property.

The Emergency Management Division of the Michigan State Police began to immediately monitor conditions in Lansing and around the state, including the state’s nuclear power plants. Within minutes, when it was clear that there was a widespread outage, the state’s Emergency Operations Center (EOC) was formally activated, and state agencies began to monitor state and national conditions.

Below, I will briefly outline some of the major complications from the blackout:

• In much of southeast and mid-Michigan, the lack of electric power resulted in widespread traffic signals not functioning and limited telephone communications. Radio and television stations reported broadcasting difficulties, with several small stations not operating at all.

• Many facilities lacked sufficient alternative energy sources. Portable generators were needed at hospitals and other public facilities, including the state mental institution.

• The Fermi II nuclear plant in Monroe County was shut down as a precaution. It returned to full power production and was reconnected to the power grid late Thursday, 21 August.

• Marathon Refinery, Michigan’s largest refining facility, lost power and had to shut down. One unit did not shut down properly and began venting partially processed hydrocarbons. Because of the tank’s location, the city of Melvindale (with the assistance of the Michigan State Police) decided to evacuate 30,000 residents and shut down Interstate 75 for several hours until the situation was controlled. The Marathon Refinery was inoperable as a result of the loss of electricity and water, and out of production for approximately 10 days.

• Gas stations were unable to supply peoples’ needs for their cars and portable generators, as without electricity the pumps were inoperable.

• The auto industry was also directly impacted by the loss of power, shutting down operations for the majority of three days.

• The Ambassador Bridge in Detroit, the busiest commercial landport in the United States with 16,000 tractor-trailers crossing daily, was also affected. Interestingly, both the bridge and U.S. Customs had their computers interrupted only momentarily until their back-up systems activated. Canadian customs, however, lost their computer datalink, and thus their ability to verify trucking manifests electronically. As a result they were forced to visually and manually inspect the manifests and, if warranted, the freight itself. This resulted in an approximately four-mile backup of traffic for almost 24 hours on the U.S. side.

• Many computer systems were not functioning, including the Law Enforcement Information Network (LEIN).

• Metropolitan Detroit Airport was closed and all flights canceled until midnight on August 14.

• The Detroit Board of Water and Sewers, oversight board of the nation’s second largest water system, reported that its system was not functioning correctly. It issued a boiled water advisory for its entire service area. A number of public water issues arose from the blackout. First, there is a need for generators and for an automatic activation switches for these generators. Second, much of the system’s gauges and switches rely on telephone lines, or telemetry, which is used to receive information on the system’s capabilities. Last, there was no system to notify all of the customers of the boiled water advisory, as notification was dependent on the public media. It became clear, on the morning of August 15, that the largest problem was the lack of potable water. Public and private entities delivered hundreds of thousands of gallons of water to those affected sites, but a boiled water advisory was not lifted until Monday, August 18.

The State’s Response

As of 6:00 pm, Governor Granholm and her senior staff had reported to the state Emergency Operations Center (EOC). The Governor had been briefed by the Emergency Management Division of the Michigan State Police (MSP), and all state agency representatives, and she first advised the citizens of conditions and our efforts via public media, at approximately 10:00 p.m. The MSP had positioned 50 state troopers on stand-by for mobilization, if needed to maintain order in blackout areas. Little to no looting was reported, and crime rates were at or below average. The Michigan National Guard also had troopers ready on stand-by.

I would note that the Governor spoke with Department of Homeland (DHS) Secretary Tom Ridge approximately one hour after the blackout began. As the dimensions of the emergency became clear, the federal DHS called every hour for briefings.

The State of Michigan has always had a great working relationship with FEMA Region V, and this working relationship was very evident during this emergency. Region V had activated their Regional Operating Center (ROC), and was in close and constant telephone contact. A FEMA representative was also present and working from the State EOC, from August 15 onward.

The state of emergency was not rescinded until August 22, 2003.

Emergency Protective Measures Reimbursement

On August 27, 2003 the State applied to FEMA for federal reimbursement under the Stafford Act for actions taken by local or state agencies to remove or reduce immediate threats to public health, safety, welfare, or private property when those measures are used in the public interest. As of September 15, we have not received any response from FEMA. This is not an inordinately long period of time, but Michigan and other states are watching to see if the placement of FEMA within the Emergency Preparedness and Response Directorate (EP&R) of DHS will prolong the application process. I would note that the Undersecretary for EP&R has assured the state emergency management directors that it will not.

Lessons Learned

In Michigan, we are monitoring, investigating, or resolving the following issues:

(A) Communications between federal and state agencies. There was full and robust communication between the appropriate federal and state agencies. DHS and FEMA were in regular, consistent contact with the State EOC. The State Department of Environmental Quality, Public Service Commission and National Guard were communicating with the Environmental Protection Agency, the Department of Energy, and the National Guard Bureau, respectively. Two suggestions for improvement, however, can be made. First, the reports given to DHS and FEMA Region V were redundant information. While the “operations tempo” of the emergency response was such that this was not a hindrance, this redundancy should be eliminated as the reorganization of federal agencies within DHS is completed. Second, all communication was by telephone or facsimile machine. Given the intermittent outages of commercial telephone service elsewhere in the state, a backup system needs to be instituted that is not reliant on commercial lines. I would note that there is a wireless system between FEMA Region V and the State EOC. Perhaps this capability can be expanded.

(B) Communications between state agencies and between state and local agencies. Internal communications, both within a state agency and between employees of the state and a local agency, worked flawlessly. The State of Michigan, over the last 12 years has spent in excess of $220 million to create a statewide 800 Mhz digital trunk radio system. It is the believed to be the largest radio system, in terms of land mass covered, in the nation that meets APSCO 25 (Association of Public Safety Communications Officials) standards. This system provides full interoperability, of course, as all members are on the same system. There are at the present time 374 different public agencies which use the Michigan Public Safety Communication System as their primary radio communications, and another 90 agencies that use the system for emergency management purposes only. The member agencies include all state agencies, as well as counties, townships, tribes, and federal agencies (the FBI, U.S. Customs, Bureau of ATF and Forest Service). There are currently more than 11,000 radios on the system.

There were no interruptions to the system anywhere during the blackout because the control center and all antennae have independent generators. Four of the five counties as well as many municipalities within those counties in the declared emergency area are now considering joining the Michigan Public Safety Communications System.

During FY 2003 the DHS administered an equipment grant program to promote interoperable communications between local governmental agencies. The states expect to learn the grant recipients and amounts awarded in the near future. This program, by providing a specific financial incentive to pursue interoperability, has been well-received by the States. This program and its results should be monitored closely and considered for potential expansion.

Because the state had to issue bonds to fund such a large expenditure, the Internal Revenue Service (IRS) has ruled that with state bonds only 5 percent of the members of the system can be non-state entities, or, in this case, federal or tribal members. While far less than 5 percent of the radios on the system are used by federal agencies, true interoperability compels their participation on the system. We need to find means to encourage federal participation on the MPSCS, thus consideration should be given to creation of an exception to the IRS bonding restriction to promote interoperability of communications between state and non-state agencies.

(C) Interdependent Infrastructure. The above narrative illustrates the ripple effect of an impact on one sector for the rest of the nation’s infrastructure. The facilities, systems, and functions that comprise our critical infrastructures are highly sophisticated and complex. We are only now beginning to study the degree that our systems work together in processes that are highly interdependent. In one oft-cited example, e-commerce depends on electricity as well as information and communications. Assuring electric service requires operational transportation and distribution systems to guarantee the delivery of fuel necessary to generate power. Such interdependencies have developed over time and are the product of operational processes that have fueled unprecedented efficiency and productivity.

Given the dynamic nature of the systems, we need not only to model but also a concerted, joint state/federal effort to identify and prioritize not just the systems, but their critical components, their interdependencies, and the state and federal agencies that both regulate and rely on them. In the past, different state and federal agencies have inventories and prioritized the critical infrastructure. This process is ongoing, it is a vital step for every operational plan for protection and security, and those priority lists are driving our efforts.

(D) Sufficiency of funds for state Emergency Operations Centers. Deficiencies in the state Emergency Operations Center become obvious after spending 36 straight hours there. The FY 2002 Supplemental Appropriation provided approximately $51 million nationwide specifically for Emergency Operation Center upgrades and modifications. This amount is insufficient to properly upgrade the Emergency Operations Center for every state and territory. For example the State of Michigan had requested $9.5 million for this purpose, which would include all design, engineering, construction, and project management costs for the State EOC, and an alternate EOC in the metro Detroit area. A decision on the grants is long overdue, particularly considering that some state, somewhere in the nation, is facing an emergency, albeit usually natural emergencies, such as floods, fires and hurricanes, almost every day.