Outlook: A very British cure for the blackout which stunned America

To really appreciate the scale of the North American blackout, it is necessary to imagine what would have happened here in the event of a similar incident. Every office, factory and home in England and Wales would have been without electricity. It would have been a power cut to make the one which followed the 1987 hurricane seem tame indeed by comparison.

The US blackout, which now seems to have originated in the Midwest and cascaded eastwards in a series of devastating "power swings" until it hit New York, took out 62,000 megawatts of capacity, or enough to supply 50 million homes. That is not far off the total capacity of the British market.

There is another parallel between what happened over there and what could happen over here. Niagara Mohawk, the network operator at the centre of the US blackout, is owned by National Grid Transco, the same company that operates the UK's national transmission network of high-voltage overhead lines.

There, however, the similarities begin to run out, for the US and UK power transmission systems are quite different. The US is carved up into three large transmission blocks, covering the eastern seaboard, the west coast and Texas, each one of which may be divided up among dozens of individual transmission companies. In England and Wales, there is one transmission system operator in the shape of National Grid. Soon there will be only one operator for the whole country when Scotland joins the fold.

The disjointed nature of the US grid has been a recipe for neglect and underinvestment, much like the rest of the country's power infrastructure. It was not for nothing that the former US energy secretary Bill Richardson yesterday described the United States as a "superpower with a Third World grid".

To compare it with the UK's grid is like contrasting a chevvy with a Rolls-Royce. To take just one comparison: National Grid has twice as many miles of high voltage wire in the US as in the UK and yet investment in the UK system is four times greater. The knee-jerk reaction yesterday was to ask whether the US blackout could happen here. Yet the better question to ask is what the UK can do to help prevent another American blackout on the same scale.

The answer is quite a lot. National Grid Transco chose to plant its flag in the north-eastern seaboard of the US because it is the area of the country with the most sympathetic regulatory regime. The return on capital it is allowed to earn is almost twice that permitted in the UK. And yet even with that, it is a struggle to modernise the US grid in the way necessary. The US Federal Energy Regulatory Commission has recognised this which is why it had begun to encourage increased investment in the transmission system.

Partly this will help to open up the US electricity market by reducing the constraints on flows of power across the country. Partly it will help strengthen the security and reliability of the system.

National Grid Transco has made no secret of its desire to expand in North America and Thursday night's power failure may have been just the wake up call the US needs.

Network Fail

I was stuck on a train going nowhere the other night (sadly, not an uncommon experience) and my thoughts turned to Network Rail. It makes a change from fantasising about Thameslink's directors being frogmarched from their offices in handcuffs and jailed for a very long time for crimes against commuters. For once, however, Thameslink was blameless, as was the hot weather. This delay was caused by a track defect which brought the line from London to the Sussex coast to a shuddering halt and proceeded to cause hold-ups for the next four hours. According to Network Rail, 125 trains were delayed for an average of 24 minutes each (I was unlucky, the train I was on sat there for more than an hour). All told, this one incident on one part of the network on one evening resulted in 3,000 train delay minutes, to use Network Rail-speak.

Network Rail's target for 2003-04 is to reduce train delay minutes attributable to it by 10 per cent to 13.25 million. That works out at just over 37,000 minutes a day. My one little incident, therefore, used up 10 per cent of all the train delay minutes Network Rail can afford on any given day.

Network Rail suffers from 40,000 signal failures and more than 400 broken rails a year - each one of them capable of causing at least as much delay as I and thousands of other passengers experienced last Wednesday night. The heat-related speed restrictions which have caused such misery for the last fortnight will have contributed hundreds of thousands more delay minutes. And we have not even reached autumn, the season, not of mellow fruitfulness, but leaves on the line, followed by winter, the season of glad tidings but also the wrong kind of snow.

On this basis, it is hard, if not impossible, to imagine how Network Rail will even get close to its target for the year - a target, incidentally, which has already been greatly relaxed. In 2002 Network Rail set itself a goal of reducing train delay minutes in 2003-04 to 10.4 million but then quietly lowered the bar after realising it would miss the target by a country mile.

Bad news for passengers, I know. Good news, however, for everyone who was offended by the news that Network Rail's directors could be eligible for more than £1m worth of bonuses this year on top of their £1.75m in basic salary. They will almost certainly not earn the bonuses. It is true that the payments are only partly dependent on a reduction in train delays (the other two targets relate to financial efficiency and the overall condition of the network). It is also true that the chairman of Network Rail's remuneration committee is an ex-investment banker who might not have got out of bed for a paltry £1m in his previous life.

But it would take insensitivity on a grand scale for Network Rail to award any bonuses at all when punctuality is not improving. This means that like everyone else, Network Rail's chief executive, John Armitt, will probably have to rub along on just his basic salary. Unlike everyone else, this amounts to £450,000. I hope the absence of a bonus does not disincentivise him to work less hard.