New Tools for Keeping the Lights On

Now, a decade after the largest blackout in American history, engineers are installing and linking 1,000 of those instruments, called phasor measurement units, to try to prevent another catastrophic power failure. When the work is done, the engineers say, they will have a diagnostic tool that makes the old system seem like taking a patient’s pulse compared with running a continuous electrocardiogram.

Gilbert C. Bindewald III, a program manager at the Energy Department, which has spent about $200 million to encourage their installation, said the instruments were “shedding light on the science that’s occurring behind the scenes, within the grid.”

Phasor measurement units work by measuring the rhythm of current at different points on the power grid. Readings at every point within each of the three North American grids — one covering the eastern two-thirds of North America, one covering the West, and one covering Texas — are supposed to be basically the same. If the measurements differ, it can be a sign of imminent collapse. When the current is flowing properly, phasor measurement units record normal readings — about as exciting as “watching paint dry,” in the words of Peter K. Lemme, a senior electrical engineer at the New York Independent System Operator, which runs New York’s grid. As Mr. Lemme spoke, he looked at a real-time display of phasor measurement units across the state.

But then he replayed New York records from an afternoon three weeks ago when a capacitor, a device that helps maintain voltage, suddenly failed at a substation near Utica. In response, measurements taken at an electrical substation near Rochester registered an enormous shock on a graph. In Leeds, south of Albany, the disruption was considerably milder. The disturbance gradually petered out, like a playground swing that slowly comes to rest.

If that glitch had been large enough to threaten a statewide power failure, the new devices could have alerted the engineers to the impending crisis and given them time to react, for example, by shutting down a part of the system to avoid cascading power failures. Tracy A. Flippo, the vice president for transmission operations at the Tennessee Valley Authority, said the devices could provide “precursor information” before a collapse.

The hope is that they could help prevent or at least limit a large-scale blackout like the one that happened a decade ago.

In 2003, as northern Ohio ran short of generation and transmission because of a combination of neglect, mismanagement and human error, circuit breakers took major transmission lines out of service. The power failure then cascaded across 600 miles, eight states and Canada. New York, Cleveland and Detroit went dark, as did Toronto and sections of New Jersey, Pennsylvania, Connecticut and Massachusetts. In New York office buildings were evacuated, thousands of commuters were stranded, and hospitals were flooded with patients suffering in the stifling heat.

“Somebody in Ohio could have recognized that we either need to raise generation or shed load,” said Richard Dewey, senior vice president of the New York Independent System Operator. Or, he said, New York could have seen trouble coming and insulated itself. The two units scrutinized after the blackout, one in Detroit and one in Cleveland, showed the strain.

Other changes to the grid should help, too. The federal government, for example, has given an industry group the authority to set standards. That group, the North American Electric Reliability Corporation, has levied substantial fines against companies that failed in tasks like trimming trees or testing equipment. Untrimmed trees and improper procedures for testing equipment have caused widespread power failures in recent years.

Joel deJesus, a former director of compliance enforcement at the corporation, said that in his view the large fines had been effective. “Wrists have been slapped pretty hard,” he said.

The network of phasor measurement units offers a technological advantage.

So far hundreds of phasor measurement units have been installed across the country, including 48 in New York.

Before then, the operators of the New York grid had only scattered data points within the state. For years they have been mostly blind to the grid outside New York, receiving only a few readings from devices at the borders with New England, Quebec, Ontario, and a region that includes Pennsylvania, New Jersey and Maryland.

But by the end of 2014, officials at the Energy Department said, they anticipate that all 1,000 phasor measurement units will be in operation and linked to one another. The next step, they said, was to figure out how to better present the flood of data to human operators in a useful way.

“The question is, How do we cue them to an event that a computer might be able to see coming?” said Mr. Bindewald of the Energy Department. Initially data will be integrated into computer displays, and later it may be used to set off automatic protective actions that would prevent or limit blackouts.

Experts argue that such a system could easily pay for itself. The 2003 blackout cost billions of dollars in lost economic output.

DealBook: As Labor Talks Collapse, Hostess Turns Out Lights

What might be the last Twinkie in America — at least for a while — rolled off a factory line Friday morning. It was just like the millions that had come before it, golden, cream-filled empty calories, a monument to classic American junk food.

But it is likely to be the last under the current management. After not one but two bankruptcies, Hostess Brands, the beleaguered purveyor of Twinkies, Ho Hos, Sno Balls and Wonder bread, announced plans to wind down operations and sell off its brands.

Since filing for Chapter 11 bankruptcy protection in January, Hostess has been trying to renegotiate its labor contracts in a bid to cut costs. But the talks fell apart, and last week one union went on strike.

The so-called liquidation will probably spell the end of Hostess, an 82-year-old company that has endured wars, countless diet fads and even an earlier Chapter 11 filing. Although the company could theoretically negotiate a last-minute deal with the union, Hostess is moving to shut factories and lay off a large majority of its 18,500 employees.

But Twinkies and the other well-known brands could eventually find new life under a different owner. As part of the process, Hostess is looking to auction off its assets, and suitors could find value in the portfolio.

“The potential loss of iconic brands is difficult,” said the company’s chief executive, Gregory F. Rayburn. “But it’s overshadowed by the 18,500 families that are out of work.”

The company’s current problems stem, in part, from the legacy of its past.

An amalgam of brands and businesses, the company has evolved over the years through acquisitions. In the 1960s and 1970s, the company, then called Interstate, bought more than a dozen regional bakeries scattered across the country. A couple of decades later, it paid $330 million for the Continental Baking Company, picking up a portfolio of brands like Wonder and Hostess.

As the national appetite for junk food waned, the company fell on hard times, struggling against rising labor and commodity costs. In 2004, it filed for bankruptcy for the first time.

Five years later, the company emerged from Chapter 11 as Hostess Brands, so named after its most prominent division. With America’s new health-conscious attitude, it sought to reshape the business to changing times, introducing new products like 100-calorie Twinkie Bites.

But the new private equity backers loaded the company with debt, making it difficult to invest in new equipment. Earlier this year, Hostess had more than $860 million of debt.

The labor costs, too, proved insurmountable, a situation that has been complicated by years of deal-making. The bulk of the work force belongs to 12 unions, including the International Brotherhood of Teamsters and the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union.

The combination of debt and labor costs has hurt profits. The company posted revenue of $2.5 billion in the fiscal year 2011, the last available data. But it reported a net loss of $341 million.

With profits eroding, the company filed for Chapter 11 in January. It originally hoped to reorganize its finances, seeking lower labor costs, including an immediate 8 percent pay cut.

The negotiations have been contentious.

The Teamsters, which has 6,700 members at Hostess, said it played an instrumental role in ousting Hostess’s previous chief executive, Brian J. Driscoll, this year after the board tripled his compensation to $2.55 million. The union also hired a financial consultant, Harry J. Wilson, who had worked on the General Motors restructuring.

While highly critical of management missteps, the Teamsters agreed in September to major concessions, including cuts in wages and company contributions to health care. As part of the deal, the union was to receive a 25 percent share of the company’s stock and a $100 million claim in bankruptcy.

“The objective was to preserve jobs,” said Ken Hall, the Teamsters’ general secretary-treasurer. “When you have a company that’s in the financial situation that Hostess is, it’s just not possible to maintain everything you have.”

But Hostess reached an impasse with the bakery union. Frank Hurt, the union’s president, seemed to lose patience with Hostess’s management, upset that it was in bankruptcy for the second time despite $100 million in labor concessions. He saw little promise that management would turn things around.

“Our members decided they were not going to take any more abuse from a company they have given so much to for so many years,” said Mr. Hurt. “They decided that they were not going to agree to another round of outrageous wage and benefit cuts and give up their pension only to see yet another management team fail and Wall Street vulture capitalists and ‘restructuring specialists’ walk away with untold millions of dollars.”

About a month ago, Mr. Rayburn said, the bakers union stopped returning the company’s phone calls altogether. For its part, the bakery union said the company had taken an overly aggressive approach. David Durkee, the union’s secretary-treasurer, said Hostess had given an ultimatum. “They said, ‘If you do not ratify this, we are going to liquidate based on your vote.’ ”

With the company standing firm, the bakery union struck last week, affecting nearly two-thirds of the company’s factories across the country. The Teamsters drivers honored the picket line, further shutting down the operations. The company gave union members until 5 p.m. on Thursday to return to work.

Mr. Rayburn said the financial strain of the strike was too much for the company, which had already reached the limits of its bankruptcy financing. Over the last week, Hostess lost tens of millions of dollars as many customers’ orders went unfilled. And its lenders would not open their wallets one more time.

By Thursday morning, Hostess’s executives were ensconced in the company’s headquarters in Irving, Tex., still hoping that enough employees would return to work to resume production. A small number of workers had already crossed the picket lines that had sprung up at most of the baker’s factories, but more than 10 plants remained well below their necessary capacity.

Mr. Rayburn’s deadline of 5 p.m. passed without either side backing down. Soon after, executives asked the company’s legal advisers to finish the court motions that would begin the liquidation. Papers had been drawn up well before that afternoon.

Around 7 p.m., Mr. Rayburn had his final discussions with the company’s board and his senior managers and made the call to begin winding down.

“We were trying to focus on where people were having success, but I had to make a call,” Mr. Rayburn said.