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UPDATE 4-Bush says US electricity grid needs upgrade

(Updates with announcement of U.S.-Canadian task force)

By Adam Entous

NEWPORT BEACH, Calif., Aug 15 (Reuters) - U.S. President George W. Bush on Friday called the worst blackout in North American history a "wake-up call" and said he would push to upgrade the nation's electricity grid to head off future breakdowns.

To determine the cause of the massive outage, the White House announced that the United States and Canada would create a joint investigative task force. The White House said Bush called Canadian Prime Minister Jean Chretien about the work of the task force.

Bush was briefed by Treasury Secretary John Snow about how financial markets were holding up and the White House said Health and Human Services Secretary Tommy Thompson was contacting hospitals to make sure they had the supplies they needed.

"I view it as a wake-up call," Bush told reporters during a visit to the Santa Monica mountains, adding that the massive blackout was "an indication we need to modernize the electricity grid."

Federal, state and local officials are still trying to pinpoint the cause of the breakdown, but they said terrorism was not involved.

Bush said investigators needed to find out why the outages cascaded so quickly through much of the northeastern United States and the Canadian province of Ontario, knocking New York City, Detroit, Cleveland, Ottawa, Toronto and a host of smaller cities back into the pre-electric age.

JOINTLY CHAIRED

The U.S.-Canadian task force will be jointly chaired by U.S. Energy Secretary Spencer Abraham and Canadian Minister of Natural Resources Herb Dhaliwal.

White House spokesman Scott McClellan said the task force would also "seek solutions to help prevent future outages."

"We need to take a look at what went wrong, analyze the problem and come up with a solution. We don't know yet what went wrong but we will," Bush said.

So far, the White House has received only one aid request, for an electric generator in New York City, which Bush said federal officials were working to deliver.

He said a sweeping energy bill, working its way through Congress, took into account the need to modernize the grid.

The blackouts could feature prominently in negotiations between the House of Representatives and Senate in September to finish the legislation -- the first U.S. energy policy re-examination in a decade and a top Bush priority.

The House Energy and Commerce Committee on Friday launched an investigation into the cause of the outages.

The focus of the energy bill has been on a controversial plan from the Federal Energy Regulatory Commission to rewrite power grid rules and require U.S. utilities to join super-regional grid groups. But that focus could shift to system reliability in the face of the blackouts.

The industry needs about $50 billion to $100 billion in new investment, according to the Electric Power Research Institute, an industry funded group in Palo Alto, California.

Former Energy Secretary Bill Richardson said much of the U.S. electricity system was 50 or 60 years old and showing its age. "We're a superpower with a third-world grid. We need a new grid," said Richardson, now governor of New Mexico.