Tighter Regional Regulation Needed of Power Grids

That is the unanimous conclusion of experts on the great 2003 blackout

Photo: ONY KURDZUK/REUTERS

Midtown Manhattan during the night of 14 August.

Not infrequently, major breakdowns of human systems, or natural disasters aggravated by patterns of human activity, give rise to heated debate about causes and implications that just go on and on. Whether it is a major reactor failure or a mudslide that takes a dreadful human toll because of unchecked settlement, experts characteristically are at each others' throats, literally before the toxic dust has settled.

Yet this has not been the case with the blackout that began the afternoon of 14 August and within hours darkened cities from New York to Detroit and Toronto. What is striking here is the similarity of the diagnoses and the cures put forth by the qualified groups that have weighed in with well-formulated opinions so far.

To be sure, it may still take months to decipher, in the thousands of relevant computerized records and communications, the exact sequence of events that produced the cascading outage. But within days of the blackout, it already was pretty clear that the trouble had begun in transmission lines operated by an Ohio utility and that the utility's alarm systems inexplicably failed, so that the utility itself, the regional regulator, and neighboring system operators did not get fair warning. What's more, even without fair warning, some adjacent systems, such as the PJM Interconnection (Valley Forge, Pa.), managed to protect themselves while others signally failed. What these facts have suggested to all well-informed observers is that the country's system of regional grid regulation urgently needs attention.

In a nutshell, over the past decade, as the grid has been transformed into a common carrier, in which electricity is bought and sold freely and transferred in ever greater quantities over ever longer distances, the traditional practice of letting state public service commissions have sole authority over local grids has proved inadequate. As a result, beginning in the Clinton years and continuing in the Bush presidency, federal regulators have sought greater authority to create regionwide supervisory authorities.

Yet for many with vested interests in the legacy system, and for states' rights-oriented conservatives, it has been painful to digest the hard conclusion that competition in electricity is not equivalent to deregulation—that at the level of the huge regional transmission grids, at least, restructuring requires tighter and more intrusive regulation than ever.

IEEE-USA weighs in

Typical of the expert recommendations responding to the blackout was testimony given to the U.S. House Committee on Energy and Commerce on 29 August by IEEE-USA, the IEEE's policy-advising arm in Washington, D.C., for U.S. members. Prepared by IEEE-USA's energy group, with input from a policy advisory group that the IEEE Power Engineering Society established several years ago, the report to the committee recommended:

*Mandatory reliability standards.

* Clear regulatory division of labor between the federal government and state authorities.

*Improved regional regulatorystandards and procedures.

*Configuring of grids to limit failures.

*Incentives for relevant new technologies.

*More federal authority to site transmission lines and other grid assets.

*Procedures for demonstrating compliance with rules.

While not excusing the blackout, IEEE-USA noted that on the whole, the Northeast-Midwest system did a pretty good job of protecting itself on 14-15 August, so that restarting it went relatively smoothly and adverse consequences were minimized. ”Unlike the 1977 and particularly the 1965 blackouts, there were ’blackstart' procedures in place and people knew what to do to bring the system back up in an orderly fashion without panic.”

Essentially similar conclusions were offered in a report issued on 28 August by the National Commission on Energy Policy, part of a larger study mounted by the Pew Charitable Trusts and other foundations. It also called for making reliability rules mandatory and enforceable. It urged support for efforts by the Federal Energy Regulatory Commission (FERC, Washington, D.C.) to establish regional transmission organizations (RTOs) that can keep grids operating smoothly.

The PJM Interconnection—the organization that manages the grids in Pennsylvania, New Jersey, and Maryland, as well as many other more or less contiguous areas—has made its opinions known as well. In testimony given to Congress on 4 September and previewed for the press the day before, PJM said the United States must give FERC authority to make regional transmission organizations flourish.

A nagging question

As the U.S. press widely reported, less than a year before the 14 August blackout, FERC allowed a Midwest regional operator to be set up without direct authority to manage the grid, and with a multiplicity of separate grid operators under its purview. Why did FERC approve the Midwest Independent System Operator Inc. (MISO)?

The situation seems all the odder in that FERC had vetoed an earlier proposal for a midwestern RTO that would have been called the Alliance RTO.

Sources at PJM surmise that until last July, when the U.S. Supreme Court upheld FERC's authority to muscle utilities into RTOs, FERC was uncertain of its powers. First in California, then in the Midwest, it figured the main thing was to get an independent operator set up, then fix any problems.

As for the proposed Alliance RTO, it would have been unique as a for-profit entity. It looked suspiciously to FERC staff as if it had been configured geographically to serve as a gatekeeper and toll collector between the Midwest and the Northeast. What was worse, according to the same sources, the Alliance's business plan left unclear how its procedures would deliver market benefits to consumers.

To Probe Further

For Spectrum's continuing online coverage of the 2003 blackout, go to http://www.spectrum.ieee.org/WEBONLY/special/aug03/blackout.html.

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