Allocating the costs of new transmission investments requires accurately assessing the value of those new lines, and identifying the primary beneficiaries. But formulaic approaches rely too much...
There are essentially two kinds of reliability: sufficient generating capacity, and sufficient transmission capacity. Although it often receives the most attention, generation accounts for only about 10 percent of reliability concerns. Even when there is a problem, there is usually time to prepare; demand can be reduced through voltage reductions, interruptible customers, public appeals, and as a last resort, rotating blackouts. Inadequate electric generating capacity causes "brownouts" or, at worst, controlled "rotating blackouts" of limited duration; not massive, uncontrolled blackouts.
The transmission system, on the other hand, accounts for about 90 percent of reliability concerns. When it fails, it usually does so suddenly and catastrophically. And the final result can be cascading outages and widespread, uncontrolled blackouts.
Coordination: Little or No Incentive
The reliability problems of the bulk-power transmission system are dealt with today by pool and regional cooperation and coordination. But the new, competitive era may place this process at risk. Transmission owners that are also power suppliers will have little or no incentive
to cooperate with one another or with others. Similarly, a world of "two-party transactions" could lead to quick fix solutions to the immediate problem, rather than an optimized long-term plan.
Developing an optimized, efficient transmission expansion or enhancement plan for an entire area (em whether a regional transmission group (RTG), power pool, or regional council (em will require all generation owners, present and prospective, to share their future plans with the group. Will independent power pro-ducers, nonutility generators, spunoff generating companies, traditional utilities (if any), power marketers, and others be willing to reveal (em even commit to (em their specific generation plans five to 10 years in the future? At best, it's questionable.
Capacity: It Depends on Contingencies
Another challenge looms. Consider the simple case of a single transmission interface that places a significant limit on transfers. Let's also assume that all parties (em generators, marketers, transmission owners (em agree that the transfer capability across that interface should or must be increased. Here are the options:
s Agree to live with it.
s Prioritize access rights.
s Build new facilities.
s Lower the criteria.
Using less stringent criteria (em lowering the river when you can't raise the bridge (em will sometimes be tempting. But as any system planner concerned with the laws of physics, electric reliability, and real efficiency will tell you, that's a prescription for disaster.
There's a problem in reconciling the apparent conflict between the Federal Energy Regulatory Commission's (FERC's) concept of "available transmission capacity" (ATC) and the industry's long-standing "transmission transfer capability" approach. But whatever it may be called, the transfer capability across an interface, down a corridor, or between two systems is a direct function of the reliability criteria used. These criteria identify the contingencies or disturbances the system must survive successfully without overloaded facilities, low voltages, or system instability. The system must also be within acceptable parameters without a contingency, of course.
Typically, a variety of contingencies must be tried on each potentially limiting interface. The critical contingency for one transmission interface will not be the same as for another. Different patterns