No clear consensus has emerged. Should regulators hold to a hard line?
Regulators have wrestled for decades with transactions between vertically integrated monopoly utilities and their...
sale can take place depends on systemwide information (em i.e., calculations, including possible loop flows. Responding to the mega-NOPR, the "What" group of the North American Electric Reliability Council (NERC) commented: "It does not seem possible to post the availability of Network Integration Transmission Services" on an OASIS.10 An engineer developing his company's OASIS remarked: "The power flows according to the laws of physics, not according to who is selling power to whom. . . . The grid systems have many bottlenecks."11
The July 2 disturbance in the Western States Coordinating Council (WSCC) clearly illustrates the dynamics of power flows. A flashover between a tree and a 345-Kv transmission line created an outage covering 15 states and affecting two million customers, all within 35 seconds. As the WSCC has noted, if this flashover had been the only incident, customer outages would not have occurred.12 But in hindsight, simultaneous record-high load, near-record-high generation, and significant power transfers were also taking place. The incident underscores the effect of a single point of failure (em one similar to undercapacity that could result from uncoordinated wheeling.
In contrast to the distributed Internet paradigm currently in development, the natural approach might lie in a small number of regional or central trading systems. With proper instrumentation and input, a central trading system could allocate capacity within engineering limits to try to meet the needs of buyers and sellers. A common database (em we might call this the "NASDAQ" approach, after the automated stock market (em might also contribute to better financial reconciliation among parties. For reliability, a central system could maintain standby computers on line at geographically separate locations.
Neither a Bottleneck Nor a Lake
The latent technical issue of OASIS is not whether the Internet is appropriate, but rather, whether a distributed system based on simple bilateral transactions can effectively manage a regional or national transmission network. Electricity does not become congested at bottlenecks, like cars queuing at an intersection. Nor is it a lake, as another has suggested, which lacks interaction among transactions.13 As experience in the United Kingdom has shown, a central database and simulation tool are needed to contain capacity plans and load commitments.
As far as OASIS access over the Internet is concerned, the potential consequences of a security breach or other failure far outweigh any possible benefit, given the current wholesale market and legal limitations on encryption. Utilities should consider the Internet as a means of communicating informally with customers and suppliers, but should only entrust their wheeling transactions to a closed network. t
John Hoag is a graduate research associate at The National Regulatory Research Institute and a PhD candidate in industrial and systems engineering at Ohio State University. His engineering experience includes creating Internet services for government and military purposes and developing demand-side management technology. E-mail: firstname.lastname@example.org.
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