Can NERC Juggle All Three En Route to Open Access?
At the year's start, the North American Electric Reliability Council decided to leave its "peer pressure" policy behind and require...
more balance in it.
"We have a conference call tomorrow where a task force we have working on this kicks off a nine-month effort to try to decide all three of these issues."
"I think thatÆs a good question. I think NERC and the reliability councils still have an opportunity to show that they can fulfill the leadership role that is going to be required from industry to retain a reliable system. As competition approaches and as I talk to customers, I don't hear anyone asking for a less reliable system. IÆve read a number of articles saying, 'The system's too reliable.' Well hell, thatÆs like saying youÆre having too much fun or you're too rich or you have too much class. It can be gold plated and you can certainly go overboard but I think what we learned in the West last summer is there isn't a customer out there asking for reliability to be degraded.
"I think NERC and the reliability councils have a significant role to play there and whether they have the only role will be determined in the public policy debate thatÆs going to surround federal legislation.ö
Who Moves the Juice?
"Certainly transmission owners shoulder the burden for maintaining and operating a reliable system. And we know from studies that most of what a customer would consider a reliability problem is associated with the lines as opposed to the generator. I've seen numbers as high as 99 percent of the reliability problems come with the lines as opposed to a shortfall of generation.
"In the future, all market participants are going to have to pay that cost and it ultimately is going to have to be paid for by load.
"So you do have some tension between the traditional industry, who is footing the bill, and the new market entrants who have not yet picked up their share of it. And it's particularly awkward as we kind of transition through rule 888, rule 889, toward, we believe, independent system operators, because there's really no reliability collection mechanism. So right now, traditional utilities support reliability pretty much out of their hides."
ISOs vs. NERC.
"I certainly donÆt see the need for [a reliability czar]. NERC fills the role of æprovide the high-level oversight on a North American basis.'
"I see the ISO as an implementing and enforcing arm of the reliability councils. Not someone that argues with the reliability councils. I don't see a conflict that's going to have to be arbitrated between an ISO and NERC.
"The ISO will have a regional planning responsibility [to call for new transmission] in most of the models IÆm familiar with. And also through congestion pricing, it identifies where there are economically justifiable reasons to build transmission. It identifies how much money would be cost-justified to invest in the new transmission.ö
"It is badly needed. And I can speak to that on a company basis. The volume of our scheduling transactions has increased by about tenfold in the last 18 months [due to sales and resales with