State regulators say they won't bargain under "threat of blackouts," but their complaint only highlights how the power is shifting.
The Michigan Public Service Commission is...
mid-Atlantic and upper Midwest regions. Applications for two other regions follow close behind. (The first ISO to become operational affected only the state of Texas and thus did not require FERC approval.) Thus far, these ISOs vary in terms of functions and governing structures. %n2%n
Nevertheless, the industry has not yet answered the question of how ISOs will maintain system reliability in an increasingly decentralized and competitive bulk power market. Traditionally, that responsibility lay with the North American Electric Reliability Council, which relied on voluntary cooperation from utilities and power pools that belong to its regional councils. In January 1997, NERC decided to make its rules and procedures mandatory and to create a new system featuring measurable performance standards. %n3%n This action, however, has raised a new issue - how to enforce the standards. Many have come to doubt whether the FERC maintains sufficient statutory authority to require all market participants to comply with NERC rules.
To clarify this issue, the Secretary of Energy Advisory Board's Task Force on Electric System Reliability has proposed that Congress adopt legislation to enable the FERC to approve a system of self-regulating organizations for transmission system reliability. %n4%n This concept is already commonly used in the securities industry, where the Securities and Exchange Commission authorizes various SROs, such as the National Association of Securities Dealers, to regulate the operations of their own members. For transmission system reliability, the proposed legislation would enable FERC to recognize the status of NERC as an SRO for establishing reliability standards for the electricity industry. As a result, ISOs would then be bound to monitor and enforce compliance with NERC standards in their regions. The FERC would ensure that NERC's governing procedures, its standards and its enforcement activities met the public interest. It is anticipated that this institutional structure would also meet the challenge of reliability if ISOs eventually should give way to transcos - network operators that also own the physical grid assets but remain independent of power generators and retail service providers.
A Technological Problem
In the long term, however, legislative fiat and institutional restructuring cannot ensure that transmission systems will address the reliability problems that may come with open access. Eventually, both the capacity and reliability of transmission networks will have to be improved simultaneously through development of a highly automated, "smart" power system. The grid will need technological advances in four major areas:
1. Improved physical control to expedite grid operations by switching power more quickly and preventing the propagation of disturbances;
2. Monitoring systems that can improve reliability by surveying network conditions over a wide area;
3. Analytical capability to interpret the data provided by the wide area monitoring system for use in network control; and
4. A hierarchical control scheme that will integrate all the above technologies and facilitate flexible network operations on a continental scale.
Electric utilities are now adding these technologies to their transmission systems, creating smart networks.
"Flexible AC transmission system," for example, denotes a family of high-voltage electronic controllers that can boost the power-carrying capacity of individual transmission lines