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News Analysis

Fortnightly Magazine - March 15 2000

utility to negotiate contractual arrangements with customers to reduce load during periods of high demand, resulting in enhanced system integrity and reliability (Case No. U- 12278). But the PSC cautioned Consumers Energy that the tariff was only a temporary measure and should not impede progress to competitive energy markets. "Michigan's economy is booming and our demand for electricity continues to increase at a rapid rate," observed PSC chairman John Strand.

The Post-Choice World

In states such as California, Illinois, and Pennsylvania, where legislation is already in place for electric utility restructuring, state PUCs are spending their energies not in overseeing the generation market, but instead, in monitoring the reliability of wires services and designing performance-based ratemaking schemes founded on service quality indices.

In particular, these measures tend to track such data as SAIFI (System Average Interruption Frequency Index), SAIDI (System Average Interruption Duration Index), CAIDI (Customer Average Interruption Duration Index), CAIFI (Customer Average Interruption Frequency Index), and MAIFI (Momentary Average Interruption Frequency Index).

California. In California, the PUC for some time has required utilities to file annual reports on reliability with data on SAIFI, SAIDI and MAIFI indices. Mark Ziering, reliability project manager in the California PUC's energy division, reports that the commission is now working with utilities and other parties to put together a database on reliability and outage information. Ziering, therefore, anticipates that filing requirements for utilities' annual reports "may get stepped up."

Illinois. Last October, the Illinois Commerce Commission approved a survey instrument to poll consumers on their understanding of prices, billing, and service reliability. The rather extensive reliability segment of the survey includes such questions as:

* Minor Outages. In the past 12 months, how many times has there been a power interruption lasting more/less than one minute at this residence/business?

* Longer Outages. How would you rate the job that [the utility] does on minimizing the number of power outages lasting longer than one minute?

* Longest Outage. How long did the longest outage last?

* Resulting Damage. In the last 12 months, have you experienced any loss or damage due to electrical outages or other electrical problems?

Illinois, incidentally, is the state that allowed stranded-cost recovery for the utilities in exchange for higher reliability standards. In that state, a utility may be subject to sanction after a power outage, unless it can prove that it took all reasonable steps to avoid or minimize the outage.

Pennsylvania. Focusing on the transmission and distribution side, the Pennsylvania PUC in a December order opted for an oversight method that monitors electric service adequacy "on a control area basis," so that generation suppliers and providers of last resort would not need to be included in its regulations. The PUC required distribution companies to provide aggregate data on both existing and planned generating capability "on both a control area and a regional reliability council basis." Docket No. L-00980136, Dec. 2, 1999.

And In Canada

The Ontario Energy Board on Jan. 18 signed off on an order (RP-1999-0034, see www.oeb.gov.on.ca) for performance-based regulation, calling for annual reliability reporting that includes SAIFI,