Many utilities have trimmed their capital spending in the face of economic weakness and regulatory uncertainty. At the same time, strong energy sales have boosted cash flow and profits. Backed by...
The blackout could doom deregulation, but why treat reliability and reform as either-or?
Driving west near Cleveland on the Ohio Turnpike back in August, a few days after the big blackout, I saw what looked like a small helicopter hovering up ahead, about 25 feet from the top of a transmission tower.
Was this a prank? Had terrorists struck? Or was it the local TV news station, just trying to get a closer look?
At 70 miles per hour, I soon drew abreast of the scene and looked out the side window. The power lines lay just past the highway shoulder, with Lake Erie not far beyond. And I was not mistaken. I squinted but could not discern any company logo on the 'copter. But as the pilot tried to keep his craft steady, I clearly spotted a second passenger (an engineer, I presume), leaning his torso out the open side door, stretching his safety harness as far as he dared. He held a pair of binoculars to his eyes and appeared to look up and down the line in both directions-checking for damage, I presume, though I could not say why, since no trees were near and I couldn't detect any unusual sagging.
I would have liked to stay and watch. But within seconds I had sped past the scene, leaving time only to steal a few more quick glances out the rearview mirror. But I continued to wonder about what I'd seen. Was it "good utility practice?" After all, a strong puff of wind from off the lake and we would have had déjà vu all over again.
THE GREAT BLACKOUT OF AUGUST 2003 MAY WELL SPELL THE DOOM OF DEREGULATION AS WE KNOW IT FOR THE ELECTRIC INDUSTRY.
Congress likely will see the uncertainty of markets and the uncertainty that plagued Midwest grid operators on Aug. 14 as one and same. How many voters would recognize the nuances between PJM, a regional control area run as a single system, and the Midwest Independent system Operator, a Holy Roman Empire of 20-plus utilities, each claiming its own control area, and each seeing itself as sovereign of its own domain. What the voters don't notice, Congress will be only to happy to ignore.
Yet I believe that reliability and a move to markets need not be mutually exclusive. Rather, they must march forward together, in step, for either to succeed. You can find evidence for that argument wherever you choose to look.
Even the North American Electric Reliability Council (NERC) can be seen admitting the usefulness of markets. The latest example came when NERC threw in the towel on its own pilot program for a value-based redispatch-a primitive market-friendly method NERC had proposed back in 1999 (remember e-tags?) for avoiding the lingering sense of discrimination that comes with incidents of transmission loading relief (TLR). Thus, in a little-noted report filed at the Federal Energy Regulatory Commission on Sept. 11, NERC said it would abandon its market redispatch program, since it's now clear that you get a much better result by