The Federal Energy Regulatory Commission appointed Bud Earley policy advisor on electric matters. Earley most recently served as director of the electric policy division of the FERC's Office of...
Regulators Forum: Shifting Winds, Shifting Strategies
State regulators grapple with investments, supply planning, and structural issues.
Q: What lessons were learned from this storm?
A: The first thing you see is that the grid really is interconnected. We've always argued in the Southeast that we'd like to stay by ourselves, in terms of our power market. But what happens 100 miles away will affect other plants and substations. When Plant Watson went down it caused a spike in the grid that shut down a SNEPA coal-fired plant in Purvis, Miss.
So we are interconnected, and we need to do a better job of ensuring in situations like this, in a Katrina-type storm or a terrorist attack, that we have the right communications systems and people in place to make the right decisions and do what needs to be done to restore the grid as quickly as possible.
Some regulatory requirements have made communication more difficult. The FERC [Federal Energy Regulatory Commission] has put firewalls in place [to prevent self-dealing and cross-subsidies]. But when you deal with a disaster of this magnitude, your first priority is to get the grid online without getting someone killed because they haven't been told the grid will be hot in five minutes. Restrictions on communication can make for dicey problems.
Q: What does the future hold for Mississippi? What improvements are needed to make the system more survivable?
A: You can't bulletproof everything. If the good Lord wants to tear something down, he's going to do it. The casinos were supposed to handle 200-mph winds, but the winds weren't that great and they still moved 100 yards inland.
But in dealing with the pipeline issues up in Collins, there are things we can do to better protect things that are vital for national security, to make sure they come online quicker. The local folks just need to know if something is in the national interest, so we can work with the federal government to protect that asset.
In the big picture, based on the growth we have in this country, we will rebuild from Katrina and Rita, and we will make the Gulf Coast better and stronger. The great thing about a storm is that when everything you have is knocked down, you can explore your options.
As we move forward, we will need power. With the high price of natural gas, we have to find alternative fuel sources to produce electricity. We are exploring clean coal and nuclear power, as well as efficiency and demand response. Our role at the PSC is to support our companies in innovating and making prudent investments in technology.
We are all in this together. With cooperation between companies and regulators, a lot of great things can happen.
One might argue that as one of the country's wealthiest states (from a per-capita income perspective), New Jersey can afford to pursue idealistic goals, including satisfying all of its future power demand growth by using efficiency and renewable resources. But on the other hand, New Jersey residents also pay living costs that are among the highest in the country. And with its large