Public Utilities Reports

PUR Guide 2012 Fully Updated Version

Available NOW!
PUR Guide

This comprehensive self-study certification course is designed to teach the novice or pro everything they need to understand and succeed in every phase of the public utilities business.

Order Now

Too Much Reliability

NERC confronts a case backlog now numbering in the thousands.

Fortnightly Magazine - January 2011

cascading outage different, and how reliability standards would change if risk of cascade was the true litmus test.

In May 2008, in the heady days following NERC’s reincarnation as an enforcement agency, its then-sitting general counsel David Cook announced approval by the board of trustees of a multi-part definition of the term “adequate level of reliability,” which included in its sixth and last element an oblique reference to load loss:

“The System has the ability to supply the aggregate electric power and energy requirements of the electricity consumers at all times, taking into account scheduled and reasonably expected unscheduled outages of system components.”

Yet E.ON U.S. maintains that this interpretation violates Congressional intent, as manifested in Federal Power Act sec. 215(a)(3), which expressly excludes from the definition of “reliability” any associated requirement “to expand transmission or generation capacity.” And, as E.ON also points out, FPA sec. 215(i)(2) expressly bars either NERC or FERC from enforcing standards for system and service adequacy, but instead assigns all responsibility for adequacy and reliability of electric service to the states ( see, Comments by E.ON U.S LLC, FERC Dkt. AD10-14, filed July 26, 2010 ).

Thus, FERC’s Turlock ruling puts NERC on the hot seat, forcing it to make judgments it was never intended to make—judgments that might be better left to a market.

Some have suggested a CEO-led forum that would function outside of regulatory supervision and settle on a what some call the “cost curve”—that is, decide how much reliability the nation really needs, and can really afford.

NERC’s Board Chairman John Q. Anderson seemed to favor that idea and explained at the summit how it might work:

“The objective would be to have very specific issues that we all understand need to get out on the table. Some of them are going to be the elephant-in- the-room type of issue that gets danced around when there’s legal proceedings.”

Many point to the Institute of Nuclear Power Operations (INPO) as an exemplar, which facilitates collaboration and disseminates lessons learned in a collegial atmosphere. In fact, the North American Transmission Forum seems to be recasting its activities in that direction, following its signing last summer of a memorandum of understanding with NERC.

Commissioner Spitzer attempted at the July summit to throw out a rough cost-benefit rule on what outages might be acceptable:

“Is load-shedding an acceptable operational procedure following a single contingency in a rural fringe area of the system, where the rest of the interconnection is not affected and customers have chosen not to build reinforcements?”

Stephen Wright, CEO of Bonneville Power, put the problem this way:

“There is a point out there at which you move from an outage to a cascading outage, and you say, `boy, that cost is just too high.’ The difficulty that we have right now is we just haven’t had that conversation, and the legislation doesn’t speak to that. It doesn’t tell you where is that point. We need to have that conversation and decide where we want to be, and candidly, there will not be a single