The musings of a utility staffer-written in a spirit of respect for all those staffers who have come to terms with their innermost fears.
I am an employee at what they call a "FERC jurisdictional utility." That means I also moonlight as a professional meeting-goer. But it's a good job. I do my small part to keep the electric transmission grid safe and reliable.
And it better be. Because, as you know, there is only one Grid, and we all have to share if we want to move power around. Out here in the West, each of us owns different pieces of the Grid. But since we must balance the Grid almost instantaneously, from Canada on down to Mexico, and from the left coast to the interior of Colorado, we know that it would collapse and fall down if we didn't coordinate our operations. After all, it takes only seconds for power to move across a continent.
For 10 years I've worked hard at this-ever since Congress chose open access in 1992. And though it's been a long time since anyone considered me for a promotion, that's OK, too. You see, I've put my ambitious younger years behind me now. Even so, I still put in a lot of early mornings and late nights, traveling around the Western states to meet with other utility employees, just like me.
What I Do
I admit that my company doesn't consider me to be indispensable to day-to-day operations. Yet they see my salary as a small price to pay for keeping FERC satisfied with the progress toward a standard market design for the electric industry. I find that rewarding.
In fact, anyone from the public is free to come to our meetings and speak his mind or vent her frustrations. We all have them. Frustrations, I mean.
When not at meetings, I fulfill the very necessary job of keeping everyone in my company informed. I report on the issues-on everyone else's position on all of the issues, on all of the other groups and all of their issues, and on how those issues relate to the timing of my group's issues. Plus, I keep track of the issues that my company thinks we should make some comments on later, or perhaps should have already made some comments on but didn't.
Sharing information is critical. Mutual understanding is essential if we are ever going to find a solution to please every stakeholder, which, of course, is even more essential.
Why I Do It
As long as people go to meetings, FERC will wait for us to figure things out ourselves for the Western Grid, which is OK by me.
No one at these meetings makes any decisions, so there's no harm in requiring just about everyone to attend, as FERC does. Nor does anyone ever make recommendations to other people who actually might make decisions. Decisions mean risk. And we all agree that risk with something as important as electricity is not a good thing.
In fact, there is really no point in getting together for a group recommendation unless everyone agrees with my employer. We can keep talking, as long as there is no one to listen to the recommendation but my employer and some of our favorite neighboring utilities.
I used to ask to be given some other job to do at my company. But they said no so many times that I stopped asking.
Besides, I have accumulated too much knowledge about all the things we have disagreed about before. It is difficult, especially in some parts of the West, to find a good job. So I go to meetings. We can do no harm there, as our management knows. There is not much chance of anything major happening. And were we all to emerge with the exact same idea, there would still be no money to implement it.
Because, as you see, the one thing we really need but don't have is capital. We need more-lots and lots of capital to keep up with growth and to replace old plants. But capital wants certainty. So as long as we go to meetings and talk about all the progress we're making, capital stays away. It just sits and waits for us to agree on a decision, which we don't want to do.
But we keep going to meetings anyway-not because we don't need capital, but because someday we may agree enough to encourage capital to come back.
Even if there were an independent board or some sort of regional council that listened to our recommendations but didn't agree to all of them, I would not worry too much, since they wouldn't likely agree to do much except file requests with FERC for more time. But don't worry-FERC also prefers not to make any decisions that involve risk. Instead, FERC just issues another order "encouraging" us to continue making progress.
"Let us know when you are ready," says FERC. "We are here to serve."
That is very wise of them. FERC is waiting for Congress to tell them what to do. And Congress is waiting for "the industry" to tell it what to do, but only if they (that's us) can all agree on something first.
So far, we agree "it ain't broke"-when the power system is working, of course. When it's not working, we agree it was "the other guy."
We have it good. It's true that we're a little scared of a truly independent RTO board, but that board is scared of FERC, and FERC is scared of Congress, and Congress is scared of the voters. And I'm a voter.
Here's an Example
Once, our group even agreed on making a recommendation. It was nearly a year in the making. We agreed that we needed one market monitor in the West because it is so important to find the bad guys-to enforce "appropriate" market behavior.
So we took our group's recommendation to another group. We knew this second group would not make a decision, but we hoped that if they liked our idea, they would recommend it to a third group: the Filers-the people who file requests at FERC. That way, maybe FERC would OK our recommendation. Unless Congress complained.
But the second group said that we needed other "mechanisms" for achieving this goal of a single market monitor. They asked us to come up with a "structural" way of having one market monitor that interfaced with three other market monitors in a "complementary" way. Although that would make four market monitors, not one, the second group insists this is just "another way" of having just one market monitor.
But the real scuttlebutt is that some people just don't like the way other people do their market monitoring, no matter who it is. So even though we are barely pretending to make progress, this is not really a problem. Most people make peace with what they have to do for their job, or else they don't last very long.
This whole monitoring thing just proves how smart my management team really is. It's the same thing with price convergence.
We are trying to glue three markets together across seams so that we get different prices to converge to a single number. But the market is not liquid. As long as sellers want to sell high and buyers want to buy low, artificial convergence is about all you're going to get. The boat won't float. If you ask me, we'll sooner see all three markets floundering in the rapids than three boats rafted (handcuffed) together.
Some people say we should work on data sharing. We could take that recommendation to the Filers, who could propose an idea to FERC, so that FERC could decide. But that would take lawyers, and the lawyers, we hear, say that they cannot be so bold as to file something with FERC if the Filers have a conflict of interest in the matter, which they do. (I'm not a lawyer so I don't quite understand how this differs from all the other issues the Filers file.)
So the polite thing, I'm told, is not to make a recommendation on data sharing. We will go back to working on a methodology to develop a criterion for proposals on market monitoring and price convergence. We'll need six months. We intend to put that in our next progress report. We have a good chance of being able to meet that report deadline, so the RTOs won't be late because of us.
How It All Holds Together
How is it that the Grid continues to work? Well, I'll tell you.
About 10 minutes before power is delivered, the Big Guys that control such things put their heads together and decide who gets how much power, and where it goes. And when I say Big Guys, I mean California, which throws a fit if it can't have its imports, and BPA, which owns a big piece of the Grid, plus lots of plants.
Now, as you know, BPA doesn't want to be blamed for California's problems. And California, of course, is quick to point fingers. So the two of them figure it out. Most of the time, the Big Guys can live with the result, and the little guys don't have enough information to complain about it. They just get told what's feasible. Little guys are just the annoying fringe; no one would miss them very much if they disappeared. Unless they are public power utilities. That's why the Big Guys make sure they get to go first. At least as much as it will keep them quiet, most of the time. Neither one of the Big Guys wants FERC or Congress to get mad enough to do something, so they have a lot to lose if they don't cooperate with each other.
Most of the time this works. Except when it doesn't. We are already battening down the hatches for the supply crisis of 2004. By then, things will pretty much be where they are now. FERC will be waiting for a signal from Congress. Congress will be waiting for the industry, or focused on Alaskan oil, or the presidential elections.
Most people have given up on effective self-regulation. We could never get Congress to understand that NERC, the national meeting-goers who discuss reliability, needs more teeth. So, by 2004, the industry should still be going to meetings, declaring it is making progress, if not recommendations.
On the other hand, the Grid doesn't talk back to you before it falls down. And once it falls down, there is a storm of accusation. We could spend years sweeping up the mess. Arguing about what the prices should have been. Who did what.
But people are really smart. They have figured out that if no one decides anything, no one can be blamed.
The public might get angry. And Congress might get angry, too. You'd see finger-pointing and mudslinging. And more meetings, too, but only now there would be just the lawyers at these meetings, getting paid by the hour to watch what happens.
And that's OK by me. Because my management thinks my talent is "conciliation." So I wouldn't have to go to those meetings.
Like I said, we all know there is only One Grid, and that nothing has been fixed since 2000. Someday, after enough crises, we will figure out how to have one coordinated way of running it. We all know that. That's why we keep going to meetings every year. At least we know where it is going to end up, a decade or so down the line. We all want the West to work, but the West is different. We have contracts, and we have municipals, and we have hydro.
Take, for instance, our historic agreement on loop flow. We took the time to get everyone to agree on the right solution, even if it did require 27 years of meetings. So we have to be careful not to undo that.
Meanwhile, I'll try to take good notes. Because someday I am going to retire, and my replacement will need to know about all the progress we have made.
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