Law or no law FERC can aid reliability, Wood observes

Federal legislation setting electric reliability requirements is the best fix for grid problems but FERC can act to boost reliability if Congress fails to pass a bill, Commission members were told.
     Regulators were advised to respect state and Canadian interests in any action they take and to be mindful of the contributions evolving technology may offer.
     FERC got that advice during its conference on ensuring grid reliability after the Aug 14 blackout.
     "We've got a lot of work ahead, with the bill, hopefully, or without it," Wood observed.
     NERC officials briefed the commission on the reliability regime that evolved over the past 35 years, initiatives to strengthen the grid and the grid's inherent limits.
     NERC Senior Vice President David Nevius intends to put more emphasis on regional programs, he noted, reporting on a new standards development process.
     NERC General Counsel David Cook wants to see FERC given the authority to create an organization that would set and enforce standards but without needed legislation NERC will gear up auditing efforts.
     NERC's compliance program is "a good one," Nevius offered, but "we've gone as far as we can to push industry in a voluntary environment."
     Cook agreed, telling Commissioner Suedeen Kelly that while peer pressure among firms worked well in the past it likely would not be good enough in the future considering changes in the industry.
     NERC is trying to foster an expanded WECC arrangement, said Cook, making compliance with key operating rules enforceable by contract with other regions.
     Control areas representing 88% of load -- 23 of 33 areas -- voluntarily joined in the program, WECC CEO Louise McCarren reported, and the WECC staff is working with the others to convince them to take part.
     FERC and state commissions can use their considerable leverage to encourage such cooperation, she noted.
     The WECC's system isn't considered final, but is an intermediate step until mandatory standards are adopted, McCarren pointed out.
     Reliability standards need to be mandated, New Jersey Commissioner Connie Hughes urged. She chairs NARUC's Ad Hoc Committee on Critical Infrastructure.
     "I don't believe in over-regulation, but our business really is about reliability," Hughes asserted.
     Federal and state commissions could do a better job of monitoring which firms meet standards, she added.
     She wants NERC to be more forthcoming with that data.
     The feds and states "both have responsibilities," she cautioned.
     How heavily interconnected the grid is was illustrated by the August blackout, noted Hans Konow, CEO of the Canadian Electricity Association.
     He made a similar plea for inclusion.
     CEA agrees that the present system of voluntary reliability standards has to change but international solutions are needed.
     The group favors the reliability language in the pending energy bill, Konow reported, but worries about unilateral action by the US.
     Technology is vital to boosting grid reliability, said DOE's William Parks, deputy director of the Office of Electric Transmission & Distribution.
     Some technologies are available today to assist in this regard, he reported, while others are to emerge over the next decade.
     "As you think about rules and regulations, be sure you don't exclude new technologies in coming years," he advised.
     For Parks, standardization of protocols and procedures to ensure reliability are key.
     Airlines and other industries have been able to do it but not the power sector, he observed.
     New technologies such as real-time sensors need to find applications regardless of market structure, noted Commissioner Nora Brownell.
     The industry has focused less on the future and more on "keeping the lights on" in recent years, Parks noted, lacking the incentives and capital to look at new technologies.
     (Story originally published in Restructuring Today 12/3/03)