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Commentaries and editorials

Yes, It Could Happen Here

by Steve Wright
The Oregonian, August 16, 2003

If past experience is any guide, it could be weeks before all contributing factors are known about the Northeast electricity outage. A major cascading outage happens so quickly and is so complex that it takes time to re-create the sequence of events affecting such a wide geographic area.

But while we may not know specific events, we have known for some time that there are significant national problems with our transmission grid. While specific solutions vary by region, there are actions that will make it less likely a similar event will happen. Fundamentally, there are two steps we need to take. We need to make reliability standards for market participants mandatory. And we need to enhance our electricity infrastructure.

Anyone watching television in the past few days has seen that we have three interconnected grids in this country: one for the east up to the Rockies, one west of the Rockies, and one that covers Texas. In an interconnected system bad things that happen on one system can cascade throughout the interconnected system.

The current system for maintaining reliability is based on voluntary standards for utilities. The introduction of competition in wholesale electric markets has eroded the incentive to voluntarily comply. There is a trade-off between maintaining reliability and incurring costs. The pressure to skate on the edge or even not comply has increased dramatically.

We need mandatory standards with financial consequences for noncompliance.

This issue has been thoroughly debated nationally, and there's consensus on how to make this happen. But mandatory standards require federal legislation to create teeth. This noncontroversial legislation is part of the national energy bill before Congress. This legislation must be enacted quickly.

We also need infrastructure investment. It is common knowledge within the utility industry that for more than a decade there has been a lack of investment in transmission. There has been a great deal of dispute about how transmission systems should be operated to create nondiscriminatory access to ensure competitive wholesale power markets. The resulting uncertainty has made it difficult to attract capital to transmission investments.

Until earlier this year, no major new transmission lines had been built in the Northwest since 1987. In June, the Bonneville Power Administration broke ground on a new high-voltage line stretching from Spokane to Grand Coulee Dam to relieve congestion east to west. Two weeks ago, we broke ground on a new line in the Puget Sound area to relieve congestion north to south.

Why are these lines being built now? Earlier this year, Congress, at the behest of the Northwest congressional delegation and the president, increased BPA's ability to borrow money from the U.S. Treasury by $700 million. This allowed us to begin construction. The increase was a response to the 2001 West Coast energy crisis, which highlighted lack of investment in our region's electricity infrastructure.

But we should not assume the increase will solve our transmission infrastructure problems.

We need to ensure that our region's utilities are financially healthy enough to access capital markets at reasonable cost so they can invest in measures to keep reliability high and costs lower.

We need to move further toward creating coordinated regional electricity transmission. Historically, utilities have planned transmission needs mostly in isolation. Consolidating these efforts should create synergies and greater opportunity for least-cost environmentally acceptable solutions.

We also need to actively implement where appropriate nonconstruction alternatives. A group of knowledgeable stakeholders convened by BPA has been considering how and when alternatives such as conservation or price incentives should be used as alternatives to putting new wire in the air.

The past few days have reminded us that electricity is a fundamental element of our lives. If we are going to continue to improve our quality of life and productivity, we must put in place policies that will ensure we have adequate electricity infrastructure and appropriate regulatory standards to meet our needs.

Steve Wright is adminstrator for the Bonneville Power Administration.

Steve Wright
Yes, It Could Happen Here
The Oregonian, August 16, 2003

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