Markets Don't Fix Power Lines; People Do: How Utility Deregulation Helped Cause 2003 Blackout
Aug 12 - U.S. Newswire "Deregulation and the restructuring of the electric power industry in the U.S. have had a devastating effect on the reliability of North American power systems, and constitute the ultimate root cause of the August 14, 2003 blackout." That is the conclusion of a report issued by three experts on electric power systems and reliability on the second anniversary of the most devastating blackout ever to strike the North American continent. The report documents many aspects of this finding, asserting that the core issue was "an almost fundamentalist reliance on markets to solve even the most scientifically complex problems." The authors contend that over-emphasis on markets brought about a shift in focus from reliability of power supply to short-term profits for self-serving corporate entities like Enron. It led to ill-conceived and premature changes. For example, the Federal Energy Regulatory Commission (FERC) approved the Midwest Independent System Operator (MISO) well prior to the blackout -- despite the fact that, at the time, MISO "had neither the authority nor technical means to operate a generation and transmission grid in the region." As a result, on Aug. 14, 2003, MISO "appeared to be little more than a toothless shell," and accomplished nothing. The report notes that "technical qualifications" no longer count for much for "those holding management positions in electric power organizations and government policy makers." It criticizes earlier reports by the U.S. and Canadian governments, and the North American Electric Reliability Council (NERC), for dealing only with symptoms of the problem while ignoring the root cause. Since the ultimate problem has not yet been addressed, the risk of a massive blackout is no lower today than it was in 2003 -- despite the passage of the Energy Policy Act of 2005, which will do nothing to enhance reliability. In fact, power system reliability may be even more at risk in the future. Reliability standards have already been reduced to accommodate greater use of the grid for commercial transactions. But efforts are now underway to further water down even the existing standards. The report notes that "decreased emphasis on the importance of strong reliability standards, and a trend toward lower standards ... is most pronounced in the very organization charged with maintaining reliability -- NERC -- aided and abetted by FERC." Two workshops are being held on this and nine other reports sponsored by the Task Force: September 15, 2005 in Washington, DC, and September 28, 2005 in Toronto, Ontario. Copies of the reports will be available on the DOE web site on August 24, 2005. The subject report, Contributions of the Restructuring of the Electric Power Industry to the Aug. 14, 2003 Blackout, may be obtained by contacting Ameredinst(At)aol.com . PEST is a not-for-profit association of experienced engineers and executives that was formed to respond to misinformation being disseminated concerning the Aug. 14, 2003 blackout. They are unpaid and conduct their investigations without any compensation. They are supported by several hundred individuals who help provide information. Their Web site is http://www.pest-03.org . |