Ratepayers Likely to Pay for New Electricity Grid, Task Force Says

Apr 8, 2004 - Akron Beacon Journal, Ohio
Author(s): Jim Mackinnon

Apr. 8--Just in case you were wondering who likely will pay to make the nation's electric grid more reliable in the aftermath of the historic August blackout, take a good look in a mirror.

Ratepayers, not taxpayers, should foot the costs of making electricity delivery more reliable, said a senior member of the U.S.- Canadian task force that earlier this week released 46 recommendations to improve the electric grid.

Not that there's a kilowatt's worth of difference between a ratepayer and a taxpayer, of course.

Work already is under way to implement many of the recommendations. They are aimed at reducing the chances of another severe blackout similar to the one that started Aug. 14 in FirstEnergy Corp.'s system in Northeast Ohio and cascaded into seven other states and part of Canada.

Some of the recommendations, such as enacting mandatory reliability standards, will require congressional action, said task force co-principal Jimmy Glotfelty, director of the office of electric transmission and distribution for the Department of Energy. Other changes likely can be put into place without government action, he said.

Some items may be complete by June 30, others by the end of the year, and still more may take years to finish, said task force member David Meyer, senior advisor in the DOE's office of electric transmission and distribution. The task force will continue to exist for another year to help the U.S. and Canadian governments, industry organizations and others work on the recommendations.

"This is no easy task," Glotfelty said Wednesday. "I think if it was easy it would have been done a long time ago."

Improving reliability will not be free, he said. "Every line, every device that improves reliability costs money."

Putting a price tag on the needed improvements is hard, he and others said.

But Glotfelty also said implementing the task force's proposals does not necessarily mean significant costs will be incurred, either. It's possible that improving grid reliability could reduce rates, he said.

In any case, the people who use electricity should be the ones footing the bill, with costs varying across different regions, he said. "I don't see that taxpayers should pay," he said.

Akron-based FirstEnergy, which largely shares the blame for starting the massive blackout, doesn't expect the recommendations to strongly affect its bottom line. The utility already is implementing, or has implemented, task force recommendations and improvements, including the installation of a new computerized energy management system.

To prevent the kind of line failures that helped trigger the blackout, it has cut down trees and other vegetation underneath its high voltage lines and put into place a new line inspection program among other things, a spokeswoman said.

The task force recommendations range from making sure vegetation and trees are regularly pruned or cut down under high voltage lines, revamping how oversight organizations interact with utilities, to changing operating procedures and protecting systems from terrorist and computer hacker attacks.

"My understanding is, what will be needed is a federal law to give teeth to these recommendations," said Bob Bellemare, chief executive officer of energy consulting company UtiliPoint International. He said he wasn't sure how an election year will impact the bill's passage.

The top recommendation, to enact mandatory, national reliability standards, will take Congressional action. A national energy bill that includes mandatory standards remains stalled in Congress, however.

But task force members are hoping to break the logjam.

On Wednesday they briefed House staff on the report's conclusions and were scheduled to give a similar briefing to Senate staff today.

The Federal Energy Regulatory Commission is reviewing the 228- page report, spokesman Bryan Lee said. FERC Chairman Pat Wood was a member of the U.S.-Canadian task force. Wood wants to implement changes quickly, Lee said. That's largely because the government and others did not implement lessons learned from previous large blackouts, Lee said.

The New Jersey-based North American Electric Reliability Council, which oversees the nation's electric grid, may be able to implement some of the recommendations on its own without needing government action, NERC spokeswoman Ellen Vancko said.

At least a few of the 46 recommendations have been suggested as far back as 1997, Vancko said.

"Some we can implement fairly easily," she said. "It's a long list and everybody has to look at it pretty hard. ...We're going to look at whatever we can do on our own."

 


© Copyright 2004 NetContent, Inc. Duplication and distribution restricted.