Washington (Platts)--20Sep2007

North American Electric Reliability Corp. President Rick Sergel Thursday
told the US Federal Energy Regulatory Commission that portions of the bulk
power system "are being operated at or near their limits more of the time,"
raising the likelihood of "of problems if unplanned events were to occur
simultaneously."  

    Sergel told the agency that this summer 18 "Level 3" energy emergency
alerts were issued by reliability coordinators across the US.

     "In a level 3 energy emergency alert, all available resources are in use,
load management procedures are in effect and firm load interruption is either
imminent or in progress. We didn't really get to that, fortunately, because
the load management worked in almost every instance," he said.

     "In short, we are operating the system at or near its physical limit more
often than the past," he noted. 

     The NERC chief said that over the summer, system operators were
challenged by high temperatures and humidity, forest fires in Idaho and Utah,
and violent lightning storms -- especially in Illinois, New York, Texas and
Virginia.

     "Heat and humidity affected operations in PJM and the Southeast, and New
England during the summer," Sergel noted. He also noted that California
experienced several days of customer conservation appeals. 

     Sergel also said that "[w]e need more investment in generation,
transmission and demand side measures in many areas of North America to ensure
that our bulk power system remains reliable, adequate and secure." These needs
"become more critical with the passage of time."

     Under the Energy Policy Act of 2005, Congress gave FERC authority to
oversee a mandatory electric reliability regime. FERC approved NERC as the ERO
last July and the ERO became fully operational June 18.

     Sergel noted at the meeting that a number of violations of electric
reliability standards have occurred since June 18, "but only a few of them
qualify for high priority attention and those that do are getting it, from
both us," and FERC staff.

--Paul Ciampoli, paul_ciampoli@platts.com