Daily Archives: August 30, 2004

KIESLING/SMITH COMMENTARY IN SAN DIEGO UNION TRIBUNE

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Lynne Kiesling

On Friday Vernon Smith and I had commentary on the importance of customer choice in electric power markets in the San Diego Union Tribune. Here’s a teaser:

Some California utilities are working to turn the clock back to the “good ol’ days” of regulation and guaranteed profits. A bill currently before the Legislature would take hard-won economic power from consumers and return it to monopoly utilities, in the name of increasing investment in the electric power system. This should cause all ratepayers concern. …

California can better meet its goal of attracting capital investment by empowering consumers. While utilities have sought rate increases through the regulatory process, entrepreneurs have risked their own capital to create innovative solutions that provide a portfolio of choices to consumers, increasing economic and grid flexibility at the same time. However these innovations remain shackled by regulatory fiat, and blocked by utilities’ control of access.

ALTERNATIVES TO MANDATORY RULES FOR THE ELECTRIC GRID?

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Michael Giberson

One of the things that “everyone recognizes,” at least if you accept the conclusions of numerous government statements on the blackout, is that reliability rules for the grid must be made mandatory. An alternative approach is suggested in an editorial piece appearing in Power Engineering (Free registration required):

The investigation into [the Three Mile Island nuclear power plant accident] showed the nuclear industry it had fundamental problems not limited to one company or one valve design and that it needed to make some serious changes. To its credit, the nuclear power community honestly acknowledged those problems and took action. A lot of things changed. The Nuclear Regulatory Commission got a lot tougher with operating reactors. Many utilities cleaned up their own houses.

The most interesting development, and the most applicable to today’s transmission problems, was the creation of the Institute of Nuclear Power Operations. INPO was created to be a utility self-policing operation aimed at improving reactor performance. Still in operaton today, it sets performance criteria, evaluates individual plant performance, and judges the results. These ratings are not publicized, but the insiders know who’s letting down the industry and they don’t tolerate it. The financial stakes are too large. In a few cases critical INPO ratings have been leaked to the public to the extreme embarrassment of utility managements.

ALTERNATIVES TO MANDATORY RULES FOR THE ELECTRIC GRID?

Posted on by

Michael Giberson

One of the things that “everyone recognizes,” at least if you accept the conclusions of numerous government statements on the blackout, is that reliability rules for the grid must be made mandatory. An alternative approach is suggested in an editorial piece appearing in Power Engineering (Free registration required):

The investigation into [the Three Mile Island nuclear power plant accident] showed the nuclear industry it had fundamental problems not limited to one company or one valve design and that it needed to make some serious changes. To its credit, the nuclear power community honestly acknowledged those problems and took action. A lot of things changed. The Nuclear Regulatory Commission got a lot tougher with operating reactors. Many utilities cleaned up their own houses.

The most interesting development, and the most applicable to today’s transmission problems, was the creation of the Institute of Nuclear Power Operations. INPO was created to be a utility self-policing operation aimed at improving reactor performance. Still in operaton today, it sets performance criteria, evaluates individual plant performance, and judges the results. These ratings are not publicized, but the insiders know who’s letting down the industry and they don’t tolerate it. The financial stakes are too large. In a few cases critical INPO ratings have been leaked to the public to the extreme embarrassment of utility managements.