Final Blackout Report Released Today

The U.S.-Canada Power System Outage Task Force released its final report on the August 2003 blackout today. From the press release:

Recommendations include the following:

* Implementation of mandatory and enforceable electricity reliability standards in both the United States and Canada, with penalties for noncompliance, backed by appropriate government oversight;
* Strengthening the institutional framework of the North American Electric Reliability Council (NERC) and its initiatives on compliance;
* Developing a funding mechanism approved by regulators for NERC and the regional reliability councils, in order to ensure their independence from the parties they oversee;
* Addressing deficiencies identified in FirstEnergy and some reliability organizations in the United States, by June 30, 2004;
* Strengthening the technical recommendations made by NERC on February 10, 2004;
* Improving near-term and long-term training and certification requirements for operators, reliability coordinators and operator support staff; and
* Increasing the physical and cyber security of the network.

Note the glaring absence of the most bang for the buck recommendation: use demand response to reduce peak demand on congested power lines. When will we stop thinking about electricity as a one-sided system? How long will we bear the vulnerabilities that such backward, obsolete thinking produces?

On a more optimistic note, the report does elaborate on the role that reactive power plays in stabilizing the grid. This is yet another area in which the use of prices to prioritize use would be of great value. The report says that reactive power supplies have been short in this region for years. Explicitly treating reactive power as an economic good, and commensurately enabling markets for it to exist and transactions/contracts for it to occur, would remedy this supply/demand imbalance that contributed so greatly to the blackout.

News roundup on the report: from the AP via the Atlanta Journal-Constitution, the Globe and Mail, Bloomberg News, and Reuters.


3 thoughts on “Final Blackout Report Released Today

  1. One way to manage demand-response is to have a true market in electricity:  you bid what you’re willing to pay and if you bid too low you don’t get the juice.  A scheme where everyone is a buyer could be structured so that everyone could also be a seller, selling power (roof-based solar, cogenerating furnaces and water heaters), reactive power, and possibly regulation services.

    It seems likely to me that such a broadening of the base of suppliers and cost-conciousness on the part of all users could slash costs by making the entire system more efficient.

  2. So their “solution” to a problem that was ultimately _CAUSED_ by government regulation of the transmission grid is (surprise, surprise!) _MORE REGULATION_.
    Why am I _NOT_ surprised? <*grrr*> <*sigh*>

  3. Gordon:

    A goodly part of this instability is actually caused by the reduction of regulation; when utilities were fully-regulated each one was responsible for its own territory, but when Congress mandated a freer market in power it did not require new entrants to assume their share of the burdens of providing reactive power, grid voltage regulation, or other goods.  The new entrants got paid only for KWH and couldn’t be billed for the other things required to actually deliver their power, so they had no reason not to freeload.  They were allowed to “wheel” power over long-distance power lines which were installed between utilities primarily to pool reserves.  This decreases the capacity left on those lines for their original purpose.

    This is not the first time Congress has created the conditions for a mammoth screw-up; see the S&L crisis for a prime example.

    A stable power grid requires a balancing act between production and consumption, and it is not something that a bunch of competitors jockeying for market position have historically done well.  If you want to fix the problem, you have to revisit the partial and misguided DE-regulation forced by Washington.

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