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ARIZONA CORPORATION COMMISSION
TO: EDITORS, NEWS DIRECTORS
FOR: IMMEDIATE RELEASE
JENNINGS DISCUSSES POWER OUTAGE
Arizona Corporation Commission Chairman Renz Jennings, appearing before the House Water and Power Resources Subcommittee, says that "we won't be able to completely eliminate the outages" such as the western power blackouts this summer, but "we can develop reasonable risk management strategies that will reduce the possibility and impacts of future outages." Saying "We need to elicit credible commitments to reliability from all participants" in the power grid, Jennings called for mandatory membership in the Western Systems Coordinating Council (WSCC), the now-voluntary organization that oversees the power grid serving most of the Rocky Mountain and Pacific states. "At the least" Jennings said "there should be mandatory requirements to meet WSCC's minimum reliability standards. A performance bond that could be attached in case of failure to comply with reliability criteria could be required as a sign of credible commitment ." Jennings told the Congressional committee "Unless there are some penalties or sanctions applied to those who fail to meet their responsibilities, we will have a reliability system that works in theory, but not in fact." He suggested that the WSCC or federal government could undertake enforcement, with state regulatory bodies being the least appropriate choice for the task. Commissioner Jennings also suggested:
(MORE) JENNINGS TESTIMONY/ADD ONE November 7, 1996 Commissioner Jennings testimony before the House Subcommittee on Water and Power Resources took place in Los Angeles November 7, 1996, during an oversight hearing on issues regarding the August 10, 1996 Bonneville/Western U. S. power outage. Millions of power customers in 12 western states were left without electricity as the result of two summer power outages, one on July 2nd, and the second on August 10th. The second outage was caused by a tree that came in contact with a high voltage transmission line in Oregon, triggering a power failure that cascaded throughout the west. - 0 - Manuscript of testimony: # # # Testimony before the
Water and Power
November 7, 1996
Renz D. Jennings, Chairman First let me say that I approach this hearing with a certain sense of humility in trying to suggest improvements to a system that is so complex. A lot of people are doing a lot of things to resolve problems identified this summer. I am not an engineer or electric reliability expert, but I hope to bring a new perspective to the discussions of this summer's outages. The two major western power outages this summer on July 2-3,1996 and August 10, 1996 have left us with an interesting risk management problem. We won't be able to completely eliminate the outages, but we can develop reasonable risk management strategies that will reduce the possibility and impacts of future outages. In order to address this risk management problem we need to look at six aspects. They are:
• The need for more and better quality information. Let me take each of these aspects and discuss them in depth. First, the need for more information relates to our need to better understand the western integrated electric grid under a wide variety of possible operating conditions. Rather than merely looking at likely single contingency scenarios, known as N-1 scenarios, we need to have WSCC and utilities look at models of multiple contingencies, known as N-2, N-3, etc.; scenarios. Second, we need to elicit credible commitments to reliability from all participants in the interconnected grid. This should start with mandatory membership in WSCC or, at least, mandatory requirements to meet WSCC's minimum reliability standards. A performance bond could be required as a sign of credible commitment and could be attached in case of failure to comply with reliability criteria. Since the two major western power outages this summer in July and August, we have heard over and over again that the safeguards built into the western interconnected grid worked as designed. The system islanded, power plants were tripped to prevent equipment damage, and loads were shed to help stabilize the system, thereby avoiding a complete shutdown of all western power generation. Yes, it appears that the protective mechanisms worked after an irreversible problem started the blackout. While it is important to improve the system in ways that will limit the damage from a system outage, it is far more important to take steps to avoid the conditions which led to the start of the outage. This brings me to a major concern that we in Arizona have. If, in fact, the NERC and WSCC criteria and requirements are appropriate, there still is a major problem ensuring that those standards are enforced. Unless there are some credible penalties or sanctions applied to those who fail to meet the standards or shirk their responsibilities, we will have a reliability system that works in theory, but not in fact. Enforcement and penalties can be handled in a number of ways. First, WSCC and other regional reliability councils could take on the responsibility of enforcement and penalties. Second, the federal government could take the responsibility. Finally, the various state PUCs could take on the enforcement and penalty responsibility; however, achieving uniformity among states might prove difficult. My preference would be to have WSCC perform this function. WSCC would monitor and measure compliance. Although NERC has the national responsibility for reliability, it is not staffed or prepared to take on an enforcement mission. Concerted State action might be much more difficult than having one entity in each region (WSCC and the other regional reliability councils) handle the enforcement of standards. Effective enforcement would only be possible if mandatory membership were made possible by FERC ruling or by federal legislation. States could require membership, but this would only work if each and every state made membership a requirement. Third, we need better communications among the participants in the western grid. It is very likely that if we had a better inter-utility communication system on August 10 that the outage might have been avoided, or at least it might have given enough warning so that the resulting impact might have been reduced. We need a real-time disturbance alert mechanism so that operators on the integrated system can get early warning of problems which may affect their system operation. Fourth, we need to ensure that, as we move to a more competitive electricity market, there is a clear delineation of reliability responsibilities through either market mechanisms, through contracts, through state or federal regulations, through Independent System Operator mechanisms, or through WSCC requirements. Fifth, we need to develop better damage control mechanisms. These could include better islanding methods. Arizona is a relatively small state, in terms of population and power usage, compared to our neighbor to the West. So, to the extent that California utilities and northwest utilities ignore potential problems on the western interconnected grid, the resulting outages will probably continue to have a major negative impact on Arizona's electric system. Whatever happens in the California power markets has a significant impact on all of the adjoining states. Since California is going to lead western states in the move toward restructuring and competition in the electric utility system starting in 1998, we hope that adequate care will be taken to ensure that all competitors in the California market meet reliability standards -- along with a fairly explicit and equitable load shedding protocol. It is my understanding that on July 3, 1996, the day after the big July 2, 1996 outage, a similar problem occurred. Idaho dropped load for the entire City of Boise, which kept the entire system from going down again. This incident and the smart and timely actions taken by Idaho operators should be proof that a load shedding protocol may limit the severity of outages. And finally, we need to encourage the participation of all appropriate parties in the process to develop solutions. In particular, the state PUC's need to be involved as honest brokers. A few years ago, it would have been unlikely for state regulators to be welcomed into this kind of problem-solving process, but times have changed. The participation of state PUC representatives in the various western RTGs has been beneficial and has opened new avenues of communication among the parties involved. We need to continue to work together in order to understand and solve this complex reliability problem. Indeed, PUC regulators bring a ground-level public interest perspective of concern for overall reliability and economic efficiency that individual market players may not necessarily bring. Without this broad perspective the narrower interests of market players may dominate reliability protocols. The regulators can help develop a balance between system reliability obligations of non-WSCC members without allowing WSCC members to inhibit the transition to competition under the guise of reliability. While this will be challenging, I and other regulators are ready to meet these challenges. | |