To: Editors, News Directors

Date: August 15, 2003

For: Immediate Release

East Coast Blackout: Can it Happen Here?
Power Plants & Transmission Lines are Critical to Reliability

PHOENIX - Yesterday a cascading series of blackouts affected New York, New Jersey, Ohio, Michigan, Connecticut, Pennsylvania, Vermont and Canada. While debate continues over the cause of the outage, one question is on the minds of many Arizonans: "Could such devastating outage happen here in Arizona?"

Energy experts and regulators have differing opinions but all agree on the two ingredients for a reliable power system: power plants to generate power and the transmission lines to move power where it is needed.

In recent years, Arizona regulators have taken proactive steps to approve new power plants and transmission lines. A line supplying power to the Phoenix metro area's southwest valley just became operational this summer. Additionally, a line to supply the growing northwest valley was approved in June. A transmission line needed to move power between Tucson and Nogales was approved by the Commission last year.

Just Wednesday, Arizona regulators took another step to bolster the state's power system by approving the Wellton Mohawk Generating Station. The project will fill an important need in the power grid once it begins producing power - expected to be in 2006 or 2007.

The power plant is strategically situated between the Gila Bend area and Yuma, Arizona. The Yuma area is one of three zones identified as "transmission constrained" in a 2001 study of Arizona's power and transmission infrastructure.

"Transmission constrained means that power plants must run within a certain area because there isn't enough room on the transmission system to import power if there is a major outage," Arizona Corporation Commission Chairman Marc Spitzer explained.

Locating a power plant within or near a transmission constrained area bolsters reliability of the entire power grid. If there is an outage at a key power plant or transmission line, power from the strategically-located plant fills the gap and keeps the entire power grid stable.

"We have approved the construction of some of the nation's most technologically-advanced power plants with the very latest pollution controls designed to minimize the effect of these plants on the environment," Commissioner Bill Mundell said. "Besides addressing the need for power plants, we have also approved transmission lines to complete the reliability picture."

Lessons Learned

"Until recently, virtually no power plant or transmission construction occurred in the last two decades. While we have made some progress, there is much that still needs to be done. We learned some important lessons after Arizona's last major power outage," Commissioner Jim Irvin said of the summer 1996 outage that originated in the Pacific Northwest.

In 1996, overheated power lines in Oregon and Washington tripped power plants off-line and de-stabilized the western power grid. Oregon, California, Nevada, New Mexico and Arizona were affected.

The addition of power plants and transmission lines helps utilities cope with instability by allowing power that can be re-routed around trouble spots.

"Another part of the reliability equation is reserve margin," explained Commissioner Jeff Hatch-Miller. "Reserve margin is like headroom in your car. It's the comfort zone or, in this case, the surplus space on the power grid that you need to cope with unplanned outages."

California's power crisis in 2000 and 2001 taught utilities and regulators the value of a good reserve margin.

"California had to institute rolling blackouts because the reserve margin got so thin. The demand for power exceeded what was available," Commissioner Mike Gleason said. "When the reserve margin dipped below three to five percent, California grid managers had to shed load - or start the rolling blackouts - to keep the grid stable."

More National and Regional Planning Needed

Western utilities, power plant operators and regulators are participating in a regional planning process that grew out of Arizona's recent transmission studies. Dubbed STEP, or Southwest Transmission Expansion Planning, the effort is aimed at coordinating upgrades to the entire western grid to avoid catastrophic outages.

Commission Chairman Marc Spitzer thinks that creating a reliable, stable power grid should be a top priority for utilities and elected officials throughout the country.

"Unfortunately, local opposition often stands in the way of critical transmission and power plant development," Spitzer said. "As long as we expect the lights to come on when we flip the switch, we have to change our way of thinking."