Electric System Reliability Task Force Completes Final Report

On Tuesday, September 29, the Secretary of Energy Advisory Board’s (SEAB) Task Force on Electric System Reliability conducted its final meeting in Washington, DC and approved its final report.

The Task Force’s final 150 page report, “Maintaining Reliability in a Competitive U.S. Electricity Industry: Final Report of the Task Force on Electric System Reliability,” dated September 29, 1998, addresses the critical institutional, technical and policy issues related to maintaining bulk-power system reliability in the context of a more competitive electric industry. It will be submitted to the Chairman of the Secretary of Energy Advisory Board and Secretary Richardson following the incorporation of the final Task Force review comments.

Printed copies of the Report can be obtained from Richard Burrow, SEAB, (202/586-1709 or Richard.Burrow@hq.doe.gov).

Inquiries regarding the Report can be directed to Paul Carrier (202/586-5659 or Paul.Carrier@hq.doe.gov).

Here is a Reuters news story about the report:

Competition won’t hurt power reliability, DOE told

WASHINGTON, Sept 29 (Reuters) – A Department of Energy advisory panel on Tuesday said opening the nation’s bulk-power markets to competition should not damage reliability of electric supply, although deregulation is a complex task.

Ending a 21-month investigation, the DOE task force concluded that the “viability and vigor of commercial markets must not be unnecessarily restricted,” and market forces now being implemented depend on fair and open access to the transmission grid.
“The traditional reliability institutions and processes that have served the nation well in the past need to be modified to ensure the reliability is maintained in a competitively neutral fashion,” the task force report said.

The group, officially called the Secretary of Energy Advisory Board’s Task Force on Electric System Reliability, was formed to address the question of whether consumers would be able to count on electricity service after restructuring.

The task force began its work as a result of concerns raised after power outages in Western states during the summer of 1996. It is chaired by Dr. Philip Sharp, a lecturer in public policy at Harvard’s Kennedy School of Government.

At the time the task force was formed, the DOE asked the group to define an agenda “to address relevant technology development and analysis tools, control schemes, operating practices and data requirements for ensuring reliability under changing industry structure and regulation.”

The report also said there is uncertainty regarding statutory and regulatory authority over reliability management, which was being exacerbated by the unbundling of vertically integrated utility functions.

The group said commercial markets should develop economic practices consistent with the mutual interests of the participants, ensuring grid reliability maintenance.

The role of the North American Electric Reliability Council (NERC) must also adapt to an increasingly decentralized and competitive industry, the report said. The NERC represents wholesale power systems in 10 regions in the U.S. and most of Canada.

Other findings praised the implementation of Independent System Operators, and said competitive markets should be created for ancillary services, like load following, spinning reserve and loss replacement.

Of the numerous recommendations supplied by the task force, the report highlighted the group’s confidence that the Federal Energy Regulatory Commission and a restructured North American Electric Reliability Organization can maintain performance.

During the transition from monopoly markets to open competition, the task force said electric utilities should open their transmission systems to others and in many cases divest their generating assets.