Posts

DOE Reliability TF- Meeting announcement and minutes

/0 Comments/in , /by

Subject: UFTO Note – DOE Reliability TF- Meeting announcement and minutes
Date: Thu, 08 Jan 1998 13:29:04 -0800

Below is the announcement of the next (7th) meeting of the DOE/SEAB Task Force meeting, which also can be found on line at: http://www.hr.doe.gov/seab

The minutes of the 6th meeting (November 6th) will also be available on line in a day or two. I have a copy if you’d like it now.

DOE Secretary of Energy Advisory Board
Notice of Open Meeting —
Seventh Meeting of the Electric System Reliability Task Force

Tuesday, January 13, 1998, 8:30 AM – 4:00 PM.
Madison Hotel, Dolley Madison Ballroom,
15th & M Streets, NW, Washington, D.C.

FOR FURTHER INFORMATION CONTACT: Richard C. Burrow, DOE,
(202) 586-1709 or (202) 586-6279 (fax).

The meeting will build on the task force’s Interim Report and SRRO Letter Report, and will include discussions of the following items:

— Draft Position Paper on Technological Issues in Transmission System Reliability
— Draft Position Paper on the Role and Shape of the Independent System Operator
— Presentation on the Provision of Ancillary Services

Tentative Agenda
8:30 – 8:45 AM Opening Remarks & Objectives — Philip Sharp,
ESR Task Force Chairman
8:45 – 10:15 AM Working Session: Discussion of Draft Position
Paper on Technical Issues in Transmission System
Reliability — Facilitated by Philip Sharp
10:15 – 10:30 AM Break
10:30 – 11:30 AM Working Session: Discussion of a Draft Position
Paper on The Role and Shape of the Independent
System Operator — Facilitated by Jose Delgado
11:30 – 12:00 PM Public Comment Period
12:00 – 1:15 PM Lunch
1:15 – 2:30 PM Working Session: Presentation & Discussion on
The Provision of Ancillary Services — Eric Hirst
(ORNL) & Facilitated by Philip Sharp
2:30 – 3:45 PM Working Session: Presentation & Discussion on
Transmission Pricing Issues — Susan Tierney &
Facilitated by Philip Sharp
3:45 – 4:00 PM Public Comment Period
4:00 PM Adjourn

Information on the Electric System Reliability Task Force and the Task Force’s interim report may be found at the Secretary of Energy Advisory Board’s web site, located at http://www.hr.doe.gov/seab.

DOE Reliability TF PAPER

/0 Comments/in , /by

Just received from Paul Carrier, Task Force Staff Director:

Attached is a copy of the Paper on “Maintaining Bulk-Power Reliability Through Use of a Self-Regulating Reliability Organization” approved by the Secretary’s Task Force on Electric System Reliability at it November 6 meeting. Also attached is a letter from Dr. Philip Sharp, Task Force Chairman, transmitting the Paper to the Chair of the Secretary of Energy Advisory Board.

(Also available in Word format on request)

——————
Dr. Walter Massey
Chairman, Secretary of Energy Advisory Board
c/o Morehouse College
830 Westview Drive, S.W.
Atlanta Georgia 30314

Dear Dr. Massey:

The Task Force on Electric System Reliability of the Secretary of Energy Advisory Board is writing to provide you with our Task Force Paper entitled Maintaining Bulk-Power Reliability Through Use of a Self-Regulating Organization. This Paper was approved by the Task Force members at our November 6, 1997 meeting.

This Paper expands on the recommendation in our earlier Interim Report that federal legislation clarify the Federal Energy Regulatory Commission’s authority to approve and oversee the operations of a private standard-setting, electric-reliability organization.

The Task Force anticipates preparing additional papers on a variety of electric-reliability topics over the next nine months, leading to a final report.

The Task Force appreciates the opportunity to provide the Department with this Paper and respectfully submits the recommendations therein.

Sincerely,

Dr. Philip Sharp
Chairman,
Task Force on Electric System Reliability

Enclosure

cc: Federico Peña
Elizabeth Moler
—————————————-
Secretary of Energy Advisory Board
Task Force on Electric-System Reliability

MAINTAINING BULK-POWER RELIABILITY THROUGH USE OF A SELF-REGULATING ORGANIZATION: POSITION PAPER

November 6, 1997

In its Interim Report, the Task Force recommended that federal legislation clarify the Federal Energy Regulatory Commission’s (FERC) authority to approve and oversee the operations of an electric-reliability organization. This paper provides Task Force recommendations concerning the relationship between the FERC and a single, international, self-regulating reliability organization (SRRO) , such as a significantly reformed North American Electric Reliability Council (NERC) with a representative membership and governance system, to assure reliability of the bulk-power system.

1. BACKGROUND

Historically, NERC, the regional reliability councils, and individual utilities have managed reliability through a system of peer-reviewed standards coupled with voluntary cooperation and adherence to reliability rules. In that system, costs associated with maintaining reliability could be recovered through rates, and peer pressure and reciprocal treatment of costs were generally sufficient to keep utilities in compliance. Also, NERC, as an international organization, includes members from all countries sharing use of the interconnected transmission grid. Under this system, a set of effective reliability rules was developed and implemented.

The Task Force believes the system is clearly unsustainable in the increasingly decentralized and competitive U.S. electricity industry. Voluntary cooperation is unlikely to be sufficient because of the dramatic increase in the number of bulk-power transactions, the increased diversity of interests among participants, the growing unbundling (deintegration) of the electricity industry, the focus on price, and the lack of appropriate incentives for those entities contributing to reliability.

Most participants in and observers of the electricity industry agree that the voluntary system must be replaced with one that requires compliance with enforceable, non-discriminatory reliability rules applicable to all entities participating in the electricity market. This requires federal legislative authority.

NERC’s Board of Trustees agreed in principle in January 1997 to require adherence to NERC rules and procedures. This new system attempts to feature: measurable performance standards, the requirement that all participants in bulk-power systems meet these standards, enforcement of these standards, and penalties for failure to comply with these standards. The detailed refinement of the standards and implementation of these principles is a work in progress.

Questions remain whether NERC has the authority to require industry participants to abide by the new rules and procedures in the absence of legislation. It is not clear whether the FERC has sufficient statutory authority to enforce NERC rules. The FERC has issued several orders requiring parties to abide by the NERC standards and parties have assented to the requirements. However, the use of FERC’s conditioning authority to enforce NERC standards has not yet been challenged. Others question whether the FERC should enforce these rules in light of concerns over NERC’s governance and decision-making procedures.

In response to these concerns, the Task Force suggests that the U.S. Congress adopt legislation to clarify such authorities and enable the FERC to approve a national self-regulating organization to establish electric reliability standards similar to the National Association of Security Dealers (NASD) in the securities industry. Under federal law, the Securities and Exchange Commission (SEC) has authority to delegate significant regulatory authority to a number of private, member-owned and operated organizations in the securities industry. The SEC has authorized several self regulating organizations (SROs) under the statutory framework.

The experience in the securities industry has been relatively successful in this regard. Self regulation under a legal framework established by Congress, and administered and enforced by a duly appointed federal agency, has certain advantages over government regulation in terms of lower costs to the taxpayer, administrative efficiency and technical expertise in developing and enforcing technical standards, and greater compliance by the regulated firms (because they helped develop the regulations). On the other hand, without careful oversight from the government, SROs might not fully consider the perspectives of the general public and focus too narrowly on the interests of the industry being regulated, especially on issues that involve policy elements rather than technical issues.

SROs have been challenged in the courts and have been found to be legal, but only if properly structured. For example, the SEC Act was found to be a constitutional delegation because:
– The SEC has the power, according to reasonably fixed statutory standards, to approve or disapprove rules; and
– The SEC must make an independent decision on violations and penalties.

2. SRRO APPLICATION TO NERC AND THE FERC

Federal legislation should grant more explicit statutory authority to the FERC to approve and oversee an electric industry SRRO having responsibility for bulk-power reliability standards.

As the industry organization currently responsible for electric reliability, most of the members of the Task Force believe that the NERC and its regional reliability councils will evolve into an entity that could fill the role of the SRRO. Most believe the NERC has already initiated many of the changes that will be required for it to be the SRRO. However, we note that this will not occur automatically. In order to qualify as the SRRO, a reformed NERC will have to meet all of the requirements of legislation and the FERC with respect to governance and processes.

The SRRO would provide the technical expertise on how best to maintain high levels of bulk-power reliability. The FERC would have regulatory oversight to ensure compliance with and ultimately resolve disputes over any SRRO mandatory reliability standards. The SRRO would produce mandatory standards applicable to all participants in the domestic and international bulk-power system. The FERC would either confirm SRRO mandatory standards or deny them and refer them back to the SRRO with comments requesting revision and resubmittal of the standards.

The SRRO would develop measurable performance standards. These mandatory standards would replace the voluntary requirements that NERC has previously relied on. Importantly, however, NERC must expedite the development and implementation of measurable standards in an open process that includes full and fair representation of all stakeholders and market participants. The Task Force recognizes that many non-utility participants have significant concerns about membership and representation and believe that NERC and the regional reliability councils must immediately open their membership to balanced representation of all stakeholders and market participants.

Legislation should provide for the following:
FERC review and approval of a proposal for an electric industry SRRO;
FERC implementation of mandatory reliability standards for the nation through rulemakings in accordance with the Administrative Procedures Act;
FERC jurisdiction for reliability over the bulk-power system including those portions owned or operated by federal, cooperative, and municipal utilities and all other entities participating in the electricity market;
FERC review and approval of all SRRO mandatory standards including specified incentives and penalties for compliance;
FERC ability to require the SRRO to develop, modify, or replace standards when necessary;
Mandatory application of reliability standards to all entities using or operating the bulk-power system;
SRRO enforcement of mandatory standards, including imposition of penalties or fines, subject to FERC review;
FERC authority to expedite or temporarily waive procedures when necessary to address an ongoing or imminent reliability problem;
When requested by the SRRO or on its own initiative (e.g., in an emergency situation or stemming from a complaint), FERC review of any SRRO governance or process issues, standards, or SRRO enforcement action; and
Sufficient resources for the FERC to administer its new responsibilities including the authority to levy necessary fees on the industry and access industry computer models, data and transmission experts.

When considering an application for the SRRO, the FERC would give notice of the application and provide an opportunity for public comment in accordance with the Administrative Procedures Act. Particular consideration would be given to SRRO governance, processes, and funding. The SRRO must assure a fair governance process that cannot be dominated by any single industry sector. The FERC would review the application to ensure that the SRRO would function in a manner consistent with the public interest and national reliability policy.

Likewise, when reviewing SRRO mandatory reliability standards, the FERC would issue a notice of proposed rulemaking based on the standard and provide an opportunity for public comment. FERC approval of a standard would require a finding that the standard was fairly developed, is cost effective, and is consistent with the public interest and national reliability policy.

In recognition of the international nature of the interconnected transmission grid, the Task Force has taken the position that mandatory electric reliability standards must be developed by the SRRO and approved by the FERC in accordance with the Administrative Procedures Act. Standard development needs to be done by a single entity that can represent all countries using the interconnected transmission grid. Also, SRRO development of the mandatory standards would avoid the imposition of federally developed standards on those portions of the interconnected transmission grid located in Canada and Mexico. Currently, the Canadian government and electric industry is represented in NERC and it will be necessary to include both Canadian and Mexican representation in the SRRO. The interests of the United States would be protected by enabling the FERC to require the SRRO to develop or modify standards as necessary. It would be incumbent upon the SRRO to develop mandatory standards that are acceptable to all three countries.

Elec Reliability TF 6th meeting Nov 6

/0 Comments/in , /by

Electric System Reliability Task Force 6th Meeting
Notice of Open Meeting — Advance Notice

The sixth meeting of the Secretary of Energy Advisory Board Task Force on Electric System Reliability will be held on Thursday, November 6, from 8:30 AM until 4:00 PM at the ANA Hotel, 2401 M Street, NW, Washington DC 20007. The draft agenda is available on line http://vm1.hqadmin.doe.gov:80/seab/esr6ann.html

The meeting will build on the task force’s Interim Report and will include discussions of the following items:

Draft Position Paper on a Self-Regulating Reliability Organization
Draft Paper on Technology Issues Affecting Reliability
A Panel Discussion on the Role of ISOs in Maintaining Reliability

——————————————-

I just received this note from DOE, with the draft papers as attachments. If you want copies of these documents, let me know, and I’ll forward them to you individually (the full set of both versions is over 600K). Tell me if you want the WP or Word versions…

—————————————

Attached are three documents for discussion at the November 6 meeting of the Task Force on Electric System Reliability. These documents are:

* Draft Position Paper on Maintaining Bulk Power Reliability through Use of a Self-Regulating Organization;

* Discussion Paper on Maintaining Reliability in a Restructured Electric Power Industry: The Role of Transmission System Operators; and

* Draft Outline for a Position Paper on Technical Issues in Transmission System Reliability.

Each document is provided in both WordPerfect and Word formats. The documents are best viewed in WordPerfect format. Since the documents were prepared in WordPerfect, the Word files may not contain all graphics.

Next Meeting, Reliability TF

/0 Comments/in , /by

We just received this advance notice of the next meeting.

DEPARTMENT OF ENERGY
Secretary of Energy Advisory Board –
Electric System Reliability Task Force

Thursday, November 6, 1997, 8:30 AM – 4:00 PM.
ANA Hotel, Ballroom I, 2401 M Street, NW, Washington, D.C. 20037

FOR FURTHER INFORMATION CONTACT: Richard C. Burrow, Secretary of Energy
Advisory Board (AB-1), U.S. Department of Energy, 1000 Independence Avenue,
SW, Washington, D.C. 20585, (202) 586-1709 or (202) 586-6279 (fax).

Background
The electric power industry is in the midst of a complex transition to competition, which will induce many far-reaching changes in the structure of the industry and the institutions which regulate it. This transition raises many reliability issues, as new entities emerge in the power markets and as generation becomes less integrated with transmission.

Purpose of the Task Force The purpose of the Electric System Reliability Task Force is to provide advice and recommendations to the Secretary of Energy Advisory Board regarding the critical institutional, technical, and policy issues that need to be addressed in order to maintain the reliability of the nation’s bulk electric system in the context of a more competitive industry.

Tentative Agenda
Thursday, November 6, 1997
8:30 – 8:45 AM Opening Remarks & Objectives —
Philip Sharp, ESR Task Force Chairman
8:45 – 9:45 AM Briefing: Reliability Council Progress in
Addressing Key Issues —
David Nevius, Vice President, NERC
9:45 – 10:00 AM Break
10:00 – 11:30 AM Working Session: Discussion of a Draft Position
Paper on a Self-Regulating Reliability Organization
11:30 – 12:00 PM Public Comment Period
12:00 – 1:15 PM Lunch
1:15 – 2:30 PM Working Session: Discussion of Draft Outline
of Technology Issues Affecting Reliability
2:30 – 3:45 PM Panel Discussion: The Role of ISOs in
Maintaining Reliability
3:45 – 4:00 PM Public Comment Period
4:00 PM Adjourn
This tentative agenda is subject to change. The final agenda will be
available at the meeting.

Public Participation: The Chairman of the Task Force is empowered to conduct the meeting in a fashion that will, in the Chairman’s judgment, facilitate the orderly conduct of business. During its meeting in Washington, D.C., the Task Force welcomes public comment. Members of the public will be heard in the order in which they sign up at the beginning of the meeting. The Task Force will make every effort to hear the views of all interested parties. Written comments may be submitted to Skila Harris, Executive Director, Secretary of Energy Advisory Board, AB-1, U.S. Department of Energy, 1000 Independence Avenue, SW, Washington, D.C. 20585.

Minutes:
Minutes and a transcript of the meeting will be available for public review and copying approximately 30 days following the meeting at the Freedom of Information Public Reading Room, 1E-190 Forrestal Building, 1000 Independence Avenue, SW, Washington, D.C., between 9:00 AM and 4:00 PM, Monday through Friday except Federal holidays. Information on the Electric System Reliability Task Force and the Task Force’s interim report may be found at the Secretary of Energy Advisory Board’s web site, located at http://www.hr.doe.gov/seab.

Next Meeting of Elec Reliability Task Force

/0 Comments/in , /by

I just received the note attached below from Paul Carrier at DOE. He also tells me that the minutes from the July meeting in San Francisco and the two agendas for Plymouth should be available September 12.

We generally get meeting notices and minutes a day or two before they’re posted on the SEAB Task Force Website: http://vm1.hqadmin.doe.gov:80/seab/electSys.html

I am thinking seriously about attending the technology briefings on Sept 24, which will cover hardware and software for the grid, plus some distributed resources. Note that it is on the day after Tech 2007 in Boston, which I do plan to attend.

EB

———————————————
The next meeting of the Electric System Reliability Task Force will be on Thursday September 25, at the Sheraton Inn, (508)747-4900, in Plymouth, Massachusetts.

The meeting will be preceded by a day of technology briefings for the Members beginning at 10:00 am on the 24th.

Please let me know, via e-mail, if you would like to sit in on the briefings.

I will send you an agenda for both days as soon as they are available.

Call me at (202)586-5659 if you have any questions.

Paul Carrier, Task Force Staff Director
paul.carrier@hq.doe.gov

Reliability TF draft Interim Report

/0 Comments/in , /by

Subject: UFTO Note – Reliability TF draft Interim Report
Date: Fri, 11 Jul 1997 11:12:59 -0700
From: Ed Beardsworth

— advance copy just received from contacts at DOE —

————————————————————–
| ** UFTO ** Edward Beardsworth ** Consultant
| 951 Lincoln Ave. tel 415-328-5670
| Palo Alto CA 94301-3041 fax 415-328-5675
| http://www.ufto.com edbeards@ufto.com
————————————————————–

—————————————-

The attached file contains a draft Interim Report that will be discussed and marked up at the July 23 – 24 meeting of the Secretary’s Electric System Reliability Task Force.

Please note that this draft has not yet been reviewed by the Task Force members.
—————————————–

DRAFT

Dr. Walter Massey
Chairman, Secretary of Energy Advisory Board
c/o Morehouse College
830 Westview Drive, SW
Atlanta, Georgia 30314

Dear Dr. Massey:

The Task Force on Electric System Reliability of the Secretary of Energy’s Advisory Board is writing to provide you interim comments on several issues important to the maintenance of reliability. Although the Task Force has not yet completed its deliberations under the Secretary of Energy Advisory Board’s Terms of Reference, its members are aware that the Department and the Administration may be making decisions on these issues and we want to be as helpful as possible.

As you know, the 24-member Task Force is a diverse group representing, for example, electricity producers, marketers, state agencies, consumers, environmental advocates, reliability organizations and academia. Not surprisingly, with such differing perspectives on changing and complex issues, it is not easy for the group to rapidly reach a consensus. Naturally, not every member agrees with every detail of this report.

We certainly all do agree, however, that the maintenance of system reliability must be a high priority and that the mechanisms for ensuring reliability must be changed to accommodate the changing electric market.

Since its establishment in January, 1997, the Task Force has convened in four open meetings. Thus far, we have focused primarily on issues relating to the bulk power transmission grid and in particular security issues—that is, questions about the operation and maintenance of that system–rather than the adequacy of supply or generation. We will be assessing a number of additional issues at future meetings.

The Task Force appreciates the opportunity to provide the Department with this Interim Report and respectfully submits the preliminary findings and recommendations contained therein.

Sincerely,

cc: Federico Peña
Elizabeth Moler

————————-
Secretary of Energy Advisory Board
Task Force on Electric System Reliability

Interim Report

July 24, 1997

Background

This report makes recommendations regarding the security of the Nation’s bulk power system consisting of generation, transmission, and control facilities.

Electric reliability can be divided into two areas: reliability of the distribution system and reliability of the bulk power system. Bulk power system outages affect large areas and can have significant regional and national implications. Further, the rules for assuring reliable operation of the bulk power system can have an effect on the transactions occurring on the system. Federal regulators have responsibility for economic regulation of electricity in interstate commerce, including wholesale transactions involving most of the nation’s generation and transmission facilities, within and across state borders. An issue introduced by competition in bulk power markets is the need to assure reliable system operations in a competitively neutral way. While everyone agrees that system reliability must be maintained as a feature of a competitive electric industry and must be under the direction of experienced expert operators, not everyone agrees about how to resolve reliability issues in a manner that does not discriminate for or against certain participants in competitive bulk power markets.

While states have an interest in the performance of the bulk power system, state regulation has tended to focus on distribution system outages, that generally have only localized effects and are frequently characterized as being related to end-user customer service, which is an area of state jurisdiction. States have traditionally also had regulatory responsibility for economic and planning approval for certain generation facilities and recovery of their costs and siting approval of both generation and transmission facilities within the state.

Bulk power system reliability has two components: adequacy and security. Adequacy implies that there are sufficient generation and transmission resources available to meet projected needs at all times, including peak conditions, plus reserves for contingencies. Security implies that the system will remain intact even after planned and unplanned outages or other equipment failures occur. Most view transmission adequacy and system security as “public goods” that benefit all buyers and sellers of electricity, and which exhibit monopoly characteristics. While the market will likely play a role in providing certain services that are needed for transmission adequacy and system security, these are the areas of greatest national interest from a reliability point of view and the primary focus of this report.

Bulk power system reliability has historically been the responsibility of the electricity industry, as opposed to the government which has only indirect jurisdiction primarily through economic regulation of wholesale electricity sales by the Federal Energy Regulatory Commission (FERC). The Department of Energy and the FERC also have some limited authority under certain circumstances to order transmission, require interconnections, make reliability recommendations and collect information. The industry, through the North American Electric Reliability Council (NERC), a self-regulating organization traditionally made up of electric utilities, and the ten regional reliability councils establish reliability standards and monitor compliance. While these organizations have been effective in a world of vertically integrated electric utilities, there is concern today about the voluntary nature of their membership, their dominance by utilities, and the inability to mandate and enforce compliance among their members and other industry participants.

Further complicating reliability issues is incomplete jurisdictional authority. As mentioned above, the NERC and the regional reliability councils have jurisdiction only over their members. There are also thousands of municipal, cooperative, and power marketing utilities that are not subject to FERC or state jurisdiction.

Similarly, we recognize that the bulk power system is an international system. We recognize that the NERC, as a body that includes U.S., Canadian, and Mexican members, has a unique role in setting and monitoring international reliability standards and that close cooperation will be required between national, state, and provincial regulatory agencies that may be given authority for reliability oversight.

Reliability Institutions

The electric utility industry traditionally has been vertically integrated, fully regulated and composed of a limited number of entities. These entities were similar in makeup, in their investments in the bulk power system, and in their expectations for grid operation and use.

In this environment, three institutions evolved that are the focus of this report.

NERC – In 1968, the North American Electric Reliability Council was formed in response to the 1965 power outage that blacked out the northeastern United States and Ontario, Canada. For over two decades, NERC’s mission has been to promote electrical system reliability and thereby prevent further such occurrences. The NERC has been a voluntary, industry-constituted governing body that develops standards, guidelines and criteria for assuring system security and evaluating system adequacy. The NERC has been funded by regional reliability councils which adapt the rules to meet the needs of their regions. Through the work of its ten regional councils and one affiliate council, the NERC has largely succeeded in maintaining a high degree of transmission grid reliability throughout the country. Historically, the NERC has functioned without external enforcement powers, depending on voluntary compliance with standards and peer pressure.

System operators – Today the country is served by approximately 150 separate control areas, each with its own system operator. The operators of these systems rely on communications with each other, access to essential system information, and real time monitoring and control of certain facilities to maintain system reliability. When an emergency occurs on the system, the control area operator takes action — both through communication and direct physical action — to ensure the integrity and security of the system. These people take and direct others to take the actions necessary to “keep the lights on” and to protect against damage to the entire system in the event of emergencies.

FERC — The Federal Energy Regulatory Commission is the federal agency with jurisdiction over the bulk power market, including interstate transmission systems. As part of these responsibilities, the FERC is implementing policies to assure that the owners and operators of bulk power transmission facilities under the agency’s jurisdiction provide non-discriminatory service to all power suppliers in wholesale power markets. Historically, the FERC has not had to involve itself with regulating reliability functions. Increasingly, some parties are calling upon the FERC to begin to exercise its current authorities by addressing reliability issues that intersect with the commercial needs of the industry.

At the onset, we note that the electric industry is changing and, indeed, has already changed in several respects: wholesale electric markets are opening to competition under open access transmission tariffs; several states containing more than one-third of the nation’s population have decided to permit retail consumers to choose their suppliers (nearly all of the remaining states are studying retail competition); energy companies are merging and establishing innovative joint ventures; new competitors are entering markets, and new institutions are forming (e.g., independent system operators; power exchanges; spot markets).

These trends indicate that in the future, market forces will determine when, where and what type of generation sources will be built and which energy trades will be transacted. Also, it is apparent that the nation’s transmission grid will be used by a larger number of entities for many more transactions. There are challenges regarding maintenance of traditional reliability levels in this new environment.

While the traditional reliability institutions and processes have served us well in the past, these institutions and processes need to be modified to assure that reliability occurs in a competitively neutral fashion, without favoring one or another set of market participants. To attempt to accommodate these new reliability issues that arise with competitive markets, today’s existing reliably institutions, and most notably the NERC, have undertaken a number of new initiatives including expanding their membership to include new market participants in addition to those long-standing members drawn from the electric industry. The Task Force welcomes these changes.

Task Force Findings

The Task Force has reached consensus on several key points:
1) Restructuring of the electric industry offers economic benefits to the nation and may result in a more efficient electric industry

2) While the changes brought about by restructuring are complex, the reliability of the system need not be compromised provided appropriate steps are taken. Transmission grid reliability and an open, competitive market can be compatible.

3) The viability and vigor of the commercial market must not be unnecessarily restricted. The market forces being introduced now depend on fair and open access to the transmission grid.

4) Commercial markets should develop economic practices consistent with the ingenuity and mutual interest of the participants. However, grid reliability must be maintained through disciplined technical standards and practices.

5) Reliability standards must be clear, transparent, nondiscriminatory, enforceable and enforced. Compliance must be mandatory for all entities using the bulk power system.
6) Regulatory oversight is necessary to ensure compliance with reliability policies and standards and to resolve disputes.

7) It is reasonable and practical to build on the experience and reliability standards developed by the NERC over the past 28 years. However, these standards as well as NERC’s own system of governance must be modified to accommodate the complexities of the competitive market.

8) Grid reliability depends heavily on system operators who monitor and control the transmission grid in real-time. In order to assure competitive use of the grid, system operators must be independent from owners of generation and transmission; they should have no commercial interests in electricity markets.

9) Bulk power systems are regional in nature and can and should be operated more reliability and efficiently when operators are coordinated over large areas.

10) The reasonable and necessary costs for maintaining the reliability system should be fully recoverable and equitably distributed.

11) Transmission grid reliability is a North American issue; the reliability relationships with Canada and Mexico must be preserved.

Task Force Recommendations

The Task Force recommends that:

1) The NERC expedite — to the fullest extent possible and consistent with assuring sound results — the modification of its governance structure to assure fairness and lack of domination by any single industry sector.

2) The FERC undertake a review of existing NERC policies and standards that affect the operation of an open wholesale market and undertake a review of NERC’s organizational structure and governance. This proposed role for the FERC is important in order to make reliability standards enforceable and to assure that reliability standards and practices are not misused in ways that would be discriminatory in the competitive market. Given the considerable demands currently faced by the FERC, additional resources may be required by the agency in order to undertake this role.

3) Federal legislation may be useful to clarify FERC’s authority and responsibility for overseeing and setting and enforcement of reliability standards.

Next Reliability TF Meeting July 23-4

/0 Comments/in , /by

Subject: UFTO Note — Next Reliability TF Meeting July 23-4
Date: Tue, 08 Jul 1997 13:34:53 -0700
From: Ed Beardsworth

Here is an advance copy of the draft agenda for the next meeting of the DOE Task Force.

————————————————————–
| ** UFTO ** Edward Beardsworth ** Consultant
| 951 Lincoln Ave. tel 415-328-5670
| Palo Alto CA 94301-3041 fax 415-328-5675
| http://www.ufto.com edbeards@ufto.com
————————————————————–

[6450-01-P] DEPARTMENT OF ENERGY
Secretary of Energy Advisory Board; Notice of Open Meeting
AGENCY: Department of Energy
SUMMARY: Consistent with the provisions of the Federal Advisory Committee Act (Public Law 92-463, 86 Stat. 770), notice is hereby given of the following advisory committee meeting:
Name: Secretary of Energy Advisory Board – Electric System Reliability Task Force

DATES AND TIMES: Wednesday, July 23, 1997, 1:00 PM – 5:00 PM and Thursday, July 24, 1997, 8:30 AM – 11:30 AM
ADDRESS: Bechtel Corporation, Hoteling Suites, Second Floor, 50 Beale Street, San Francisco, California
FOR FURTHER INFORMATION CONTACT: Richard C. Burrow, Secretary of Energy Advisory Board (AB-1), U.S. Department of Energy, 1000 Independence Avenue, SW, Washington, DC 20585, (202) 586-1709 or (202) 586-6279 (fax).

Background
The electric power industry is in the midst of a complex transition to competition, which will induce many far-reaching changes in the structure of the industry and the institutions which regulate it. This transition raises many reliability issues, as new entities emerge in the power markets and as generation becomes less integrated with transmission.

Purpose of the Task Force
The purpose of the Electric System Reliability Task Force is to provide advice and recommendations to the Secretary of Energy Advisory Board regarding the critical institutional, technical, and policy issues that need to be addressed in order to maintain the reliability of the nation’s bulk electric system in the context of a more competitive industry.

Tentative Agenda
Wednesday, July 23
1:00 – 1:30 PM Opening Remarks & Introductions;
Philip Sharp, ESR Task Force Chairman
1:30 – 2:45 PM Working Session: Review of the Draft
ESR Task Force Interim Report
2:45 – 3:00 PM Break
3:00 – 4:30 PM Working Session: continued
4:30 – 5:00 PM Public Comment Period
5:00 PM Adjourn

Thursday, July 24
8:30 – 8:45 AM Opening Remarks & Summary of Agreements;
Philip Sharp, ESR Task Force Chairman
8:45 – 10:00 AM Working Session: continued
10:00 – 10:15 AM Break
10:15 – 11:00 AM Discussion: Next Steps — Approach to Addressing
& Resolving the Remaining Task Force Issues
11:00 – 11:30 AM Public Comment Period
11:30 AM Adjourn

This tentative agenda is subject to change. The final agenda will be available at the meeting.

Public Participation: The Chairman of the Task Force is empowered to conduct the meeting in a fashion that will, in the Chairman’s judgment, facilitate the orderly conduct of business. During its meeting in San Francisco, California the Task Force welcomes public comment. Members of the public will be heard in the order in which they sign up at the beginning of the meeting. The Task Force will make every effort to hear the views of all interested parties. Written comments may be submitted to Skila Harris, Executive Director, Secretary of Energy Advisory Board, AB-1, US Department of Energy, 1000 Independence Avenue, SW, Washington, DC 20585. This notice is being published less than 15 days before the date of the meeting due to programmatic issues that had to be resolved prior to publication.

Minutes: Minutes and a transcript of the meeting will be available for public review and copying approximately 30 days following the meeting at the Freedom of Information Public Reading Room, 1E-190 Forrestal Building, 1000 Independence Avenue, SW, Washington, DC, between 9:00 AM and 4:00 PM, Monday through Friday except Federal holidays. Information on the Electric System Reliability Task Force may also be found at the Secretary of Energy Advisory Board’s web site, located at http://vm1.hqadmin.doe.gov:80/seab/.

Issued at Washington, DC, on
Rachel M. Samuel Deputy Advisory Committee Management Officer

Reliability TF Draft “Framework”

/0 Comments/in , /by

Subject: UFTO Note – Reliability TF Draft “Framework”
Date: Tue, 27 May 1997 07:37:59 -0700
From: Ed Beardsworth

————————————————————–
| ** UFTO ** Edward Beardsworth ** Consultant
| 951 Lincoln Ave. tel 415-328-5670
| Palo Alto CA 94301-3041 fax 415-328-5675
| http://www.ufto.com edbeards@ufto.com
————————————————————–

Attached below is the first page of a revised draft of “An Organizational Framework for Bulk Electric System Reliability: Functions and Interrelationships”. This paper will be the focus of discussions at the June 3 Task Force meeting.

The entire paper is 7-12 pages (depending on font choice). I can send it as a Word attachment or in the body of an email note.

A copy will also be available at the meeting.

—————————————————-
Draft: May 20, 1997 Task Force on Electric System Reliability

AN ORGANIZATIONAL FRAMEWORK FOR BULK ELECTRIC SYSTEM RELIABILITY: FUNCTIONS AND INTERRELATIONSHIPS

INTRODUCTION Purpose:

This paper presents one possible organizational framework to ensure the reliable operation of the bulk power system. It was written to provide a focal point for future discussions within the Task Force on Electric System Reliability of the Secretary of Energy Advisory Board. The paper is based on discussions by Task Force members at their first two meetings as well as their comments on a draft of this paper. The organizational framework is, at this point, necessarily described in broad terms. This document will evolve through further Task Force discussions and will become more specific as issues and alternatives are considered and addressed.

This paper does not attempt to address whether there are sufficient legal authorities to accomplish what is proposed herein. The need for additional legal authorities will be addressed after a suitable organizational framework has been designed.

In addition, five supporting papers discuss and propose positions on some important issues that cut across the organizations proposed in this framework document.