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Reliability TF Draft “Framework”

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

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| ** 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
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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.

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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.

Buying and Selling Power Plants

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Subject: UFTO Note — Buying and Selling Power Plants
Date: Tue, 11 Feb 1997 10:22:28 -0800
From: Ed Beardsworth

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| ** 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
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Buying and Selling Generation Assets – Conference April 14-15, 1997, New York

As a result of ongoing restructuring of the U.S. Power industry, transfers of generating assets are occurring at an unprecedented scale, and have really only just begun, representing a huge and critical opportunity for industry players to buy/sell/spin-off assets to meets goals, whether for growth, portfolio rebalancing, or entry or exit from the market. Regulated utilities in particular are becoming participants in both small project sales and large portfolio transactions. Yet there are endless issues to be considered, from estimating current asset values and future market conditions, to clarifying regulatory and balance sheet implications, to arranging financing, and managing environmental and other risks.

The conference is being organized by Infocast, Inc, together with Jeffrey C. Bodington, President, Bodington & Co., and will include 2 days of presentations by experts from Industry, Wall Street and Washington, who will outline the critical issues involved. Case studies will serve as examples, providing do’s and don’ts of deal negotiation.

For more information, or copies of the Conference brochure, contact:
Jeff Bodington, Bodington & Co., 415-391-3280, or
Stephanie Thomas, Infocast, 818-902-5400

(Bodington & Co. provides investment banking, consulting services, and management and financial counsel to electricity generators involved in the sale or purchase of power plants.)

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Managing Environmental Liabilities as Buyer or Seller of Generation Assets

Buyers and Sellers need to manage the Environmental risks which often play a big role in these transactions, affecting sale price and contract terms such as indemnification for future liabilities. For a given facility, the risks may or may not be well characterized, creating an unknown in the equation.

Currently, it appears that a Seller’s market exists for generating facilities. Some buyers are anxious to close the deal. They know they can’t be too concerned with trying to negotiate down the price, and don’t want to look too closely at any discouraging news about what they’re buying, such environmental risks. (More accurately, the people working for the buyer companies can have career incentives to close the deal, and don’t want to slow things down for problems that will only become apparent long after.) Clearly, this could have unfortunate consequences for the Buyer, and also for the Seller, who will still be responsible as the prior owner.

Selling utilities may want, or find themselves forced, to be very upfront about such liabilities. Detailed environmental and regulatory risk assessments can be performed on behalf of either side, and a comprehensive strategy can and should be developed (particularly for companies doing large scale divestiture of many facilities).
For more information, contact UFTO.

Update — DOE Task Force on Electric Reliability; new EIA report

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Subject: UFTO Note: Update — DOE Task Force on Electric Reliability; new EIA report
Date: Fri, 07 Feb 1997 13:00:12 -0800
From: Ed Beardsworth <edbeards@ufto.com>

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| ** 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
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Update — DOE Task Force on Electric Reliability; new EIA report

The minutes of the January 16 meeting should be made available soon, pending final OK by the task force chairman, Phil Sharp. They will be available on-line–I’ll let you know as soon as I hear from DOE.

Meanwhile, DOE staff are preparing some briefing papers for the Task Force members, and also plan to provide them with copies of a new report from the Energy Information Administration:

“The Changing Structure of the Electric Power Industry: An Update”, DOE/EIA-0562 (96), provides a good summary of the issues at stake and a history of the electric power industry.

It is available through the EIA at (202) 586-8800 (free to “energy producers”, but not to consultants!) or on their web site (http:// www.eia.doe.gov). You can download the complete report (2.5 MB in pdf-Acrobat format), and a summary is available at:

http://www.eia.doe.gov/cneaf/electricity/pub_summaries/eu_stru1_sum/contents.html#N_1_

Here are the first couple of paragraphs of that summary:

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The Changing Structure of the Electric Power Industry: An Update

Electric utilities(1)–one of the largest remaining regulated industries in the United States–are in the process of transition to a competitive market. Traditionally vertically integrated,(2) the industry will in all probability be segmented at least functionally into its three component parts: generation, transmission, and distribution. The proposals and issues are being addressed in Federal and State legislation and are being debated in State regulatory hearings. (View a discription of utilities and nonutilities in the current market structure.)

Change is occurring through the issuance by the Federal Energy Regulatory Commission (FERC) of Orders 888 and 889 (dated April 24, 1996) to encourage wholesale competition. Order 888 addresses the issues of open access to the transmission network and stranded costs. Order 889 requires utilities to establish electronic systems to share information about available transmission capacity. In addition, as of June 30, 1996, 44 States and the District of Columbia (more than 88 percent of the Nation’s regulatory commissions) have started activities related to retail competition in one form or another.(3) Issues such as recovery of stranded costs, divestiture of transmission assets, increased mergers, renewable energy incentives, energy efficiency investments, reliability, and the timing of retail competition are critical due to the degree of importance electricity holds in this country’s economic and social well-being. Legislative proposals on electric power restructuring have been introduced into the U.S. House of Representatives and the U.S. Senate.

Request for Comments on NIST Plan

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Subject: UFTO – Request for Comments on NIST Plan
Date: Tue, 28 Jan 1997 12:23:16 -0800
From: Ed Beardsworth

Gerry FitzPatrick called today, and says he’d appreciate any feedback or comments on the NIST Plan that many of you have seen. They have a review meeting coming up soon, and industry input would be very helpful to them. It’s also an opportunity to influence what they’re working on, and to forge stronger links with the program there at NIST.

Repeated below is the note about this from last November. I’m sure Jerry would be happy to rush you a copy of the plan, if you don’t have one.

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| ** 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
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Subject: UFTO Note — NIST Strategic Plan
Date: Thu, 14 Nov 1996 10:42:35 -0800
From: Ed Beardsworth

NIST Strategic Plan for Electric Power Industry

The Electrical Systems Group at NIST has prepared a Draft “Strategic Plan For Measurement Support for the U.S. Electric-Power Industry,” July 31, 1996. It is an attempt to identify the highest priority technical needs of the industry during these times of dramatic change, and particularly where NIST can make a significant contribution.

Based on a comprehensive review of needs in areas of power system efficiency and reliability, environmental protection and power quality, the report focuses on implications for NIST. It may prove a useful benchmark for your own technology needs identification purposes. More immediately, however, NIST is anxious to have a greater degree of input, review and comment from the industry, and will happily send you a copy. You can relay your request through UFTO, or directly to:

James K. Olthoff, 301-975-2431 james.olthoff@nist.gov or
Jerry Fitzpatrick, 301-975-2737 fitzpatrick@nist.gov

Bellcore Developing Specs for Flywheel Batteries for Use in Telecomm

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Subject: UFTO Note – Bellcore Developing Specs for Flywheel Batteries for Use in Telecomm
Date: Tue, 28 Jan 1997 12:33:55 -0800
From: Ed Beardsworth <edbeards@ufto.com>

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| ** 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
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Bellcore Developing Specs for Flywheel Batteries for Use in Telecomm

Bellcore (now owned by SAIC, but still representing the technical needs of the RBOCs) is developing what they call “generic requirements” for flywheel batteries to meet growing needs for extremely reliable back up power on the telecomm system. The key goals are high reliability, low maintenance and long life in what they call “outside plant batteries,” which support equipment in remote locations. Systems would range from 0.1 to 5 kWh, over several hours (i.e. relatively low power). Their view is that they have an existing need that provides a good first application and sizable first market. Their leadership could prove useful to the overall development of flywheel batteries, which may take on a much larger role in storage, power quality and uninterruptible power applications, where utilities have a strong interest.

They are inviting outside parties to participate with them in this process, as outlined in the announcement attached below. The cost schedule hasn’t been determined as yet.

Bellcore has had very little contact with utilities thus far, but they would like to, particularly to take into account issues of seismic effects. (Only one utility was represented at the safety forum in November 1995. Incidentally, the documentation of that meeting is available from Bellcore for a fee of $200.)

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INVITATION TO FUND AND PARTICIPATE
BELLCORE GENERIC REQUIREMENTS TO SUPPORT FLYWHEEL ENERGY STORAGE SYSTEMS (FESS) (NEW GR)

Bellcore has been active in the potential use of Flywheel Energy Storage Systems (FESS) in telecommunications for over three years. This was motivated by our involvement in dealing with the many problems associated with valve-regulated lead-acid batteries in the telecommunications outside plant environment. Bellcore envisions FESSs as eventually replacing those batteries in that environment and perhaps many other applications.

Bellcore convened a symposium on the subject of employing FESS in telecommunications in July 1995 in San Diego, and held a safety forum on FESS on November 15, 1995 at Bellcore’s facility in Chester, New Jersey. Bellcore has an experimental FESS test facility in Chester and has an operating 5kwh system and some smaller FESSs operating experimentally. Bellcore conducted a basic materials investigation in 1996 that consisted of iterative computer modeling and testing of the impact of carbon composites into steel containment targets. This has led to a three-dimensional finite element model that enables us to identify generic design requirements for containment regimes.

Bellcore now invites all interested members of the flywheel energy storage system industry and local exchange and interexchange carriers, and any other members of the telecommunications industry to fund and participate in the development of a new generic requirements document to specify functionality and operability requirements for FESSs in telecommunications applications.

Bellcore proposes to convene a Bellcore Technical Forum (BTF) for funders to address development of a new Bellcore GR covering proposed requirements for FESS applications. The BTF would consist of one or more meetings to:

– Scope out the issues associated with FESS functionality in telecommunications, as well as operational issues, such as Network Equipment Building Standards (NEBS), Lightning and Earthquake concerns, power concerns, and physical design. – Develop a schedule for funders’ participation in development of a draft GR – Determine if additional Industry input will be necessary – Produce and publish a Bellcore GR on FESS in Telecommunications.

It is expected that the development of the GR will take most of 1997 to complete.

Funders will have the opportunity to provide nonproprietary input into the technical descriptions of the material, to comment on all draft text, to receive the GR and Issues List Reports(ILRs), if any are funded, pertaining to this release of the GR, and to exercise other rights and undertake responsibilities as provided by the applicable funding agreements with Bellcore and by law. Interactions beyond any meetings with funders may be via letters, conference calls, faxes or electronic mail.

It should be noted that Bellcore does not make procurement decisions for any Bellcore client company. Bellcore activities that involve industry interactions in no way indicate a potential purchase or selection decision by any Bellcore client company.

Bellcore reserves the right to alter or withdraw this proposal if there is insufficient interest in this invitation.

If your company is interested in funding and participating in the development of these proposed Bellcore Generic Requirements, please contact Bellcore by March 31, 1997:

Lawrence M. Slavin Bellcore 445 South Street, MCC 1C-117B Morristown, NJ 07960
201-829-4330 201-829-5886 (FAX) lslavin@notes.cc.bellcore.com

SEAB TF Meeting Announced

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Subject: UFTO Note – SEAB TF Meeting Announced
Date: Wed, 08 Jan 1997 15:51:51 -0800
From: Ed Beardsworth <edbeards@ufto.com>

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| ** 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
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Here is the official announcement of the first meeting of the SEAB Task Force on Reliability, adapted from the Federal Register of Dec 30.

Note that the meeting is open, and public participation is permitted.

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

Thursday, January 16, 1997, 8:30 AM – 5:00 PM

JW Marriott Hotel
Capital Ballroom – Salon E
1331 Pennsylvania Avenue, NW
Washington, D.C. 20004

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 richard.burrow@hq.doe.gov

SUPPLEMENTARY INFORMATION:
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.

Subject: UFTO Note – SEAB TF Meeting Announced Page 2 of 2
Date: Wed, 08 Jan 1997 15:51:51 -0800

Tentative Agenda

8:30 – 9:15 Opening Remarks
Hazel R. O’Leary, Secretary of Energy
Bob Hanfling, Chairman, Secretary of Energy Advisory Board
Phil Sharp, Chairman, Electric System Reliability Task Force

9:15 – 9:30 Task Force Member Introductions

9:30 – 9:45 Break

9:45 – 10:30 Institutional Reliability Issues
Mike Gent, National Electric Reliability Council

10:30 – 11:15 Technical Reliability Issues
Karl Stahlkopf, Electric Power Research Institute

11:15 – 11:45 State Reliability Perspectives
Duncan Kincheloe, Missouri Public Utility Commission

11:45 – 1:00 Lunch

1:00 – 1:30 Federal Policy Issues
Charles B. Curtis, Deputy Secretary of Energy

1:30 – 2:00 Public Comment

2:00 – 4:30 Development of a Task Force Work Plan

4:30 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 David Cheney, Acting Executive Director, Secretary of Energy Advisory Board, AB-1, 1000 Independence Avenue, SW, Washington, DC 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, DC, between 9:00 AM and 4:00 PM, Monday through Friday except Federal holidays.

December 20, 1996

NIST Strategic Plan

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Subject: UFTO Note — NIST Strategic Plan
Date: Thu, 14 Nov 1996 10:42:35 -0800
From: Ed Beardsworth

————————————————————–
| ** UFTO ** Edward Beardsworth ** Consultant
| 951 Lincoln Ave. tel 415-328-5670
| Palo Alto CA 94301-3041 fax 415-328-5675
————————————————————–

NIST Strategic Plan for Electric Power Industry

The Electrical Systems Group at NIST has prepared a Draft “Strategic Plan For Measurement Support for the U.S. Electric-Power Industry,” July 31, 1996. It is an attempt to identify the highest priority technical needs of the industry during these times of dramatic change, and particularly where NIST can make a significant contribution.

Based on a comprehensive review of needs in areas of power system efficiency and reliability, environmental protection and power quality, the report focuses on implications for NIST. It may prove a useful benchmark for your own technology needs identification purposes.

More immediately, however, NIST is anxious to have a greater degree of input, review and comment from the industry, and will happily send you a copy. You can relay your request through UFTO, or directly to:

James K. Olthoff, 301-975-2431 james.olthoff@nist.gov or
Jerry Fitzpatrick, 301-975-2737 fitzpatrick@nist.gov

3rd DOE Public Meeting on Elec. Industry Restructuring

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Subject: UFTO Note –3rd DOE Public Meeting on Elec. Industry Restructuring
Date: Mon, 04 Nov 1996 09:25:36 -0800
From: Ed Beardsworth

————————————————————–
| *** UFTO *** Edward Beardsworth * Consultant
| 951 Lincoln Ave. tel 415-328-5670
| Palo Alto CA 94301-3041 fax 415-328-5675
————————————————————–

A letter went out last Friday from the DOE Office of Policy inviting participation in the 3rd regional public meeting on electric industry restructuring. (See UFTO Note, Oct. 17)

It will be held in Chicago on November 15, 1-5 pm at the Downtown Marriott. It will begin with a “town meeting”, then panelists, then Q&A.

Questions are being handled by a hotline at 423-576-3610. I just called them and they are very helpful. They can provide additional information, including summaries of the first two meetings and guidance on how to become a panelist.