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i
<br /> particularly the transmission sector.
<br /> It has highlighted electric reliability
<br /> :4-''.
<br /> 4 7. ' - o j concerns,as witnessed by investiga-
<br /> tions announced by Congress, the
<br /> - ' U.S. Department of Energy and
<br /> -_ _ -- _ _ Canada's Department of Natural
<br /> .y="'✓� Resources. Stephen Fleishman,
<br /> "'� global coordinator for power and
<br /> r gas for Merrill Lynch, says one
<br /> ^ result could be passage of a
<br /> _ National Energy Bill before the
<br /> f 2x,- 7.Y? 2004 elections. At a minimum,
<br /> Fleishman says, renewed attention
<br /> to reliability means utilities them-
<br /> „,- -a;7. - z•aigow selves will plow more money into
<br /> j transmission- Regulators and the
<br /> il " aY general public, Fleishman adds,
<br /> a I -” may be more open to rate increas-
<br /> �..
<br /> es, tax credits or other funding
<br /> Jerry Hoisington, Senior Central Systems Supervisor, monitors the Detroit Edison mechanisms to help fund transmis-
<br /> Electrical System Operation Center in Detroit. Mich., Monday, Aug. 18, 2003.
<br /> sion upgrades.
<br /> Hoisington was at the controls of DTE Energy's system operations center
<br /> ' Many also predict the blackout
<br /> Thursday when the blackout of 2003 occurred. (AP Photo/Paul Sancya) will lead to the passage of national
<br /> asking the grid to do things it was utilities, regulators and indepen- reliability rules for the transmission
<br /> not supposed to do. Transmission dent power producers. "All you grid. "The reliability rules need to
<br /> owners cannot keep up. If we are have to do is look at the number of be mandatory as opposed to volun-
<br /> going to do this,we need new tools stage-two outage alerts we have tary, and they need to be national
<br /> I. to help the operators manage the seen over the past five years. rather than based on what each
<br /> system better." Transmission operators are scram- state does," says Phillip Lookadoo,
<br /> Among the improvements Dow bling to meet demand on facilities a partner in the electric utility prac-
<br /> I would like to see are more and bet- that have been neglected for years." tice of law firm Thelen Reid &
<br /> ter alarm systems to move to a
<br /> completely "self-healing" grid. The Priest. "Clearly, the voluntary rules
<br /> ...Costs and Repercussions have not worked."
<br /> 1 nation's transmission system, he Early estimates put the overall Fleishman says national rules
<br /> says, also needs more lines in high- cost of the outage at between $4 would also appeal to investors,
<br /> ly congested areas, uniform rules billion and $6 billion, hardly a rip- specifically those interested in
<br /> and regulations and tighter integra- ple in a national economy of over investing in interstate transmission.
<br /> tion of communications between $10 trillion. Hardest hit were the "Investors like certainty," he notes.
<br /> system operators. EPRI has called electric utilities themselves,airlines, "Federal rules would add a lot
<br /> for investments of up to $100 bit- cities and smaller retailers who lost more certainty than we have now."
<br /> lion in new nationwide transmis- business for the day or a few days. William Museler, president and
<br /> sion systems, and Dow makes the David Wyss, chief economist at CEO of the New York ISO, calls
<br /> case that even in challenging eco- Standard & Poor's, calls the black- for mandated Federal reliability
<br /> nomic times the nation must invest out "a minor nuisance, as opposed standards as well as improved
<br /> in its infrastructure if it hopes to to a major disaster." incentives for siting new transmis-
<br /> avoid future blackouts. "Load By way of comparison, the sion. "New York's transmission
<br /> growth over the past decade has Insurance Services Offices, a com- grid needs to be strengthened,"
<br /> been 35 percent while growth in pany that tracks the cost of natural Museler says. "Current incentives
<br /> investment has been 17 percent," and man-made disasters, estimates for building transmission are inad-
<br /> Dow says. "If we don't increase the cost of the September 11 terror- equate, the state's transmission sit-
<br /> investment, there is no way we are ist attacks at $20.7 billion, of ing law can be further streamlined
<br /> going to be able to keep up with Hurricane Andrew in 1992 at and, in the case of interstate facili-
<br /> demand." 519.9 billion and of the 1994 Los ties, a federal override may be
<br /> "A major outage was bound to Angeles earthquake at $15.2 appropriate."
<br /> happen at some time," adds Robert billion. Perhaps most importantly, the
<br /> Michaels, a professor of economics The blackout may even turn out lights going out on Broadway on
<br /> at California Stare University to be of economic benefit to the August 14 — in this case in :c'ather
<br /> Fullerton and consultant to electric electric utility industry as a whole, dramatic fashion—serves to remind
<br /> 28 I 4th Quarter 2003
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