ERMUSR MISC. ITEMS 12-09-2003 - Laserfiche WebLink

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i I that have been in place since the j �1�, �t'�i! 1\ �Ir4 F .. 1930s. That is the consensus view of c ,�• _ ►�� o ? several dozen leading industry �� It experts, regulators and corpo- '1 rate executives interviewed in C AI' silo± _ recent weeks by Transmission G' $34 II `- - ' ,t'` ' Distribution World. This is a j7�/ a �e ri.1,' , report of their views of the legacy • l'?' � of the August outage. -_; Capital Investment Capital investment in the power II grid has languished for years. Clark Gellings, vice president at Rep. Steve Latourette, R-Ohio, right, tours a FirstEnergy Power Plant in the Electric Power Research Eastlake, Ohio, Monday, August 18, 2003. The plant was the first of several sites Institute, in Palo Alto, Calif, told where transmission failures occurred in the Cleveland area before the blackout. the Wall Street Journal, "today AP Photo/Jamie-Andrea Yanak) J we're making the lowest yearly technologies it will spawn — may outage was unfolding grid opera- investment in transmission since very well rival the Apollo moon tors' computers were crashing. the Great Depression. Electricity li program in its spinoff benefits to Technicians overseeing neighbor- demand has grown 35 percent in a our nation's economy. Nor only ing grids a couple hundred miles decade but transmission capacity will it end the persistent low grade away had no clue as to what was has increased just 18 percent." recession that has mired our econ- transpiring. A federal study says that actual omy for several years, but it may Such insanity is about to end. transmission construction has well set the foundation for jobs Thought leaders in the power declined 30 percent since 1990. and wealth formation for coming industry envision the creation of a Wall Street concurs that not generations of Americans. highly sophisticated grid that will enough capital has gone into the Near unanimity is emerging on provide power companies and their grid. I the need to fix the grid. The system is in very serious Murray Weidenbaum, a promi- need of modernization and more Capital investment in the nent economist at Washington efficient operations," said Leonard I University and chairman of Pres- power grlG hdS S.Hyman,a senior associate of R.J. dent Reagan's council of econom- jdnguisned for years. Rudden Associates Inc., in New is advisors, said, "Transmission York. Hyman, who headed Merrill has been badly underfinanced. customers with real-time informa- Lynch's utility research group for Every study since the August 14 tion about power demand and 16 years, said that the industry fiasco has come up with that con- costs. For the companies responsi- now spends $3.5 billion to $4 elusion. It has fallen between the ble for transmitting power, such billion a year on transmission cracks and no one was paying information will enable them to construction and improvements attention." seamlessly coordinate the use of well short of the $5.5 billion that "The system was highly their resources and make cascading is needed. stressed," said Calpine Corp.'s outages like August's obsolete. Sounds like a lot, but not when executive vice president, Jim New methods of generating measured against the colossal Macias. "Fragmented planning has power — such as fuel cells sitting industry. The assets of investor- led to a hodgepodge of connec- atop office buildings and in subdi- owned utilities top $1 trillion,their tions." visions — will proliferate, joining a market capitalization is $300 bil- How bad is it? Power lines built growing fleet of wind and solar lion and their annual revenues are in the 1960s to shoulder loads installations. about $240 billion. flowing in one direction 40 years While the industry may have By the time needed upgrades in later are carrying power in the been slowly, erratically evolving in the transmission grid are made, opposite direction. Early efforts to that direction,--many now believe typical consumers may wind up document the August outage left the mid-August outage will hasten spending no more than an addi- investigators incredulous that data capital investment, research into tional $50 over five years for their lacked an essential time stamp, new technologies, new thinking power bills, Hyman said. making it a nightmare to unravel among state and federal regulators Regrettably, a variety of factors the sequence of events. \X'hile the and changes in federal utility laws have held up needed investments in 10 1 4th Quarter 2003