Static on the Power Lines

The Aug. 14 blackout exposed the weaknesses of a patchwork transmission system ill-suited to the realities of the 21st century. Here’s why things aren’t likely to change for the better any time soon

By Lindsay Audin  

The blackout that rolled through parts of the Northeast, the Midwest and Canada darkened buildings, snarled traffic, silenced cell phones and sent hordes of people into the streets to try to make their way home. It wasn’t supposed to be that way. After the 1965 blackout, which covered much of the same territory as the August 2003 event, steps were taken to prevent a recurrence of the problem. The system put in place clearly failed on Aug. 14.

Unfortunately, until some centralized process is created to deal with existing transmission problems, facility executives are likely to continue experiencing power problems. Most vulnerable are those facilities located in areas where the electrical system was developed prior to World War II.

Effects on facilities will vary greatly. Although blackouts as widespread as the most recent are unlikely, some facilities might experience infrequent, but no less inconvenient, outages. Others will see occasional high wholesale power pricing as transmission systems become more congested. Demand charges will increase as utilities move toward real-time pricing. The price of power pricing will continue to be affected by a facility’s location on the transmission system; price competition will remain minimal.

For those highly dependent on a continuous flow of power, some on-site backup capacity will become even more important. For those seeking lower and consistent power pricing, longer-term contracts, plus installation of cost-mitigating equipment, such as thermal-storage and demand-response systems, might be necessary.

For those having political and financial resources, representation to regulatory bodies and legislatures via trade groups might become part of a cost-control strategy. Extra care might be needed when locating new facilities, or expanding existing properties.

Although the cause of the blackout is still not clear, the system-wide conditions that made it possible for the outage to cut such a wide swath have been developing for many years.

To understand how the current situation developed, it’s worthwhile to go back to the days after the 1965 blackout. Local utility power systems in the United States and Canada voluntarily gathered themselves into 10 power pools under which reliability councils defined standards for avoiding future blackouts. A power pool is a geographic area containing the transmission system and the power plants that supply it.

Together, the councils constitute the North American Electric Reliability Council (NERC), a private agency seeking to improve and maintain America’s high-voltage power lines. It’s important to note that neither the grid nor NERC was expected to enhance interstate power trading, which in the 1960s made little sense for regulated utilities working within defined boundaries.

Any geographic region in which generators and transmission lines are dispatched in a coordinated fashion is called a control area. Most utilities consist of one or more control areas and the NERC regions were developed to coordinate them via the power pools. Some are either centrally controlled using automation, such as the “tight” pools in New York state, or remain informal and “loose” in nature, with actions being taken mainly via phone calls to plant operators. Because NERC is a private industry group without any legal enforcement power, its rules are voluntary.

Fast Forward to Today

Over the past 25 years, the U.S. power supply has been undergoing a massive restructuring. Private non-utility power generators now provide a significant portion of electricity, using the still-regulated transmission systems as their delivery mechanism. In essence, the interstate transmission system was opened, at least in theory, as a common carrier similar to how long-distance phone lines are now used by a variety of phone service vendors. Local distribution systems, however, have remained under regulation of public utility commissions (PUCs).

While, to a small extent, retail deregulation has expanded the number of wholesale power transactions, it is the trade among major power suppliers, including still-regulated utilities, and brokers that has changed the flow of electricity over America’s power lines. Various federal orders and legislation have tried to better organize what exists to expand that commerce, with varying degrees of success.

The ISO: New Sheriff in Town

To replace the power pool system that was heavily dominated by utilities, the Federal Energy Regulatory Commission (FERC) developed the concept of independent system operators (ISOs). Regulated by FERC, ISOs were designed to formalize the coordination of control areas, improve power commerce, provide unbiased equal access to transmission, set standards for power entering the system, and determine when a system required expansion or improvement. ISOs are nonprofit organizations that do not own any generation or transmission assets, but are charged with controlling those under their jurisdiction and working with adjacent ISOs to maintain reliability.

When an ISO is formed, it may consolidate all control areas under its jurisdiction into one unit. An ISO provides minute-by-minute direction over which power plants and power lines will be used to ensure reliability and minimize wholesale pricing.

Most ISOs have also acted as wholesale power exchanges, overseeing hourly pricing and other matters related to wholesale power markets. In their short history, ISOs have also created markets that allow owners of on-site generation and demand-control systems to use such capabilities via ISO-managed markets to reduce temporary local or system-wide power problems instead of curtailing use of the transmission system or dispatching high-priced generation. In addition, ISOs have created pricing mechanisms designed to attract, again with varying degrees of success, financing for new transmission and generation upgrades from the private sector.

Unlike power pools and reliability councils, ISOs include representation not only from utilities but also from power marketers, private generators, PUCs, special interests and customer groups. Such organizations are operating in New England, California, New York, the Pennsylvania/New Jersey/Maryland area and Texas. Others, such as the Midwest ISO, which many are blaming for the recent blackout, are still developing.

Effects at the Retail Level

Through their procedures, ISOs significantly influence power pricing at the wholesale level, which eventually affects retail pricing. For example, some have ascribed the lack of an ISO as a contributing factor in the summer 1999 Midwest price spike that briefly drove wholesale power prices as high as $7.50 per kilowatt-hour. Such high costs eventually appear as high fuel adjustment charges, rate increases on retail electric bills, high buy-through pricing for interruptible customers or as penalties paid by customers who cannot reduce their power usage when called upon to do so under a demand-response program.

Some ISO structures might also affect customers’ ability to influence regulatory policy. While state PUCs still exist as a venue for customer complaints and input, jurisdiction over transmission and wholesale pricing might change under an ISO, with the forum now being management/operating committees often dominated by generators and transmission owners, which are usually the incumbent utilities. A PUC becomes just another voice, albeit an important one, among many.

Some see this change as a shift in the balance of power away from local and state control, making oversight and intervention in regulatory policy more difficult and expensive for customers.

Because ISOs also have the responsibility for keeping the lights on in their territories, the “buck” stops at their headquarters. Their inability to quickly find and correct the cause of the recent blackout has given such agencies a black eye.

Not Enough to Get the Job Done

After several years of ISO operation, FERC concluded that these agencies needed greater authority to succeed, especially in the matter of transmission improvements. ISOs have the obligation to study and suggest upgrades, for example, but lack the authority to site them or condemn property for that purpose. Likewise, ISO boundaries have tended to follow those of power pools, which in FERC’s opinion might be too small to handle regional transmission problems such as congestion. Congestion occurs when too much power is trying to move through lines too small to accommodate the flow.

To respond to such problems, FERC has been trying to convert ISOs into larger regional transmission organizations (RTOs) having more clout. In July 2002, FERC proposed a sweeping set of changes to the wholesale power market under its standard market design (SMD) proceeding. That effort would have moved ISOs even further ahead by converting them into independent transmission providers with greater latitude than the proposed RTOs. Because of opposition from utilities and PUCs in the Northwest and Southeast, however, the Bush administration in early September dropped SMD as part of its bargaining posture on a national energy bill. As a result, the existing patchwork — a mix of ISOs and power pools — is likely to continue for at least several more years.

On a broader scale, the nation’s economic competitors in Europe and the Pacific Rim are benefiting from more centralized and in some cases advanced power systems. Some of those systems boast better reliability than systems in the United States. While states, utilities and various regulatory agencies wrestle with the problem, it might just take some intervention at the national level to break the roadblocks and similarly move the U.S. power transmission system into the 21st century.

Lindsay Audin is president of EnergyWiz, an energy consulting firm based in New York. He is a contributing editor to Building Operating Management.

The flow of power: Understanding the grid

The blackout focused attention on how power is delivered and just how reliable that process may be. Dependence on uninterrupted electric power grows with every computer, cell phone and electronic widget used in buildings. As a result, understanding the “grid” that moves electricity from power plants to light switches has become more important. To quickly grasp this process, consider water flow.

Imagine a reservoir fed by streams, springs and rainfall. That may be likened to a network of transmission wires fed by various power plants. Water — analogous to electricity — from the reservoir is delivered to customers through a system of pipes that are like the high-voltage cables running between power towers along highways and the lower-voltage distribution lines strung between utility poles along local roads. This overall delivery matrix is the electricity grid. A “power pool” consists of a geographically bound area containing a transmission system and the power plants that feed into it.

Now imagine several reservoirs interconnected by giant pipes; they are analogous to the connections — called interties or seams — between power pools. When the level in one reservoir drops, others may provide water to make up the difference. The clarity of water flowing into these various systems is like the 60-cycle alternating-current waveform maintained in power wires. If the power frequency starts to vary, flow may be shut off or filtered to avoid “polluting” other systems.

In this analogy, the flow of water from the reservoirs (i.e., “transmission”) occurs at high pressure, which is lowered at waterworks for retail distribution to our homes and businesses. In the real world, high-voltage power (several hundred thousand volts running through cables between power towers) is stepped down via transformers at utility substations. It is then sent through a distribution system (seen along roads as wires and utility poles) operating in the thousands of volts. Once it gets near your building, voltage is stepped down further (into the hundreds of volts) by a distribution transformer on a nearby utility pole or concrete pad.

— Lindsay Audin

Gridlock on Route 66

The problems of the existing power transmission system are reminiscent of the nation’s highways prior to 1950, before the interstate highway system was created. During World War II, it was found that moving supplies needed for the war effort was hampered by lack of high-speed and contiguous roadways across the nation. While some urban areas had highways, most of the country was served by a patchwork of local, county and state roads.

Under the Eisenhower administration, a high priority was given to developing a series of highways built under consistent standards, unlimited by state boundaries or local politics.

Much of the electric transmission system is like America’s roads in 1950. While working acceptably within narrowly confined geographic areas, it hampers widespread trade in electric energy, has many bottlenecks and is heir to a great deal of parochial politics. Where the various local systems have been interconnected, jurisdictional and control issues arise. Authority is divided among federal and state agencies, with no central overriding and enforceable standards or bodies for ensuring reliable, economical and high-volume traffic.

In general, public utility commissions (PUCs) regulate use of local distribution systems and, to varying degrees, share control over the long-distance transmission grid with the Federal Energy Regulatory Commission (FERC).

The local utility distribution lines — county roads in the analogy — were designed to move power from regulated utilities to their local customers, not to foster interstate commerce. At present, those “roads” are distributed among more than a hundred large utilities and several thousand small co-op and municipal power systems, creating a maze of wiring across the nation. Each may charge a “toll” — a wholesale power tariff — for moving power over its part of the lines. Imagine the obstacles to commerce created by having a tollbooth at every county border and the crazy quilt of the existing transmission system becomes clear.

While various public and private agencies have worked to reduce such barriers, the problems have only gotten worse as more parties selling power have sought access under deregulation to move power along that grid. Because trade is the lifeblood of the economy, however, attacking deregulation as the problem is like saying that holiday drivers intentionally cause potholes.

— Lindsay Audin

Testing, maintenance crucial for emergency power systems

The most common cause of emergency power supply systems failure is failure to perform maintenance and testing in accordance with manufacturers’ manuals and standards found in NFPA 110, Emergency and Standby Power Systems. If these guidelines were followed there would be few, if any, failures of emergency power supply system components.

While planning for Y2K, facility executives made most emergency power systems ready for action. During the blackout in August, only three-and-a-half years later, a surprising number of systems didn’t meet demands because the testing and maintenance protocols had been relaxed or neglected.

Age has been one reason cited for system failures. But, if logic prevails, older equipment should have been replaced according to manuals and standards.

Failures of generators to come on line or stay on line was the most common problem. The number one cause of failure is failure to maintain and test batteries, battery cables and other components of the starting system. The second leading cause of failure is contaminated fuel and poorly designed fuel delivery systems. The third biggest cause of failure is the engine cooling systems. Corroded and clogged radiators, leaks, obstructions in the airflow and failure of louvers to open because of improper wiring of building automation systems are among the reasons cooling systems fail.

Failures of UPS systems are most often traced to poor battery management. In several cases, batteries have exploded as voltage dropped and amperage increased. If the proper maintenance and testing protocols had been followed, most — if not all — of these problems could have been prevented.

The blackout should make maintenance and testing a top priority. It should also lead to updates of one-line diagrams to ensure that all life-safety loads are fed by the proper distribution panels and that distribution gear — panels, automatic transfer switches, circuit breakers, etc. —are in good repair.

Litigators say that they will sue for criminal negligence if their clients have suffered injuries resulting from failure of emergency power systems. Facility executives should bring the critical importance of the emergency systems to the attention of the CFO and ask for adequate funds to maintain and test the systems and other life-safety items. Adding redundant generators, possibly using combined heat and power, is also a possibility where the electrical rates are the highest.

— Dan Chisholm is president of Motor and Generator Institute and editor of Healthcare Circuit News. He is also a technical committee member of NFPA 110 Emergency and Standby Power Systems and NFPA 99 Health Care Facilities – Electrical Section.

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  posted on 10/1/2003   Article Use Policy

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