Legislation Would Set Rules for Grid

[Rose Siding]

Three months after the worst blackout in U.S. history knocked out electricity from New York to Detroit, Republican congressional leaders have responded with an energy bill that they said would go far toward preventing such a calamity in the future.

The legislation includes the first federally enforceable rules to protect transmission grids against cascading power surges such as those that triggered the Aug. 14 blackout, according to congressional aides.

But while it would strengthen reliability rules, the legislation does not deal with the disorganized, fragmented system of grid control centers in parts of the country -- particularly the Midwest, where the blackout started, some experts said. That could leave the Midwest and neighboring regions vulnerable to serious power outages unless utility companies agree to tighten grid controls.

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The rules would prevent the "dithering" seen in grid control rooms on Aug. 14, as operators, struggling with faulty computer systems and inadequate information, delayed actions that could have prevented the blackout, said utility executive Elizabeth A. Moler, who headed an Energy Department study of the transmission system.

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Under the rules proposed in the Republican bill, grid operators could order a utility to increase or reduce power output from specific generators to ease congestion on overloaded power lines, or even to cut off power temporarily to groups of customers to lower demand. Rule violations could result in financial penalties.

http://www.washingtonpost.com/ac2/wp-dyn/A42844-2003Nov14?language=printer

No more DITHERING! Clearly that was the only hinderance to working efficiently with "faulty computer systems and inadequate information."

Does that last bit make it sound like they just legalized- or at least made it easier to do- some of what the industry did to CA?

[salin]

1. Yes

and no. On the one hand the legislation will take regulatory powers away from the state - and hand it to FERC. In theory - FERC is better poised (so they tell us) to see unethical (illegal) behavior as was seen in California (shipping energy out of state, then selling it back to California at inflated rates.) The rationale IS california. What they don't say - is that this single issue was the reason Ken Lay exed one FERC head nominee for current FERC head - Pat Woods - and that they have wanted to do this all along (in part as a way to leverage the opening of MORE deregulated energy markets rather than trying to force state by state dereg. Don't know how that would work - but it is the intent.) They also don't say that even when FERC had information about the shenanigans in their hands during the California manufactured (manipulated - now documented) crisis - they didn't "see" it OR act. They also put in rules in the case California was bringing against the gouging companies to recoup some of the 36 (or was it 72) BILLION extracted from the California economy by disallowing consideration of certain evidence (or did they put time lines in that let the relevance of the evidence expire?) which greatly hindered the case and lowered the amount that California could recoup.

The other yes is that it takes one of the last bastions/consumer protections against vertical ownership in energy utility companies and the monitoring power over potential gouging, by killing the Public Utilities Corporations Holding Act (PUHCA). See - gouging by utilites was a big problem in the predepression/depression era. Two ways: example 1. A utility company owns a subsidiary through which it purchases certain equipment - and charges for over the market rate (to itself) - and passes on the grossly inflated costs to consumers. The company could do this with multiple subsidiaries for multiple 'services/materials' claimed necessary for the production and delivery of the utility services. In return for giving the SEC monitoring power over the ownership of subsidiaries and for price gouging (PUCHA works through, I believe, the SEC) - utilities are granted, through the state, a guaranteed - but reasonable - profit over the costs of delivering the utilities services. This, in part, is why utilities were always considered a safe and steady investment. Example 2. A company owning the utility also owns a completely unrelated company that goes into serious losses; the company can pillage the assets of the utility to offset the losses - done because the 'market' for the utilities is captive and has to pay what is charged (people can not just do without all water.) In the end the consumers have to pay much more to bailout the utility, or to rebuild the infrastructure of the utility if it has been allowed to degrade because all utility assets were looted to pay for the parent companies other, unrelated, holdings. This could also create great instability and further neglect of the infrastructure such that created the conditions for the great blackout in the NOrtheast - and make that a much more common situation.

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