Consumer demand for electricity and construction of new power-generating facilities is rising, but even after last summer's massive blackout, investment in the nation's strained electricity transmission grid is lagging, partly because of federal-state turf contests. Reliability of the grid, experts say, is threatened.
According to the North American Electric Reliability Council (NERC), a not-for-profit corporation of power industry members that oversees the grid's reliability, for every gigawatt of new power generation capability installed in 1972, there was roughly $200 million in year-2000 dollars invested in the transmission grid. That's $6 billion spent on the lines supporting 30 gigawatts of new power plants.
But in 2001, 41.8 gigawatts of new power plants got only $3.9 billion -- or about $90 million per gigawatt, less than half the 1972 level -- invested in the transmission grid. And investment has continued to decline in 2002 and 2003.
"It doesn't seem this blackout is attracting the financing activity it should have," said Richard Stavros, executive editor of Public Utilities Fortnightly, a magazine covering the power and gas industry.
Investment in the grid is being held up in part by a complicated power struggle between state and federal authorities.
In 2003, the Federal Energy Regulatory Commission (FERC) tried to encourage grid investment by allowing companies to charge up to 3 percent more for transporting power though their lines if they joined a regional transmission organization (RTO). RTOs are not-for-profit companies responsible for directing power across the grid in the same sense that air traffic controllers direct flights in and out of airports. In joining an RTO, a company gives it control of the company's transmission lines.
"Everybody thought last year that would create a huge investment wave," Stavros said.
Reliability down
In a recent survey, over half of the electric industry professionals who responded said the grid is becoming less reliable, and over half of that group said competition -- which blossomed after deregulation -- is the cause. The survey, conducted by GF Energy LLC, a Washington, D.C.-based energy industry consulting group, went out to 72 respondents, over half of whom were presidents or chief executive officers in the electric power industry.
"The existing interconnection transmission systems in this country are today being used in ways for which they, frankly, weren't designed," said Brant Eldridge, executive manager of the East Central Area Reliability Council, one of 10 regional members of NERC. "You don't have as much margin if something goes wrong as you used to have."
Merrillville-based Northern Indiana Public Service Co.'s portion of the grid is just as reliable, despite its heavier use, said Julia Van De Water, manager of NIPSCO communications, by e-mail. The company, a subsidiary of NiSource Inc., regularly reviews all its grid assets and makes improvements when necessary, she said, and NIPSCO's investment in the grid has remained steady.
Richard Bulley, executive director of Mid-America Interconnected Network, another regional member of NERC, said the power lines are currently operating closer to their limits, requiring greater scrutiny of the lines than in the past.
MISO watches over
Providing that scrutiny in the Midwest is the Midwest Independent Transmission System Operator Inc. (MISO), a non-profit organization located in Carmel, Ind. MISO, founded in 1996, was the first regional transmission organization (RTO) approved by the Federal Energy Regulatory Commission.
MISO's reliability coordinators watch over the transmission grid stretching from eastern Montana to Indiana and Michigan. If they spot a problem, they tell local control-area operators -- working for utility companies -- who then fix it by altering the flow of power across their utility's section of MISO's portion of the national grid.
In its investigation of last summer's blackout, NERC found MISO partially responsible and asked it to improve a host of its operational aspects by June 30.
One improvement includes MISO giving its reliability coordinators five more days of training dealing with emergency power situations. NERC also asked MISO to improve its ability to monitor the power grid, a task primarily accomplished by the grid overview -- a screen showing all the different points on MISO's grid area and the amount of power flowing through those points. The overview did not cover all of MISO's territory until October 2003, over a month after the blackout, said Roger Harszy, vice president of engineering at MISO. And in December, MISO launched an upgraded computer system that increased its ability to track the flow of power across the grid.
"The full deployment of our set of tools that we have now would certainly been very beneficial in August last year," he said.
