# Presentation: 359437

## Reliability: New Concerns, New Approaches

**National Energy Modeling System/**
**Annual Energy Outlook Conference**
***Washington, D.C.***
***March 27, 2001***

***Diane Barney******, Chairman***
***NARUC Staff Subcommittee on Electric Reliability***
***diane_barney@dps.state.ny.us***

## Overview

**State Interest in Reliability & NARUC Staff ****	****	****Subcommittee on Electric Reliability**
**Electric Reliability Categories (Technical):**
***Energy Supply***
***Operational ***
***Physical***
**How Reliability Techniques Have Changed During the Transition to Competition**

## State Interest in Reliability

**Responsible to provide a safe environment for its citizens**
**When the utility systems fail, it is the state’s responsibility to:**
***secure the streets***
***provide medical assistance***
***rescue people stranded in high-rise buildings***
***provide emergency services (shelter,food, etc.) to affected residents***
**When an electric emergency happens, the states need to move quickly and decisively to save lives and assist in restoring the system to operation**

## NARUC Staff Subcommittee on Electric Reliability (ERC)

**Very new committee - ***February 2000*
**Mission:****	***“to address *_*technical*_* issues related to **	**	**	**  reliability of electric service”*
**Purpose:****	**** **
***Assist states by making the experience of other states accessible to them***
***Provide a state forum to identify reliability issues rising to the forefront and developing solutions***

## ERC Projects

**System Reliability Service Measures**
***State survey: ***
***	******http://www.nrri.ohio-state.edu/survey/reliability_print.php***
**NESC Standards Process**
**Distribution System Vulnerability to Summer Heat and Peak Loading**
**Distributed Generation Interconnection Standards**
**Reliability in the Planning and Operating of the Transmission and Upper-level Distribution Systems**

## Reliability of Electric Supply

- What is it?
- 	Assurance that sufficient energy will be available to serve load under most conditions.
- Pre-Competition Techniques:
- 	Utilities build as assured investment
- 	Reserve Margin

## Reliability of Electric Supply

**Transition-to-Competition Techniques:**
**Market supplies new generation**
***Timeliness problem***
**NEED:  Gap and backup plan**
**NEED:  Coordination & Control of Outages**
**Reserve Margin valuable during transition**
***Early-warning system to need for new generation***
***New modes of generation operation can impact margin requirements***
**NEED:  Re-evaluation of assumptions**

## Reliability of Electric Supply

**Transition-to-Competition Techniques (continued):**
**New balance between reliability & economics**
***California as a case study***
**Reliability at all costs?**
**Economists and engineers need to talk**
**Short-term price signals vs.... long lead-time to build**

## Operational Reliability

- What is it?
- 	Maintain balance between resources and loads so that no physical harm occurs on the system.
- Pre-Competition Techniques:
- 	System Operators (Total Command & 			Control)
- 	Operating Reserve Requirements
- 	NERC

## Operational Reliability

**Transition-to-Competition Techniques:**
**System Operators - A Brave New World**
***Most potential for decreases in reliability***
**Actions governed by contracts**
**Emergency responses complicated by increased communication layers and contract obligations**
**Parties no longer working toward common goals**

## Operational Reliability

**Transition-to-Competition Techniques (continued):**
**Operating Reserve Requirements**
***New criteria for determining required level***
***Uncertainty in applying old techniques to new situation***
**Can reduce reliability levels**
***ISO/RTO/Seams sharing agreements***
**Can increase reliability levels**

## Operational Reliability

**Transition-to-Competition Techniques (continued):**
**NERC Transition (“Plan B”)**
***Industry self-regulation by agreement***
***Increased uniformity of standards***
***Rapid response process***
***Mandatory, enforceable standards***
**NEED:  Determination of regulatory interface**

## Physical Reliability

- What is it?
- 	Sufficient, well maintained transmission and distribution facilities and related equipment exist so that 1) load can be met; and 2) no physical harm to the system is incurred under normal and contingent operation.
- Pre-Competition Techniques:
- 	Interconnection standards
- 	Load-based T&D planning

## Physical Reliability	

**Transition-to-Competition Techniques:**
**Interconnection standards for generation are bifurcated**
***Minimum system requirements***
**NEED:  Determination of property rights**
***Integration***
**NEED:  Define developer vs. TO responsibility split**

## Physical Reliability	

**Transition-to-Competition Techniques (continued):**
**Load-based T&D Planning**
***Increased emphasis on balancing economic and physical need***
**NEED:  Consistent, fact-based economic criteria**
***Total overhaul of transmission planning process***
**NEED:  Answer the following -**
- Who is in charge?
- Who is responsible?
- Who is going to perform studies?
- How  will it be coordinated?
- Who pays?

## Physical Reliability	

**Transition-to-Competition Techniques (continued):**
**Reliability Service Measurements**
***Compatible with Performance Based Ratemaking***
***Quantification of reliability levels***
***Meaningful targets***
***Know when targets are met***
**NEED:  Increased regulatory voice in IEEE process**

## Transaction Reliability

- What is it?
- 	Assurance that a transaction will be able to take place on the electrical system.  New concept of reliability that is NOT technical in nature, but business related.  May require technical solutions.
- Pre-Competition Techniques:
- 	None!

## Transaction Reliability

**Transition-to-Competition Techniques (technical):**
**Economically justified transmission upgrades**
***Beyond load requirements***
**NEED:  Methodologies to identify how projects help/harm the system**
**System Operator independence**
***Impacts flow of and access to information in BOTH directions***

## Summary

**Flexibility and an open-mind are required to ensure reliability during transition period**
**Open Communication channels are key**
***Economists & Engineers***
***State & Federal Regulators***
***Regulators & Industry***
***Regions need to share lessons learned with other areas***