Reliability Issues in a Restructured Electric Industry

Sharon Ashurst, Public Utility Specialist,

Energy Forecasting Branch, RUS

1

I have been in the business for a long, long time. In fact when I started in Load Research,

we were still collecting data on wax charts and paper tape, and entering the data into a

mainframe computer using data cards. We had just retired the stone tablets and chisels.

My first project in Load Research was a commercial time of day rate. In those days the

thought of a residential time of use rate was absolutely unheard of. After all, residential

customers were not about to alter their lifestyle to save a few pennies. Only commercial

customers, whose electric bill represented such a large portion of operating costs, were

sophisticated enough to modify their usage patterns by planning and adjusting the

running of certain processes. My job was not to design rates to be charged but to

determine rating periods to be considered peak, off-peak and shoulder, and to develop a

scheme for editing any lost data that would accurately depict customer usage during the

unrecorded period. Remember, in many cases the recording methods were not exactly

state-of-the-art, and there were many gaps in the data. It was, to say the least, a tedious

task.

As time went on the data collection evolved from magnetic tape and chip memory and

computers got smaller while handling greater amounts of data. Once we were convinced

that time of use worked for commercial loads, we experimented with residential loads.

By performing end-use surveys to determine appliance mix and load research on enduses, we were able to determine the time and duration of appliance use and contributions

of each appliance to peak. We all know that a single residential load may not be that

significant, but in Washington, D. C., I surveyed some homes that used as much power as

a small business. Consider this -- a wine cellar, a tropical garden, a heated swimming

pool, eight bedrooms, and an art gallery all under one roof. Obviously this was not a

candidate for time of use and the residents didn't really care how much money was spent
2

to keep all their thermostats happy. But there were others who, through education, could

definitely benefit from load controls and wiser use of electricity.

For years, we assumed residential customers would use their electricity indiscriminately,

believing there was nothing they could do to reduce the bill and knowing there would

always be an adequate power supply at the flick of a switch.

When I introduced a real time pricing rate to the large industrial customers in New York

State, they were all skeptical. First of all, we only talked to customers who were on the

time of use rate. One customer, through intense negotiations with the labor union, had

shifted most of their crew to night work to take advantage of off peak rates. The off-peak

rate more than made up for the night shift pay differential, particularly in an industry

where more than 75% of their operating costs are for electricity. The real time rate would

allow the workers to return to day work, and the company could take advantage of lower

costs, by using forecasted rates to plan their operations.

The residential time of use rate I introduced in New York drew a lot of flak from dairy

farmers, who complained that their cows would object to being milked off-peak,

according to the time of use schedule. Residential customers could readily adapt to the

new rates. My response was to design a new rate for farmers (and their cows) to better

their commercial operations.

This discussion of load research, rate design and forecasting may seem irrelevant to

reliability and restructuring of the electric industry, but knowing your system, your

customers, and your future energy needs are highly relevant to maintaining a healthy

electric system. Load research provides information about usage and exposes

opportunities; rate design provides incentives to shift loads, and forecasting is a major

planning tool. While these functions are integral to system reliability, they could also

become victims of competition.
3

Now we are moving into a new era. Competition and deregulation have become the new

buzzwords. While electric utilities have competed for years with other fuels, they will

now compete with one another.

Over the past two decades there has been a great deal of talk and movement towards

competition and the restructuring of businesses and services traditionally considered

natural monopolies. Technological advances, providing the means to break down

barriers to competition, have been greatly responsible for this movement and a changing

attitude about natural monopolies. Trucking, airlines, long distance telecommunications,

natural gas and now electricity have all been de-regulated to varying degrees.

Following close on the heels of FERC's orders to open transmission (FERC Orders 888

and 889), is the current push to break up or restucture electric utilities into their

functional parts: generation, transmission, distribution and customer service.

Today I want to talk a little about electric reliability and the possible impacts of

restructuring and competition on reliability. We have just gone through a year-long

exercise to test the reliability and Y2K readiness of the nation's electric grid. Manual

workarounds and contingency plans were examined and rewritten to deal with computer

misread problems. Systems and plans were examined so carefully that unrelated

problems were discovered and solved. By comparison, this was only a pop quiz, for

competition will, I suspect, test our ability to make the most of precious resources.

Competition, whether implemented on the state or federal level, will lead to restructuring

of electric utilities. As they evolve into leaner, meaner, more efficient organizations,

cutbacks to improve bottom line and cut costs, may additionally compromise customer

service and reliability. The biggest question will be who is responsible and accountable

to ensure customers continue to be served as well as they have in the past? How can this

be enforced? In the vertically structured utility the responsibility was well defined, but in

the new structure with so many new players, the lines of responsibilities may become

blurred.
4

How is reliability defined -- how is it measured -- who oversees the reliability of the

national grid?

Reliability is the delivery of power, safely, efficiently, with a minimum of fluctuations

and outages. Reliability is monitored by the North American Electricity Reliability

Council (NERC) which is made of geographic subgroups of electric utilities, many of

which are electric cooperatives operating in rural America. NERC, under the U. S. Dept.

of Energy, along with NRECA , APPA and EEI, played a major role in the monitoring

and testing of Y2K readiness in the United States during the last two crucial years. While

most electric utilities in the United States and Canada are members of NERC's subcouncils, membership is strictly volunteer and NERC has no means to penalize utilities

for infractions of reliability standards, even though members are expected to follow the

stardards developed by NERC. Basically, this is a self-regulating system. In many

States, even the public service commissions have limited authority to enforce standards,

even though they recognize them and require reporting on such actions as outages and

accidents. Otherwise the Councils work together to forecast energy needs and keep the

grid secure.

In 1996 the National Association of Regulatory Utility Commissioners (NARUC)

surveyed its State commission members to determine their position on what constitutes

reliability issues and standards and their authority over those areas. In light of

restructuring, many standards currently under the jurisdiction of the State commissions

could be left to the individual companies at the expense of the consumer. In that survey,

less than one-third responded that they were updating their standards, some were

adopting NEPOOL standards, but most were taking a wait-and-see approach. Most

commissions have incorporated standards in their rules or in administrative code (law).

(A complete list of reliability issues addressed by Commissions is found at the end of this

paper.)
5

Over the years, State public utility commissions have developed definitions of reliability

to include those areas which contribute to the delivery of reliable electric service. For the

most part it is understood that good engineering practice for plant construction,

operations and maintenance must be exercised at all times. NESC, NEC and ANSI, and

OSHA safety standards as well as Federal, State and local standards and ordinances must

be followed. ANSI includes standards for construction, meters and transformers, and

voltage standards for variation and quality.

Other important reliability issues currently addressed by State commissions include

outage reporting, including frequency and duration; voltage studies; safety programs,

inspections, protective measures, and tree trimming; procedures for handling complaints;

and emergency operating and contingency plans. Many commissions have developed

indices for monitoring interruptions and standards for frequency and voltage fluctuations.

(A table of these indices is found at the end of this paper.)

Under a competitive structure, including further reduced State oversight, it is likely that,

in the interest of maintaining revenues, the reliable electric service could become a scarce

commodity.

As conscientious engineers, we would say this is impossible, but in the new environment,

energy will be bought, sold and moved around by small businesses more interested in

improving their bottom line than making sure that the power lines are equipped to carry

the power being forced onto them.
6

BIOGRAPHICAL SKETCH

SHARON E. ASHURST

Sharon Ashurst is currently a Senior Power Requirements Officer in the Energy

Forecasting Branch where she reviews load forecasts of some of RUS' largest borrowers.

Most recently, she coordinated the Electric Program's efforts to assist borrowers in Y2K

compliance. Sharon started her career at Potomac Electric Power Company (PEPCo) in

Washington, D. C., where she held various positions. Her last eight years with the utility

were in load research, where she performed class and end-use studies, including

appliance saturation and a study of non-response bias with EPRI. After PEPCo, she

worked for Niagara Mohawk Power Corporation in Syracuse, New York, where she

assisted in the installation of a data base and load analysis package and trained a load

research staff. Additionally, she performed cost of service studies for both gas and

electric sectors of Niagara Mohawk and designed real time and time of use rates for

electric customers and gas transportation rates. She has testified before the New York

State Public Service Commission on gas and electric issues and has ten published

reports, including her Masters thesis on competitive strategies for rural utilities.
7

Reliability Issues -- Required by Utilities

Exercise good engineering practice for plant construction, operations and maintenance

Follow National Electrical Safety Code

National Electrical Code

ANSI standards for meters and transformers

ANSI standards for construction

Grounding standards for industrial and commercial power systems

Other appropriate Federal, State and local standards and ordinances

Reduce life hazards

Maintain records of accidents

Report to commission on death and injuries

Permit formal investigation

Written program for inspection of system

Checks of poles, wires, distribution system

Implement safety programs

Tree trimming programs

Verify satisfactory meter location

Check circuit and secondary grounding

Miss Utility programs -- call before you dig

Performance based mechanisms

Generation or power supply:

Provide adequate power supply

Provide for reserve power supply

Transmission and distribution:

Design, construct, maintain and electrically reinforce system to perform reliably,

considering storm and traffic hazard environment

Maintain residential and underground lines
8

Preventive maintenance schedules

Emergency repair procedures

Plant and equipment inspections

Meter testing, accuracy and records

Frequency standards, including variation and quality

Example: 60 cycles per second, maintain within +/-2%

ANCI standards on voltage standards, variation and quality

Example: Maximum voltage deviation +/- 2% for retail and +/- 7.5% for

wholesale loads

Perform voltage studies

Rules for equipment testing and recordkeeping

Reasonable care for avoidance of outages

Speedy restoration of power, consistent with safety considerations

Calculation of indices

Maintain records on interruptions

Distribution outage reports

Adequate notice of planned outages

Protective measures; health and safety measures

Records on worst performing circuits

Emergency operations plan -- contingency plans or manual workarounds

Load research

Procedure for handling complaints

Forecasting and resource planning

Records of sales and purchases

Parallel generation source

EMF protection
9

Calculation of Indices -- adopted by EEI, IEEE, EPRI

SAIFI -- System Average Interruption Duration Index -- The number of times the

average customer's service is interrupted in a year. Minimum and Objective levels are

established by service area. Calculated by dividing the total annual number of customers

interrupted by the average number of customers served in a year. (10,000 customers out

of 100,000 experience five interruptions each = .5)

CAIDI (SAIDI) -- Customer (System) Average Interruption Duration Index -- The

average number of hours required to restore service to a customer whose service is

interrupted or the average amount of time a customer is without service during the

reporting period.. Minimum and Objective levels are established by service area.

Calculated by dividing the annual sum of all customer interruption durations by the sum

of customers experiencing the an interruption. (i.e., 100,000 customers experience one

interruption lasting one hour = 1.0)

MAIFI -- Momentary Average Interruption Frequency Index -- The average number of

momentary interruptions that a customer experiences during the reporting period.

CIII -- Customer Interruption per Interruption Index -- The total number of customers

interrupted divided by the number of interruptions. The index measures the average

number of customers without service per interruption.

TLPI -- Transmission Line Performance Index -- Transmission line insulation failures for

the period divided by the miles of transmission line at the end of the period.

Worst Performing Circuits -- Circuits, which for each reliability index, are among one

percent of all circuits in an operating area with the highest achieved values (lowest

performance levels) for a specific reliability index.
	





	













 


!"#
$$

 %

&
	

❂ '


❂ (


❂ )*+

	

❂ ,



❂ 
"
	


!",%	

❂-
"
	

❂-
"
		

❂
$


❂


*

)*


❂ .
/

❂ .
*/
	,$


❂ ,%	$*"0$	$$
	"


$$



 
	

❂ 1)21 
	)


❂ 1 )21
 
$		

)


❂ 1 21 
	


+


❂ )2
		)


❂ &2
&


+

	


❂ 3


*$*




*






❂ "
01)1) 1
4 

"









❂ 5

❂ *

❂ $	*

	


❂ 

$


❂ 

❂ !%

❂ &


❂ 
	*


❂ )


	*

)



❂ -
"
	

❂ -
"
		

❂ -
"
	*%
%



❂