EE.RMSTD-98-440 ,» -'. 1

REPORT OF THE

U.S. DEPARTMENT OF

ENERGY'S POWER

OUTAGE STUDY TEAM

FINDINGS AND RECOMMENDATIONS TO ENHANCE

RELIABILITY FROM THE SUMMER OF 1999

March 2000

Final Report

EE-RM-STD-98-440 COMMENT 132

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EE-RM/STD-98-440 

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REPORT OF THE 

u.s. DEPARTMENT OF 

ENERGY'S POWER 

OUTAGE STUDY TEAM 

££-i? M / ~ -rO-'it-41../0 

FINDINGS AND RECOMMENDATIONS TO ENHANCE 

RELIABILITY FROM THE SUMMER OF 1999 

March 2000 

Final Report 

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EE-RM/STD-98-44of-| 2

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999

EE-RM-STD-98-440 COMMENT 132 "... . . 

E~.RM!sTD.98~!~ ... 

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999 .. 

11 
EE-RM/STD-98-440 - / C)

: ; . :.. i -

POST Study Participants

Mr. Paul Carrier, Chairman

Office of Policy

U.S. Department of Energy

Prof. Fernando Alvarado* Prof. Anjan Bose

Department of Electrical and Computer Engineering College of Engineering and Architecture

University of Wisconsin-Madison Washington State University

Mr. Vikram Budhraja' Dr. William Buehring'

Electric Power Group Decision and Information Sciences Division

Argonne National Laboratory

Mr. Anthony Como' Prof. Chris DeMarco

Office of Fossil Energy Department of Electrical and Computer Engineering

U.S. Department of Energy University of Wisconsin-Madison

Mr. Joseph Eto* Ms. Regina Griego'

Environmental Energy Technologies Division Office of Environment, Safety, and Health

E.O. Lawrence Berkeley National Laboratory U.S. Department of Energy

Dr. John Hauer' Prof. Ian Hiskens

Energy Technology Division Department of Electrical and Computer Engineering

Pacific Northwest National Laboratory University of Illinois at Urbana-Champaign

Mr. John Kueck* Prof. Thomas Overbye

Engineering Technology Division Department of Electrical and Computer Engineering

Oak Ridge National Laboratory University of Illinois at Urbana-Champaign

Mr. Philip Overholt' Dr. Paula Scalingi'

Office of Energy Efficiency and Renewable Energy Office of Critical Infrastructure Protection

U.S. Department of Energy U.S. Department of Energy

Prof. Richard Schuler Dr. Kevin Stamber

Cornell Institute of Public Affairs Critical Infrastructure Surety Department

Cornell University Sandia National Laboratories

Prof. Robert Thomas* Mr. F. Craig Zingman*

School of Electrical Engineering Office of Emergency Management

Cornell University U.S. Department of Energy

POST coordinated with the Consortium for Electric Reliability Technology Solutions

DOE Management Support: Richard Glick and Howard Gruenspecht

Technical Consultants: James Dyer, A. Daniel Gorski, and Goray Mookerjee

Publication/Administrative Support: Margaret Clemmons and Kathleen Schmidt

POST members. .

iii '

EE-RM-STD-98-440 COMMENT 132

POST Study Participants· 

Mr. Paul Carner, Chainnan" 

Office of Policy 

U.S. Department of Energy 

Prof. Fernando Alvarado" Prof. Anjan Bose 

Department of Electrical and Computer Engineering College of Engineering and Architecture 

University of Wisconsin-Madison Washington State University 

Mr. Vikram Budhraja" 

Electric Power Group 

Dr. William Buehring" 

Decision- and Information Sciences Division 

Argonne National Laboratory 

Mr. Anthony Como" Prof. Chris DeMarco 

Office of Fossil Energy 

U.S. Department of Energy 

Department of Electrical and Computer Engineering 

Mr. Joseph Eto" 

Environmental Energy Technologies Division 

. E.O. Lawrence Berkeley National Laboratory 

Dr. John Hauer" 

Energy Technology Division 

Pacific Northwest National Laboratory 

Mr. John Kueck' 

Engineering Technology Division 

Oak Ridge National Laborato!), 

Mr. Philip Overholt" 

Office of Energy Efficiency and Renewable Energy 

U.S. Department of Energy 

Prof. Richard Schuler 

Cornell Institute of Public Affairs 

Cornell University 

Prof. Robert Thomas" 

School of Electrical Engineering 

Cornell University 

University of Wisconsin-Madison ... 

Ms. Regina Griego * 

Office of Environment, Safety, and Health 

U.S. Department of Energy 

Prof. Ian Hiskens 

Department of Electrical and Computer Engineering 

University oflllinois at Urbana-Champaign 

Prof. Thomas Overbye 

Department of Electrical and Computer Engineering 

University of lllinois at Urbana-Champaign 

Dr. Paula Scalingi* . 

Office of Critical Infrastructure Protection 

u.s. Department of Energy 

Dr. Kevin Stamber 

Critical Infrastructure Surety Department 

Sandia National Laboratories 

Mr. F. Craig Zingman* 

Office of Emergency Management 

U.S. Department of Energy . 

POST coordinated with the Consortium for Electric Reliability Technology Solutions . 

DOE Management Support: Richard Glick and Howard Gruenspecht 

Technical Consultants: James Dyer, A. Daniel Gorski, and Goray Mookerjee 

Publication! Administrative Support: Margaret Clemmons ~nd Kathleen Schmidt 

• POST members. 

iii 
EE-RM/STD-98-440 / .-

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999

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EE-RM-STD-98-440 COMMENT 132

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Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999 

IV 
EE-RM/STD-98-440 / w - -

Contents

POST Study Participants......................................................................................................................... iii

Notation.................................................................................................................................................... vii

Executive Sum m ary . ........................................................................ ................................. SIntroduction ......................................................................................................................... 1

2 Summ ary of Electric Power System Events Studied by POST .......................................................... 3

2.1 New England: Generation Deficiency on June 7 and 8 ............................................................ 3

2.2 New York City: Outages on July 6 and 7.................................................................................... 4

2.3 Long Island: Outages and Depressed Voltages on July 3-8 ....................................................... 4

2.4 M id-Atlantic Area: Voltage Declines on July 6 and 19............................................................... 5

2.5 New Jersey: Outages on July 5-8 ........................................ ................................. 5.

2.6 Delm arva Peninsula: Outages on July 6...................................................................................... 6

2.7 South-Central States: Rotating Outages on July 23 .................................................................... 6

2.8 Chicago: Outages on July 30-August 12 ............................................ 7

2.9 Follow-up Activities..................................................................................................................... 7

3 Sum m ary of POST Findings ........................................ 8

3.1 N ew England................................................................................................................................ 8

3.2 New York City ............................................................................................................................. 8

3.3 Long Island................................................................................................................................... 9

3.4 M id-A tlantic Area ................................................................................................................... 10

3.5 N ew Jersey ............. .......................................................................................................... 11

3.6 Delm arva Peninsula................................................: 11

3.7 South-Central States ..................................................................................................................... 12

3.8 Chicago....................................................................................................................................... 13

4 Process for Soliciting Public Input..................................................................................................... 16

5 Recomm endations to the Secretary of Energy ................................................................................... 17

Appendix A Sum m ary of Public Comm ents................................................................................... . A -

Appendix B Glossary .............................................................................................................................. BTables

I Sum m er of 1999: Electric Power Events Studied by PO ST ............................................................... 3

2 Sum m ary of Recomm endations and Associated Findings ................................................................... 29

' V *' . * '

EE-RM-STD-98-440 COMMENT 132

E~.RM/STD-98-44~ --tt 13::? __ ., , 

Contents 

POST Study Participants.......................................................................................................................... 111 

Notation.................................................................................................................................................... Vll 

Executive Summary ................................................................................................................................. S-1 

Introduction ...................................................................................................................... ,.................. 1 

2 Summary of Electric Power System Events Studied by POST ........................................................ ;... 3 

2.l New England: Generation Deficiency on June 7 and 8 .............................................................. 3 

2.2 New York City: Outages on July 6 and 7.................................................................................... 4 

2.3 Long Island: Outages and Depressed Voltages on July 3-8 ....................................................... 4 

2.4 Mid-Atlantic Area: Voltage Declines on J,uly 6 and 19............................................................... 5 

2.5 New Jersey: Outages on July 5-8 ............................................................................................... 5 

2.6 Delmarva Peninsula: Outages on July 6...................................................................................... -6 

2.7 South-Central States: Rotating Outages on July 23 ....................................................................6 

2.8 Chicago: Outages on July 3D-August 12 ..................................................... ; .... ; ................... ;..... 7 

2.9 Follow-up Activities..................................................................................................................... 7 

3 Summary of POST Findings ......................................................................................................... :..... 8 - . 

3.1 New England ................................................................................................................................ 8 

3.2 New York City ............................................................................................................................. 8 

3.3 Long Island................................................................................................................................... 9 

3.4 Mid-Atlantic Area ................................................................................................................... _.-.. 10 

3.5 New Jersey .................... : ................ :............................................................................................. .11 

3.6 Delmarva Peninsula ................................................ :..................................................................... 11 

3.7 South-Central States..................................................................................................................... 12 

3.8 Chicago.......................................................................................................................................... 13 

4 Process for Soliciting Public Input.. .............................................................................................. ~..... -16 -

5 Recommendations to the Secretary of Energy .......................................... :......................................... 17 

Appendix A Summary of Public Comments ........................................................................................... ," A-I· 

Appendix B Glossary ..................................................................................................... : ...... : .................. B·-1 

Tables 

1 Summer of 1999: Electric Power E~ents Studied by POST ................ ............ ...... ...... ...... ........... ...... 3 

2 Summary of Recommendations and Associated Findings ................................................. :................. ·29 

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Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999

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EE-RM-STD-98-440 COMMENT 132

E~-RM/STD-98-440_#/3~·., 

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Spmmer of J 999 

'.r' 

vi 
EE-RM/STD-98-440- /3

Notation

This notation list identifies the abbreviations, acronyms, initialisms, and units of

measure used in this report. The glossary (Appendix B) provides definitions of some of

the terms listed here as well as many others used throughout the report and some others

that are related to the field but not expressly mentioned. In the text of this report, terms

that are defined in the glossary appear in italics the first time they are used.

ComEd Commonwealth Edison Company

Con Ed Consolidated Edison Company

DC direct current

DOE U.S. Department of Energy

DPL Delmarva Power & Light Company

EPRI Electric Power Research Institute

FACTS flexible alternating-current transmission system

FERC Federal Energy Regulatory Commission

GPU GPU Energy

IR2 Indian River Unit 2

ISO independent system operator

ISO-NE ISO-New England

kV kilovolt(s)

kVA kilovolt(s)-ampere

kW kilowatt(s)

LIPA Long Island Power Authority

MAAC Mid-Atlantic Area Council (NERC region)

MAPP Mid-Continent Area Power Pool (NERC region)

MVA megavolt(s)-ampere

MVAR megavolt(s)-ampere-reactive

MW megawatt(s)

MWh megawatt-hour(s) of electric energy

vii

EE-RM-STD-98-440 COMMENT 132

-j . 

EE-RM/STD-98-440-qf: 13~ 

Notation 

This notation list identifies the abbreviations, acronyms, initialisms, and units of 

measure used in this report. The glossary (Appendix B) provides defmitions of some of 

the tenns listed here as well as many others used throughout the report and some others 

that are related to the field but not expressly mentioned. In the text of this report, tenns 

that are defined in the glossary appear in italics the first time they are used. 

CornEd Commonwealth Edison Company 

ConEd Consolidated Edison Company 

DC direct current 

DOE U.S. Department of Energy 

DPL Delmarva Power & Light Company 

EPRI Electric Power Research Institute 

FACTS flexible alternating-current transmission system 

FERC Federal Energy Regulatory Commission 

GPU GPUEnergy 

IR2 Indian River Unit 2 

ISO independent system operator 

ISO-NE ISO-New England 

kV kilovolt(s) 

kVA kilovolt( s )-ampere 

kW kilowatt(s) 

LIPA Long Island Power Authority 

MAAC Mid-Atlantic Area Council (NERC region) 

MAPP Mid-Continent Area Power Pool (NERC region) 

MVA megavolt( s )-ampere 

MVAR megavolt( s )-ampere-reactive 

MW megawatt(s) 

MWh megawatt-hour(s) of electric energy 

-vii 

.. , 

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EE-RM/STD-98-440 9/3^

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999

NARUC National Association of Regulatory Utility Commissioners '... :' -

NERC North American Electric Reliability Council :

NYPP New York Power Pool .

PECO PECO Energy Company

PJM PJM Interconnection, LLC (formerly Pennsylvania, New Jersey,

Maryland Interconnection)

POST Power Outage Study Team

PSE&G Public Service Electric and Gas Company

PUC public utilities commission

R&D research and development

SCADA supervisory control and data acquisition

SERC Southeastern Electric Reliability Council (NERC region)

SPP Southwest Power Pool (NERC region)

TVA Tennessee Valley Authority

T&D transmission and distribution

V volt(s)

XLPE cross-linked polyethylene

viii

EE-RM-STD-98-440 COMMENT 132

EE-RM/STD-98-440,,-=If 13~· ' .. 

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999 

.'. : 

Vlll 
EE-RM/STD-98-440 - /-S ?

Executive Summary

Recently; the National Academy of Engineering ranked the twenty greatest

engineering achievements of the last century, and, on the basis of its effect on the quality

of life, electrification, or electric power, rated first. Having a reliable electric power

system has become an essential part of our daily lives, allowing us to enjoy a high

quality of life and a vital economy that continues to prosper.

Yet, our electric power system is not infallible. At times, extreme weather

conditions, equipment failures, and human errors have interrupted the supply of

electricity. And, as the digital age continues to affect our lives more and more, many find

an even greater need for high-quality and reliable electric services. In fact, in the summer

of 1999, during periods of extreme heat and humidity, power outages and other system

disturbances disrupted the lives of millions of people and thousands of businesses in

various regions of the country.

In response to public concerns about these problems, the Secretary of Energy

brought together a team of experts to study some of last summer's events. This team -

the Power Outage Study Team, or POST - consists of experts from the Department of

Energy, the national laboratories, and the academic community. The team examined a

number of those events in detail and, in this report, recommends a number of actions that

the federal government can take to help avoid future outages. What distinguishes this

report from documents of the past is that these recommendations take into consideration

a new factor - an industry that is undergoing extensive restructuring.

Until recently, the U.S. electric power system consisted primarily of full-service

utilities that generated, transmitted, and distributed electricity to customers at rates set by -

regulators.

But times have changed, and now 24 states and the District of Columbia have

passed legislation or issued regulatory orders that permit customers to choose the

company that supplies their electricity. Almost every other state is considering the

possibility of proceeding in this direction. At the federal level, the Federal Energy:

Regulatory Commission has also increased the role of competition in generation markets

through its implementation of the 1978 Public Utility Regulatory Policies Act and the

1992 Energy Policy Act. Thus, the electric utility industry is following the lead of the

telecommunications, airline, and natural gas industries by increasing its reliance on

competition. The new electric industry will rely on competitive markets as a basis for

making decisions concerning electricity investments, operations, and consumption.

Transmission and distribution services are likely to remain regulated.

Competitive markets are expected to herald new efficiencies and dramatic

innovations that will save customers money and lead to new electric services. Under

S-1

EE-RM-STD-98-440 COMMENT 132

( 

EE·RM/STD·98-440 -# /34. 

Executive Summary 

Recently; the National Academy of Engineering ranked the twenty greatest 

engineering achievements of the last century, and, on the basis of its effect on the quality 

of life, electrification, or electric power, rated first. Having a reliable electric power 

system has become an essential part of our daily lives, allowing us to enjoy a high 

quality oflife and a vital economy that continues to prosper. 

Yet, our electric power system is not infallible. At times, extreme weather 

conditions, equipment failures, and human errors have interrupted the supply of . 

electricity. And, as the digital age continues to affect our lives more and more, many fmd 

an even greater need for high-quality and reliable electric services. In fact, in the summer 

of 1999, during periods of extreme heat and humidity, power outages and other system 

disturbances disrupted the lives of millions of people and thousands of businesses in 

various regions of the country. 

In response to public concerns about these problems, the Secretary of Energy 

brought together a team of experts to study some oflast summer's events. This teamthe Power Outage Study Team, or POST - consists of experts from the Department of 

Energy, the national laboratories, and the academic community. The team examined a 

number of those events in detail and, in this report, recommends a number of actions that 

the federal government can take to help avoid future outages. ~at distinguishes this" 

report from documents of the past is that these recommendations take into consideration 

a new factor - an industry that is undergoing extensive restructuring. 

Until recently, the U.~. electric power system consisted primarily of full-service 

utilities that generated, transmitted, and distributed electricity to customers at rates set by 

regulators. 

But t~es have changed, and now 24 states and the District of Columbia have 

passed legislation or issued regulatory orders that permit customers to choose the 

company that supplies their electricity. Almost every other state is considering the 

possibility of proceeding in this direction. At the federal level, the Federal Energy, . 

. Regulatory Commission has also increased the role of competition in generation markets 

through its implementation of the 1978 Public Utility Regulatory Policies Act and the 

1992 Energy Policy Act. Thus, the electric utility industry is following the lead of the 

telecommunications, airline, and natural gas industries by increasing its reliance on 

competition. The new electric industry will rely on competitive markets as a basis for 

making decisions concerning electricity investments, operations, and consumption. 

Transmission and distribution services are likely to remain regulated. 

Competitive markets are expected to herald new efficiencies and 'dramatic . 

innovations that will save customers money and lead to new electric services. Under 

...... -

S-1 
EE-RM/STD-98-440- -T/3=

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of1999 '': . .

proper guidance, these markets will also improve reliability. However, the mechanisms : '. -

that protected electric reliability in the past need to be changed along with ongoing - - - .

market developments.

The power outages and disturbances studied by POST served as a wake-up call,

reminding us that reliable electric service is critical for our health, comfort, and the

economy. While the new industry structure should improve reliability, as an earlier

Department of Energy Task Force on Electric System Reliability recognized, the

transition to that new structure presents a risk to reliability. It is essential for continued

reliable electric service that we proceed expeditiously through this period of transition.

POST conducted a thorough study of eight outages and disturbances in different

parts of the country. The team visited the sites and interviewed the people who were

operating the system at the time of the occurrences, obtaining valuable first-hand

information and data. Following a detailed analysis of these facts, POST published an -

interim report, which described the outages and disturbances and discussed the team's

findings. The team then conducted a series of three technical workshops, which gave the

public an opportunity to comment on appropriate federal actions. Finally, the team

examined all of this information and developed its recommendations..

In its interim report, POST found that the reliability events of the summer of 1999

demonstrated that the necessary operating practices, regulatory policies, and

technological tools for assuring an acceptable level of reliability were not yet in place.- -'

This report outlines some of the changes needed to address the causes of these events.

Many of the recommendations ____

presented in this report address reforms Ancillary services include a number of

required to enable restructured markets functions, such as reserves and reactive

to fulfill their potential to provide power, that are necessary to support

improved reliability. Markets should operations of the transmission system.

reflect the value of reliability to energy

providers and their customers, and to

the broader public interest. Both

providers and customers should have

opportunities to participate in markets for energy and ancillary services - and to profit -

from that participation. Modified (or new) institutions are needed to monitor and enforce

compliance with reliability standards. ...

Other recommendations address the importance of continuing to invest in the

development and use of the tools needed for monitoring and maintaining the electric

system and for responding to system emergencies. The key to maintaining reliability is "

information. Improved diagnostic tools, improved data gathering, and real-time modeling

of system conditions are needed. These tools can be used to improve maintenance -

practices and assist operators in identifying and responding to system emergencies. .

Providers and customers can use real-time power system and market information to

manage reliability.

S-2 .. .

EE-RM-STD-98-440 COMMENT 132 " , 

EE-RM/STD-98-440-#/3:=9 

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999 

8-2 

proper guidance, these markets will also improve reliability. However, the mechanisms 

that protected electric reliability in the past need to be changed along with ongoing 

market developments. 

The power outages and disturbances studied by POST served as a wake-up call, 

reminding us that reliable electric service is critical for our health, comfort, and the 

economy. While the new industry structure should improve reliability, as an earlier 

Department of Energy Task Force on Electric System Reliability recognized, the 

transition to that new structure presents a risk to reliability. It is essential for continued 

reliable electric service that we proceed expeditiously through this period of transition. 

POST conducted a thorough study of eight outages and disturbances in different 

parts of the country. The team visited the sites and interviewed the people who were 

operating the system at the time of the occurrences, obtaining valuable first-hand 

information and data. Following a detailed analysis of these facts, POST published an " 

interim report, which described the outages and disturbances and discussed the team's 

fmdings. The team then conducted a series of three technical workshops, which gave the 

public an opportunity to comment on appropriate federal actions. Finally, the team 

examined all of this information and developed its reco"mmendations. 

In its interim report, POST found that the reliability events of the summer of 1999 

demonstrated that the necessary operating practices, regulatory policies, and 

technological tools for assuring an acceptable level of reliability were not yet in place." 

This report outlines some of the changes needed to address the causes of these events. 

Many of the recommendations 

presented in this report address reforms 

required to enable restructured markets 

to fulfill their potential to provide 

improved reliability. Marl\ets should 

reflect the value of reliability to energy 

providers and their customers, and to 

the broader public interest. Both 

Ancillary services include a number"of 

functions, such as reserves and reactive 

power, that are necessary to support 

operations of the transmission system. 

providers and customers should have " " 

opportunities to participate in markets for energy and ancillary services - and to profit 

from thai participation. Modified (or new) institutions are needed to monitor and enforce" 

compliance with reliability standards. 

Other recommendations address the importance of continuing to invest in the 

development and use of the tools needed for monitoring and maintaining the electJic 

system and for responding to system emergencies. The key to maintaining reliability is 

information. Improved diagnostic tools, improved data gathering, and ~eal-time modeling 

of system conditions are needed. These tools can be used to improve maintenance 

practices and assist operators in identifying and responding to system emergencies. 

Providers and customers can use real-time power system and market information to 

manage reliability. 

.. '- , -'.' ~ 

"';;; 

-:-

-'. :..: 

. .... 
EE-RM/STD-98-440o-:/. - .

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999 -

POST has limited its recommendations to federal actions that address the team's .

findings. Other aspects of reliability and the restructuring process may warrant federal -:

actions but are beyond the scope of this study.

Further, POST's recommendations reflect the basic premise that, while markets and

industry should address issues related to reliability, the federal government has a

fundamental responsibility for ensuring that the public's interests are fully represented.

Moreover, many stakeholders, including state and local governments, share this

responsibility. Systems developed by the industry have evolved to protect electric

reliability; however, many of these systems need to be overhauled to address the needs of

a changing industry. Nevertheless, they are the appropriate starting points for any

required changes.

In this report, POST submits twelve recommendations for consideration by the

Secretary of Energy. The following recommendations are designed to help avoid future

power outages. One or more possible federal actions are suggested along with each

recommendation.

1. Promote market-based approaches to ensure reliable electric services.

Restructuring is based on the fundamental principle that competition and markets,

not regulators and utilities, result in better investment and operating decisions with

respect to generation and consumption of electricity. Mechanisms that will ensure

adequate supplies of electricity- and reliable operations - should be designed with

this principle in mind. The value of reliability needs to be determined in competitive .

markets, and customers, as well as energy providers, need to have the opportunity to

participate in markets for energy and ancillary services - and profit from that

participation. Yet, because electric service is provided through a network, it has aspects

of a public good and may be underprovided by private entities. Guidance is needed to'

ensure that the public interest is adequately captured.

Many states have made significant progress in developing competitive electricity

markets. However, efforts in developing market-based mechanisms for promoting -

electric reliability - for example, allowing customers to participate in energy and

ancillary service markets - have been less aggressive. Developers of these mechanisms

must explicitly account for the broad geographic scope of today's electricity markets,

which can extend across multiple states and regions of the country.' Although states have .

a definite role in regulating utilities and protecting consumers, there is also an important

federal role: to improve the operation of power markets by providing leadership,

direction, and consistency across the country.

The U.S. electric power system consists ofjust three distinct interconnections; trade can be

conducted throughout an interconnection. For example, a generator in Minnesota can sell to a

customer in Florida.

' . S-3 S-3 - -:

EE-RM-STD-98-440 COMMENT 132

-, 

.,: 

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999 --

POST has limited its recommendations to federal actions that address the team's 

fmdings. Other aspects of reliability and the restructuring process may warrant federal, 

actions but are beyond the scope of this study. 

FUrther, POST's recommendations reflect the basic premise that, while markets and 

industry should address issues related to reliability, the federal government has a 

fundamental responsibility for ensuring that the public's interests are fully represented. 

Moreover, many stakeholders, including state and local governments, share this 

responsibility. Systems developed by the industry have evolved to protect electric 

reliability; however, many of these systems need to be overhauled to address the needs of 

a changing industry. Nevertheless, they are the appropriate starting points for any 

required changes. 

In this report, POST submits twelve recommendations for consideration by the 

Secretary of Energy. The following recommendations are designed to help avoid future 

power outages. One or more possible federal actions are suggested along with each 

recommendation. 

1. Promote market-based approacbes to ensure reliable electric services. 

Restructuring is based on the fundamental principle that competition and markets, 

not regulators and utilities, result in better investment and operating decisions with 

respect to generation and consumption of electricity. Mechanisms that will ensure 

adequate supplies of electricity - and reliable operations - should be designed with 

this principle in mind. The value of reliability needs to be determined in competitive 

markets, and customers, as well as energy providers, need to have the opportunity to 

participate in markets for energy and ancillary services - and profit from that 

participation. Yet, because electric service is provided through a network, it has aspects 

of a public good and may be underprovided by private entities. Guidance is needed to· _ 

, ensure that the public interest is adequately captured. 

Many states have made significant progress in developing competitive electricity 

markets. However, efforts in developing market-based mechanisms for promoting -

electric reliability - for example, allowing customers to participate in energy and ' 

ancillary service markets - have been less aggressive. Developers of these mechanisms 

must explicitly accOlmt for the broad geographic scope oftoday's electricity markets, 

which can extend across multiple states and regions of the country.} Although states have 

a definite role in regulating utilities and protecting consumers, there is also an important 

federal role: to improve the operation of power markets by providing l~adership, -

direction, and consistency across the country. 

} The U.S. electric power system consists of just three distinct interconnections'; trade can be' 

conducted throughout an interconnection. For example, a generator in Minnesota caoseIl,toa 

customer in Florida. 

S-3 

- . 

_'" "_0- . -. ~-

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EE-RM/STD-98-440-#4 /

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999

Action forfederal consideration:

Support the implementation offair, efficient, and transparent markets for

electric power and ancillary services.

2. Enable customer participation in competitive electricity markets.

The ability of customers to manage their demand in response to market prices is the

key to ensuring both reliable electric service and an efficiently functioning, competitive

electricity market. POST agrees with public comments received that meaningful

customer participation is a prerequisite for achieving the full reliability benefits of

restructuring. To more fully participate in a competitive market, customers must be able

to see real-time prices (if they choose to do so) and have access to the communication

and control technologies that will enable them to participate directly.

Actionsforfederal consideration:

* Support the development of market rules that allow customers to supply load

reductions and ancillary services in competitive energy markets.

* Encourage development of demand management systems that support electric

reliability.

3. Remove barriers to distributed energy resources.

There is currently great interest in relying more heavily on distributed generation

technologies to help utilities respond more rapidly to an increased demand for electricity

in areas where demand is already high. At the same time, utilities are striving to improve

the quality of power to customers. Many argue that barriers impede market-driven

acceptance of these technologies. The federal government should target this area for

special attention and review and remove these barriers, as needed.

Actions forfederal consideration:

* Support the development of interconnection standards for distributed energy

resources.

* Support state-led efforts to.address regulatory disincentives for integrating

customer supply and demand solutions.

* Study the potentialfor using emergency backup generators to reduce system

demands to help avoid power outages.

S-4 * * . * * ' .. '*. -

S4 -:~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

EE-RM-STD-98-440 COMMENT 132 , , 

EE-RM/STO-9S-440'# /~~ 

Repon of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999 

S-4 

Action for federal cOllsideration: 

• Support the implementation of fair, efficient, and transparent markets for 

electric power and ancillary services. 

2. Enable customer participation in competitive electricity markets. 

The ability of customers to manage their demand in response to market prices is the 

key to ensuring both reliable electric service and an efficiently functioning, competitive 

electricity market. POST agrees with public comments received that meaningful 

customer participation is a prerequisite for achieving the full reliability benefits of 

restructuring. To more fully participate in a competitive market, customers must be able 

to see real-time prices (if they choose to do so) and have access to the communication 

and control technologies that will enable them to participate directly. ' 

Actions for federal consideration: 

• Support the development oj market rules that allow customers to supply load 

reductions and ancillary services in competitive energy markets. 

• Encourage development oj demand management systems that support electric 

reliability. 

3. Remove barriers to distributed energy resources. 

There is currently great interest in relying more heavily on distributed generation ' 

technologies to help utilities respond more rapidly to an increased demand for electricity 

in areas where demand is already high. At the same time, utilities are striving to improve 

the quality of power to customers. Many argue that barriers impede market-driven 

acceptance of these technologies. The federal government should target this area for 

special attention and review and remove these barriers, as needed. 

Actions for federal consideration: 

• Support the development oj interconnection standards Jor distributed energy 

resources. 

• Support state-led efforts to. address regulatory disincentives Jor integraiing . 

customer supply and demand solutions. 

• Study the potential Jor using emergency backup generators to reduce system 

demands to help avoid power outages. 

',. :. 

';,-.. 
EE-RM/STD-98-440 -7 5 -

_________ T Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999

,- * -: " ""* . ' -"'' *

4. Support mandatory reliability standards for bulk-power systems. :

--- : ' ~-: -Today, the interconnected electric power system is being transformed from one that

was primarily designed to serve the customers of full-service utilities, each integrated

across the generation, transmission, and distribution functions, to one that will support a

vibrant, competitive market. This change makes the current system of voluntary

compliance with reliability standards inadequate for ensuring reliability. Mandatory

standards for bulk-power systems are needed to ensure that the "rules of the road" are

implemented in a straightforward and balanced manner.

Action forfederal consideration:

Support the creation of a self-regulated reliability organization with federal

oversight to develop and enforce reliability standards for bulk-power systems as

part of a comprehensiveplan for restructuring the electric industry.

5. Support reporting and sharing of information on "best practices."

Many forums for exchanging information on "best practices" for maintaining and

operating electric generation, transmission, and distribution systems already exist.

However, concerns exist about the consistency of some information (such as reliability

indices), the availability of data to all industry stakeholders, and the continued viability

of these forums in a restructured industry. The federal government could play an

important role in enhancing the definition, collection, and sharing of information. It

should work in close partnership with states and other industry stakeholders as it

develops this role.

Actions for federal consideration:

* Promote the use of uniform definitions and measurements for reliability-related

information.

* Facilitate the collection and sharing of information on reliability-related

regulatory issues among state public utility commissions.

* Support activities to develop and share information among industry participants

on critical resources and industry practices. .

6. Enhance emergency preparedness activities for low-probability,

high-consequence events on bulk-power systems.

Emergencies on bulk-power systems affect large geographic areas, involve many

stakeholders, and affect millions of customers. The events of the summer of 1999 :- :

demonstrated that effective communication and coordination among many parties are

critical during times of system emergencies. The federal government should actively

support efforts to continually review and improve planning and response capabilities.

S-5 4:- .. . -:- . .. - -.'...

EE-RM-STD-98-440 COMMENT 132

EE-RM/STD-98-440 :-=IF 13;<, 

Report of the DOE Power Outage Study Team on Electric Reliability Events ;fthe Summ~r of 1999 

4. Support mandatory reliability standards for bulk-power systems. 

Today, the interconnected electric power system is being transformed from one that 

was primarily designed to serve the customers of full-service utilities, each integrated 

across the generation, transmission, and distribution functions, to one that will support a 

vibrant, competitive market. This change makes the current system of voluntary 

compliance with reliability standards inadequate for ensuring reliability. Mandatory 

standards for bulk-power systems are needed to ensure that the "rules of the road" are 

implemented in a straightforward and balanced manner. 

Action for federal consideration: 

5. 

• Support the creation of a self-regulated reliability organization with federal 

oversight to develop and enforce reliability standards for bulk-power systems as 

part of a comprehensive plan for restructuring the electric industry. 

Support reporting and sharing of information on "best practices." 

Many forums for exchanging information on "best practices" for maintaining and 

operating electric generation, transmission, and distribution systems already exist. " 

However, concerns exist about the consistency of some information (such as reliability " 

indices), the availability of data to all industry stakeholders, and the continued viability 

of these forums in a restructured industry. The federal government could play an 

important role in enhancing the definition, collection, and sharing of information. It 

should work in close partnership with states and other industry stakeholders as it 

develops this role. 

Actions for federal consideration: 

6. 

• Promote the use of uniform definitions and measurements for reliability-related 

information. "" 

Facilitate the collection and sharing of information on reliability-related 

regulatory issues among state public utility commissions. 

• Support activities to develop and share information among industry participants" 

on critical resources and industry practices. " 

Enhance emergency preparedness activities for low-probability, 

high-consequence events on bulk-power systems. 

Emergencies on bulk-power systems affect large geographic areas, involve~y 

stakeholders, and affect millions of customers. The events of the summer of 1999 "" 

demonstrated that effective communication and coordination among many parties are 

critical during times of system emergencies. The federal government should actively 

support efforts to continually review and improve planning and response capabilities. 

" "8-5 

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.'. 
EE-RM/STD-98-440/ /

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999 -

Action for federal consideration:

Work with regional, state, and local authorities to support continuous :

improvement in coordination, planning, and preparations to respond to

electricity emergencies.

7. Demonstrate federal leadership through promotion of best reliability practices

at federal utilities.

Federal utilities are unique assets that have long pursued many federal and regional

objectives, ranging from power production to agricultural and economic development.

As part of their role, these utilities have served as research and development catalysts for

technological changes within the industry. Piloting new reliability initiatives would be

consistent with this historic leadership role.

Actions forfederal consideration:

* Develop andpilot reliability self-assessment procedures.

* Support distributed energy resources.

* Encourage economic energy efficiency.

8. Conduct public-interest reliability-related research and development

consistent with the needs of a restructuring electric industry.

Industry investments in reliability-related R&D have declined steadily over the past

few years. These declines have occurred at least in part because the "clients" for next- - -

generation investments, such as regional transmission organizations, are still in their

formative stage. Furthermore, the independent system operators currently do not own the

transmission assets and are nonprofit institutions. A stable climate for private -

investments in longer-range R&D conducted with the public's interest in mind does not

currently exist. Federal investments in public-interest, reliability-related R&D are

especially needed during this time of industry transition. POST strongly supports

Secretary Richardson's commitment to increase federal investments in electric reliability

R&D as provided for in the Administration's proposed fiscal year 2001 budget. .-

Actions forfederal consideration: . .

* Develop real-time system monitoring, communication, and control technologies.

* Create sensors, remote monitoring, and diagnostic technologiesfor cables and .

aging transmission and distribution infrastructure.

* Integrate customer demand management, distributed generation, and storage -

technologies.

.- ' * ' ': ' ~S-6 * . * ' -~~~~ * :-:: ~~ ;::

EE-RM-STD-98-440 COMMENT 132

" 

EE-RM/STO-9S-44o-#=13cR 

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999 

S-6 

Action for federal consideration: 

• Work with regional, state, and local authorities to support continuous 

.improvement in coordination, planning, and preparations to respond to 

electricity emergencies. 

7., Demonstrate federal leadership through promotion of best retia bility practices 

at federal utilities. 

Federal utilities are unique assets that have long pursued many federal and regional 

objectives, ranging from power production to agricultural and economic development. 

As part of their role, these utilities have served as research and development catalysts for 

technological changes within the industry. Piloting new reliability initiatives w,?uld be 

consistent with this historic leadership role. 

Actions for federal consideration: 

• Develop and pilot reliability self-assessment procedures. 

• Support distributed energy resources. 

• Encourage economic energy efficiency. 

8. Conduct public-interest reliability-related research and development . 

consistent with the needs of a restructuring electric industry. 

Industry investments in reliability-related R&D have declined steadily over the past 

few years. These declines have occurred at least in part because the "clients" for next- ' '. 

generation investments, such as regional transmission organizations, are still in therr 

formative stage. Furthermore, the independent system operators currently do not own the 

transmission assets and are nonprofit institutions. A stable climate for private 

investments in'longer-range R&D conducted with the public's interest in mind does not' 

currently exist. Federal investments in public-interest, reliability-related R&D are 

especially. needed during this time of industry transition. POST strongly supports', 

Secretary Richardson's commitment to increase federal investments in electric ielia~ility 

R&D as provided for in the Administration's proposed fiscal year 2001 budget.- ' 

Actions for federal consideration: 

• Develop real-time system monitoring, communication, and control technologies. 

. . . . 

• Create sensors, remote monitoring, and diagnostic technologies for cables 'and, 

aging transmission and distribution infrastructure. 

• Integrate customer demand management, distributed generation, and storage 

technologies. ' 

"," "':". ~ 

, ' , ~ 

. ~. J: _ 

'. ;: 

, ' , " 

." ;," ~ -".: - ;", 

.~ ~: '.' : . 

. ' .. -. 
EE-RM/STD-98-440- /

^" '~: ~a~~~. -Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of1999': -

.371 -"' '" ~* Improve analytic models for loadforecasts, power system simulations, and

~. '~- . ~contingency ~. assessments. . .

* Examine the design andperformance of competitive electricity markets.

9. Facilitate and empower regional solutions to the siting of generation and

transmission facilities.

Stable incentives for investing in generation and transmission must be

complemented by siting boards that can discharge their responsibilities in a timely and

coordinated fashion. Such boards need to address two primary problems. First, policies

among agencies, among states, between state and federal agencies, and among federal

agencies overlap and sometimes conflict. Second, parochial bodies do not have

incentives to seek regional solutions. These problems result in long delays, and they

could lead to inefficient and inequitable siting decisions.

Actionsforfederal consideration: .

* Convene regional summits to initiate andfacilitate dialog among regional

stakeholders.

* Supportfederal legislation to facilitate state efforts to form regional siting

boards.

". .

* Raise reliability as an issue (as appropriate) wheneverfederal permits are

requiredfor siting electric facilities. .

10. Promote public awareness of electric reliability issues.

General public awareness of the complex issues associated with maintaining reliable

electric service is low. Yet, as demonstrated by the events of the summer of 1999, public .

interest in reliable electric service is high. Greater understanding of electric reliability

issues, including both the frequency and causes of outages and the steps being taken to

prevent and limit the consequences of outages, will lead to better-informed decisions. .

Special attention should be placed on discussing the costs and trade-offs inherent in

making reliability investment and operating decisions. Future activities should :

complement, not replace, existing state, utility, and locally led efforts and be effectively

coordinated with them. '

Actionsforfederal consideration: -- .

"- ':.~ -·* Continue DOE-sponsored independent investigations ofsignificant power :

outages and other reliability events.

* Continue DOE-sponsoredforums where stakeholders can meet to discuss

reliability issues. .

' : - i' :'.S-7

EE-RM-STD-98-440 COMMENT 132

':". I 

Report o/the DOE Power Outage Study Team on Electric Reliability Events o/the Summer 0/ 1999.":'" '~'." : ~/ :. 

9. 

• Improve ana~ytic models for load forecasts. power system simulation~, and 

contingency assessments. 

• Examine the design and performance of competitive electricity markets. 

I ' 

Facilitate and empower regional solutions to the siting of generation and 

transmission facilities. 

Stable incentives for investing in generation and transmission must be 

complemented by siting boards that can discharge their responsibilities in a timely and, 

coordinated fashion. Such boards need to address two primary problems. First, policies 

among agencies, among states,between state and federal agencies, and among federal 

agencies overlap and sometimes conflict. Second, parochial bodies do not have, 

incentives to seek regional solutions. These problems result in long delays, and they 

could lead to inefficient and inequitable siting decisions. 

Actions for federal consideration: 

• Convene regional summits to initiate andfacilitate dialog among regional 

stakeholders. 

• Support federal legislation to facilitate state efforts to form regional siting 

boards. 

Raise reliability as an issue (as appropriate) whenever federal permits are' 

required for siting electric facilities. 

10. Promote public awareness of electric reliability issues. 

General public awareness of the complex issues associated with maintaining reliable 

electric service is low. Yet, as demonstrated by the events of the summer of 1999, public 

interest in reliable electric service is high. Greater understanding of electric reliability , 

issues, including both the frequency and causes of outages and the steps being taken to 

prevent and limit the consequences of outages, will lead to better-infonned decisions. ' 

Special attention should be placed on discussing the costs and trade-offs inherent iti .. ' 

making reliability investment and operating decisions. Future activities should . 

complement, not replace, existing state, utility, and locally led efforts and be effectively, 

coordinated with them. 

Actions for federal consideration: 

Continue DOE-sponsored independent investigations of significant power, 

outages and other reliability events. 

• Continue DOE-sponsored forums where stakeholders can meet to discuss 

reliability issues. 

.' 

S~7 " 

~. ' .. ,'o. 

~ " .. 

• +. ," 

...... 

. ",'." .;;; , , 

,. ""." ... .:. .:':"'-

'. "-"' 
EE-RM/STD-98-440 -/ .

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999

11. Monitor and assess vulnerabilities to electric power system reliability. '

The outages and disturbances studied by POST resulted from unpredicted events .

that exploited specific weaknesses in physical systems and the planning and operating

processes that supported them (e.g., extremely hot weather caused overloads and cable

failures). Other electric power system vulnerabilities were identified during POST's

studies and technical workshops. In view of the regional and national implications of

power outages, known and emerging electric system vulnerabilities need to be studied

from a national rather than a local perspective. Studies from a national perspective

uniquely belong to the federal government, but studies must be carried out in close

partnership with the electric industry.

Actions forfederal consideration:

* Work with industry stakeholders to conduct comprehensive assessments of

electric power system vulnerabilities.

* Work with industry stakeholders to refine and implement procedures to assess

the robustness of the electric system in responding to bulk-power system

emergencies.

12. Encourage energy efficiency as a means for enhancing reliability.

The increased adoption of energy efficiency measures can enhance electric system

reliability by reducing demand growth in areas experiencing shortages in electric

generation or constraints in electric transmission or distribution. Programs to stimulate

adoption of energy-efficient technologies and practices can provide more rapid relief to

areas with fast-growing demand. Further, they can do so with fewer negative impacts

than would occur during the construction of new generation, transmission, and:

distribution facilities. Such programs might be especially helpful in areas where growth

in electric demand is high; yet, markets for hew generation are in their infancy or

existing incentives for investments in transmission and distribution are in transition.

Technologies and practices that reduce loads during times of peak demand, such as

high-efficiency air conditioning and lighting equipment, are especially valuable.

Actions for federal consideration:

* Work with slate and local governments to support development and

implementation of cost-effective energy efficiency programs.

Expand existing federal programs to promote energy efficiency. .

S-8

EE-RM-STD-98-440 COMMENT 132

EE-RM/STD-98-440 - ! 3 ~ 

Report oJthe DOE Power Outage Study Team on Electric Reliability Events oJthe Summer oj 1999 

11. Monitor and assess vulnerabilities to electric power system reliability.· --

The outages and disturbances studied by POST resulted from unpredicted events -

that exploited specific weaknesses in physical systems and the planning and operating 

processes that supported them (e.g., extremely hot weather caused overloads and cable 

failures). Other electric power system vulnerabilities were identified during POST's 

studies and technical workshops. In view of the regional and national implications of 

power outages, known and emerging electric system vulnerabilities need to be studied 

from a national rather than a local perspective. Studies from a national perspective 

uniquely belong to the federal government, but studies must be carried out in close 

partnership with the electric industry. 

Actions for federal consideration: 

• Work with industry stakeholders to conduct comprehensive assessments of 

electric power system vulnerabilities. 

Work with industry stakeholders to refine and implement procedures to assess 

the robustness of the electric system in responding to bulk-power system 

emergencies. 

12. Encourage energy efficiency as a means for enhancing reliability. 

...... ' 

'" .. >, . ', •. 

- ~ - ": - . 

The increased adoption of energy efficiency measures can enhance electric system 

reliability by reducing demand growth in areas experiencing shortages in electric --

generation or constraints in electric transmission or distribution. Programs to stimulate 

adoption of energy-efficient technologies and practices can provide more rapid relief to 

areas with fast-growing demand. Further, they can do so with fewer negative impacts 

than would occur during the construction of new generation, transmission, and . _ 

distribution facilities. Such programs might be especially helpful in areas where growth 

in electric demand is high;' yet, markets for hew generation are in their infancy or - " 

S-8 

existing incentives for investments in transmission and distribution are in transition. 

Technologies and practices that reduce loads during times of peak demand, such as 

high-efficiency air conditioning and lighting equipment, are especially valuable. 

Actions for federal consideration: 

• Work with state and local governments to support development and _ 

implementation of cost-effective energy efficiency programs. 

• Expand existingfederal programs to promote energy efficiency. 

..... : 
EE-RM/STD-98-440.- /31

Section 1

Introduction

The summer of 1999 was marked by a number of electric power outages and other

power disturbances in the eastern interconnection that occurred during periods of

extreme heat and humidity. 2 These included distribution system failures, as well as

shortages of power supplies and occurrences of low voltages in the transmission system.

Outages in New York City and Chicago were among the most notable.

In response to public concerns, at the summer meeting of the National Association

of Regulatory Utility Commissioners (NARUC), the Secretary of Energy pledged to

investigate several recent major electric power disturbances as part of a six-point plan to '

improve the reliability of the U.S. electric power system. The Secretary appointed a

panel of U.S. Department of Energy (DQE), national laboratory, and academic experts,

called the Power Outage Study Team, or POST, to conduct the investigations.

This is the final report of POST's investigation of last summer's electric reliability

problems. Six power outages and two power system disturbances that did not result in

outages that took place between early June and early August 1999 were studied, and

potential federal actions for preventing such events in the future are recommended.

POST members visited the affected utilities or operating entities in the fall of1999 .

to learn first-hand about the outages and system disturbances. Members interviewed the

affected utilities and system operators, as well as other local parties, and reviewed

available reports and materials that had been prepared following the events. Without

exception, all parties cooperated and supported the team's efforts. The events and the

POST's findings were described in an Interim Report, dated January 4, 2000. 3 Section 2

of this report provides brief summaries of the events drawn from the Interim-Report. :

Section 3 reports POST's 38 findings from the events.

The Interim Report formed the basis for a series of three DOE-sponsored technical

workshops at which POST received public comments on recommendations to consider :

for this final report. Technical workshops were held on January 20 in San Francisco,

California; January 25 in New Orleans, Louisiana; and January 27 in Newark,

New Jersey. More than 150 individuals attended and, of those, more than 50 offered

public comments at one or more of the workshops. In addition, DOE received more than

70 written comments on the Interim Report. Section 4 summarizes the process that the

team used to solicit public input.

2 Terms that are defined in the glossary (Appendix B) are in italics the first time they are used in

the text.

3 The Interim Report can be downloaded from http://www.policy.energy.gov/. .

-. ' * . ' * " . - 1 : · ' * * ''***.- ''.~~~~

EE-RM-STD-98-440 COMMENT 132

EE-RM/STD-9S-440_ #/30<. : .. 

Section 1 

Introduction 

The summer of 1999 was marked by a number of electric power outages and other 

power disturbances in the eastern interconnection that occurred during periods of 

extreme heat and humidity.2 These included distribution system failures, as well as 

shortages of power supplies and occurrences of low voltages in the transmission system. 

Outages in New York City and Chicago were among the most notable .. 

In response to public concerns, at the summer meeting of the National Association 

of Regulatory Utility Commissioners (NARUC), the Secretary of Energy pledged to 

investigate several recent major electric power disturbances as part of a six-point plan to . 

improve the reliability of the U.S. electric power system. The Secretary appointed a 

panel of U.S. Department of Energy (DQE), national laboratory, and academic experts~ . 

called the Power Outage Study Team, or POST, to conduct the investigations. 

This is the final report of POST's investigation oflast summer's electric reliability 

problems. Six power outages and two power system disturbances that did not result in 

outages that took place between early June and early August 1999 were studied, and 

potential federal actions for preventing such events in the future are recommended. 

POST members visited the affected utilities or operating entities in the fall 00999 . 

to learn first-hand about the outages and system disturbances. Members interviewed th'e 

affected utilities and system operators, as well as other local parties, and reviewed 

available reports and materials that had been prepared following the events. Without 

exception, all parties cooperated and supported the team's efforts. The events and the 

POST's fmdings were described in an Interim Report, dated January 4,2000.3 Section 2 

of this report provides brief summaries of the events drawn from the Interim' Report . 

. Section 3 reports POST's 38 findings from the events. . 

The Interim Report formed the basis for a series of three DOE-sponsored technic~ 

workshops at which POST received public comments on recommendations to consider. : 

for this fmal report. Technical workshops were held on January 20 in San Francisco, 

California; January 25 in New Orleans, Louisiana; and January 27 in Newark, 

New Jersey. More than 150 individuals attended and, of those, more than 50 offered 

public comments at one or more of the workshops. In addition, DOE received more than 

70 written comments on the Interim Report. Section 4 summarizes the process that the 

team used to solicit public input. . 

2 Tenns that are defined in the glossary (Appendix B) are in italics the first time th~y are Used in . 

the text. 

3 The Interim Report can be downloaded from http://www.policy.energy.gov/ .. 

-' 1 . 

" ..... . 

'1. 

:- .. .. ,.'. 
EE-RM/STD-98-440--/ --/

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999

Section 5 consists of the team's recommendations to the Secretary of Energy and

identifies potential federal actions to help avoid future power outages. The

recommendations offered in this report address POST's findings (see Section 3 of this

report) from its study of the significant reliability events from the summer of 1999. Other

federal, state, and local actions regarding electric reliability are beyond the scope of this

report.

Appendix A summarizes the comments that POST received. Appendix B provides a

glossary of terms.

EE-RM-STD-98-440 COMMENT 132

EE.RM/STD.98-440-~ /3~. 

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999 

2 

Section 5 consists of the team's recommendations to the Secretary of Energy 'and 

identifies potential federal actions to help avoid future power outages. The 

recommendations offered in this report address POST's findings (see Section 3 of this '. 

report) from its study of the significant reliability events from the summer of 1999. Other' 

federal, state, and local actions regarding electric reliability are beyond the scope of this 

report. 

Appendix A summarizes the comments that POST received. Appendix B provides a 

glossary of terms. 

- :-: ;;'., 
EE-RM/STD.98-440-4 /3 ,

Section 2

Summary of Electric Power System Events Studied by POST

The Secretary of Energy appointed POST to review significant power outages and

system disturbances that occurred during the summer of 1999 (Table 1). Following this

review, the team was directed to suggest actions that the federal government could take

to avoid future power outages. Specifically, POST studied six electric power system

outages and two other electric power system disturbances that did not lead to outages.

Table 1 gives the locations and dates of these events. The sections that follow briefly

summarize each event.

Table 1 Summer of 1999: Electric Power Events

Studied by POST

Event/Location Date

Outages

New York City July 6 and 7

Long Island July 3-8

New Jersey July 5-8

Delmarva Peninsula July 6

South-Central states July 23

Chicago July 30-August 12

Power system disturbances

New England states June 7 and 8

Mid-Atlantic area July 6 and 19

2.1 New England: Generation Deficiency on June 7 and 8

ISO-New England (ISO-NE), which initiated operations on July 1, 1997, is the

nonprofit independent system operator (ISO) responsible for operating New England's

bulk-power system and for administering the region's restructured wholesale electricity

market. The New England electric system encompasses Connecticut, Maine,

Massachusetts, New Hampshire, Rhode Island, and Vermont.

On June 7 and 8, 1999, record-breaking heat and humidity spread across the

northeastern United States and much of central and eastern Canada. At that time, many

generating units were out of service for routine maintenance and refueling in ':.

anticipation of high system demands later in the summer. As a result, the New England,

Ontario, and New York regions experienced shortages in reserve electric capacity-and

consequent operating emergencies.

3,

EE-RM-STD-98-440 COMMENT 132

EE-RM/STO-98-440-#: /~" - -\ . . .:~ . -- - -----.. ~.-- ." - .. ~.--

Section 2. 

Summary of Electric Power System 

Events Studied by POSTThe Secretary of Energy appointed POST to review significant power outages and 

system disturbances that occurred during the summer of 1999 (Table I). Following this 

review, the team was directed to suggest actions that the federal government could take 

to avoid future power outages. Specifically, POST studied six electric power system 

outages and two other electric power system disturbances that did not lead to outages. 

Table I gives the locations and dates of these events. The sections that follow briefly 

summarize each event. 

Table 1 Summer of 1999: Electric Power Events 

Studied by POST 

EventiLocation 

Outages 

New York City 

Long Island 

New Jersey 

Delmarva Peninsula 

South-Central states 

Chicago 

Power system disturbances 

New England states 

Mid-Atlantic area 

Date 

July 6 and 7 

July 3-8 

July 5-8 

July 6 

July 23 

July 30-August 12 

June 7 and 8 

July 6 and 19 

2.1 New England: Generation Deficiency on June 7 and 8 

ISO-New England (ISO-NE), which initiated operations on July 1, 1997, is the 

nonprofit independent system operator (ISO) responsible for operating New England's 

bulk-power system and for administering the region's restructured wholesale electricitY _ 

market. The New England electric system encompasses Connecticut, Maine, -

Massachusetts, New Hampshire, Rhode Island, and Vermont. 

On June 7 and 8, 1999, record-breaking heat and humi4!!Y spread across the _ 

northeastern United States ana much of central and eastern Canada. At that time, manygenerating units were out of service for routine maintenance and refueling in -

anticipation of high system demands later in the summer. As a result, the New England, 

Ontario, and New York regions experienced shortages in reserve electric capacity.and 

consequent operating emergencies. 

. 3-

..- : 

- -

. -~ ~ ... -.. ~ .. 

..... - .- .z 
EE-RM/STD-98-440 -^/•r 1

Report ofthe DOE Power Outage Study Team on Electric Reliability R Events of the Summer of 1999 . . -.-- 

A combination of emergency responses by ISO-NE, operators of neighboring

systems, electricity customers, the governors of several states, and ultimately a break in

the weather enabled ISO-NE to maintain a continuous supply of electricity under :

demanding circumstances. During this event, ISO-NE received sustained transfers of

emergency power from as far away as Michigan. ISO-NE reduced voltages, implemented

load reductions, and received critically important assistance from PJM Interconnection,

LLC (PJM), New York, Michigan, Ontario, Quebec, and the Maritime Provinces. Some

of these systems encountered their own emergencies on these dates. The emergency

subsided on the afternoon of June 8, when conservation measures took effect and air

temperatures cooled.

2.2 New York City: Outages on July 6 and 7

Consolidated Edison Company (Con Ed) is a member of the New York Power Pool

(NYPP) and the Northeast Power Coordinating Council. Con Ed serves the most dense

electrical loadpocket in the world, with more than 3.1 million customers in a

604-square-mile area. The company uses a unique concept, called a distributed network

in which each network operates independently from its neighboring networks and is fed

from multiple distribution feeder cables. The networks are designed conservatively so

that they can carry load, while being kept energized even if two or three feeders

(depending on the load) are lost.

On July 6, 1999, the Washington Heights network in northern Manhattan had to be

de-energized for 19 hours after the distribution network lost 8 of its 14 feeder cables.

The loss of feeders occurred because of heat-related failures in connections, cables, and

transformers. Power to 68,000 customers (representing a population of 200,000) was

interrupted. The Washington Heights network was re-energized at about 5:00 p.m. on .

July 7, after repairs had been made.

2.3 Long Island: Outages and Depressed Voltages on July 3-8

The Long Island Power Authority (LIPA) -an organization of the State of

New York - acquired the Long Island transmission and distribution (T&D) system from

the Long Island Lighting Company in 1998. Keyspan Energy operates the system under

contract from LIPA.

From July 3 through 8, service was interrupted to a total of 110,000 LIPA customers -'

for varying periods. A new system peak load of 4,340 MW was set on July 5, and that

record was broken theTofowing day (July 6) when the peak load reached 4,590 MW

(a 9.1% increase over the previous year). On July 6, NYPP ordered a systemwide

5% voltage reduction, and LIPA activated its Commercial Peak Reduction Program and

appealed to its other large customers to voluntarily curtail their use of.electricity. Many

organizations and government offices responded by closing early or cutting back on their .

electricity use. The South Fork of Long Island - an area that has experienced rapid load

growth - was on the edge of voltage collapse. Voltage collapse probably would have

occurred if the peak demand had not been reduced as a result of voluntary load

curtailment procedures, a 5% voltage reduction, and load decreases associated with

:

4 ' * .. -* ; ; ---

EE-RM-STD-98-440 COMMENT 132 EE-RM/STD-9S-440 4' I~-: -

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999 

A combination of emergency responses by ISO-NE, operators of neighboring 

systems, electricity customers, the governors of several states, and ultimately a break in _ 

the weather enabled ISO-NE to maintain a continuous supply of electricity under 

demanding circumstances. During ~his event, ISO-NE received sustained transfers of 

emergency power from as far away as Michigan. ISO-NE reduced voltages, implemented 

load reductions, and received-critically important assistance from PJM Interconnection, 

LLC (PJM), New York, Michigan, Ontario, Quebec, and the Maritime Provinces. Some 

of these systems encountered their own emergencies on these dates. The emergency 

subsided on the afternoon of June 8, when conservation measures took effect and air 

temperatures cooled. 

2.2 New York City: Outages on July 6 and 7 

Consolidated Edison Company (Con Ed) is a member of the New York Power Pool 

(NYPP) and the Northeast Power Coordinating Council. Con Ed serves the most dense 

electrical load pocket in the world, with more than 3.1 million customers in a 

604-square-mile area. The company uses a unique concept, called a distributed network, 

in which each network operates independently from its neighboring networks and is fed 

from multiple distribution feeder cables. The networks are designed conservatively so 

that they can carry load, while being kept energized even if two or three feeders 

(depending on the load) are lost. 

On July 6, 1999, the Washington Heights network in northern Manhattan had to be 

de-energized for 19 hours after the distribution network lost 8 of its 14 feeder cables. 

The loss of feeders occurred because of heat-related failures in connections, cables, and 

transformers. Power to 68,000 customers (representing a popUlation of 200,000) Was 

interrupted. The Washington Heights network was re-energized at about 5:00 p.m. on 

July 7, after repairs had been made. .' 

2.3 Long Island: Outages and Depressed Voltages on July 3-8 

4 

The Long Island Power Authority (LIPA) - an organization of the State of 

New York - acquired the Long Island transmission and distribution (T &0) system from 

the Long Island Lighting Company in 1998. Keyspan Energy operates the system under 

contract from LIP A. 

From July 3 through 8, service was interrupted to a total of 110,000 LIPA~ustomers' 

for varying periods. A new system peak load of 4,340 MW was set on July 5, arid thatrecord was broken therOIIowing aay (July 6) when the peak load reached 4,590 MW 

(a 9.1 % increase over the previous year). On July 6, NYPP ordered a systemwide _ 

5% voltage reduction, and LIP A activated its Commercial Peak Reduction Prograffi" and 

appealed to its other large customers to voluntarily curtail their use of electricity. Many 

organizations and government offices responded by closing early or cutting back on their. 

electricity use. The South Fork of Long Island - an area that has experienced rapid load 

growth - was on the edge of voltage collapse. Voltage collapse probably would have 

occurred if the peak demand had not been reduced as a result of voluntary load, . 

curtailment procedures, a 5% voltage reduction, and load decreases aSsociated with 

::- .-

." :, 

. . . . .: :~. 

-.; 

-. ,', 
EE-RM/STD-98-440 -f

Report of the DOE Power Outage Study Team on Electric Reliability Events ofthe Summer o

overloaded wire burndowns. The peak load in the South Fork on July 5 was 25% higher

than it was in 1998.

2.4 Mid-Atlantic Area: Voltage Declines on July 6 and 19

PJM Interconnection, LLC, is an ISO that serves as (1) the regional transmission

provider responsible for transmission planning, (2) a control area operator, (3) a North

American Electric Reliability Council (NERC) security coordinator, and (4) operator of

the Mid-Atlantic integrated energy market. PJM is the largest centrally dispatched

electric power system in North America. The system encompasses New Jersey;

Delaware; the District of Columbia; and parts of Pennsylvania, Maryland, and Virginia.

On two occasions in July, the eastern half of the PJM grid experienced sudden and

steep voltage declines. The first occurred on July 6, during the heat storm that affected

much of the East from New England down past the Mid-Atlantic. An all-time-high peak

load (51,600 MW), which was not predicted to occur until 2002, was recorded for the

PJM grid that day. A similar voltage problem occurred during another period of high

loads on July 19.

The integrity of the PJM system was maintained, however, on both July 6 and 19,

because emergency actions were put in place to reduce voltage, curtail contractually

interruptible customers, start up maximum emergency generation, appeal for voluntary

load reductions, and curtail emergency exports. The more rapid recovery on July 19 may

be partially explained by PJM's implementation of some of the lessons it had learned on

July 6.

2.5 New Jersey: Outages on July 5-8

POST studied three outages that occurred at two New Jersey utilities during the heat

wave that took place in early July. Public Service Electric and Gas Company (PSE&G) is

a wholly owned subsidiary of Public Service Enterprise Group Incorporated. PSE&G

supplies electric and gas service to approximately 5.5 million people in a corridor of

roughly 2,600 square miles that runs diagonally across New Jersey, from Bergen County

in the northeast to an area below the city of Camden in the southwest. GPU, Inc., is a

holding company that owns all of the outstanding common stock of three electric utilities

serving customers in New Jersey (Jersey Central Power & Light Company,

Pennsylvania-Metropolitan Edison Company, and Pennsylvania Electric Company),

which are operated jointly as GPU Energy.

PSE&G suffered outages related to recurrent cable and switchgear troubles at

several of its substations and on the 26-kV Bergen County loop. The Hudson Terrace and

Citibank substations were shut down once, and the Englewood substation was shut down

twice. Up to 10,000 customers at a time were affected for periods of less than one hour

each during the service interruptions. Multiple terminator and cable failures affected

three of the four transformers at the City Dock substation in downtown Newark,

New Jersey. PSE&G shut down the entire substation to protect the remaining transformer

' - . 5 :-

- - --

EE-RM-STD-98-440 COMMENT 132

EE-RM/STD-9S-440 -1F-/~ -' 

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer a 

overloaded wire burndowns. The peak load in the South Fork on July 5 was 25o/~ higher- , 

than it was in 1998. 

2.4 Mid-Atlantic Area: Voltage Declines on July 6 and 19 

PJM Interconnection, LLC, is an ISO that serves as (1) the regional transmission 

provider responsible for transmission planning, (2) a control area operator, (3) a North 

American Electric Reliability Council (NERC) security coordinator, and (4) operator of 

the Mid-Atlantic integrated energy market. PJM is the largest centrally dispatched 

electric power system in North America. The system encompasses New Jersey; 

Delaware; the District of Columbia; and parts of Pennsylvania, Maryland, and Virginia. 

On two occasions in July, the eastern half of the P JM grid experienced sudden and 

steep voltage declines. The fIrst occurred on July 6, during the ~at storm that affected, 

much of the East from New England down past the Mid-Atlantic. An all-time-high peak 

load (51,600 MW), which was not predicted to occur until 2002, was recorded for the 

PJM grid that day. A similar voltage problem occurred during another period of high 

loads on July 19. 

The integrity of the PJM system was maintained, however, on both July 6 and 19, 

because emergency actions were put in place to reduce voltage, curtail contractually 

interruptible customers, start up maximum emergency generation, appeal for voluntary 

load reductions, and curtail emergency exports. The more rapid recovery on July 19 may 

be partially explained by PJM's implementation of some of the lessons it had learned on 

July 6. 

2.5 New Jersey: Outages on July 5-8 

POST studied three outages that occurred at two New Jersey utilities during the heat 

wave that took place in early July. Public Service Electric and Gas Company (pSE&G) is 

a wholly owned subsidiary of Public Service Enterprise Group Incorporated. PSE&G -,-

supplies electric and gas service to approximately 5.5 million people in a corridor of 

roughly 2,600 square miles that runs diagonally across New Jersey, from Bergen County 

in the northeast to an area below the city of Camden in the southwest. GPU, Inc., is a -

holding company that owns all of the outstanding common stock of three electric utilities 

serving customers in New Jersey (Jersey Central Power & Light Company, 

Pennsylvania-Metropolitan Edison Company, and Pennsylvania Electric Company);' -

which are operated jointly as GPU Energy. ' - ' 

PSE&G suffered outages related to recurrent cable and switchgear troubles at 

several of its substations and on the 26-kV Bergen County loop. The Hudson Terrace and 

Citibank substations were shut down once, and the Englewood substation was shut down 

twice. Up to 10,000 customers at a time were affected for periods of less than one hour 

each during the service interruptions. Multiple terminator and cable failures affected 

three of the four transformers at the City Dock substation in downtown Newark, , 

New Jersey. PSE&G shut down the entire substation to protect the remaining transformer., 

, - 5 " -
EE-RM/STD-98-44 0 - 4 t

Report of the DOE Power Outage Study Team on Electric Reliability Events ofthe Summer of 1999'

affecting 2,600 customers. Service was restored to several large customers within -· -.

2 hours, and service was restored to all customers in less than 11 hours. .

Starting on July 5, GPU Energy suffered outages resulting from problems with the

four transformers at its Red Bank substation. Two transformers were severely damaged

and had to be replaced. Scheduled and unscheduled outages affected more than

100,000 customers. Service was restored to all customers by 1:20 a.m. on July 8.

2.6 Delmarva Peninsula: Outages on July 6

Delmarva Power & Light Company (DPL) is a wholly owned subsidiary of

Conectiv. DPL provides electricity to approximately 455,300 customers within its

service territory, which includes Delaware, 10 primarily eastern shore counties in

Maryland, and the eastern shore of Virginia. .-- .

The DPL system was severely affected by the first heat wave of July 1999, which

for DPL extended from July 3 to July 6. High loads, in combination with various

generation outages, produced a capacity shortfailthat could not be remedied through

energy imports on the transmission system. On the worst day, July 6, DPL implemented

rotating outages from 10:30 a.m. until 7:30 p.m. Approximately 138,000 customers

experienced outages of varying duration and frequency. Subsequent studies performed

by POST (reported in the Interim Report) and others indicate that the DPL operator

concerns regarding imminent voltage collapse were well founded.

2.7 South-Central States: Rotating Outages on July 23 -

Entergy is a vertically integrated power company that serves approximately

2.5 million customers in parts of Louisiana, Arkansas, Texas, and Mississippi. It is a

member of the Southeastern Electric Reliability Council and participates in a reserve

sharing agreement with the Southwest Power Pool (SPP). Entergy has about one-third of

the total SPP load.

On the basis of load forecasts and reports on expected generator availability on

July 22, Entergy anticipated that it would be able to meet its reserve requirements on

July 23, with the curtailment of some interruptible and curtailable retail loads. However,.::.

by the morning of July 23, the situation had worsened; load forecasts for the day were

slightly higher, while generator availability was lower than anticipated. Throughout the

day, equipment problems further reduced generating capability at several units. At noon,..

Entergy made a public appeal for conservation - only its third such request in 20 years.

During the afternoon, Entergy received emergency assistance from SPP for more than an

hour. As this period of assistance came to an end, nonfirm capacity purchases were

recalled because of high demands and widespread shortages throughout the region, while

additional generation capability was forced out of service. The combination of these

events led Entergy to begin curtailing 900 MW of firm load by mid-afternoon. Customer :

outages occurred on a 20- to 30-minute cycle. Ultimately, more than 550,000 customers

experienced at least one outage that afternoon.

6

EE-RM-STD-98-440 COMMENT 132

EE-RM/STD-98-440'--# 13??/ . Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999 

affecting 2,600 customers. Service was restored to several large customers within. 

2 hours, and service was restored to all customers in less than 11 hours. - . 

Starting on July 5, GPU Energy suffered outages resulting "from problerris with the 

four transformers at its Red Bank substation. Two transformers were severely daIDaged 

and had to be replaced. Scheduled and unscheduled outages affected more than 

100,000 customers. Service was restored to all customers by 1 :20 a.m. on July 8. 

2.6 Delmarva Peninsula: Outages on July 6 

Delmarva Power & Light Company (DPL) is a wholly owned subsidiary of 

Conectiv. DPL provides electricity to approximately 455,300 customers within its 

service territory, which includes Delaware, 10 primarily eastern shore counties in 

Maryland, and the eastern shore of Virginia. 

The DPL system was severely affected by the first heat wave of July 1999, whiCh 

for DPL extended from July 3 to July 6. High loads, in c~bination with various 

generation outages, produced a capacity Shortfall that could not be remedied through 

energy imports on the transmission system. On the worst day, July 6, DPL implemented 

rotating outages from 10:30 a.m. until 7:30 p.m. Approximately 138,000 customers 

experienced outages of varying duration and frequency. Subsequent studies performed 

by POST (reported in the Interim Report) and others indicate that the DPL operator 

concerns regarding imminent voltage collapse were well founded. 

2.7 South-Central States: Rotating Outages on July 23 

6 

Entergy is a vertically integrated power company that serves approximately 

2.5 million customers in parts of Louisiana, Arkansas, Texas, and Mississippi. It is a 

member of the Southeastern Electric Reliability Council and participates in a reserve 

sharing agreement with the Southwest Power Pool (SPP). Entergy has about one-third of 

the total SPP load. 

On the basis of load forecasts and reports on expected generator availability on . 

July 22, Entergy anticipated that it would be able to meet its reserve requirements on 

July 23, with the curtailment of some interruptible and curtailable retail loads. However, .. :. 

by the morning of July 23, the situation had worsened; load forecasts for the day were' 

slightly higher, while generator availability was lower than anticipated. Throughout the ..• 

day, equipment problems further reduced generating capability at several units" At noon, . 

Entergy made a public appeal for conservation - only its third such request in 20 yea.r.s. 

During the afternoon, Entergy received emergency assistance from SPP for more than an .' 

hour. As this period of assistance came to an end, nonjirm capacity purchases were . :. 

recalled because of high demands and widespread shortages throughout the region, while 

additional generation capability was forced out of service. The combination of these 

events led Entergy to begin curtailing 900 MW of firm load by mid-afternoon. Customer 

outages occurred on a 20- to 30-minute cycle. Ultimately, more than 550,000 customers 

experienced at least orie outage that afternoon. 

- . . .,. .. 

.": ,". 

~. ; 
EE-R M/STD-98-440 /3

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999

2.8 Chicago: Outages on July 30-August 12

Commonwealth Edison (ComEd) is the principal utility subsidiary of its parent

company, Unicom. ComEd provides electricity to more than 3.4 million customers in

northern Illinois. The ComEd T&D system is typical of transmission and distribution in

the electric industry in that it consists mainly of networked underground systems, located

primarily in Chicago; overhead systems in urban, suburban, and rural areas; and

underground residential systems in urban and suburban areas.

Between July 30 and August 12, three major distribution system outages occurred in

ComEd's service territory in Chicago at the Northwest, Lakeview, and Jefferson

substations. During a period of intense heat and humidity, ComEd recorded an all-timehigh peak demand on July 30. In the late afternoon, the electric system began to

experience difficulties. Two separate cable faults at the Northwest substation deenergized transformers, thereby overloading nearby interconnected transformers and

causing them to shut down automatically to prevent equipment damage. Seven cable

faults in and around the Lakeview substation also caused outages. Over the July 30 to

August 1 period, more than 100,000 customers suffered temporary losses of power for up

to several hours.

ComEd's Jefferson substation, which serves Chicago's greater downtown area

(including businesses in the "Loop") plays a critical role in the topology of ComEd's

system because it is the sole path of power for six downstream substations. Power

interruptions on August 12 to customers served by the Jefferson substation resulted from

intentional load shedding, which ComEd elected to do to protect overloaded equipment.

Transformer problems and multiple cable faults were the primary causes of overloading.

The largest number of customers simultaneously without service as a result of the

intentional actions taken by ComEd was less than 3,300 (however, since many of these

customers are large businesses, the number of people affected was much greater than

3,300). To prepare for service interruptions in the south Loop, ComEd personnel sent

warnings about potential emergency power outages; these reached many unaffected

customers in the area. ComEd staff suggested that a significant number of customers who

did not experience interruptions in electric power chose to suspend business operations

in anticipation of possible interruptions.

2.9 Follow-up Activities

The power outages and system disturbances that POST studied have also been ."

subject to follow-up activities by the companies and organizations that experienced :

them, as well as, in some cases, by local regulatory authorities. Other studies and reviews

have been conducted or are underway, and many follow-up actions have been announced

and implemented. By design, these activities have been confined primarily to the specific

events and companies or organizations affected. In this regard, the national focus of this

report complements the local studies because it looks at these events from a national

perspective.

..

EE-RM-STD-98-440 COMMENT 132

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999 -------~:.!:...:.....:.....:~:..:....::.....:....::~::........;:.-....:...;,...,;;:;!..:;...::..:..:....:..::....--..,;...---------::....-----::...----""'"--..,.- -.. ~,..~~-

·2.8 Chicago: Outages on July 30-August 12 

Commonwealth Edison (CornEd) is the principal utility subsidiary of its parent . 

company, Unicorn. CornEd provides electricity to more than 3.4 million customers in 

northern lllinois. The CornEd T&D system is typical of transmission and distribution in 

the electric industry in that it consists mainly of networked underground systems, located 

primarily in Chicago; overhead systems in urban, suburban, and rural areas; and 

underground residential systems in urban and suburban areas. 

Between July 30 and August 12, three major distribution system outages occurred in 

CornEd's service territory in Chicago at the Northwest, Lakeview, and Jefferson 

substations. During a period of intense heat and humidity, CornEd recorded an all-timehigh peak demand on July 30. In the late afternoon, the electric system began t; 

experience dIfficulties. Two separate cable faults at the Northwest substation deenergized transformers, thereby overloading nearby interconnected transformers and 

causing them to shut down automatically to prevent equipment damage. Seven cable 

faults in and around the Lakeview substation also caused outages. Over the July 30 to 

August 1 period, more than 100,000 customers suffered temporary losses of power for up 

to several hours. 

CornEd's Jefferson substation, which serves Chicago's greater downtown area 

(including businesses in the "Loop") plays a critical role in the topology ofComEd's 

system because it is the sole path of power for six downstream substations. Power 

interruptions on August 12 to customers served by thelefferson substation resulted from 

intentional load shedding, which CornEd elected to do to protect overloaded equipment. . 

Transformer problems and multiple cable faults were the primary causes of overloading. 

The largest number of customers simultaneously without service as a result of the 

intentional actions taken by CornEd was less than 3,300 (however, since many of these . 

customers are large businesses, the number of people affected was much greater than 

3,300). To prepare for service interruptions in the south Loop, CornEd personnel sent 

warnings about potential emergency power outages; these reached many unaffected . 

customers in the area. CornEd staff suggested that a significant number of customers who 

did not experience interruptions in electric power chose to suspend business operations 

in anticipation of possible interruptions. 

2.9 Follow-up Activities 

The power outages and system disturbances that POST studied have also been· 

subject to follow-up activities by the companies and organizations that experienced 

them, as well as, in some cases, by local regulatory authorities. Other studies·an"dreviews 

have been conducted or are underway, and many follow-up actions have been announced 

and implemented. By design, these activities have been confined prirrurrily to the specific 

events and companies or organizations affected. In this regard, the national focus of this 

report complements the local studies because it looks at these events from a national 

perspective. 

.\ 

- .~ 
EE-RM/STD-98-440 o-' /C

Section 3

Summary of POST Findings

POST's study of the events reported in Section 2 resulted in 38 findings, which

were specific to the events studied. The 38 findings are presented below by power

system event.

3.1 New England

1. Electricity suppliers respond to market signals, but there is a lag of several

years before new generation resources can be placed into service. Most of the

states in New England have implemented some form of competition for the

provision of energy services. High electricity prices and several summers of low

generation reserves as a result of the early retirement of several nuclear power

plants have led generation companies to propose adding more than 30,000 MW of

new capacity. This amount represents more than the total existing capacity in the

area. Although much of this new capacity will never be built, many are predicting a

generation surplus in New England within a few years. Such predictions clearly

indicate that this aspect of the generation market is working in New England.

However, it does take time to build new generation facilities, and there has

historically been a lag between the time when generation is needed and when it

becomes available.

2. Retail customers have limited mechanisms and incentives to conserve energy

or resort to alternatives during electricity shortages. ISO-NE had to resort to

public appeals for conservation, including the step of asking the New England

governors to close nonessential facilities.

3. Market rules for system operation during times of system emergencies have

not been fully developed or agreed upon by market participants. The reliability

event of June 7 and 8 uncovered many market flaws, including the inability to

(1) forecast market clearing prices when supplies are scarce and (2) manage pump

storage and must-run resources that are above the energy clearing price.

4. Some independent system operators were lacking the needed authority to

arrange energy transfers during emergency conditions. Some of the ISOs

involved in the June 8 delivery of emergency power from Michigan to New England

did not have well-defined emergency procedures to conduct the transactions.

3.2 New York City

5. Cable condition is not accurately assessed by conventional diagnostics and

practices, which may accelerate cable failure. Conventional cable testing

methods, such as direct-current (DC) high-potential testing, are not always able to

detect degradation or incipient failure in cable systems. In fact, the DC highpotential cable testing method being used by Con Ed may actually be aggravating

8

EE-RM-STD-98-440 COMMENT 132

EE-RM/STD-98-440 :-f/1309~· 

Section 3 

Summary of POST Findings 

POST's study of the events reported in Section 2 resulted in 38 fmdings, which 

were specific to the events studied. The 38 findings are presented below by power 

system event. 

3.1 New England 

1. Electricity suppliers respond to market signals, but there is a lag of several 

years before new generation resources can be placed into service. Most of the 

states in New England have implemented some form of competition for the 

provision of energy services. High electricity prices and several summers of low 

generation reserves as a result of the early retirement of several nuclear power 

plants have led generation companies to propose adding more than 30,000 MW of 

new capacity. This amount represents more than the total existing capacity in the . 

area. Although much of this new capacity wiII never be built, many are predicting a 

generation surplus in New England within a few years. Such predictions clearly 

indicate that this aspect of the generation market is working in New England. 

However, it does take time to build new generation facilities, and there has 

historically been a lag between the time when generation is needed and when it . 

becomes available. 

2. Retail customers have limited mechanisms and incentives to conserve energy 

or resort to alternatives during electricity shortages. ISO-NE had to resort to 

public appeals for conservation, including the step of asking the New England 

governors to close nonessential facilities. 

3. Market rules for system operation during times of system emergencies have 

not been fully developed or agreed upon by market participants. The reliability 

event of June 7 and 8 uncovered many market flaws, including the inability to 

(1) forecast market clearing prices when supplies are scarce and (2) manage pump 

storage and must-run resources that are above the energy clearing price. 

4. Some independent system operators were lacking the needed authority to 

arrange energy transfers during emergency conditions. Some of the ISOs 

involved in the June 8 delivery of emergency power from Michigan to New J:;ngland 

did not have well-defmed emergency procedures to conduct the transactions. 

3.2 New York City 

8 

5. Cable condition is not accurately assessed by conventional dillgilostics and 

practices, which may accelerate cable failure. Conventional cable testing 

methods, such as direct-current (DC) high-potential testing, are not always able to . 

detect degradation or incipient failure in cable systems. In fact, the DC highpotential cable testing method being used by Con Ed may actually be aggravating. 

... - . 
EE-RM/STD-98-440- 4 -/3c

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999

potential failure spots in the cables. Each spring, Con Ed routinely tests cables all

over the city to prepare for the summer peak. Four of the feeder cables from the

Sherman Creek substation had been tested in the spring of 1999. Three of the four

cables had passed the test but subsequently failed during the July 6 outage. The

fourth cable failed the test but was repaired and did not fail during the outage. The

fact that three cables that passed the test failed later during the heat storm may be an

indicator of a testing deficiency that actually contributes to cable failure.

There is presently a debate in the industry over the best way to test the insulation of

distribution cables. Many of Con Ed's 13.8-kV feeder cables are insulated with

cross-linked polyethylene (XLPE). Studies suggest that DC high-potential testing

on aged cable with this type of insulation may induce failures. The practice of using

the DC test on cables has carried over from the time when older paper-oil types of

cable insulation that are not degraded by the DC test were used. In the Con Ed

feeders, XLPE-insulated cable is sometimes spliced in to replace sections of paperoil cable, so both cable types can exist in the same feeder.

6. Real-time data on cable temperature are not available. The secondary lowvoltage distribution system contains a large number of conductors in parallel in

many possible combinations. Calculating the power flow and temperature rise for

each combination of conductors requires a highly sophisticated analysis. In

addition, individual network conductors are protected by fusible links, and there are

no remote indications when these links are open. Thus, the thermal model can only

really estimate the temperature rise of individual conductors. Real-time data on the

actual thermal condition of the network cables (either calculated or measured) is not

available.

7. The harsh environment in which cables are located contributes to reliability

problems. The salt that the city uses on the streets in the winter gets into the cable

vaults, manholes, and conduits. Con Ed can actually plot the customer interruption

rate versus the tonnage of salt used by the city and find a remarkably good

correlation. During its visit to New York, the POST observed that the vaults were

also contaminated by oil from car engines and a variety of other trash that fell

through the grating. The manholes, vaults, and conduits are also routinely flooded

during heavy rains and water main leaks. The combination of salt, water, oil, and

constant high humidity is an extremely severe environment for cables. Lead jackets

on the cable, which are very effective in these harsh environments, can no longer be

used because of environmental concerns.

3.3 Long Island

8. Load predictions have been inadequate. Load growth has been unusually rapid. In

some areas, the peak load increased more than 25% in the last year. T&D capability

has not kept up with load growth. There is a perception that load forecasting has

been inadequate over the last two or three years. The review of the capability and

condition of the existing infrastructure might not have been adequate. For example,

9

EE-RM-STD-98-440 COMMENT 132

EE-RM/STD-98-440 - #13~. ' 

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999,. 

potential failure spots in the cables. Each spring, Con Ed routinely tests cables all ' 

over the city to prepare for the summer peak. Four of the feeder cables from the 

Sherman Creek substation had been tested in the spring of 1999. Three of the foUr' 

cables had passed the test but subsequently failed during the July 6 outage. The 

fourth cable failed the test but was repaired and did not fail during the outage. The 

fact that three cables that passed the test failed later during the heat storm may be an 

indicator of a testing deficiency that actually contributes to cable failure. 

There is presently a debate in the industry over the best way to test the insulation of 

distribution cables. Many of Con Ed's 13.8-kV feeder cables are insulated with 

cross-linked polyethylene (XLPE). Studies suggest that DC high-potential testing 

on aged cable with this type of insulation may induce failures. The practice of using 

the DC test on cables has carried over from the time when older paper-oil types of 

cable insulation that are not degraded by the DC test were used. In the Con Ed 

feeders, XLPE-insulated cable is sometimes spliced in to replace sections of paperoil cable, so both cable types can exist in the same feeder. 

6. Real-time data on cable temperature are not available. The secondary lowvoltage distribution system contains a large number of conductors in parallel in 

many possible combinations. Calculating the power flow and temperature rise for 

each combination of conductors requires a highly sophisticated analysis. In 

addition, individual network conductors are protected by fusible links, and there are 

no remote indications when these links are open. Thus, the thermal model can only 

really estimate the temperature rise of individual conductors. Real-time data on the 

actual thermal condition of the network cables (either calculated or measured) is not' 

available. 

7. The harsh environment in which cables are located contributes to reliability 

problems. The salt that the city uses on the streets in the winter gets into the cable 

vaults, manholes, and conduits. Con Ed can actually plot the customer interruption 

rate versus the tonnage of salt used by the city and fmd a remarkably good 

correlation. During its visit to New York, the POST observed that the vaults were 

also contaminated by oil from car engines and a variety of other trash that fell 

through the grating. The manholes, vaults, and conduits are also routinely flooded, 

during heavy rains and water main leaks. The combination of salt, water, oil, and, 

constant high humidity is an extremely severe environment for cables. Lead jackets 

on the cable, which are very effective in these harsh environments, can no longer be 

used because of environmental concerns. 

3.3 Long Island 

8. Load predictions have been inadequate. Load growth has been 'unusually rapid. In 

some areas, the peak load increased more than 25% in the last year. T &D capability 

has not kept up with load growth. There is a perception that load forecasting has ' 

been inadequate over the last two or three years. The review of the capability and 

condition of the existing infrastructure might not have been adequate. For example, 

9 
EE-RM/STD-98-440 - 7 / ~

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999

the predicted 1999 summer peak for the South Fork was 141 megavolts-ampere

(MVA), while the actual peak was 167 MVA, 18% higher than the forecast.

Although much of the increase resulted from the booming economy, LIPA .

forecasting methods still appear to be inadequate.

9. Transformer failure and associated interconnection problems can require

lengthy equipment repair times. LIPA import capability was reduced by 430 MW

because two key transformers providing interconnections to the NYPP and New

England Power Pool had failed in the spring. These transformers could not be

replaced quickly and had to be repaired because they were unique, nonstandard

designs. The repair time was on the order of one year. Replacing large transformers

requires a very long lead time.

10. Traditional methods (e.g., construction of new transmission and central

generation) for supplying electric power to load pockets were not able to keep

up with load growth. The South Fork of Long Island was on the edge of voltage

collapse because new generation and transmission had not kept up with the load

growth. Load growth had been extremely rapid, with an increase in peak load up to

25% in one year. There has been local resistance to the construction of new, highervoltage transmission lines and new generating stations in the area.

3.4 Mid-Atlantic Area

11. Unit ratings were not consistent with operating performance during periods of

high loads. When PJM called for maximum production of reactive power, many

generating units were not able to provide levels of real and reactive power -

consistent with their expected capabilities. This was evident during both the July 6

and 19 events. Immediately following the event on July 19, PJM instructed all

generators to re-rate units for their ability to produce reactive power.

12. There may not be adequate incentives for reactive power production. At the

time of these events, there were no economic incentives for generators to produce

reactive power. In fact, there was a disincentive, since generators operating at full

capacity generally have to cut back on real energy production to increase reactive

power production (as requested by PJM during these reliability events). Thus, their

sales and earnings are reduced. The Federal Energy Regulatory Commission

(FERC) has since approved a tarif for PJM to compensate generators for lost

opportunity costs.

13. Planning tools did not predict significant voltage degradation during periods of

high loads. PJM operators were surprised by each of these events. The severe

declines in voltages were not predicted for the operating conditions.being

experienced. The duration of the voltage decay on July 6 could be an indication of a

delayed response to the problem or a lack of adequate policies and procedures to

address the issue. When the tools and experience to predict and respond to such

events are not available, there is a risk of voltage collapse.

10

EE-RM-STD-98-440 COMMENT 132

~ . 

Report o/the DOE Power Outage Study Team on Electric Reliability Events o/the Summer 0/1999 

the predicted 1999 summer peak for the South Fork was 141 megavolts-ampere 

(MV A), while the actual peak was 167 MV A, 18% higher than the forecast. 

Although much of the increase resulted from the booming economy, LIP~:. 

forecasting methods still appear to be inadequate. . 

9. Transformer failure and associated interconnection problems can require 

lengthy equipment repair times. LIP A import capability was reduced by 430 MW 

because two key transformers providing interconnections to the NYPP and New 

England Power Pool had failed in the spring. These transformers could not be 

replaced quickly and had to be repaired because they were unique, nonstandard 

designs. The repair time was on the order of one year. Replacing large transformers 

requires a very long lead time. 

10 .. Traditional methods (e.g., construction of new transmission and central 

generation) for supplying electric power to load pockets were not able to keep 

up with load growth. The South Fork of Long Island was on the edge of voltage 

collapse because new generation and transmission had not kept up with the load 

growth. Load growth had been extremely rapid, with an increase in peak load up to 

25% in one year. There has been local resistance to the construction of new, highervoltage transmission lines and new generating stations in the area. 

3.4 Mid-Atlantic Area 

10 

11. Unit ratings were not consistent with operating performance during periods of 

high loads. When PJM called for maximum production of reactive power,many 

generating units were not able to provide levels of real and reactive power .. 

consistent with their expected capabilities. This was evident during both the July 6 

and 19 events. Immediately following the event on July 19, PlM instructed all 

generators to re-rate units for their ability to produce reactive power. 

12. There may not be adequate incentives for reactive power production. At the 

time of these events, there were no economic incentives for generators to produce 

reactive power. In fact, there was a disincentive, since generators operating at full 

capacity generally have to cut back on real energy production to increase reactive 

power production (as requested by PJM during these reliability events). Thus, their 

sales and earnings are reduced. The Federal Energy Regulatory Commission 

(FERC) has since approved a tarifJfor PlM to compensate generators for lost 

opportunity costs. 

13. Planning tools did not predict significant voltage degradation during periods of 

high loads. PJM operators were surprised by each of these events. The severe . 

declines in voltages were not predicted for the operating conditions.being 

experienced. The duration of the voltage decay on July 6 could be an hldication of a 

delayed response to the problem or a lack of adequate policie~ and procedures to 

address the issue. When the tools and experience to predict and respond to such· 

events are not available, there is a risk of voltage collapse. 
EE-RM/STD-98-440 _ /C 3 c

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999

3.5 New Jersey

14. There are no reliable tests for identifying incipient failures in feeder cables.

PSE&G experienced multiple cable failures at its Englewood and City Dock

substations. PSE&G staff informed POST that improved testing methods are needed

to identify incipient cable failures, and that the company has begun a pilot program

of low-frequency discharge testing for paper-insulated and lead-covered cables.

15. Mechanisms for sharing information on maintenance best practices and

equipment performance among distribution utilities were inadequate. There are

few incentives for sharing data on equipment maintenance and performance

characteristics. In some cases, research in this area is proprietary and not readily

available to all utilities.

16. Utilities may experience lengthy delays in replacing failed critical equipment.

The GPU system has approximately 50 transformers like the ones that failed at its

Red Bank substation, and at the time of those failures, it had only two spare

transformers. Luckily, those were stored at the Red Bank substation. Large

transformers like these are difficult to move because of their size and weight (more

than 200 tons). Replacement or repair of large transformers can take a year or

longer. Since the transformer failures at Red Bank, GPU is considering increasing

the number of spares it keeps from two to four.

3.6 Delmarva Peninsula

17. Forecasting methods used by system planners did not accurately predict peak

summer loads. The severity and longevity of the heat and humidity during this

reliability event were very unusual. DPL did not plan for the loads associated with

these conditions.

18. Summer ratings for electric generating units were calculated for normal

summer temperatures and were not consistent with performance during

periods of unusually high temperatures. During periods of high temperatures and

humidity, generating units generally do not perform as well as they do during times

of normal temperatures. Peak summer loads are associated with high temperatures

and humidity, and it is precisely at that time that unit ratings are critical to reliable

operations. Planning and operations need to be based on ratings that are relevant at

the time of peak loads.

19. Retail customers have limited mechanisms and incentives to conserve energy

or resort to alternatives during electricity shortages. DPL's reserves were

depleted on July 6, and operators had to resort to rotating outages to reduce load

when Indian River Unit 2 (IR2) was forced out of service.

20. Notice requirements in load management contracts do not permit an efficient

response to emergencies. DPL contracts for interruptible loads are not amenable to

quickly responding to generator outages. Contracts for interruptible loads require

EE-RM-STD-98-440 COMMENT 132

EE-RM/STD-98-440-#= /3c;< IReport of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999 

3.5 New Jersey 

14. There are no reliable tests for identifying incipient failures in feeder cables. 

PSE&G experienced multiple cable failures at its Englewood and City Dock 

substations. PSE&G staff informed POST that improved testing methods are needed 

to identify incipient cable failures, and that the company has begun a pilot program 

of low-Jrequency discharge testing for paper-insulated and lead-covered cables. 

15. Mechanisms for sharing information on maintenance best practices and 

equipment performance among distribution utilities were inadequate. There are 

few incentives for sharing data on equipment maintenance and performance 

characteristics. In some cases, research in this area is proprietary and not readily 

available to all utilities. 

16. Utilities may experience lengthy delays in replacing failed critical equipment. 

The GPU system has approximately 50 transformers like the ones that failed at its 

Red Bank substation, and at the time of those failures, it had only two spare 

transformers. Luckily, those were stored at the Red Bank substation: Large 

transformers like these are difficult to move because of their size and weight (more 

than 200 tons). Replacement or repair oflarge transformers can take a year or 

longer. Since the transformer failures at Red Bank, GPU is considering increasing 

the number of spares it keeps from two to four. 

3.6 Delmarva Peninsula 

17. Forecasting methods used by system planners did not accurately predict peak 

summer loads. The severity and longevity of the heat and humidity during this 

reliability event were very unusual. DPL did not plan for the loads assoCiated with 

these conditions. 

18. Summer ratings for-electric generating units were calculated for normal 

summer temperatures and were not consistent with performance during 

periods of unusually high temperatures. During periods of high temperatures and _ 

humidity, generating units generally do not perform as well as they do during times 

of nonnal temperatures. Peak summer loads are associated with high temperatures 

and humidity, and it is precisely at that time that unit ratings are critical to reliable 

operations. Planning and operations need to be based on ratings that are relevant at 

the time of peak loads. 

19. Retail customers have limited mechanisms and incentives to -conserve energy 

or resort to alternatives during electricity shortages. DPL's reserves were 

depleted on July 6, and operators had to resort to rotating outages to reduce load -

when Indian River Unit 2 (IR2) was forced out of service. 

20. Notice requirements in load management contracts do not permit an efficient 

response to emergencies. DPL contracts for interruptible loads are not amenable to 

quickly responding to generator outages. Contracts for interruptible loads require 

11 
EE-RM/STD-98-440 /3 -

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999 -

advance notice, and, in DPL's case, they limit service interruptions to only six

hours. The advanced notice requirement prevented DPL operators from shedding

interruptible loads as an immediate response to the outage of IR2. The duration

limits prevented the use of interruptible loads in the morning hours, because these

loads would then be coming back on line during the afternoon peak.

21. Reliability criteria for generation reserves were not sufficient to avoid regular

power shortfalls. DPL planning was based on meeting the load associated with the

average high summer temperature. Higher-than-average peak summer temperatures,

combined with depleted reserves that had resulted from prior outages, left DPL

operators with no option but to shed load when IR2 failed.

3.7 South-Central States

22. Summer ratings and actual capability of generating units are not always

consistent. There are concerns over the determination of summer ratings in

comparison with the actual capability shown on July 23. The 500 MW in small

deratings is equivalent to a moderate-sized fossil unit.

23. Problems in anticipation and delays in the application of public appeals limited

the effectiveness of the appeals once they were made. Public appeals for

conservation have a limited, temporary effect. Public appeals are most effective

when issued with sufficient anticipation. Considering the event of July 23, dayahead public appeals were not issued because at the time it was thought that

reserves would be adequate. Eventually, public appeals were issued prior to the

rotating blackouts. Entergy's lack of relative familiarity with the public appeals

process was also a constraining factor on the system. Because Entergy had issued

only two public conservation notices in the previous 20 years, comprehensive

mitigation strategies were not in place, forcing a series of meetings that eventually

led to a noon public notice for conservation.

24. Reliance on nonfirm purchases to meet operating reserve targets results in

inadequate reserves during regionwide events of high demand. Entergy

calculated its reserves as a combination of own capacity, firm and nonfirm

interchange transactions, and load management. Relying on other members of a

reserve-sharing agreement for reserves saves significantly on operating reserve

costs under most conditions. However, in situations like July 23, reserves are not .

used in a "normal" mode. Operating reserves can be used any time the firm load is

likely to be curtailed. Under conditions of high demand, the probability of firm load

curtailment is consequently higher because more members of the reserve-sharing

agreement are utilizing their full capability and counting on nonfirm purchases to

maintain reserve. Also, any nonfirm purchase under conditions in which power

markets are approaching extreme conditions is subject to recall. This greatly

increases the uncertainty in peak demand obligations. This observation is not taken

into consideration in the analysis of reserve requirements.

12

EE-RM-STD-98-440 COMMENT 132

EE-RM/STD-98~440 4' / ~ .. 

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999 

advance notice, and, in DPL's case, they limit service interruptions to only six 

hours. The advanced notice requirement prevented DPL operators from shedding 

interruptible loads as an immediate response to the outage of IR2. The duration 

limits prevented the use of interruptible loads in the morning hours, because these.' 

loads would then be coming back on line during the afternoon peak. 

21. Reliability criteria for generation reserves were not sufficient to avoid regular 

power shortfalls. DPL planning was based on meeting the load associated with the 

average high summer temperature. Higher-than-average peak summer temperatures, 

combined with depleted reserves that had resulted from prior outages, left DPL 

operators with no option but to shed load when IR2 failed. 

3.7 South-Central States 

12 

. 22. Summer ratings and actual capability of generating units are not always 

consistent. There are concerns over the determination of summer ratings in 

comparison with the actual capability shown on July 23. The 500 MW in small 

deratings is equivalent to a moderate-sized fossil unit. 

23. Problems in anticipation and delays in the application of public appeals limited 

the effectiveness of the appeals once they were made. Public appeals for 

conservation have a limited, temporafy effect. Public appeals are most effective' 

when issued with sufficient anticipation. Considering the event of July 23, dayahead public appeals were not issued because at the time it was thought that 

reserves would be adequate. Eventually, public appeals were issued prior to the 

rotating blackouts. Entergy's lack of relative familiarity with the public appeals 

process was also a constraining factor on the system. Because Entergy had issued 

only two public conservation notices in the previous 20 years, comprehensive 

mitigation strategies were not in place, forcing a series of m_eetings that eventually 

led to a noon public notice for conservation. 

24. Reliance on nonfirm purchases to meet operating reserve targets results in 

inadequate reserves during regionwide events of high demand. Entergy 

calculated its reserves as a combination of own capacity, firm and nonfIrm . 

interchange transactions, and load management. Relying on other members of a 

reserve-sharing agreement for reserves saves significantly on operating reserve 

costs under most conditions. However, in situations like July 23, reserves are not 

used in a "normal" mode. Operating reserves can be used any time the fInn load is 

likely to be curtailed. Under conditions of high demand, the probability of firm load· 

curtailment is consequently higher because more members of the reserve-sharing 

agreement are utilizing their full capability and counting on nonfrrrn purchases to 

maintain reserve. Also, any nonfrrrn purchase under conditions in which power 

markets are approaching extreme conditions is subject to recall. This greatly 

increases the uncertainty in peak demand obligations. This observation is ~ot taken 

into consideration in the analysis of reserve requirements. 
EE-RM/STD-98-440-, /3 .

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999

25. Mechanisms for short-term power sales rely on multiple, often manual

telecommunications, leading to inefficient and untimely outcomes. The shortterm power market and the steps required to enact a transaction present concerns.

These problems are associated with timing. The timing during which transactions

can be executed presents barriers to solving problems. Typically, for hour-ahead

power, the market clears no later than one-half-hour past the hour for the next hour.

In the Entergy July 23 case, this meant that information on the imminent loss of

White Bluff Unit 1 and the loss of an additional 300 MW of interruptible power

from TVA came after this point in the hour (at around 2:30 p.m.). The rules for

short-term markets left Entergy unable to acquire additional short-term power until

4:00 p.m.

26. The generation infrastructure is aging. Entergy's average unit age is 35 years,

while its newest unit currently on line is 20 years old. Currently, Entergy is in the

process of adding to its generation capability through a multi-billion-dollar

purchasing contract. This addition will increase Entergy's generation capability by

approximately 4,800 MW, but the age of its generation capability will remain an

issue for Entergy.

27. Dispatch software problems led to inefficient utilization of limited energy

resources. SPP had a major operating-reserve-sharing software problem that

resulted in the inability to "clear" reserve "markets" when the program came across

situations of insufficiency. SPP has placed a temporary "patch" into the program to

stop attempting to solve an infeasible problem. SPP's solution on July 23 was to

perform a series of small transactions between territories to maintain the system

economy. The number of manual transactions far outpaced what should have been

done.

3.8 Chicago

28. Load forecasting techniques and associated distribution planning tools failed to

adequately accommodate the effects of unusual summer weather conditions as

experienced in 1999. Planning has been based on "average" weather conditions,

meaning that load exceeds the design criterion approximately once in every 2 or

3 years. A criterion of 1 in 10 years is more commonplace in the industry. These

shortcomings were compounded by further uncertainty in predictions for individual

substation load levels. ComEd has now changed to a 99°F, four-hour movingaverage peak temperature as a basis for planning...

29. Emergency preparedness and management plans did not address distribution

problems. Although ComEd had an emergency plan for its bulk transmission and

generation system, it lacked a comparable level of preparation for dealing with .

distribution system problems. The response plans that were in place for extreme,

multiple distribution-level contingencies were inadequate. In particular:

' - 13 .

EE-RM-STD-98-440 COMMENT 132

3.8 Chicago 

EE-RM/STD-9S-440 -if- 13~~ 

Report of the DOE Power Outage Study Team on Electric Reliability Events o/the Summer of 1999 

25. Mechanisms for short-term power sales rely on multiple, often manual 

telecommunications, leading to inefficient and untimely outcomes. The shortterm power market and the steps required to enact a transaction present concerns.' 

These problems are associated with timing. The timing during which transactions . 

can be executed presents barriers to solving problems. Typically, for hour-ahead' 

power, the market clears no later than one-half-hour past the hour for the next hour. 

In the Entergy July 23 case,'this meant that information on the imminent loss of 

White Bluff Unit 1 and the loss of an additional 300 MW of interruptible power 

from TVA came after this point in the hour (at around 2:30 p.m.). The rules for 

short-term markets left Entergy unable to acquire additional short-term power until 

4:00 p.m. 

26. The generation infrastructure is aging. Entergy's average unit age is 35 years, 

while its newest unit currently on line is 20 years old. Currently, Entergy is in the 

process of adding to its generation capability through a multi-billion-dollar 

purchasing contract. This addition will increase Entergy's generation capability by 

approximately 4,800 MW, but the age of its generation capability will remain an 

issue for Entergy. 

27. Dispatch software problems led to inefficient utilization of limited energy 

resources. SPP had a major operating-reserve-sharing software problem that 

resulted in the inability to "clear" reserve "markets" when the program came across 

situations of insufficiency. SPP has placed a temporary "patch" into the program to 

stop attempting to solve an infeasible problem. SPP's solution on July 23 was to 

perform a series of small transactions between territories to maintain the system 

economy. The number of manual transactions far outpaced what should have been 

done. .- --

28. Load forecasting techniques and associated distribution planning tools failed to 

adequately accommodate the effects of unusual summer weather conditions as 

experienced in ll999. Planning has been based on "average" weather conditions, 

meaning that load exceeds the design criterion approximately once in every 2 or 

3 years. A criterion of 1 in 10 years is more commonplace in the industry. These 

shortcomings were compounded by further uncertainty in predictions for individual 

substation load levels. CornEd has now changed to a 99°F, four-hour movingaverage peak temperature as a basis for planning. . 

29. Emergency preparedness and management plans did not address distribution 

problems. Although CornEd had an emergency plan for its bulk transmission and 

generation system, it lacked a comparable level of preparation for· dealing with 

distribution system problems. The response plans that were in place for extreme, 

mUltiple distribution-level contingencies were inadequate. In particular: 

13 

.. :..~ 

.,. 

-, ".' 

-",,' . 
EE-RM/STD-98-440 - /_,0

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999

* Detailed distribution level load relief and emergency load interruption. ..

procedures were incomplete; :

* Under emergency conditions, information flows between the utility and

organizations affected by outages were perceived as inadequate by these

organizations; and

* ComEd's planning process has no measure (or metric) for assessing the risk of

multiple contingencies.

30. The distribution system topology is inflexible. The topology of the urban

distribution system lacked flexibility. In particular, its ability to shift load between

substations under contingency conditions was inadequate. The use of Y joints in

cables made it more difficult to locate a fault and increased the effects of cable ::

faults. Inconsistent protection philosophies tended to increase the duration of the

outages.

31. Substation protection and equipment configuration practices limited flexibility.

Some substation protection and equipment configuration practices also limited

flexibility in emergency response situations (which, when coupled with existing

equipment protection schemes, could force removal of both a failed transformer and

a working transformer paired with it).

32. Planned distribution system upgrades were not implemented on schedule.

Distribution system upgrades in progress were not completed in time for the

summer peak (e.g., an in-progress 69-kV to 138-kV substation transformer

upgrade).

33. Real-time information and historical records on distribution system conditions

were limited and were not always preserved. Less than full penetration of

supervisory control and data acquisition (SCADA) system technology hindered

complete monitoring of distribution system overload conditions. Each of the highvoltage substations (Northwest, Lakeview, and Jefferson) has SCADA. Most of the

4-kV portions of the distribution system that were interrupted as a result of the

12-kV cable failures do not have SCADA. Selection of SCADA data for long-term

"warehousing" excluded certain key measurements, such as feeder overloads, which

impeded the study of reliability trends. Also, the computer system that records

alarms overloaded and lost information that was needed to analyze the outage

chronology. (This problem was corrected in the aftermath of the summer outages.)

34. Maintenance planning did not consider transformer overload analysis.

Transformer overload analysis and reporting tools were generally not coordinated

with maintenance planning and programs.

35. Substation maintenance programs did not anticipate component weaknesses.

Many fixed, periodic, substation maintenance programs had been scaled back or

14

EE-RM-STD-98-440 COMMENT 132

EE-RM/STD-98-440 - tt:--/ 3 ~ 

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of J 999 

30. 

3l. 

32. 

33. 

34. 

35. 

14 

• Detailed distribution level load relief and emergency load interruption 

procedures were incomplete; -

• Under emergency conditions, information flows between the utility and 

organizations affected by outages were perceived as inadequate by these 

organizations; and 

• CornEd's planning process has no measure (or metric) for assessing the risk of 

multiple contingencies. 

The distribution system topology is inflexible. The topology of the urban 

distribution system lacked flexibility. In particular, its ability to shift load between 

substations under contingency conditions was inadequate. The use ofY joints in 

cables made it more difficult to locate a fault and increased the effects of cable :,. 

faults. Inconsistent protection philosophies tended to increase the duration of the 

outages. 

Substation protection and equipment configuration practices limited flexibility. 

Some substation protection and equipment configuration practices also limited 

flexibility in emergency response situations (which, when coupled with existing 

equipment protection schemes, could force removal of both a failed transformer and 

a working transformer paired with it). 

Planned distribution system upgrades were not implemented on schedule. 

Distribution system upgrades in progress were not completed in time for the . 

summer peak (e.g., an in-progress 69-kV to 138-kV substation transformer 

upgrade). 

Real-time information and historical records on distribution system conditions 

were limited and were not always preserved. Less than full penetration of . 

supervisory control and data acquisition (SCADA) system technology hindered 

complete monitoring of distribution system overload conditions. Each of the highvoltage substations (Northwest, Lakeview, and Jefferson) has SCADA. Most of the 

4-kV portions of the distribution system that were interrupted as a result of the 

12-kV cable failures do not have SCADA. Selection of SCADA data for long-term 

"warehousing" excluded certain key measurements, such as feeder over1oads, which 

impeded the study of reliability trends. A1so, the computer system that records 

alarms overloaded and lost information that was needed to analyze the outage 

chronology. (This problem was corrected in the aftermath of the summer outages.). 

Maintenance planning did not consider transformer overload' analysis. 

Transformer overload analysis and reporting tools were generally not coordmated 

with maintenance planning and programs. 

-.. 

Substation maintenance programs did not anticipate component weaknesses. 

Many fixeq, periodic, substation maintenance programs had been scaled back or 

'-".-

'.-
EE-RM/STD-98-440- /32.

Report of the DOE Power Outage Stud) Team on Electric Reliability Events of the Summer of 1999

discontinued in transition to a "reliability-centered maintenance"- philosophy.

However, the collection of data and measurements necessary for successful _

reliability-centered maintenance was not fully in place (e.g., the dissolved gas

analysis of oil-filled cables used to detect internal degradation and incipient failure

began only in the aftermath of the summer outages). In general, the ability to predict

possible component failures from the inspections that were performed and data that

were collected was limited.

36. Maintenance management contributed to the severity of the outages.

Management of maintenance activities was weak; tracking of inspection and

maintenance processes was incomplete and poor; and employee training and skill

levels were inappropriately matched to inspection duties (as documented in the case

of aerial inspection of transmission conductors and insulators). A large backlog of

desired corrective and preventive maintenance activities had accumulated in the

year preceding the outages.

37. Transmission and distribution maintenance expenditures declined over time

and became inadequate. T&D maintenance expenditures declined dramatically

and consistently from 1991 to 1998. The decline coincided with other cost pressures

faced by ComEd, including those associated with nuclear plant maintenance and

industry restructuring.

38. Several business factors compromised reliability performance. While many

individual "pieces" of reliability activity were in place (e.g., ComEd's participation

in a joint Electric Power Research Institute (EPRI)-led project on reliability data

mining), overall reliability performance was compromised by inadequate links .

between new business strategies (such as reliability-centered maintenance), resource

allocation, employee training and supervision, and reliability-relevant data

collection and analysis tools currently used in the field.

15

EE-RM-STD-98-440 COMMENT 132

EE-RM/STD-98-440 4-(3e:Z, 

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999 

discontinued in transition to a "reliability-centered maintenance". philosophy. 

However, the collection of data and measurements necessary for successful . 

reliability-centered maintenance was not fully in place (e.g., the dissolved gas 

analysis of oil-filled cables .used to detect internal degradation and incipient failure 

began only in the aftermath of the summer outages). In general, the ability to predict 

possible component failures from the inspections that were performed and data that 

were collected was limited. 

36. Maintenance management contributed to the severity of the outages. 

Management of maintenance activities was weak; tracking of inspection and 

maintenance processes was incomplete and poor; and employee training and skill 

levels were inappropriately matched to inspection duties (as documented in the case 

of aerial inspection of transmission conductors and insulators). A large backlog of 

desired corrective and preventive maintenance activities had accumulated in:the 

year preceding the outages. 

37. Transmission and distribution maintenance expenditures declined over time 

and became inadequate. T &D maintenance expenditures declined dramatically 

and consistently from 1991 to 1998. The decline coincided with other cost pressures 

faced by CornEd, including those associated with nuclear plant maintenance and 

industry restructuring. 

38. Several business factors compromised reliability performance. While many 

individual "pieces" of reliability activity were in place (e.g., CornEd's participation 

in a joint Electric Power Research Institute (EPRI)-led project on reliability data 

mining), overall reliability performance was compromised by inadequate links . 

between new business strategies (such as reliability-centered maintenance), resource 

allocation, employee training and supervision, and reliability-relevant data 

collection and analysis tools currently used in the field. 

1$ 

'" . 
EE-RM/STD-98-440 O.-- 3 

Section 4

Process for Soliciting Public Input

Following release of the Interim Report on January 4, 2000, POST conducted three

technical workshops at which the team heard public comments and recommendations on

appropriate actions that the federal government could take to address the findings

described in Section 3 of this report. The workshops listed below were organized around

the five topics used in the Interim Report to group the findings4:

* January 20, 2000: San Francisco, California

- Transition to Competitive Energy Service Markets

- Regulatory Policy for Reliable Transmission and Distribution

* January 24, 2000: New Orleans, Louisiana

- Information Resources

- Operations Management and Emergency Response

* January 27, 2000: Newark, New Jersey

-Reliability Metrics, Planning, and Tracking

The workshops were well attended, with more than 150 individuals participating in

one or more of the sessions. Attendance reflected a broad cross-section of stakeholders in

today's electricity industry, including utilities, ISOs, marketers, union representatives,

state regulators, local officials, NERC, trade associations, consumer advocates, EPRI,

equipment vendors, and industry consultants. The team also received more than

70 written comments through its web site, by mail, and by fax. Appendix A contains an

integrated summary of the input received at the technical workshops and via the web site,

by mail, and by fax.

POST has found the technical workshops and public comment process to be an

invaluable source of input for the development of its recommendations. Around the

country, POST observed a deep interest in reliability. In developing its

recommendations, the team relied on these comments to supplement and enhance its own

analysis and expertise.

4 Each workshop also provided opportunities for public comment on any of the other findings and

topic areas.

16

EE-RM-STD-98-440 COMMENT 132

EE-RM/STO-9S-440-# /3C:Z 

Section 4 

Process for Soliciting Public Input 

16 

Following release of the Interim Report on January 4,2000, POST conducted three 

technical workshops at which the team heard public comments and recommendations on 

appropriate actions that the federal government could take to address the findings 

described in Section 3 of this report. The workshops listed below were organized around 

the five topics used in the Interim Report to group the findings4: 

• January 20, 2000: San Francisco, California 

- Transition to Competitive Energy Service Markets 

- Regulatory Policy for Reliable Transmission and Distribution 

• January 24, 2000: New Orleans, Louisiana 

- Information Resources 

- Operations Management and Emergency Response 

• January 27, 2000: Newark, New Jersey 

- Reliability Metrics, Planning, and Tracking 

The workshops were well attended, with more than 150 individuals participating in 

one or more of the sessions. Attendance reflected a broad cross-section of stakeholders in 

today's electricity industry, including utilities, ISOs, marketers, union representatives, 

state regulators, local officials, NERC, trade associations, consumer advocates, EPRI, . 

equipment vendors, and industry consultants. The team also received more than . 

70 written comments through its web site, by mail, and by fax. Appendix A contains an 

integrated summary of the input received at the technical workshops and via the web site, 

by mail, and by fax. 

POST has found the technical workshops and public comment process to be an 

invaluable source of input for the development of its recommendations. Around the 

country, POST observed a deep interest in reliability. In developing its 

recommendations, the team relied on these comments to supplement and enhance its own 

analysis and expertise. 

4 Each workshop also provided opportunities for public comment on any of the other findings and 

topic areas. 
EE-RM/STD-98-440 --S / 3

Section 5

Recommendations tothe

Secretary of Energy -

The U.S. electric industry is in a state of transition. Formerly full-service utilities

are divesting, merging, and reorganizing in an effort to maximize their opportunities in a

restructured industry. New market entrants are seeking to expand their presence within

the industry, and new institutions are emerging to operate the grid.

It is uncertain what the industry will look like following restructuring or the time

frame in which it will be realized. What is certain is that ensuring reliable electric service

will be an essential requirement throughout. The POST members recognize that . :

adequately balancing public interest in reliability with its associated costs will be an

ongoing challenge.

The recommendations offered to the Secretary of Energy in this report are based on

the findings developed by POST following its study of significant reliability events from

the summer of 1999. Some recommendations support ongoing federal programs. Others

address areas of new or increased federal involvement. These recommendations for

federal actions on reliability are not intended to be all inclusive. Some aspects of

reliability are beyond the scope of this report.

POST's recommendations reflect the basic premise that, while markets and-industry :-

should address issues related to reliability, the federal government has a fundamental .-

responsibility for ensuring that the public's interests are fully represented. Moreover,

many stakeholders, including state and local governments, share this responsibility.

Systems developed by the industry have evolved to protect electric reliability; however,

these systems need to be overhauled to address the needs of a changing industry.

Nevertheless, they are the appropriate starting points for any required changes. For

example, POST recommends that the federal government support management of electric

grids by a self-regulating reliability organization that has federal oversight to make

compliance with reliability standards mandatory.

Further, POST recommends increased federal leadership in selected areas, such as

comprehensive restructuring legislation, reliability-enhancing activities by federal

utilities, and facilitating regional solutions for siting. The team recognizes that federal

leadership in these areas may be controversial but maintains that leadership is essential

for ensuring reliability.

It is important to recognize that electric reliability and efficient electricity markets

are inextricably intertwined. Just as markets cannot be designed without considering

reliability, the mechanisms for reliability in a competitive market cannot be effectively

implemented without a clear understanding of how markets will work. As we move

toward regional, and even national, electricity markets, regional and national solutions -

for reliability of the bulk-power system must be considered. In the interest of reliability,

17

EE-RM-STD-98-440 COMMENT 132

'~ . 

E~.RM/STD.98.440 -#- 13~ 

Section 5 

Recommendations to the . " 

Secretary of Energy-::- ' . .-

The U.S. electric industry is in a state of transition. Fonnerly full-service utilities 

are divesting, merging, and reorganizing in an effort to maximize their opportunities in a 

restructured industry. New market entrants are seeking to expand their presence within 

the industry, and new institutions are emerging to operate the grid 

It is uncertain what the industry will look like following restructuring or the time 

frame in which it will be realized. What is certain is that ensuring reliable electric service 

will be an essential requirement throughout. The POST members recognize that 

adequately balancing public interest in reliability with its associated costs will be ail 

ongoing-challenge. 

The recommendations offered to the Secretary of Energy in this report are based on 

the findings developed by POST following its study of significant reliability events from 

the summer of 1999. Some recommendations support ongoing federal programs. Othersaddress areas of new or increased federal involvement:These recommendations for 

federal actions on reliability are not intended to be all inclusive. Some aspects of _ 

reliability are beyond the scope of this report. 

POST's recommendations reflect the basic premise that, while markets and industry 

should address issues related to reliability, the federal government has a fundamental -

responsibility for ensuring that the public's interests are fully represented. Moreover, 

many stakeholders, including state and local governments, share this responsibility. 

Systems developed by the industry have evolved to protect electric reliability; however, 

these systems need to be overhauled to address the needs ofa changing industry. 

- Nevertheless, they are the appropriate starting points for any required changes. For 

example, POST recommends that the federal government support management of electric 

grids by a self-regulating reliability organization that has federal oversight to make 

compliance with reliability standards mandatory. 

Further, POST recommends increased federal leadership in selected areas, such as 

comprehensive restructuring legislation, reliability-enhancing activities by federal 

utilities, and facilitating regional solutions for siting. The team recognizes that federal 

leadership in these areas may be controversial but maintains that leadership is essential 

for ensuring reliability. -

It is important to recognize that electric reliability and efficient elec_tricity markets' 

are inextricably intertwined. Just as markets cannot be designed without considering 

reliability, the mechanisms for reliability in a competitive market cannot be effectively -' 

implemented without a clear understanding of how markets will work. As we move -

toward regional, and even national, electricity markets, regional and national solutionsfor reliability of the bulk-power system must be considered. In the interest of reliability, -

.17 

.. ' .- - ~ 

.. :", -
EE-RM/STD-98-440- /3 ; :

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999 - -. -

it is imperative that a comprehensive, not a piecemeal, approach be taken, while, atthe :

same time, respecting traditional state roles.

POST also recommends enhancing federal activities in areas where federal roles are

already well established, such as in facilitating exchanges of information, conducting

public interest R&D, and monitoring reliability issues. The team has identified several

areas where increased federal support for these activities is especially warranted at this

time. The POST prefaces these actions by noting that effectiveness will be maximized by

undertaking them in close partnership with industry stakeholders.

In this report, POST submits twelve recommendations for consideration by the

Secretary of Energy. The following recommendations are designed to help avoid future

power outages. One or more possible federal actions are suggested along with each

recommendation. Following each recommendation are numbers that correlate to the

findings in Section 3. Table 2 also lists the recommendations and their associated

findings (at the end of this section).

1. Promote market-based approaches to ensure reliable electric services.

(addresses Findings 1-3, 10, 12, 19, and 37)

Restructuring is based on the fundamental principle that competition and markets,

not regulators and utilities, result in better investment and operating decisions with

respect to generation and consumption of electricity. Mechanisms that will ensure

adequate supplies of electricity - and reliable operations - should be designed with

this principle in mind. The value of reliability needs to be determined in competitive

markets, and customers, as well as energy providers, need to have the opportunity to

participate in markets for energy and ancillary services - and profit from that

participation. Yet, because electric service is provided through a network, it has aspects

of a public good and may be underprovided by private entities. Guidance is needed to

ensure that the public interest is adequately captured.

Many states have made significant progress in developing competitive electricity

markets. However, efforts in developing market-based mechanisms for promoting

electric reliability - for example, allowing customers to participate in energy and

ancillary service markets - have been less aggressive. Developers of these mechanisms

must explicitly account for the broad geographic scope of today's electricity markets,

which can extend across multiple states and regions of the country. 5 Although states have

a definite role in regulating utilities and protecting consumers, there is also an important

federal role: to improve the operation of power markets by providing leadership,

direction, and consistency across the country.

5 The U.S. electric power system consists of just three distinct interconnections; trade can be.

conducted throughout an interconnection. For example, a generator in Minnesota can sell to a

customer in Florida.

18 - '.

EE-RM-STD-98-440 COMMENT 132

EE-RM/STD-98-440 - # J:3 ~ .' 

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999 

18 

it is imperative that a comprehensive, not a piecemeal,approach be taken, while, at1he . 

same time, respecting traditional state roles. . 

POST also recommends enhancing federal activities in areas where federal roles are . 

already well established, such as in facilitating exchanges of information, conducting . 

public interest R&D, and monitoring reliability issues. The team has identified several . 

areas where increased federal support for these activities is especially warranted at this 

time. The POST prefaces these actions by noting that effectiveness will be maximized by 

undertaking them in close partnership with industry stakeholders. 

In this report, POST submits twelve recommendations for consideration by the 

Secretary of Energy. The following recommendations are designed to help avoid future 

power outages. One or more possible federal actions are suggested along with each 

recommendation. Following each recommendation are numbers that correlate to the. 

fmdings in Section 3. Table 2 also lists the recommendations and their associated' 

fmdings (at the end of this section). 

1. Promote market-based approaches to ensure reliable electric services,. 

(addresses Findings 1-3, 10, 12, 19, and 37) 

Restructuring is based on the fundamental principle that competition and markets, 

not regulators and utilities, result in better investment and operating decisions with . 

respect to generation and consumption of electricity. Mechanisms that will ensure 

adequate supplies of electricity - and reliable operations - should be designed with 

this principle in mind. The value of reliability needs to be determined in competitive 

markets, and customers, as well as energy providers, need to have the opportunity to 

participate in markets for energy and ancillary services - and profit from that . 

participation. Yet, because electric service is provided through a network, it has aspects 

of a public good and may be underprovided by private entities. Guidance is ne'eded to .. 

ensure that the public interest is adequately captured. 

Many states have made significant progress in developing competitive electricity . 

markets. However, efforts'in developing market-based mechanisms for promoting -

electric reliability - for example, allowing customers to participate in energy and 

ancillary service markets - have been less aggressive. Developers of these mechanisms . 

must explicitly account for the broad geographic scope oftoday's elec'tricity markets, 

which can extend across multiple states and regions of the country.5 Although states have 

a definite role in regulating utilities and protecting consumers, there is also an important _" 

federal role: to improve the operation of power markets by providing leadership, 

direction, and consistency across the country. 

5 The U.S. electric power system consists of just three distinct interconnections; trade can be . 

conducted throughout an interconnection. For example, a generator in Minnesota can sell to a 

customer in Florida. 
EE-RM/STD-98-440- + /2- -

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999

Action for federal consideration:

Support the implementation offair, efficient, and transparent markets for

electric power and ancillary services.

Depending on markets to ensure reliability requires well-functioning exchange

forums. Energy and ancillary services should be defined uniformly so that performance

or delivery can be verified easily. Standard contract terms and conditions are needed to

clarify obligations and responsibilities. Prices for energy and ancillary services should be

widely available so that buyers and sellers can make informed decisions. ISOs and

system operators should be encouraged to make real-time market prices and information

on system conditions widely available. Finally, prices should accurately reflect supply

and demand. Mechanisms to monitor and curtail abuses of market power must be

enhanced. The federal government should ensure that these threshold conditions are met

by efforts to create and implement markets for electric services around the country.

2. Enable customer participation in competitive electricity markets.

(addresses Findings 1, 2, 10, 19, and 20)

The ability of customers to manage their demand in response to market prices is the

key to ensuring both reliable electric service and an efficiently functioning, competitive

electricity market. POST agrees with public comments received that meaningful

customer participation is a prerequisite for achieving the full reliability benefits of

restructuring. To more fully participate in a competitive market, customers must be able

to see real-time prices (if they choose to do so) and have access to the communication

and control technologies that will enable them to participate directly.

Actions for federal consideration:

Support the development of market rules that allow customers to supply load

reductions and ancillary services in competitive energy markets.

The market rules for competitive energy markets evolved from rules used to govern

operations and energy transactions involving large generating units. It is not surprising

that many rules assume that generating technologies will provide energy and ancillary

services. Functional, rather than technology-dependent, specifications are needed fordelivering energy and providing ancillary services so that customers can participate. The

federal government should support the development and adoption of market rules that

ensure reliability by providing for broad and meaningful customer participation in

competitive markets for energy and ancillary services.

*Encourage development of demand management systems that support electric ..

reliability.

Price visibility is an important prerequisite for efficient markets. For customers to

participate in markets for energy and ancillary services, price visibility must be coupled

19

EE-RM-STD-98-440 COMMENT 132

EE-RM/STD-98-440 -~ / 3"~ " "." 

Report a/the DOE Power Outage Study Team on Electric Reliability Events a/the Summer 0/1999 

Action for federal consideration: 

Support the implementation oj Jair, efficient, and transparent markets Jor 

electric power and ancillary services. 

Depending on markets to ensure reliability requires well-functioning exchange 

forums. Energy and ancillary services should be defined unifonnly so that performance 

or delivery can be verified easily. Standard contract terms and conditions are needed to 

clarify obligations and responsibilities. Prices for energy and ancillary services should be 

widely available so that buyers and sellers can make informed decisions. ISOs and 

system operators" should be encouraged to make real-time market prices and information 

on system conditions widely available. Finally, prices should accurately reflect supply 

and demand. Mechanisms to monitor and curtail abuses of market power must be 

enhanced. The federal government should ensure that these threshold conditions are met 

by efforts to create and implement markets for electric services around the country. 

2. Enable customer participation in competitive electricity markets. 

(addresses Findings 1,2,10,19, and 20) 

The ability of customers to manage their demand in response to market prices is the 

key to ensuring both reliable electric service and an efficiently functioning, competitive 

electricity market. POST agrees with public comments received that meaningful 

customer participation is a prerequisite for achieving the full reliability benefits of 

restructuring. To more fully participate in a competitive market, customers must be able 

to see real-time prices (if they choose to do so) and have access to the communication" 

and control technologies that will enable them to participate directly. 

Actions for federal consideration: 

• Support the development oj market rules that allow customers to supply load 

reductions and ancillary services in competitive energy markets. 

The market rules for competitive energy markets evolved from rules used to govern 

operations and energy transactions involving large generating units. I~ is not surprising 

that many" rules assume that generating technologies will provide energy and ancillary 

services. Functional, rather than technology-dependent, specifications are needed for" " 

delivering energy and providing ancillary services so that customers can participate. The 

federal government should support the development and adoption of market rules that 

ensure reliability by providing for broad and meaningful customer participation in 

competitive markets for energy and ancillary services. " 

• Encourage development oj demand management systemS that support electric" " 

reliability. 

Price visibility is an important prerequisite for efficient markets. For customers to 

participate in markets for energy and ancillary services, price visibility must be coupled 

19 
EE-RM/STD-98-440 -ff /5BP

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999 '

with communication and control technologies that enable customers to receive, interpret,

and respond to prices. The federal government should support the development and

demonstration of demand management technologies, systems, and approaches that will

allow customers to participate in competitive energy markets.

3. Remove barriers to distributed energy resources.

(addresses Findings 1, 2, 10, and 19)

There is currently great interest in relying more heavily on distributed generation

technologies to help utilities respond more rapidly to an increased demand for electricity

in areas where demand is already high. At the same time, utilities are striving to improve

the quality of power to customers. Many argue that barriers impede market-driven

acceptance of these technologies. The federal government should target this area for

special attention and review and remove these barriers, as needed.

Actions for federal consideration:

Support the development of interconnection standards for distributed energy

resources.

Interconnection practices for distributed energy resources vary widely across the

country. Greater uniformity in these practices should lower installation and operating

costs, without diminishing the importance of worker safety, system reliability, and

customer protection needs. Industry-led forums, such as those sponsored by the Institute

of Electrical and Electronics Engineers, are leading the way in developing a consensus

on this subject, largely due to support from DOE. The federal government should

continue these efforts - and enhance their effectiveness - by encouraging local

jurisdictions to adopt them and by promoting the development of testing and verification

procedures.

*Support state-led efforts to address regulatory disincentives for integrating

customer supply and demand solutions.

Current ratemaking practices are disincentives for distributed resources. In many

jurisdictions, reduction of load (through either customer-owned distributed generation or

other load-reduction technologies) may be profitable to utility distribution companies

only during periods of peak demand. From a customer's perspective, however,

investments in these technologies may have an economic value. During periods of peak

demand, load reduction could improve reliability by reducing demand on stressed

electric systems. The federal government should support state efforts to identify and

address mismatches between traditional ratemaking approaches and public policies

appropriate for reliability-enhancing distributed energy resources in a restructured

electric industry.

20

EE-RM-STD-98-440 COMMENT 132

EE-RM/STD-98-440 - tt /3b1..... 

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999 

20 

with communication and control technologies that enable customers to receive, interpret, . 

and respond to prices. The federal government should support the development and 

demonstration of demand management technologies, systems, and approaches that will .. .' I 

allow customers to participate in competitive energy markets. 

3. Remove barriers to distributed energy resources. 

(addresses Findings 1,2,10, and 19) 

There is currently !,'Teat interest in relying more heavily on distributed generation 

technologies to help utilities respond more rapidly to an increased demand for electricity 

in areas where demand is already high. At the same time, utilities are striving to improve 

the quality of power to customers. Many argue that barriers impede market-driven 

acceptance of these technologies. The federal government should target this area for 

special attention and review and remove these barriers, as needed. 

Actions for federal consideration: 

Support the development oj interconnection standards Jor distributed energy 

resources. 

Interconnection practices for distributed energy resources vary widely across the 

country. Greater uniformity in these practices should lower installation and operating 

costs, without diminishing the importance of worker safety, system reliability, and 

customer protection needs. Industry-led forums, such as those sponsored by the Institute 

of Electrical and Electronics Engineers, are leading the way in·developing a consensus 

on this subject, largely due to support from DOE. The federal goveminent should 

continue these efforts - and enhance their effectiveness - by encouraging local 

jurisdictions to adopt them and by promoting the development of testing and verification 

procedures. 

• Support state-led e.JJorts to address regulatory disincentives Jor integrating 

customer supp~y and demand solutions. 

Current ratemaking practices are disincentives for distributed reliources. In many 

jurisdictions, reduction of load (through either customer-owned distributed generation m 

other load-reduction technologies) may be profitable to utility distribution companies. 

only during periods of peak demand. From a customer's perspective, however, 

investments in these technologies may have an economic value. During periods of peak 

demand, load reduction could improve reliability by reducing demand on stressed 

electric systems. The federal government should support state efforts to identify and 

address mismatches between traditional ratemaking approaches and public policies . 

appropriate for reliability-enhancing distributed energy resources in a restructured 

electric industry. 
EE-RM/STD-98-440-4t /± 3

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999 '

Study the potentialfor using emergency backup generators to reduce system -: :.

demands to help avoid power outages.

A large installed base of emergency backup generation exists that is currently

deployed only after actual power outages. Operating these generators in advance of

system emergencies can reduce stress on a system and possibly avoid outages. However,

operating these generators to avoid outages is complicated because of the lack of

incentives for backup generation owners; the need for demonstrations of communication,

control, and system protection technologies; and current environmental restrictions. The

federal government should study these issues and, where appropriate, take actions to

remove barriers to the use of backup generation to enhance system reliability.

4. Support mandatory reliability standards for bulk-power systems.

(addresses Findings 4, 11, 21, 24, and 36-38)

Today, the interconnected electric power system is being transformed from one that

was primarily designed to serve the customers of full-service utilities, each integrated

across the generation, transmission, and distribution functions, to one that will support a

vibrant, competitive market. This change makes the current system of voluntary

compliance with reliability standards inadequate for ensuring reliability. Mandatory

standards for bulk-power systems are needed to ensure that the "rules of the road" are

implemented in a straightforward and balanced manner.

Action for federal consideration:

Support the creation of a self-regulated reliability organization with federal

oversight to develop and enforce reliability standards for bulk-power systems as

part of a comprehensive plan for restructuring the electric industry.

Industry-led voluntary reliability standards for bulk-power system operation and

planning have worked effectively since their inception. These efforts are the logical and

appropriate starting point to change from voluntary to mandatory standards. The federal

government should continue its support for this evolutionary process by authorizing the

creation of a self-regulated reliability organization with federal oversight to ensure

compliance with reliability standards. However, this effort should not be undertaken in

isolation. It must be treated as an integral element of a comprehensive plan for

restructuring the industry. A piecemeal approach that treats reliability in isolation would

compromise reforms needed in other arenas linked to reliability (e.g., more efficient

markets, regional operations of grids).

5. Support reporting and sharing of information on "best practices."

(addresses Findings 5-9, 11, 15-18, 21, 22, 24, 27, and 29-38)

Many forums for exchanging information on "best practices" for maintaining and

operating electric generation, transmission, and distribution systems already exist.

However, concerns exist about the consistency of some information (such as reliability

21

EE-RM-STD-98-440 COMMENT 132

EE-RM/STD-98-440 --tt: /3;;z. 

Report oj the DOE Power Outage Study Team on Electric Reliability Events oj the Summer oj 1999 _, 

Study the potential Jor using emergency backup generators to reduce syste11l - __ 

demands to help avoid power outages. 

A large instaIJed base of emergency backup generation exists that is currently 

deployed only after actual power outages. Operating these generators in advance of 

system emergencies can reduce stress on a system and possibly avoid outages. However, 

operating these generators to avoid outages is complicated because of the lack of 

incentives for backup generation owners; the need for demonstrations of communication, 

control, and system protection technologies; and current environmental restrictions. The 

federal government should study these issues and, where appropriate, take actions to 

remove barriers to the use of backup generation to enhance system reliability. 

4. Support mandatory reliability standards for bulk-power systems. 

(addresses Findings 4, 11,21,24, and 36-38) 

Today, the interconnected electric power system is being transformed from one that 

was primarily designed to serve the customers of fuIJ-service utilities, each integrated 

across the generation, transmission, and distribution functions, to one that will support a 

vibrant, competitive market. This change makes the current system of voluntary 

compliance with reliability standards inadequate for ensuring reliability. Mandatory 

standards for bulk-power systems are needed to ensure that the "rules of the road" are 

implemented in a straightforward and balanced manner. 

Action for federal consideration: 

Support the creation oj a selJ-regulated reliability organization with Jederal 

oversight to develop and enforce reliability standards for bulk-power systems ~ 

part of a comprehensive plan Jor restructuring the electric industry. -

Industry-led voluntary reliability standards for bulk-power system operation and 

plmming have worked effectively since their inception. These efforts are the logical and 

appropriate starting point to change from voluntary to mandatory standards. The federal 

government should continue its support for this evolutionary process by authorizing the 

creation of a self-regulated reliability organization with federal oversight to ensure , 

compliance with reliability standards. However, this effort should not be undertaken in 

isolation. It must be treated as an integral element of a comprehensive plan for- _ 

restructuring the industry. A piecemeal approach that treats reliability in isolation would 

compromise reforms needed in other arenas linked to reliability (e.g., more efficient 

markets, regional operations of grids). 

5. Support reporting and sharing of information on "best practices." 

(addresses Findings 5-9,11,15-18,21,22,24,27, and 29-38) 

Many forums for exchanging information on "best practices" for maintaining- and 

operating electric generation, transmission, and distribution systems already exist. 

However, concerns exist about the consistency of some information (such as reliability 

21 
EE-RM/STD-98-440 - /3:-

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999. .

indices), the availability of data to all industry stakeholders, and the continued viability

of these forums in a restructured industry. The federal government could play an

important role in enhancing the definition, collection, and sharing of information. It

should work in close partnership with states and other industry stakeholders as it

develops this role.

Actions for federal consideration:

Promote the use of uniform definitions and measurements for reliability-related

information.

Industry-led groups have developed a number of measurements for reliability. As

reliability becomes more of a commodity that customers can select and pay for, increased

uniformity in definitions and measurements is needed, and new measures of reliability

should be developed. The federal government should promote these efforts.

*Facilitate the collection and sharing of information on reliability-related

regulatory issues among state public utility commissions.

Oversight and regulation of distribution system reliability are state responsibilities.

Among many other things, restructuring is requiring state public utility commissions

(PUCs) to re-examine, and, where appropriate, modify policies for reliability. The

effectiveness of these state-led activities is enhanced by information sharing among these '

commissions. The federal government should support these activities by working with

national organizations, such as the National Association of Regulatory Utility

Commissioners, to facilitate the collection and sharing of information on comparative

utility reliability performance, service reliability standards, and regulatory policies and

incentives for reliability. Information on reliability policies in other countries, where, for

example, utilities are penalized and customers are compensated for outages, may be

especially helpful. Similarly, better information on the value customers place on (and

their willingness and ability to pay for) reliability should be especially helpful in

establishing future regulatory policies for reliability.

* Support activities to develop and share information among industryparticipants

on critical resources and industry practices.

In response to concerns that information sharing among utilities may become a -

greater concern because of restructuring the industry, the federal government should

begin to assess existing forums for information exchange and, if necessary, examine

ways to enhance them or develop complementary forums. Information on the availability

of critical T&D equipment and on best practices for distribution system maintenance

should be considered first. Electronic media, such as web sites, should be considered as

possible forums for facilitating these exchanges. .

22

EE-RM-STD-98-440 COMMENT 132

EE-RM/STO-9S-440-# /3~.·· 

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999. 

22 

indices), the availability of data to all industry stakeholders, and the continue.d viability .. 

of these forums in a restructured industry. The federal government could play an 

important role in enhancing the definition, collection, and sharing of infonnation. It 

should work in close partnership with states and other industry stakeholders as it 

develops this role. 

Actions for federal consideration: 

• Promote the use of uniform definitions and measurements for reliability-related 

information. 

Industry-led groups have developed a number of measurements for reliability. As 

reliability becomes more of a commodity that customers can select and pay for, increased 

unifonnity in definitions and measurements is needed, and new measures of reliability . 

should be developed. The federal government should promote these efforts. 

• Facilitate the collection and sharing of information on reliability-related 

regulatory issues among state public utility commissions. 

Oversight and regulation of distribution system reliability are state responsibilities. 

Among many other things, restructuring is requiring state public utility commissions 

(PUCs) to re-examine, and, where appropriate, modify policies for reliability. The . 

effectiveness of these state-led activities is enhanced by information sharing among these· . 

commissions. The federal government should support these activities by working with 

national organizations, such as the National Association of Regulatory Utility 

Commissioners, to facilitate the collection and sharing of information on comparative· 

utility reliability perfonnance, service reliability standards, and regulatory policies and 

incentives for reliability. Infonnation on reliability policies in other countries, where, for 

example, utilities are penalized and customers are compensated for outages, may be 

especially helpful. Similarly, better infonnation on the value customers place on (and 

their willingness and ability to pay for) reliability should be especially helpful in 

establishing future regulatory policies for reliability. . 

• Support activities to develop and share information among industry participants 

on critical resources and industry practices. 

In response to concerns that information sharing among utilities may become a 

greater concern because of restructuring the industry, the federal government should 

begin to assess existing forums for information exchange and, if necessary, examine 

ways to e~ance them or develop complementary forums. Information on the availability 

of critical T &D equipment and on best practices for distribution System maintenance 

should be considered first. Electronic media, such as web sites, should be considered as' . 

possible forums for facilitating these exchanges. 

'. :;: 
EE-RM/STD-98-44q 04 /37

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999

6. Enhance emergency preparedness activities for low-probability,

high-consequence events on bulk-power systems.

(addresses Findings 3, 4, 9, 20, 23, and 29)

Emergencies on bulk-power systems affect large geographic areas, involve many

stakeholders, and affect millions of customers. The events of the summer of 1999

demonstrated that effective communication and coordination among many parties are

critical during times of system emergencies. The federal government should actively

support efforts to continually review and improve planning and response capabilities.

Action forfederal consideration:

Work with regional, state, and local authorities to support continuous

improvement in coordination, planning, and preparations to respond to .. :

electricity emergencies.

A critical element of emergency preparedness by industry participants is

coordination with and among federal, regional, state, and local authorities. The federal

government can play an important role in facilitating coordination among these

authorities and with the industry in responding to power system emergencies. The federal

government should work with these parties to help improve and better coordinate these

responses.

7. Demonstrate federal leadership through promotion of best reliability practices

at federal utilities.

(addresses Findings 1, 2, and 19)

Federal utilities are unique assets that have long pursued many federal and regional

objectives, ranging from power production to agricultural and economic development.

As part of their role, these utilities have served as research and development catalysts for

technological changes within the industry. Piloting new reliability initiatives would be

consistent with this historic leadership role.

Actionsforfederal consideration:

* Develop and pilot reliability self-assessmentprocedures.

Federal utilities should continue to promote best reliability practices through an

ongoing process of self-assessment. In addition, power marketing administrations should

continue to support their respective generating agencies in those areas that involve the

reliability of hydropower facilities.

Federal utilities should continue to participate in continued development of pilot

programs to incorporate new criteria and compliance monitoring for future phases of

reliability programs. These programs should provide opportunities for self-assessment,

23

EE-RM-STD-98-440 COMMENT 132

EE-RM/STD-98-440- # 13~· 

Report o/the DOE Power Outage Study Team on Electric Reliability Events o/the Summer of 1999 . 

6. Enhance emergency preparedness activities for low-probability, 

high-consequence events on bulk-power systems. 

(addresses Findings 3, 4, 9, 20, 23, and 29) 

Emergencies on bulk-power systems affect large geographic areas, involve many 

stakeholders, and affect millions of customers. The events of the summer of 1999 

demonstrated that effective communication and coordination among many parties are 

critical during times of system emergencies. The federal government should actively 

support efforts to continually review and improve planning and response capabilities. 

Action for federal consideration: 

• Work with regional, state, and local authorities to support continuous 

improvement in coordination, planning, and preparations to respond to 

electricity emergencies. 

A critical element of emergency preparedness by industry participants is 

coordination with and among federal, regional, state, and local authorities. The federal 

government can play an important role in facilitating coordination among these 

authorities and with the industry in responding to power system emergencies. The federal 

government should work with these parties to help improve and better coordinate these 

responses. 

7. Demonstrate federal leadership through promotion of best reliability practices 

at federal utilities. 

(addresses Findings 1,2, and 19) 

Federal utilities are unique assets that have long pursued many federal and regional 

objectives, ranging from power production to agricultural and economic development. 

As part of their role, theseutiIities have served as research and development catalysts for 

technological changes within the industry. Piloting new reliability initiatives would be 

consistent with this historic leadership role. 

Actions for federal consideration: 

• Develop and pilot reliability self-assessment procedures. 

Federal utilities should continue to promote best reliability practices through an -' 

ongoing process of self-assessment. In addition, power marketing administrations should 

continue to support their respective generating agencies in those areas that involve the 

reliability of hydropower facilities. 

Federal utilities should continue to participate in continued development of pilot 

programs to incorporate new criteria and compliance monitoring for future phases of 

reliability programs. These programs should provide opportunities for self-assessment, 

23 

. : ... 
EE-RM/STD-98-440-- /3<p

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999

for monitoring and review of compliance, and for sanctions for noncompliance with

established reliability criteria.

Support distributed energy resources.

Federal utilities should support the development and facilitate the installation of

distributed energy resources, and they should explore ways for enhancing the reliability

of their transmission facilities by these installations. Federal utilities should also ensure

that their transmission policies aid in integrating electric distribution systems and energy

markets to increase reliability.

*Encourage economic energy efficiency.

Federal utilities should strive to implement energy-efficiency measures to reduce

the amount of power required to serve growing energy loads. In addition, they should

continue to develop programs to encourage their utility customers to invest in energy

efficiency.

8. Conduct public interest reliability-related research and development

consistent with the needs of a restructuring electric industry.

(addresses Findings 5-8, 13, 14, 17, 28, and 33)

Industry investments in reliability-related R&D have declined steadily over the past

few years. These declines have occurred at least in part because the "clients" for nextgeneration investments, such as regional transmission organizations, are still in their

formative stage. Furthermore, the independent system operators currently do not own the

transmission assets and are nonprofit institutions. A stable climate for private

investments in longer-range R&D conducted with the public's interest in mind does not

currently exist. Federal investments in public-interest, reliability-related R&D are

especially needed during this time of industry transition. POST strongly supports

Secretary Richardson's commitment to increase federal investments in electric reliability

R&D as provided for in the Administration's proposed fiscal year 2001 budget.

Actionsforfederal consideration:

Develop real-time system monitoring, communication, and control technologies.

Currently, individual technologies are available for enhancing reliability and

increasing trade over existing transmission lines (including Wide Area Measurement

System, flexible AC transmission systems (FACTS), and high-voltage DC transmission

technologies). However, continued demonstration of existing technologies, as well as

development of new technologies, is needed. Past federal investments in developing and

demonstrating some of these technologies, which were discontinued starting in the

mid-1990s, should be renewed to facilitate adoption of these technologies when a more

stable climate for investment by industry emerges.

24

EE-RM-STD-98-440 COMMENT 132

"., 

EE-RM/STD-98-440-# /3~":. 

" Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of J 999 

24 

for monitoring and review of compliance, and for sanctions for noncompliance with 

established reliability criteria. 

• Support distributed energy resources. 

Federal utilities should support the development and facilitate the installation of 

distributed energy resources, and they should explore ways for enhancing the reliability 

of their transmission facilities by these installations. Federal utilities should also ensure 

that their transmission policies aid in integrating electric distribution systems and energy 

markets to increase reliability. 

• Encourage economic energy efficiency. 

Federal utilities should strive to implement energy-efficiency measures to reduce 

the amount of power required to serve growing energy loads. In addition, they should 

continue to develop programs to encourage their utility customers to invest in energy 

efficiency. 

8. Conduct public interest reliability-related research and development 

consistent with the needs of a restructuring electric industry. 

(addresses Findings 5-8, 13, 14, 17,28, and 33) 

Industry investments in reliability-related R&D have declined steadily over the past 

few years. These declines have occurred at least in part because the "clients" for next- "" 

generation investments, such as regional transmission organizations; are still in their 

formative stage. Furthelmore, the independent system operators currently do not own the 

transmission assets and are nonprofit institutions. A stable climate for private 

investments in longer-range R&D conducted with the public's interest in mind doe~ not 

currently exist. Federal investments in public-interest, reliability-related R&D are . 

especially needed during this time of industry transition. POST strongly supports " 

Secretary Richardson's commitment to increase federal investments in electric reliability 

R&D as provided for in the Administration's proposed fiscal year 2001 budget. 

Actions for federal consideration: 

• Develop real-time system monitoring. communication. and control technologies. 

Currently, individual technologies are available for enhancing reliability and 

increasing trade over existing transmission lines (including Wide Area Measurement 

System, flexible AC transmission systems (FACTS), and high-voltage DC transmission 

technologies). However, continued demonstration of existing technologies, as well as 

development of new technologies, is needed. Past federal investments in developing and 

demonstrating some of these technologies, which were discontinued starting in the . 

mid-l 990s, should be renewed to facilitate adoption of these technologies when a more 

stable climate for investment by industry emerges. 

- " 
EE-RM/STD-98-440t7 /3Z --

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999

Create sensors, remote monitoring, and diagnostic technologies for cables and'

aging transmission and distribution infrastructure.

POST members heard much discussion regarding the value of improved cable

monitoring technologies and the need for better cable diagnostic techniques. At the same

time, the team heard that adoption of these technologies and techniques was simply a

matter of comparing cost to value, and that on that score, additional investments could

not be justified. Federal support for industry-led R&D to lower the costs and improve the

reliability of these technologies would clearly improve cable maintenance and reliability.

*Integrate customer demand management, distributed generation, and storage

technologies.

Currently, efforts to conduct the R&D necessary to support widespread integration

of demand management, distributed generation, and storage technologies are limited

because parties with the greatest vested interest are constrained in their ability to pursue

the necessary research. Utilities, on the one hand, face significant regulatory

disincentives to pursue research that, under current regulations, will erode revenues and

profits. Distributed energy resource equipment manufacturers lack proprietary

information on the design and operation of utility systems to explore promising new

approaches. Federally supported R&D activities are needed to explore new methods of

integrating and controlling distributed energy resources in ways that enhance system

reliability. An important focus of these activities should be development of technologies

that would allow these resources to participate directly in competitive markets for energy

and ancillary services.

Improve analytic models for loadforecasts, power system simulation, and

contingency assessments.

Uncertainty is a pervasive element of reliability planning and operations. Methods

and data are needed to better understand traditional sources of uncertainty (e.g., weather

and equipment performance), as well as new sources introduced by restructuring

(e.g., behavior of market participants). Federally sponsored R&D should spur the

accelerated transfer and testing of promising techniques from other fields to enhance

models used by the electricity industry.

Examine the design andperformance of competitive electricity markets.

A special need exists for unbiased public interest research on the design and

performance of competitive electricity markets. Interdisciplinary, science-based

approaches involving both market economics and power system engineering are

required. Federally sponsored R&D should support developing metrics, designing and

conducting experiments, analyzing performance, and testing alternatives.

25

EE-RM-STD-98-440 COMMENT 132

'-

EE-RM/STD-98-44~ I~ ... --

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer oj 1999 

• Create sensors, remote monitoring, and diagnostic technologies for cables and' 

aging transmission and distribution infrastructure. 

POST members heard much discussion regarding the value of unproved cable 

monitoring technologies and the need for better cable diagnostic techniques. At the same 

time, the team heard that adoption of these technologies and techniques was simply a 

matter of comparing cost to value, and that on that score, additional investments could 

not be justified. Federal support for industry-led R&D to lower the costs and improve the 

reliability of these technologies would clearly improve cable maintenance and reliability. 

• Integrate customer demand management, distributed generation, and storage 

technologies. 

Currently, efforts to conduct the R&D necessary to support widespread integration' 

of demand management, distributed generation, and storage technologies are limited 

because parties with the greatest vested interest are constrained in their ability to pursue 

the nec'essary research. Utilities, on the one hand, face significant regulatory 

disincentives to pursue research that, under current regulations, will erode revenues and 

profits. Distributed energy resource equipment manufacturers lack proprietary 

information on the design and operation of utility systems to explore promising new 

approaches. Federally supported R&D activities are needed to explore new methods of 

integrating and controlling distributed energy resources in ways that enhance system' 

reliability. An important focus of these activities should be development of technologies 

that would allow these resources to participate directly in competitive markets for energy 

and ancillary services. . . 

Improve analytic models for load forecasts, power system simulation, and 

contingency assessments. 

Uncertainty is a pervasive element of reliability planning and operations. Methods 

and data are needed to better understand traditional sources of uncertainty (e.g., weather 

and equipment performance), as well as new sources introduced by restructuring 

(e.g., behavior of market participants). Federally sponsored R&D should spur the 

accelerated transfer and testing of promising techniques from other fields to enhance 

models used by the electricity industry. . 

• Examine the design and performance of competitive electricity markets. 

A special need exists for unbiased public interest research on the design and 

performance of competitive electricity markets. Interdisciplinary, science-based 

approaches involving both market economics and power system engineering are .. . 

required. Federally sponsored R&D should support developing metrics, designing and' 

conducting experiments, analyzing performance, and testing alternatives. 

2S 

.' ~ . 
EE-RM/STD-98-440-9j /53

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999

9. Facilitate and empower regional solutions to the siting of generation and

transmission facilities.

(addresses Findings 1, 10, and 26)

Stable incentives for investing in generation and transmission must be

complemented by siting boards that can discharge their responsibilities in a timely and

coordinated fashion. Such boards need to address two primary problems. First, policies

among agencies, among states, between state and federal agencies, and among federal

agencies overlap and sometimes conflict. Second, parochial bodies do not have

incentives to seek regional solutions. These problems result in long delays, and they

could lead to inefficient and inequitable siting decisions.

Actions forfederal consideration:

Convene regional summits to initiate andfacilitate dialog among regional

stakeholders.

Dialog among stakeholders is the first step in identifying regional solutions.

Because of its national perspective, the federal government could be an important leader

in brokering these discussions. The federal government should continue to convene

regional summits that provide for meaningful participation by all stakeholders and for

equitable resolution of outstanding issues.

*Support federal legislation to facilitate state efforts to form regional siting

boards.

Empowering regional decision-making boards is a logical complement to summits

that initiate dialog among regional stakeholders. The authority of these boards must be

final and binding on all parties. Federal legislation should be enacted that will allow

states to create these authorities.

*Raise reliability as an issue (as appropriate) wherefederalpermits are required

for siting electric facilities.

The federal government participates in siting decisions through various federal

agencies. These agencies should give appropriate consideration to electric reliability.

The Department of Energy could provide guidance to federal agencies regarding the need

for and value of electric reliability in siting proceedings.

10. Promote public awareness of electric reliability issues.

(addresses Findings 2, 19, and 23)

General public awareness of the complex issues associated with maintaining reliable

electric service is low. Yet, as demonstrated by the events of the summer of 1999, public

interest in reliable electric service is high. Greater understanding of electric reliability

issues, including both the frequency and causes of outages and the steps being taken to

26

EE-RM-STD-98-440 COMMENT 132

EE-RM/STO-98-440-# /3~ 

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999 

26 

9. Facilitate and empower regional solutions to the siting of generation and 

transmission facilities. 

(addresses Findings 1, 10, and 26) 

Stable incentives for investing in generation and transmission must be 

complemented by siting boards that can discharge their responsibilities in a timely and 

coordinated fashion. Such boards need to address two primary problems. First, policies 

among agencies, among states, between state and federal agencies, and among federal 

agencies overlap and sometimes conflict. Second, parochial bodies do not have 

incentives to seek regional solutions. These problems result in long delays, and they 

could lead to inefficient and inequitable siting decisions. 

Actions for federal consideration: 

• Convene regional summits to initiate and facilitate dialog among regional 

stakeholders. 

Dialog among stakeholders is the first step in identifying regional solutions. 

Because of its national perspective, the federal government could be an important leader 

in brokering these discussions. The federal government should continue to convene 

regional summits that provide for meaningful participation by all stakeholders and for 

equitable resolution of outstanding issues. 

• Support federal legislation to facilitate state efforts to form regional siting 

~~ -

Empowering regional decision-making boards is a logical complement to summits 

that initiate dialog among regional stakeholders. The authority of these boards must be 

fmal and binding on all parties. Federal legislation should be enacted that will allow. 

states to create these authorities. 

• Raise reliability as an issue (as appropriate) where federal permits are required 

for siting electric facilities. 

The federal govemment participates in siting decisions through various federal 

agencies. These agencies should give appropriate consideration to electric reliability. 

The Department of Energy could provide guidance to federal agencies regarding the need . 

for and value of electric reliability in siting proceedings. . 

10. Promote public awareness of electric reliability issues. 

(addresses Findings 2, 19, and 23) 

General public awareness of the complex issues associated with maintaining reliable 

electric service is low. Yet, as demonstrated by the events of the summer of 1999, public 

interest in reliable electric service is high. Greater understanding of electric reliability 

issues, including both the frequency and causes of outages and the steps bemg taken to , . 

\: . 
EE-RM/STD-98-440 -' /3_-

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999

prevent and limit the consequences of outages, will lead to better-informed decisions.

Special attention should be placed on discussing the costs and trade-offs inherent in

making reliability investment and operating decisions. Future activities should

complement, not replace, existing state, utility, and locally led efforts and be effectively·

coordinated with them.

Actions for federal consideration:

* Continue DOE-sponsored independent investigations ofsignificantpower

outages and other reliability events.

Stakeholder support for the studies and technical workshops conducted by POST

confirms the important role that the federal government plays in increasing the

awareness of reliability issues during industry restructuring. The federal government

should continue to conduct periodic studies of significant reliability events to identify

problem areas and to recommend additional federal actions, as warranted.

* Continue DOE-sponsoredforums where stakeholders can meet to discuss

reliability issues.

As the electric power industry changes, a special need exists for a dialog among

stakeholders and information exchanges on reliability issues. Many thoughtful comments

have been expressed on options for the future organization of the industry and the

reliability issues these options seek to address. The evolution of these ideas is especially

needed. Such ideas include the important process of developing consensus for the most.

promising ideas and holding forums for discussing feedback on what works and what

does not work. DOE-sponsored conferences, workshops, and other exchanges would

facilitate this process.

11. Monitor and assess vulnerabilities to electric power system reliability.

(addresses Findings 5, 7, 9, 16, 25, and 26)

The outages and disturbances studied by POST resulted from unpredicted events

that exploited specific weaknesses in physical systems and the planning and operating

processes that supported them (e.g., extremely hot weather caused overloads and cable

failures): Other electric power system vulnerabilities were identified during POST's

studies and technical workshops. In view of the regional and national implications of

power outages, known and emerging electric system vulnerabilities need to be studied

from a national rather than a local perspective. Studies from a national perspective

uniquely belong to the federal government, but studies must be carried out in close

partnership with the electric industry.

27

EE-RM-STD-98-440 COMMENT 132

EE-RM/STO-9S-440, -:# ! 3c:<- _ 

Report a/the DOE Power Outage Study Team on Electric Reliability Events a/the Summer 0/ 1999 

prevent and limit the consequences of outages, will lead to better-informed decisions. 

Special attention should be placed on discussing the costs and trade-offs inherent in 

making reliability investment and operating decisions. Future activities should 

complement, not replace, existing state, utility, and locally led efforts and be effectivelycoordinated with them. 

Actions for federal consideration: 

• Continue DOE-sponsored independent investigations of significant power 

outages and other reliability events. 

Stakeholder support for the studies and technical workshops conducted by POST 

confirms the important role that the federal government plays in increasing the 

awareness of reliability issues during industry restructuring. The federal government 

should continue to conduct periodic studies of significant reliability events to identify 

problem areas and to recommend additional federal actions, as warranted. 

• Continue DOE-sponsored forums where stakeholders can meet to discuss 

reliability issues. 

As the electric power industry changes, a special need exists for a dialog among " 

stakeholders and information exchanges on reliability issues. Many thoughtful comments 

have been expressed on options for the future organization of the industry and the 

reliability issues these options seek to address. The evolution of these ideas is especially 

needed. Such ideas include the important process of developing consensus for the most" 

promising ideas and holding forums for discussing feedback on what works and what 

does not work. DOE-sponsored conferences, workshops, and other exchanges would 

facilitate this process. 

II. Monitor and assess vulnerabilities to electric power system reliability. 

(addresses Findings 5, 7, 9, 16,25, and 26) 

The outages and disturbances studied by POST resulted from unpredicted events 

that exploited specific weaknesses in physical systems and the planning and operating 

processes "that supported them (e.g., extremely hot weather caused overloads and cable 

failures): Other electric power system vulnerabilities were identified during POST's 

studies and technical workshops. In view of the regional and national implications of 

power outages, known and emerging electric system vulnerabilities need to be studied 

from a national rather than a local perspective. Studies from a national perspective 

uniquely belong to the federal government, but studies must be carried out in close 

partnership with the electric industry. 

27 

".:.,' . 
EE-RM/STD-98-440 /f / \2

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999

Actions for federal consideration:

Work with industry stakeholders to conduct comprehensive assessments of

electric power system vulnerabilities.

An appropriate role for the federal government would be to work with industry to

assess and analyze vulnerabilities and to develop the technologies and expertise

necessary for reducing such vulnerabilities. The federal government has already initiated

a series of assessments toward this end, which are being implemented in close

partnership with industry. These efforts should be continued.

Work with industry stakeholders to refine and implementprocedures to assess

the robustness of the electricity system in responding to bulk-power system

emergencies.

Well-established procedures are in place for responding to system emergencies.

However, they need to be thoroughly tested and updated regularly. In particular,

consistency within procedures is needed when many operating entities are coordinating

efforts. The federal government should build on efforts initiated during preparations for

the Year 2000 to ensure that emergency preparedness remains a high priority.

Specifically, the federal government should work with industry to enhance assessment

procedures to ensure consistent and coordinated responses to system emergencies.

12. Encourage energy efficiency as a means for enhancing reliability.

(addresses Findings 2, 10, and 19)

The increased adoption of energy efficiency measures can enhance electric system

reliability by reducing demand growth in areas experiencing shortages in electric

generation or constraints in electric transmission or distribution. Programs to stimulate

adoption of energy-efficient technologies and practices can provide more rapid relief to

areas with fast-growing demand. Further, they can do so with fewer negative impacts

than would occur during the construction of new generation, transmission, and

distribution facilities. Such programs might be especially helpful in areas where growth

in electric demand is high; yet, markets for new generation are in their infancy or

existing incentives for investments in transmission and distribution are in transition.

Technologies and practices that reduce loads during times of peak demand, such as highefficiency air conditioning and lighting equipment, are especially valuable.

Actions for federal consideration:

Work with state and local governments to support development and

implementation of cost-effective energy efficiency programs.

Utility demand-side management programs were successful in reducing demand

growth during the early 1990s. These activities began to decline, however, as the -

industry prepared for restructuring. Many states have tried to preserve funding for these

28

EE-RM-STD-98-440 COMMENT 132

EE .. RM/STD .. 98-440 1t /3 -~-

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of J 999 

28 

Actions for federal consideration: 

Work with industry stakeholders to conduct comprehensive assessments of 

electric power system vulnerabilities. 

An appropriate role for the federal government would be to work with industry to 

assess and analyze vulnerabilities and to develop the technologies and expertise 

necessary for reducing such vulnerabilities. The federal government has already initiated 

a series of assessments toward this end, which are being implemented in close 

partnership with industry. These efforts should be continued. 

Work with industry stakeholders to refine and implement procedures to assess 

the robustness of the electricity system in responding to bulk-power syste"! 

emergencies. 

Well-established procedures are in place for responding to system emergencies. 

However, they need to be thoroughly tested and updated regularly. In particular, 

consistency within procedures is needed when many operating entities are coordinating 

efforts. The federal government should build on efforts initiated during preparations for 

the Year 2000 to ensure that emergency preparedness remains a high priority. 

Specifically, the federal government should work with industry to enhance assessment 

procedures to ensure consistent and coordinated responses to system emergencies. 

12. Encourage energy efficiency as a means for enhancing reliability. 

(addresses Findings 2, 1 b, and 19) 

The increased adoption of energy efficiency measures can enhance electric system 

reliability by reducing demand growth in areas experiencing shortages in electric 

generation or constraints in electric transmission or distribution. Programs to sti~ulate .. 

adoption of energy-efficient technologies and practices can provide more rapid relief to 

areas with fast-growing demand. Further, they can do so with fewer negative impacts 

than would occur during the construction of new generation, transmission, and 

distribution facilities. Such programs might be especially helpful in areas where growth 

in electric. demand is high; yet, markets for new generation are in their infancy or 

existing incentives for investments in transmission and distribution are in transition. 

Technologies and practices that reduce loads during times of peak demand, such as bighefficiency air conditioning and lighting equipment, are especially valuable. 

Actions for federal consideration: 

Work with state and local governments to support development and 

implementation of cost-effective energy efficiency programs. 

Utility demand-side management programs were successful in reducing demand 

growth during the early 1990s. These activities began to decline, however, as the -.. 

industry prepared for restructuring. Many states have tried to preserve funding for these 

;;- ."' 
EE-RM/STD-98-440-o 4S

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of

activities concurrent and consistent with the development of competitive markets for . :

energy. The federal government should work with state and local governments to

continue and expand these efforts, both to improve reliability in the short term, while

markets develop, and, in the long term, to the extent markets do not fully capture the

public reliability and other benefits that they offer.

Expand existingfederalprograms topromote energy efficiency.

The federal government currently conducts research in support of more efficient

end-use technologies, promulgates standards for more efficient technologies, and

provides weatherization assistance to low-income households. These well-established

federal activities should be expanded in ways that are consistent with improving the

reliability of the U.S. electric power system through more efficient use of electricity.

Table 2 Summary of Recommendations and Associated Findings

No. Recommendation Relevant Findings'

1 Promote market-based approaches to ensure reliable 1-3, 10, 12, 19, and 37

electric services.

2 Enable customer participation in competitive electricity 1, 2, 10, 19, and 20

markets.

3 Remove barriers to distributed energy resources. 1, 2, 10, and 19

4 Support mandatory reliability standards for bulk-power 4, 11, 21, 24, and 36-38

systems.

5 Support reporting and sharing of information on "best 5-9, 11, 15-18, 21, 22,

practices." 24, 27, and 29-38

6 Enhance emergency preparedness activities for low- 3, 4, 9, 20, 23, and 29

probability, high-consequence events on bulk-power

systems.

7 Demonstrate federal leadership through promotion of 1, 2, and 19

best reliability practices at federal utilities.

8 Conduct public interest reliability-related research and 5-8, 13, 14, 17, 28,

development consistent with the needs of a and 33

restructuring electric industry.

9 Facilitate and empower regional solutions to the siting 1, 10, and 26

of generation and transmission facilities. ' .. : 

10 Promote public awareness of electric reliability issues. 2, 19, and 23

11 Monitor and assess vulnerabilities to electric power 5, 7, 9, 16, 25, and 26

system reliability.

12 Encourage energy efficiency as a means for enhancing 2, 10, and 19.

reliability.

The numbers assigned to the relevant findings correspond to the numbers assigned to

the findings in Section 3.

29 .

EE-RM-STD-98-440 COMMENT 132

EE.RM/STD;'98~440-tJ::== . 

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1 

activities concurrent and consistent with the development of competitive markets for 

energy. The federal government should work with state and local governments to . 

continue and expand these efforts, both to improve reliability in the short term, while 

markets develop, and, in the long term, to the extent markets do not fully capture the 

public reliability and other benefits that they offer. 

• Expand existingfederal programs to promote energy efficiency. 

The federal government currently conducts research in support of more efficient 

end-use technologies, promulgates standards for more efficient technologies, and 

provides weatherization assistance to low-income households. These well-established 

federal activities should be expanded in ways that are consistent with improving the 

reliability of the u.s. electric power system through more efficient use of electricity. 

Table 2 Summary of Recommendations and Associated Findings 

No. Recommendation Relevant Findings" 

Promote market-based approaches to ensure reliable 1-3,1O,12,19,and37 

electric services. 

2 Enable customer participation in competitive electricity 1,2, 10, 19, and 20 

markets. 

3 Remove barriers to distributed energy resources. 1,2,10, and 19 

4 Support mandatory reliability standards for bulk-power 4, 11,21,24, and 3~38 

systems. 

5 Support reporting and sharing of information on ''best 5-9, II, 15-18,21,22, 

practices." 24, 27~ and 29-38 

6 Enhance emergency preparedness activities for low- 3, 4, 9, 20, 23, and 29 

probability, high-consequence events on bulk-power 

systems ... 

7 Demonstrate federal leadership through promotion of 1,2, and 19 

best reliability practices at federal utilities. 

8 Conduct public interest reliability-related research and 5-8,13,14,17,28, 

development consistent with the needs of a and 33 

restructuring electric industry. 

9 Facilitate and empower regional solutions to the siting 1, 10, and 26 

of generation and transmission facilities. 

10 Promote public awareness of electric reliability issues. 2, 19, and 23 

11 Monitor and assess vulnerabilities to electric power 5,7,9, 16, 25, and 26 

system reliability. 

12 Encourage energy efficiency as a means for enhancing 2,10, and 19. 

reliability. 

8 The numbers assigned to the relevant findings correspond to the numbers assigned to 

the findings in Section 3. 

.. :-

29 
EE-RM/STD-9 8-4 4 0 -#/,3-P

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999

30

EE-RM-STD-98-440 COMMENT 132

E~-RM/STD-98;'4404/3::<. 

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of J 999 

30 
EE-RM/STD-98-440-t/<S.

Appendix A

Summary of Public Comments

This appendix summarizes comments received and suggestions made regarding

actions that the federal government could take to address the findings of the Power

Outage Study Team (POST). These summaries have been categorized to correlate with

the five topic areas that were identified in the POST Interim Report' and used to structure

the discussions at three technical workshops organized by the POST. The summaries

reflect comments sent directly to the POST as well as comments offered at the three

workshops.

A.1 Transition to Competitive Energy Service Markets

Most of the commenters saw restructuring as being part of the solution for achieving

reliable electric service. Commenters who tried to link ongoing restructuring activities

with the reliability disruptions of last summer (or to link restructuring with larger trends

in areas such as utility staffing and maintenance practices) also offered possible solutions

for improving reliability that took restructuring into account. The comments most

germane to the industry transition are categorized here into four areas: the effects of

competitive energy markets on reliability, customer participation in competitive energy

markets, emerging institutions for managing reliability issues in a competitive market,

and unique federal roles in a competitive market. Many comments that addressed this

topic are also relevant to the other topics and are included in those sections as well.

A.1.1 Effect of Competitive Energy Markets on Reliability

A theme repeated in many comments was that the federal government should

recognize that electric markets are the appropriate first line of defense for ensuring

reliable electric service. Several commenters mentioned regions of the United States

where substantial investments in new electric generating capacity were recently

announced. In all cases, these investments were made first in response to the need for

new capacity and second in response to the emerging markets, which enable new

generating sources to compete to meet these needs. Many commenters were optimistic,

believing that ultimately, such competitive markets would be sufficient to ensure :

adequate long-term investments in generation capacity.

Other commenters suggested that competitive markets are the best mechanism for

managing reliability in the short term. An example of the inefficiency created under

current non-market-based transmission loading relief procedures was provided. Under

these procedures, transactions involving hundreds of megawatts of capacity in one part of

the interconnected power system can cause curtailment of transactions involving

thousands of megawatts of capacity in another part of the system.

Interim Report of the U.S. Department of Energy's Power Outage Study Team, Findings from

the Summer of 1999, January 2000.

A-l

EE-RM-STD-98-440 COMMENT 132

EE-RM/STD-98-440 -#-13~:~ : 

Appendix A .. Summary of Public Comments 

This appendix summarizes comments received and suggestions made regarding 

actions that the federal government could take to address the findings of the Power 

Outage Study Team (POST). These summaries have been categorized to correlate with 

the five topic areas that were identified in the POST Interim Reportl and used to structure 

the discussions at three technical workshops organized by the POST. The summaries . 

reflect comments sent directly to the POST as well as comments offered at the three 

workshops. 

A.1 Transition to Competitive Energy Service Markets 

Most of the commenters saw restructuring as being part of the solution for achieving .. 

reliable electric service. Commenters who tried to link ongoing restructuring activities· .' 

with the reliability disruptions oflast summer (or to link restructuring with larger trends 

in areas such as utility staffing and maintenance practices) also offered possible solutions 

for improving reliability that took restructuring into account. The comments most 

germane to the industry transition are categorized here into four areas: the effects of 

competitive energy markets on reliability, customer participation in competitive energy 

markets, emerging institutions for managing reliability issues in a competitive market, 

and unique federal roles in a competitive market. Many comments that addressed this 

topic are also relevant to the other topics and are included in those sections as well. 

A.1.1 Effect of Competitive Energy Markets on Reliability 

A theme repeated in many comments was that the federal government should 

recognize that electric markets are the appropriate first line of defense for ensuring 

reliable electric service. Several commenters mentioned regions of the United States 

where substantial investments in new electric generating capacity were recently 

announced. In all cases, these investments were made first in response to the need for 

new capacity and second in response to the emerging markets, which enable new -

generating sources to compete to meet these needs. Many commenters were optimistic, 

believing that ultimately, such competitive markets would be sufficient to ensure . 

adequate long-term investments in generation capacity. 

. .~ . 

Other commenters suggested that competitive markets are the best mechanism for 

managing reliability in the short term. An example of the inefficiency created under 

current non-market-based transmission loading relief procedures was provided. Under' 

these procedures, transactions involving hundreds of megawatts of capacity in one part. of 

the interconnected power system can cause curtailment of transactions involving . 

thousands of megawatts of capacity in another part of the system. . " . 

. .. 

Interim Report of the Us. Department of Energy's Power Outage Study Team, Findings from 

the Summer of 1999. January 2000. . . . 

A-I 
EE-RM/STD-98-440- z/I

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999

In reflecting on the voltage drops of July 6 and July 19, Interconnection, LLC

(PJM), attributed the more rapid system recovery on July 19 at least in part to market-led :

curtailments in direct response to the high location-based market prices observed on that .

day. It was suggested that market participants might have learned from the events of

July 6, so that by July 19, they already had plans to respond profitably to prevailing

market signals.

PJM also described how, as a result of the events of the summer of 1999, it obtained

Federal Energy Regulatory Commission approval to impose a tariff that will provide

generators with compensation for reactive power production at the opportunity cost of

foregone real power sales. This tariff allows PJM to ensure that its directions to

generators to produce reactive power are now consistent with the competing incentives

the market offers to produce real power. 2

A.1.2 Customer Participation in Competitive Energy Markets

Many commenters suggested that the fact that end-use customers do not participate

in competitive markets is a major factor that contributes to short-term energy shortages,

such as those that occurred during last summer's heat waves. Reliability depends on a

utility's ability to serve a sudden and inflexible surge in electricity demand. These

commenters noted that public appeals for conservation get mixed results. What is really

needed is a mechanism for balancing the cost of serving an increased load by acquiring

more power with the cost of reducing load. Unless customers are given meaningful

opportunities (not mandates) to participate, this balance will not be achieved. Instead,

market inefficiency will persist, leading to periodic energy shortages and unnecessarily

high prices for energy and ancillary services during periods of peak demand.

Some commenters noted that now, when energy and ancillary services are in short

supply, generators are the primary beneficiaries of the higher prices for these services. If

customers could see these high prices and be able to respond to them by selling their

loads in the market, they too could share in the economic rewards. The end result would

be threefold: more stable prices for electricity and ancillary services, a reduced need for

investment in transmission systems, and more reliable electric service.

Several commenters observed that coupled with the use of competitive markets to

get the prices for electric service "right," steps must be taken to ensure that these prices

can be seen. Electric reliability has a price, and this price must be visible if customers are

to make reasoned, economically efficient decisions about their electric service. One

commenter pointed out the need for robust communication infrastructures to convey price

information.

..

2 Typically, generators can produce both real and reactive power. At times of peak real power - . generation, increased reactive power generation (essential for maintaining system stability

during high system loads) requires a reduction in real power generation.

A-2

EE-RM-STD-98-440 COMMENT 132

EE·RM/STD-98-440~ #1 ~-

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999 

A-2 

In reflecting on the voltage drops of July 6 and July 19, Interconnection, LLC 

(PJM), attributed the more rapid system recovery on July 19 at least in part to market-led' 

curtailments in direct response to the high location-based market prices observed on that , 

day. It was suggested that market participants might have learned from the events of -

July 6, so that by July 19, they already had plans to respond profitably to prev~ling 

market signals. 

P JM also described how, as a result of the events of the summer of 1999, it obtained 

Federal Energy Regulatory Commission approval to iplpose a tariff that will provide 

generators with compensation for reactive power production at the opportunity cost of 

foregone real power sales. This tariff allows PJM to ensure that its directions to 

generators to produce reactive power are now consistent with the competing incentives 

the market offers to produce real power.2 

A.1.2 Customer Participation in Competitive Energy Markets 

Many commenters suggested that the fact that end-use customers do not participate 

in competitive markets is a major factor that contributes to short-tenn energy shortages, ' 

such as those that occurred during last summer's heat waves. Reliability depends on a 

utility'S ability to serve a sudden and inflexible surge in electricity demand. These 

commenters noted that public appeals for conservation get mixed results. What is really 

needed is a mechanism for balancing the cost of serving an increased load by acquiring 

more power with the cost of reducing load. Unless customers are given meaningful , 

opportunities (not mandates) to participate, this balance will not be achieved. Instead, 

market inefficiency will persist, leading to periodic energy shortages and unnecessl:!rily 

high prices for energy and ancillary services during periods of peak demand. 

Some commenters noted that now, when energy and ancillary services are in's'hort 

supply, generators are the primary beneficiaries of the higher prices for these services. If 

customers could see these high prices and be able, to respond to them by selling their , 

loads in the market, they too could share in the economic rewards. The end result would 

be threefold: more stable prices for electricity and ancillary services, a reduced need for 

investment in transmission systems, and more reliable electric service. 

Several commenters observed that coupled with the use of competitive markets to-' 

get the prices for electric service "right," steps must be taken to ensure that these prices 

can be seen. Electric reliability has a price, and this price must be Visible if customers are 

to make reasoned, economically efficient decisions about their electric service. One ' 

commenter pointed out the need for robust communication infrastructures to convey price 

infonnation. 

2 Typically, generators can produce both real and reactive power. At times of peak real power 

generation, increased reactive power generation (essential for maintaining system stability, ' 

during high system loads) requires a reduction in real power generation.' ': 

, , 

.... 

" -"':'. 

. ~"./ .. 
EE-RM/STD-98-440 /3 .

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999

Several commenters described emerging efforts to increase opportunities for :

demand-side participation in competitive electric markets. Some utilities and system

operators are experimenting with real-time and price-sensitive interruptible tariffs.

However, these opportunities are now primarily available to only the largest customers,

because the costs of participation are too high when compared with the savings that are

available. Some commenters discussed the need for advances in communication and

metering technologies to increase the opportunities for smaller customers to participate.

Some commenters focussed on a related but (in important ways) distinct form of

demand-side participation that should be encouraged: distributed energy resources. A

federal role in promoting wider adoption of these technologies was suggested. This role

would include conducting research and development (R&D) on advanced system

integration concepts and supporting near-term activities to remove regulatory barriers that

impede adoption of these technologies. The current federal support of efforts to develop

interconnection standards was cited as a prime example of an appropriate federal activity

that should be continued.

Throughout these discussions, many commenters emphasized that decisions to

participate in competitive markets should remain firmly in the customer's control. In

other words, in a free market, customers should be empowered to choose how they can

best meet their energy needs. Some customers that can adjust their loads might choose

real-time pricing or direct participation in markets for energy and ancillary services.

Others might choose a fixed price (as in most current utility tariffs). The point is that

customers, not regulators, should be making these decisions. But in order to make

informed decisions, customers require access to market information and prices. Such

access requires actions by the appropriate regulatory authorities.

A.1.3 Emerging Institutions for Managing Reliability

in a Competitive Market

A third major theme addressed by commenters was the role of the federal

government with respect to the emerging institutions responsible for organizing trade and

ensuring reliability in a restructured industry. These comments, by and large, pointed out

that the federal government needs to ensure that state and regional conditions are .

acknowledged and that the primacy of existing state and regional decision-making

processes is respected.

The commenters suggested that the federal government should embrace the diversity

of approaches already being used and seek to exert its influence in support of existing

local, state, and regional institutions. For example, the federal government could become

a public member on the boards for independent system operators and thereby influence

their evolution.

A-3

EE-RM-STD-98-440 COMMENT 132

EE.RM/STD.98.440-#=/~ -

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999 

Several commenters described emerging efforts to increase opportuniti~s for . 

demand-side participation in competitive electric markets. Some utilities and system 

operators are experimenting with real-time and price-sensitive interruptible tariffs. 

However, these opportunities are now primarily available to only the largest customers, 

because the costs of participation are too high when compared with the savings that are 

available. Some commenters discussed the need for advances in communication and 

metering technologies to increase the opportunities for smaller customers to participate. 

Some commenters focussed on a related but (in important ways) distinct form of 

demand-side participation that should be encouraged: distributed energy resources. A 

federal role in promoting wider adoption of these technologies was suggested. This role 

would include conducting research and development (R&D) on advanced system 

integration concepts and supporting near-term activities to remove regulatory barriers that 

impede adoption of these technologies. The current federal support of efforts to develop 

interconnection standards was cited as a prime example of an appropriate federal activity 

that should be continued. 

Throughout these discussions, many commenters emphasized that decisions to 

participate in competitive markets should remain firmly in the customer's control. In . 

other words, in a free market, customers should be empowered to choose how they can 

best meet their energy needs. Some customers that Cll11 adjust their loads might choose 

real-time pricing or direct participation in markets for energy and ancillary services. 

Others might choose a fixed price (as in most current utility tariffs). The point is that 

customers, not regulators, should be making these decisions. But in order to make 

informed decisions, customers require access to market information and prices. Such 

access requires actions by the appropria~e regulatory authorities. 

A.1.3 Emerging Institutions for Managing Reliability 

in a Competitive Market 

A third major theme addressed by commenters was the- role of the federal 

government with respect to the emerging institutions responsible for organizing trade and . 

ensuring reliability in a restructured industry. These comments, by and large, pointed out 

that the federal government needs to ensure that state and regional conditions are 

acknowledged and that the primacy of existing state and regional decision-makiilg 

processes is respected. 

The commenters suggested that the federal government should embrace the diversity 

of approaches already being used and seek to exert its influence in support of existing 

local, state, and regional institutions. For example, the federal government could become 

a public member on the boards for independent system operators and thereby influence 

their evolution. 

A-3 

- ~ 
EE-RM/STD-98-440 ^- /-)

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999

A.1.4 Unique Federal Roles in a Competitive Market

Commenters pointed to two areas in which the federal government could play a

unique role with regard to the transition to competitive markets: (1) federal utilities,

including the power marketing administrations, and (2) public awareness.

The federal utilities exert great influence on restructuring activities in their regions.

Commenters saw their ability to exert a federal presence in regional developments as a

positive way the federal government could promote reliability.

Several commenters observed that the public's level of awareness about electric

industry restructuring is low. Disruptions in reliability, such as the events of last summer,

fuel public concern that restructuring is somehow to blame for problems. Some

commenters suggested that a critically needed and essential role for the federal

government is to increase the public's awareness of electric industry restructuring in

general and electric power reliability in particular. This role should be undertaken in

coordination with industry stakeholders. No one disputed the authority or legitimacy of

the federal government in playing a leadership role in providing objective information of

this type. In fact, several commenters expressed appreciation for the POST activity and

said that it was appropriate and reassuring for the federal government to watch market

developments, especially with respect to the their effect on reliability.-

A.2 Regulatory Policy for Reliable Transmission and Distribution

Commenters suggested that a number of areas related to transmission and

distribution (T&D) regulatory policies should be revisited. These included (1) the roles of

industry and government in managing reliability, (2) incentives for investing in

transmission system reliability, (3) regional coordination in siting generation and

transmission facilities, and (4) state public utility commission (PUC) regulation of

electric distribution.

A.2.1 Roles of Industry and Government in Managing Reliability

Commenters expressed strong support for continuing to rely on self-regulation rather than

government regulation to manage the reliability of the bulk-power system. However,

many of these commenters also acknowledged the limitations of the current voluntary

form of reliability management and the need for federal oversight to support mandatory .

reliability standards. Several commenters explicitly supported the proposal to transform

the North American Electric Reliability Council (NERC) into the North American

Electric Reliability Organization. In a discussion of the features that mandatory reliability

rules should have, one commenter emphasized an open standard-setting process.

A.2.2 Incentives for Investing in Transmission System Reliability

Several commenters pointed out that investments in transmission capacity have not

kept up with investments in generation capacity. As a result, parts of the United States

may experience delivery problems. These problems increase the risk to system reliability.

A-4

EE-RM-STD-98-440 COMMENT 132

, 

"-:" . '1-

EE.RM/STD~98.44O---# j3~: ... 

, Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999 

A.1.4 Unique Federal Roles in a Competitive Market 

Commenters pointed to two areas in which the federal government could playa 

unique role with regard to the transition to competitive markets: (1) federal utilities, -

including the power marketing administrations, and (2) public awareness. 

The federal utilities exert great influence on restructuring activities in their regions. 

Commenters saw their ability to exert a federal presence in regional developments as a 

positive way the federal government could promote reliability. 

Several commenters observed that the public's level of awareness about electric 

industry restructuring is low. Disruptions in reliability, such as the events oflast summer, 

fuel public concern that restructuring is somehow to blame for problems. Some 

commenters suggested that a critically needed and essential role for the federal . 

,government is to increase the public's awareness of electric industry restructuring in 

general and electric power reliability in particular. This role should be undertaken in 

coordination with industry stakeholders. No one disputed the authority or legitimacy of 

the federal government in playing a leadership role in providing objective information of 

this type. In fact, several commenters expressed appreciation for the POST activity and 

said that it was appropriate and reassuring for the federal government to watch market 

developments, especially with respect to the their effect on reliability. 

A.2 Regulatory Policy for Reliable Transmission and Distribution 

A-4 

Commenters suggested that a number of areas related to transmission and 

distribution (T &D) regulatory policies should be revisited. These included (1) the 'roles of 

industry and government in managing reliability, (2) incentives for investing in . 

transmission system reliability, (3) regional coordination ,in siting generation and 

transmission facilities, and (4) state public utility commission (PUC) regulation of 

electric distribution. 

A.2.1 Roles of Industry and Government in Managing Reliability 

Commenters expressed strong support for continuing to rely on self-regulation rather than 

governmept regulation to manage the reliability of the bulk-power system. However,. 

many of these commenters also acknowledged the limitations of the current voluntary , 

form of reliability management and the need for federal oversight to support mandatory 

reliability standards. Several commenters explicitly supported the proposal to transform· , 

the North American Electric Reliability Council (NERC) into the North American 

Electric Reliability Organization. In a discussion of the features that mandatory reliability . 

rul~s should have, one commenter emphasized an open standard-setting process. 

A.2.2 Incentives for Investing in Transmission System' Reliability 

Several commenters pointed out that investments in transmission capacity have not, 

kept up with investments in generation capacity. As a result, parts of the United States 

may experience delivery problems. These problems increase the risk to system reliabilityc· 

...... : 

..•. -
EE-RM/STD-98-440--4-/5

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999

Thus, a bigger investment in transmission capacity to support increased trade would also

tend to increase system reliability.

These commenters suggested that to a degree, the low levels of investment in -

transmission capacity now simply reflect the uncertainties currently facing investors.

They indicated that hastening or smoothing the transition to competitive markets would

largely address this issue. Some commenters mentioned that current earning opportunities

are insufficient to support needed investments in transmission capacity. No suggestions

for specific federal actions to address this issue were mentioned, beyond those already

identified in Section A. 1 on the transition to competitive energy service markets.

A.2.3 Regional Coordination in Siting Generation

and Transmission Facilities

Somewhat in parallel with comments on financial incentives for investing in

transmission capacity, the POST also received many comments on the current difficulties

associated with siting generation and transmission facilities. These comments described

the many federal, state, and local decision-making bodies that affect siting decisions and

the difficulties in working effectively with them. The basic challenge seems to be to

ensure that the benefits from regional or more global solutions are shared adequately with

individual, more narrowly defined, parochial interests.

Many commenters concurred that improved regional coordination on siting issues is

a high priority. Several recommended model state and local siting processes to be

considered by other jurisdictions. All acknowledged the difficulties in trying to apply

these models in regional or multistate settings.

Recommendations for appropriate federal actions to address siting fell into three

areas. First, federal agencies themselves should better coordinate their activities. The

U.S. Department of Energy and U.S. Environmental Protection Agency were explicitly

mentioned in this context. Second, federal leadership in forming and supporting regional

decision-making bodies would be helpful. (Some commenters were pessimistic, believing

that such federal efforts would not be successful.) Third, federal support should be

provided to develop probabilistic planning tools that could support regional planning

activities.

A.2.4 State Public Utility Commission Regulation

of Electric Distribution :

The POST received many comments about regulatory policies that affect the ' -

reliability of electric distribution. The comments uniformly pointed out the primacy of

state PUCs in overseeing and regulating the local distribution of electricity. Several

observers, while acknowledging the POST review of distribution system outages in the

summer of 1999, mentioned that state PUCs were conducting significant investigations of

these outages and other ones not considered by the POST. - -

A-5

.A-5 -.

EE-RM-STD-98-440 COMMENT 132

"1'. " 

EE-RM/STD-98-440-#=;C3~ . -: 

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summe~ of1999 . ~ ; 

Thus, a bigger investment in transmission capacity to support increased trade would also' 

tend to increase system reliability. 

These commenters suggested that to a degree, the low levels of investment in 

transmission capacity now simply reflect the uncertainties currently facing investorS. 

They indicated that hastening or smoothing the transition to competitive markets would 

largely address this issue. Some commenters mentioned that current earning opportunities 

are insufficient to support needed investments in transmission capacity. No suggestions 

for specific federal actions to address this issue were mentioned, beyond those already 

identified in Section A.I on the transition to competitive energy service markets. 

A.2.3 Regional Coordination in Siting Generation 

and Transmission Facilities 

Somewhat in parallel with comments on financial incentives for investing·iIi 

transmission capacity, the POST also received many comments on ~he current difficulties 

associated with siting generation and transmission facilities. These comments described 

the many federal, state, and local decision-making bodies that affect siting decisions and 

the difficulties in working effectively with them. The basic challenge seems to be to 

ensure that the benefits from regional or more global solutions are shared adequately with 

individual, more narrowly defined, parochial interests. 

Many commenters concurred that improved regional coordination on siting issues is 

a high priority. Several recommended model state and local siting processes to be . 

considered by other jurisdictions. All acknowledged the difficulties in trying to apply 

these models in regional or multistate settings. 

Recommendations for appropriate federal actions to address siting fell into three 

areas. First, federal agencies themselves should better coordinate their activities. The 

U.S. Department of Energy and U.S. Environmental Protection Agency were explicitly 

mentioned in this context. Second, federal leadership in forming and supporting regionill. 

decision-making bodies would be helpful. (Some commenters were pessimistic, believing 

that such federal efforts would not be successful.) Third, federal support should be 

provided to develop probabilistic planning tools that could support regional planning 

activities .. 

A.2.4 State Public Utility Commission Regulation' 

of Electric Distribution 

The POST received many comments about regulatory policies that affect the 

reliability of electric distribution. The comments uniformly pointed out the priniacy'of 

state PUCs in overseeing and regulating the local distribution of electri.city. Several" 

observers, while acknowledging the POST review of distribution system outages in the 

summer of 1999, mentioned that state PUCs were conducting significant investigations of· 

these outages and other ones not considered by the POST. 

A-5 

- ,', 

~::.- . 
EE-RM/STD-98-440 - /

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of1999

Commenters advocated that the federal government not attempt to second guess .

these efforts or seek a greater role in overseeing electric distribution system reliability. A

few commenters requested national reliability standards for distribution, but many more:

strongly urged the federal government to not propose a single, uniform set of national

standards. (Additional, more detailed recommendations on appropriate federal actions to

support state-led standard-setting for distribution system reliability are discussed in

Section A.5 on reliability metrics, planning, and tracking.)

Several commenters recommended appropriate federal actions to ensure the

reliability of the electric distribution system, including the collection and dissemination

of data on industry best practices. Commenters explicitly mentioned that federal support

be given to national organizations that would represent state interests, such as the

National Association of Regulatory Utility Commissioners (NARUC), with regard to

electric distribution system reliability issues. Support to encourage information sharing

among states through organizations such as these was recognized as an important and

valuable federal role. Specific forms of information exchange could include the sharing

of successful regulatory policies and practices (such as performance-based rate making

and direct compensation to customers for outages) from states and other parts of the

world. Federal support for efforts and information that would help remove regulatory and

technical barriers to distributed generation and increase the role of demand-side

participation were already mentioned in Section A. 1.2 of this appendix.

A.3 Information Resources

The POST received many comments related to federal actions that could be taken to

address the accuracy and exchange of information. The comments focussed on the

following types of information: (1) planning and load forecasting criteria, (2) generating

unit capabilities, (3) T&D equipment availability and performance, and (4) cable testing

techniques. Other forms of information, including information to support market and

real-time operations, public notification during system emergencies, and information on

reliability metrics and "best practices," are discussed in other parts of this summary.

A.3.1 Planning and Load Forecasting Criteria

The POST found that inaccurate load forecasts contributed to some of the events

reviewed in the Interim Report. Comments related to this issue covered both the actual

assumptions on which forecasts are based and the methods used to develop the forecasts

from these assumptions.

Several commenters observed that many of the events that occurred in the summer

of 1999 happened during record-breaking heat waves that had not been anticipated.

Planning that was adequate for normal summer conditions was not adequate for such

unusually hot weather. One commenter described how forecasts could be based on recent

weather trends instead of long-term averages in an effort to improve accuracy.

Another commenter addressed a more global issue: What assumptions about weather

severity should be used for reliability planning? This question was seconded by others,

A-6

EE-RM-STD-98-440 COMMENT 132

',' EE-RM/STD-98-440 -::IF )3~ . ' 

Report oj the DOE Power Outage Study Team on Electric Reliability Events oj the Summer oj 1999 

" 

, , 

-:. ". 

Commenters advocated that the federal government not attempt to seco~d guess 

these efforts or seek a greater role in overseeing electric distribution system reliability. A, .... 

few commenters requested national reliability standards for distribution, but maily more: ' 

strongly urged the federal government to not propose a single, uniform set of national 

standards. (Additional, more detailed recommendations on appropriate federal actions to 

support state-led standard-setting for distribution system reliability are discussed in 

Section A.S on reliability metrics, planning. and tracking.) 

Several commenters recommended appropriate federal actions to ensure the 

reliability of the electric distribution system, including the collection and dissemination 

of data on industry best practices. Commenters explicitly mentioned that federal support 

be given to national organizations that would represent state interests, such as the 

National Association of Regulatory Utility Commissioners (NARUC), with regard to 

electric distribution system reliability issues. Support to encourage information sharing 

among states through organizations such as these was recognized as an important and 

valuable federal role. Specific forms of information exchange could include the sharing " 

, , .. " 

of successful regulatory policies and practices (such as performance-based rate making 

and direct compensation to customers for outages) from states and other parts of the 

world. Federal support for efforts and information that would help remove regulatory and 

technical barriers to distributed generation and increase the role of demand-side 

participation were already mentioned in Section A.I.2 of this appendix. 

A.3 Information Resources 

The POST received many comments related to federal actions that could be taken to 

address the accuracy and exchange of information. The comments focussed on the 

following types ofinfonnation: (I) planning and load forecasting criteria, (2) generating, 

unit capabilities, (3) T &D equipment availability and perfoimance, and (4) cable testing 

techniques. Other forms of information, including information to support market and 

real-time operations, public notification during system emergencies, and information on 

reliability metrics and "best practices," are discussed in other parts of this summary. 

A.3.1 Planning and Load Forecasting Criteria 

The POST found that inaccurate load forecasts contributed to some of the events 

reviewed in the Interim Report. Comments related to this issue covered both the actual 

assumptions on which forecasts are based and the methods used to develop the forecasts 

from these assumptions. 

Several commenters observed that many of the events that occurred in the summer 

of 1999 happened during record-breaking heat waves that had not been anticipated. 

Planning that was adequate for normal summer conditions was not adequate for such 

unusually hot weather. One commenter described how forecasts could be based on recent 

weather trends instead of long-term averages in an effort to improve accuracy. 

Another commenter addressed a more global issue: What assumptions about weather 

severity should be used for reliability planning? This question was seconded by~thers, .. 

{. , , 

"i_-' • --: . 

A-6 

.... 
EE-RM/STD-98-440 - /

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999

who observed that increasing electric system reliability entails more costs, and these costs

should be considered when the appropriateness of any planning criterion is being

determined. The cost of reliability and society's willingness to pay for reliability

constitute a theme that surfaced throughout these discussions.

Other commenters pointed out the need for better load forecasting techniques. One

commenter expressed a specific interest in federal R&D to improve forecasting

techniques for smaller geographic areas. Another mentioned the need to factor

uncertainties explicitly into planning processes.

A.3.2 Generating Unit Capabilities

The POST found that difficulties experienced by both PJM and Entergy were

exacerbated by inaccurate information about generating unit capabilities. In post-event

studies, when more accurate data about these capabilities were used, the conditions that

were experienced could be reproduced. Earlier studies based on inaccurate information

had failed to predict these conditions. Commenters noted the need for (1) standardized

definitions of generator performance characteristics and (2) periodic verifications of

generator capabilities. However, the commenters also suggested that market prices should

be counted on to provide adequate incentives to generators to maintain performance at

levels they determine to be economic.

A.3.3 Transmission and Distribution Equipment Availability

and Performance

Several commenters referred to information on the availability and performance of

T&D equipment. Some people expressed concerns that industry-organized forums for

information exchange were inadequate. Even though competition among distribution and

transmission system owners is essentially nonexistent (when compared with competition

among generation system owners), this concern was strong, especially among firms that

have not divested their generation assets.

Several commenters suggested that there is a need for forums in which information

on T&D equipment performance could be shared. Others mentioned that this type of

information is not widely available except from vendors, whose business interests could

undermine confidence in the accuracy of the information.

Commenters suggested that a valuable role for the federal government would be to

support forums that promote the sharing of information on equipment availability and

performance. Web-based information exchange vehicles were mentioned. One

commenter mentioned that after Hurricane Hugo, common pieces of distribution

equipment were labeled with unique identifiers to facilitate inter-firm exchanges.

Most commenters emphasized that the federal government needs to work with

industry to develop appropriate information exchange forums. Others specifically

cautioned the federal government against pre-empting private parties that might be able

to manage information exchanges without requiring taxpayer dollars. The issue of

A-7 . . .A-7

EE-RM-STD-98-440 COMMENT 132

EE-RM/STD-98-440 ~~/3~ ".' 

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of /999 • 

who observed that increasing electric system reliability entails more costs, and these costs 

should be considered when the appropriateness of any planning criterion is being 

determined. The cost of reliability and society's willingness to pay for reliability 

constitute a theme that surfaced throughout these discussions .. 

Other commenters pointed out the need for better load forecasting techniques. One 

commenter expressed a specific interest in federal R&D to improve forecasting 

techniques for smaller geographic areas. Another mentioned the need to factor 

uncertainties explicitly into planning processes. 

A.3.2 Generating Unit Capabilities 

The POST found that difficulties experienced by both PJM and Entergy were 

exacerbated by inaccurate information about generating unit capabilities. In post-event 

studies, when more accurate data about these capabilities were used, the conditions that 

were experienced could be reproduced. Earlier studies based on inaccurate information 

had failed to predict these conditions. Commenters noted the need for (I) standardized· 

defmitions of generator performance characteristics and (2) periodic verifications of 

generator capabilities. However, the commenters also suggested that market prices should 

be counted on to provide adequate incentives to generators to maintain performance at 

levels they determine to be economic. 

A.3.3 Transmission and Distribution Equipment Availability 

and Performance 

Several commenters referred to information on the availability and performance of 

T &D equipment. Some people expressed concerns that industry-organized forums for· 

information exchange were inadequate. Even though competition among distribution and 

transmission system owners is essentially nonexistent (when compared with competition. 

among generation system owners), this concern was strong, especially among firms that 

have not divested their generation assets. 

Several commenters suggested that there is a need for forums in which infonnation 

on T &D equipment performance could be shared. Others mentioned that this type of 

information is not widely available except from vendors, whose business interests could 

undermine confidence in the accuracy of the information. 

Commenters suggested that a valuable role for the federal government would be to 

support forums that promote the sharing of information on equipment availability and' .. 

performance. Web-based information exchange vehicles were mentioned. One 

commenter mentioned that after Hurricane Hugo, common pieces ()f distribution 

equipment were labeled with unique identifiers to facilitate inter-firm exchanges. 

Most commenters emphasized that the federal government needs to work with 

industry to develop appropriate information exchange forums. Others specifically 

cautioned the federal government against pre-empting private parties that might be able 

to manage information exchanges without requiring taxpayer dollars. The issue of 

~" A-7 

. -." .' 
EE-RM/STD-98-440J^/3c3

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999 -

information exchange is discussed further in Section A.5 on reliability metrics, planning,

and tracking.

A.3.4 Cable Testing Techniques

Several commenters discussed the sharing of information on cable testing

procedures. One commenter identified an existing industry forum for exchanging

information on cable testing techniques and practices. Another indicated that the high

potential testing method used in New York had been determined to be worthwhile, and

that this determination had accounted for the fact that the testing itself might have caused

damage. Several commenters mentioned that federal R&D might be appropriate in this

area.

A.4 Operations Management and Emergency Response

The POST received many comments on operations management and emergency

procedures. They are grouped under the following headings: (1) emergency planning and

operations, (2) training and certification, (3) T&D equipment availability, and

(4) reliability-enhancing technologies. Some other comments in this area that address

load forecasting and demand-side participation have already been discussed. Others that

address best practices are discussed in Section A.5.2.

A.4.1 Emergency Planning and Operations

Many commenters discussed emergency planning and operations. All of them

supported the need for advanced plans to support emergency operations. Several

described current approaches for testing and upgrading these plans on a regular basis. The

involvement and coordination of all affected parties were noted as a key element of

successful plans. Clear, mutually agreed-upon, well-rehearsed protocols for actions,

especially for public notification, are also essential. Some commenters noted that

although all utilities have some form of emergency plan, some of them lack systematic,

on-going processes to review and update their plan.

One commenter described factors that influence the effectiveness of public

notification procedures. Location is one factor; better responses were observed in rural

areas. An increase in the frequency of public appeals for emergency actions leads to a

decrease in the effectiveness of these appeals. .

Some people suggested that federal assistance in coordinating emergency planning

and operations among nonutility and utility parties would be valuable. One commenter

cited the need to give utilities more flexibility in complying with federally mandated

environmental restrictions during times of system restoration.

Commenters made special mention of the need for assessment or audit procedures to

help ensure that reliability-related planning and operating procedures are adequate. Of

course, utilities and system operators routinely make advanced preparations to promote

reliable operation. The day-ahead and season-ahead load forecasting and system planning

A-8

EE-RM-STD-98-440 COMMENT 132

EE.RM/STD.98.440-#/3~ . 

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999 

information exchange is discussed further in Section A.5 on reliability metrics, planning, .. 

and tracking. 

A.3.4 Cable Testing Techniques 

Several commenters discussed the sharing of infonnation on cable testing 

procedures. One commenter identified an existing industry forum for exchanging 

infonnation on cable testing techniques and practices. Another indicated that the high 

potential testing method used in New York had been determined to be worthwhile, and 

that this determination had accounted for the fact that the testing itself might have caused 

damage. Several commenters mentioned that federal R&D might be appropriate in this 

area. 

A.4 Operations Management and Emergency Response 

A-8 

The POST received many comments on operations management and emergency 

procedures. They are grouped under the following headings: (1) emergency planning and 

operations, (2) training and certification, (3) T&D equipment availability, and 

(4) reliability-enhancing technologies. Some other comments in this area that address 

load forecasting and demand-side participation have already been discussed. Others that 

address best practices are discussed in Section A.5.2. 

A.4.1 Emergency Planning and Operations 

Many commenters discussed emergency planning and operations. All of them 

supported the need for advanced plans to support emergency operations. Several 

described current approaches for testing and upgrading these plans on a regular basis. The . 

involvement and coordination of all affected parties were noted as a key element of 

successful plans. Clear, mutually agreed-upon, well-rehearsed protocols for actions, 

especially for public notification, are also essential. Some commenters noted that 

although all utilities have some fonn of emergency plan, some of them lack systematic, 

on-going processes to review and update their plan. . 

One commenter described factors that influence the effectiveness of public 

notification procedures. Location is one factor; better responses were observed in rural· 

areas. An increase in the frequency of public appeals for emergency actions leads to a 

decrease in the effectiveness of these appeals. 

Some people suggested that federal assistance in coordinating emergency planning· 

and operations among nonutility and utility parties would be valuable. One commenter 

cited the need to give utilities more flexibility in complying with federaIiy mandated 

environmental restrictions during times of system restoration. . .. 

Commenters made special mention of the need for assessment or audit procedures to 

help ensure that reliability-related planning and operating procedures are adequate. Of 

course, utilities and system operators routinely make advanced preparations to promote . 

reliable operation. The day-ahead and season-ahead load forecasting and system plannirig . 
EE-RM/STD-98-440 -44,/ 3 -^

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999

activities already discussed are examples of such preparations. Moreover, NERC, through

regional reliability councils, coordinates and integrates the reporting of these

preparations.

However, commenters suggested that even more thorough and standardized

assessment procedures might be warranted. Formal reporting may also be required to

complement or enhance existing reporting requirements. Federal support for improving

and disseminating information on these procedures may be needed. However, any federal

support for these activities should be coordinated with the electric industry.

A.4.2 Training and Certification

Commenters frequently mentioned the importance of training and certifying

operating personnel throughout the electric generation, transmission, and distribution

system. They expressed concern that the aging of the workforce, competition for workers

from other industries, and business pressures to reduce operating costs had led to

shortages of adequately trained personnel, among other things.

At least one commenter noted that many of the staff members who operate recently

sold generating plants are, in fact, the same personnel who had operated these plants

when they were part of a full-service utility. Some commenters noted that the market

incentives to operate plants reliably should ensure that plant personnel are appropriately

trained and certified. Others stated that the independent generators do not have operatortraining programs similar to those previously provided by the full-service utilities and

that there will soon be a shortage of qualified operators.

Some commenters, while acknowledging that operating transmission systems

reliably in a competitive market does create new needs for operator training and

certification, nevertheless suggested that adequate incentives for reliable transmission

system operation, rather than training and certification per se, ought to be the focus of

attention. By implication, these comments could be extended to apply to distribution

system operation.

Several commenters observed that mature, industry-developed forums and processes

for training and certification already exist. They suggested that an appropriate federal role

would be to identify industry best practices for worker training and appropriate staffing

levels.

A.4.3 Transmission and Distribution Equipment Availability

In addition to being concerned about how information on T&D equipment

availability and performance is exchanged (Section A.3.3), several commenters were

concerned about the availability of this equipment. The lead times for obtaining large

transformers can be very long, and transporting them often involves logistic hurdles. :

One commenter wondered if the federal government should stockpile critical T&D

equipment. Although this idea seems appealing, the commenter was concerned about the

.A-9

EE-RM-STD-98-440 COMMENT 132

. . . 

EE-RM/STD-98-440_# I~' 

Report o/the DOE Power Outage Study Team on Electric Reliability Events of the Summer of J 999 

activities already discussed are examples of such preparations. Moreover, NERC, through ... '.': .; .' 

regional reliability councils, coordinates and integrates the reporting of these .. 

preparations . 

However, commenters suggested that even more thorough and standardized 

assessment procedures might be warranted. Fonnal reporting may also be required to 

complement or enhance existing reporting requirements. Federal support for improving 

and disseminating information on these procedures may be needed. However, any federal 

support for these activities should be coordinated with the electric industry. 

A.4.2 Training and Certification 

Commenters frequently mentioned the importance of training and certifying 

operating personnel throughout the electric generation, transmission, and distribution 

system. They expressed concern that the aging of the workforce, competition for workers 

from other industries, and business pressures to reduce operating costs had led to 

shortages of adequately trained personnel, among other things. 

At least one commenter noted that many of the staff members who operate recently 

sold generating plants are, in fact, the same personnel who had operated these plants 

when they were part of a full-service utility. Some commenters noted that the market 

incentives to operate plants reliably should ensure that plant personnel are appropriately 

trained and certified. Others stated that the independent generators do not have operatortraining programs similar to those previously provided by the full-service utilities and . 

that there will soon be a shortage of qualified operators. .' 

Some commenters, while acknowledging that operating transmission systems 

reliably in a competitive market does create new needs for operator training and 

certification, nevertheless suggested that adequate incentives for reliable transmission 

system operation, rather than training and certification per se, ought t~ be the focus of 

attention. By implication, these comments could be extended to apply to distribution 

system operation. 

Several commenters observed that mature, industry-developed forums and processes 

for training and certification already exist. They suggested that an appropriate federal role. 

would be to identify industry best practices for worker training and appropriate staffmg 

levels. 

A.4.3 Transmission and Distribution Equipment Availability 

In addition to being concerned about how information on T &D equipment 

availability and perfonnance is exchanged (Section A.3.3), several con;unenterswere 

concerned about the availability of this equipment. The lead times for obtaining large 

transfonners can be very long, and transporting them often involves logistic hurdles. . . 

One commenter wondered if the federal government should stockpile critical T&D 

equipment. Although this idea seems appealing, the commenter was concerned about the 
EE-RM/STD-98-440 -/jR/- -

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999

commercial implications of such an endeavor and suggested managing such stockpiles

may not be appropriate for the federal government.

A.4.4 Reliability-Enhancing Technologies

Several commenters offered suggestions that would support an increased reliance on

technologies and further development of reliability-enhancing technologies. One offered

a radical vision for a future transmission system, in which the current, highly

interconnected power systems of the East and West Coasts would be broken into smaller

systems through the use of direct-current transmission and flexible alternating-current

transmission system (FACTS) technologies. These technologies would allow systems to

remain interconnected to support power flows between regions. However, they would

also electrically insulate one system from disturbances and thus localize reliability

problems.

As mentioned above, others commented more broadly on the appropriate federal

role in this area. They suggested that the federal government should limit its role to

supporting the development of incentives that will encourage market participants to make

their own investments in reliability-enhancing technologies.

One commenter specifically cautioned the federal government against embracing a

single national standard for control area operations, such as data management protocols

and advanced applications. This commenter suggested that the federal government should

respect the fact that some systems in the United States have already made substantial

investments in these technologies. The federal government should articulate clearly the

objectives that must be met, then allow the industry to determine the best means for

meeting them.

Other commenters did identify specific federal R&D priorities in support of more

reliable tools and technologies. Improved load forecasting, probabilistic planning, and

cable testing tools and techniques have already been mentioned in other sections of this

appendix. There is also a need for federal support of basic R&D to develop and

demonstrate (1) technologies that can respond flexibly to load growth (including storage

and distributed generation) and (2) modeling tools that can more accurately capture the

system reliability impacts of induction motors. Commenters emphasized the need to

coordinate federal activities with existing industry-led activities.

A.5 Reliability Metrics, Planning, and Tracking

Comments on the topic of reliability metrics, planning, and tracking are grouped

under three broad headings: (1) reliability metrics and benchmarking, (2) best practices,

and (3) federal reliability reporting.

A.5.1 Reliability Metrics and Benchmarking

Effective reliability management depends on clear articulation of objectives. "

Performance can then be measured against these objectives through the use of metrics. A

A-10

EE-RM-STD-98-440 COMMENT 132

EE-RM/STD-98-440 --*/~,., ." 

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999 

commercial implications of such an endeavor and suggested managing such stockpiles, 

may not be appropriate for the federal government. 

A.4.4 Reliability-Enhancing Technologies 

Several commenters offered suggestions that would support an'increased reliance on ' 

technologies and further development of reliability-enhancing technologies. One offered 

a radical vision for a future transmission system, in which the current, highly 

interconnected power systems of the East and West Coasts would be broken into smaller 

systems through the use of direct-current transmission and flexible alternating-current 

transmission system (FACTS) technologies. These technologies would allow systems to 

remain interconnected to support power flows between regions. However, they would 

also electrically insulate one system from disturbances and thus localize reliability 

problems. 

As mentioned above, others commented more broadly on the appropriate federal 

role in this area. They suggested that the federal government should limit its role to 

supporting the development of incentives that will encourage market participants to make 

their own investments in reliability-enhancing technologies. 

One commenter specifically cautioned the federal governinent against embracing a 

single national standard for control area operations, such as data management protocols ' 

and advanced applications. This commenter suggested that the federal government should 

respect the fact that some systems in the United States have already made substantial 

investments in these technologies. The federal government should articulate clearly the 

objectives that must be met, then allow the industry to determine the best means for 

meeting them. 

Other commenters did identify specific federal R&D priorities in support o(more 

reliable tools and technologies. Improved load forecasting, probabilistic planning, and 

cable testing tools and techniques have already been mentioned in other sections of this 

appendix. There is also a need for federal support of basic R&D to develop and 

demonstrate (1) technologies that can respond flexibly to load growth (including storage 

and distributed generation) and (2) modeling tools that can more accurately capture the 

system reliability impacts of induction motors. Commenters emphasized the need to 

coordinate federal activities with existing industry-led activities. 

A.S Reliability Metrics, Planning, and Tracking 

A-lO 

Comments on the topic of reliability metrics, planning, and tracking are grouped 

under three broad headings: (1) reliability metrics and benchmarking, (2) best practices, 

and (3) federal reliability reporting. ' 

A.S.1 Reliability Metrics and Benchmarking 

Effective reliability management depends on clear articulation of objectives. '. 

Performance can then be measured against these objectives through the use of metrics. A 

........ 

,', 

',.': 

:.=:" 
EE-RM/STD-98-440go - $ -

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999

wide variety of reliability metrics are in use today. Several commenters suggested that ' :.

additional standardization of some definitions is needed so comparisons can be made.

They also suggested that federal support for these efforts would be helpful. .-

Other commenters cautioned that comparisons of utilities on the basis of reliability

metrics alone could be misleading. The conditions associated with various electric

systems can be quite different, rendering simple comparisons meaningless. For example,

vegetation, population density, and weather severity are important conditions that must

be accounted for if comparisons are to be meaningful. One commenter described how a

company used company-specific benchmarks (further disaggregated by regions within its

service territory) in an effort to control for these differences just for its own use (rather

than for comparisons with other utilities).

Many commenters spoke forcefully against establishing a single national standard - .-

for reliability. In addition to mentioning physical conditions, they also highlighted the

fact that distribution reliability falls under the jurisdiction of state and local authorities

and is more appropriately regulated by them.

Other commenters pointed out that service reliability (and quality) standards do not

yet exist in all jurisdictions. They thought the federal government could play a valuable

role in supporting these jurisdictions in their efforts to establish standards. They

mentioned the newly established Reliability Subcommittee in NARUC as one venue

through which federal support might be provided.

Several commenters, while supporting the sharing of performance information

through the use of standardized reliability metrics, also acknowledged the challenges of

using this information. NARUC was again mentioned as an organization through which -

federal support might be directed.

Finally, some commenters observed that the use of reliability metrics makes sense

only for frequent events from which reliable statistical trends can be extracted. Many of

the most severe outages and troublesome events occur only rarely. Different analytical

techniques, such as root cause analysis, are more appropriate for reviewing these events.

A.5.2 Best Practices. -

The POST received a variety of comments on the subject of best practices. Some

have already been discussed in other sections of this summary. This section extends and :*---

integrates these discussions to capture a broader perspective on this issue..

What are best practices? Some commenters suggested that best practices could be:

expressed directly in metrics (e.g., labor-hours for a given task or minimum staffing

requirements for certain functions). Other commenters warned that using metrics to

express best practices could make the definitions obsolete as technologies and procedures

improve. Metrics must be reviewed and revised regularly to capture improvements. Other

comments suggested that it is more important to articulate clearly the performance

A- 1 .

EE-RM-STD-98-440 COMMENT 132

EE.RM/STD.98.440.;.....~/...3=:< " 

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999 

wide variety of reliability metrics are in use today. Several commenters suggested that ' 

additional standardization of some defInitions is needed so comparisons can be made. 

They also suggested that federal support for these efforts would be helpful. 

Other commenters cautioned that comparisons of utilities on the basis of reliability 

metrics alone could be misleading. The conditions associated with various electric 

systems can be quite different, rendering simple comparisons meaningless. For example, 

vegetation, population density, and weather severity are important conditions that must 

be accounted for if comparisons are to be meaningful. One commenter described how a 

company used company-specifIc benchmarks (further disaggregated by regions within its 

service territory) in an effort to control for these differences just for its own use (rather 

than for comparisons with other utilities). 

Many commenters spoke forcefully against establishing a single national standard 

for reliability. In addition to mentioning physical conditions, they also highlighted the 

fact that distribution reliability falls under the jurisdiction of state and local authorities 

and is more appropriately regulated by them. 

Other commenters pointed out that service reliability (and quality) standards do not 

yet exist in all jurisdictions. They thought the federal government could playa valuable 

role in supporting these jurisdictions in their efforts to establish standards. They 

mentioned the newly established Reliability Subcommittee in NARUC as one venue 

through which federal support might be provided 

Several commenters, while supporting the sharing of performance information 

through the use of standardized reliability metrics, also acknowledged the challenges of 

using this information. NARUC was again mentioned as an organization through which 

federal support might be directed. 

Finally, some commenters observed that the use of reliability metrics makes sense 

only for frequent events from which reliable statistical trends can be extracted. Many of 

the most severe outages and troublesome events occur only rarely. Different analyti~l 

techniques, such as root cause analysis, are more appropriate for reviewing these events. 

A.S.2 Best Practices 

The POST received a variety of comments on the subject of best practices. Some ' 

have already been discussed in other sections of this summary. This section extends and, 

integrates these discussions to capture a broader perspective on this issue. 

What are best practices? Some commenters suggested that best practices could be' 

expressed directly in metrics (e.g., labor-hours for a given task or minimum staffing 

requirements for certain functions). Other commenters warned that using metricstO 

express best practices could make the defInitions obsolete as technologies and procedures 

. improve. Metrics must be reviewed and revised regularly to capture improvements. Other , ; 

comments suggested that it is more important to articulate clearly the performance' ' 

A-n 

'" .. 

" , . 
EE-RM/STD-98-440

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999

objectives being sought without referring to the specific steps to be taken to achieve

them.

Many commenters spoke of the need to ensure that effective mechanisms for sharing -

information on best practices are available. Several of them mentioned existing industryled organizations, such as Edison Electric Institute and NERC, as candidates for

coordinating information flow. The development of federal actions for sharing

information on best practices should be coordinated with these and other existing forums.

Concerns. about the commercial value of information on best practices were

expressed. Although these concerns might be significant with regard to generating units,

they should be smaller with regard to T&D planning and operations. In fact, as mentioned

in Section A.3.3 on information resources for T&D equipment performance, the absence

of reliable and easily accessed information on best practices in some areas hinders wider

adoption of these practices.

Commenters strongly supported the notion that the implementation of best practices

should be seen as an outcome of issues discussed under Section A.2 on regulation for

reliable transmission and distribution. They suggested that an appropriate federal role

would be to support the collection and dissemination of data on best practices, especially

in the area of T&D reliability.

A.5.3 Federal Reliability Reporting

Several commenters addressed current federal requirements for reporting reliability

events. One commenter suggested that low compliance with federal requirements was the

result of (1) perceptions that the thresholds for reporting were arbitrary, (2) the lack of

meaningful sanctions (or the lack of enforcement of sanctions) for failures to report, and

(3) perceptions that federal reporting requirements are less important than the reporting

requirements of local regulatory bodies and regional reliability councils. Commenters

suggested that the federal government revisit current reporting requirements to ensure

that they are appropriate for federal uses of the data.

A-12 . . I A 1..* : ,

' . .

A-12

EE-RM-STD-98-440 COMMENT 132

"-.. 

EE.RM/STD~98.440ffI3~-_ -

Report o/the DOE Power Outage Study Team on Electric Reliability Events o/the Summer 0/1999 

objectives being sought without referring to the specific steps to be taken to achieve 

them. 

Many commenters spoke of the need to ensure that effective mechanisms for sharing 

information on best practices are available. Several of them mentioned existing industry- ... 

led organizations, such as Edison Electric Institute and NERC, as candidates for 

coordinating information flow. The development offederal actions for sharing 

infonnation on best practices should be coordinated with these and other existing forums. 

Concerns. about the· commercial value of information on best practices were 

expressed. Although these concerns might be significant with regard to generating units, 

they should be smaller with regard to T &D planning and operations. In fact, as mentioned 

in Section A.3.3 on information resources for T&D equipment perfonnance, the absence 

of reliable and easily accessed information on best practices in some areas hinders wider _ 

adoption of these practices. -

Commenters strongly supported the notion that the implementation of best practices 

should be seen as an outcome of issues discussed under Section A.2 on regulation for 

reliable transmission and distribution. They suggested that an appropriate federal role 

would be to support the collection and dissemination of data on best practices, especially 

in the area ofT&D reliability. 

A.S.3 Federal Reliability Reporting 

Several commenters addressed current federal requirements for reporting reliability 

events. One commenter suggested that low compliance with federal requirements was the . 

result of (1) perceptions that the thresholds for reporting were arbitrary, (2) the lack of 

meaningful sanctions (or the lack of enforcement of sanctions) for failures to report, and 

(3) perceptions that federal reporting requirements are less important than the reporting 

requirements of local regulatory bodies and regional reliability councils. Conunent.ers 

suggested that the federal government revisit current reporting requirements to ensure 

that they are appropriate for federal uses of the data. 

: .; 

A-12 .. -

.:.' 

.. .,"--
EE-RM/STD-98-440 a

Appendix B

Glossary

This glossary provides definitions of some of the terms listed in the Notation list as

well as many others used throughout the report and some others that are related to the

field but not expressly mentioned. In the text of this report, terms that are defined in the

glossary appear in italics the first time they are used.

Adequacy - Ability of the electric system to supply the aggregate electrical demand and

energy requirements of customers at all times, taking into account scheduled and

reasonably expected unscheduled outages of system elements.

Ancillary Services - A number of functions, such as reserves and reactive power, that

are necessary to support operations of the transmission system.

Apparent Power - Product of the volts and amperes. It comprises both real and' .

reactive power, usually expressed in kilovolt-amperes (kVA) or megavolt-amperes

(MVA).

Availability - Measure of time that a generating unit, transmission line, or other facility

is capable of providing service, whether or not it actually is in service. Typically, this

measure is expressed as a percent available for the period under consideration. -

Bulk-power System -The portion of an electric power system that encompasses the

generation resources, system control, and high-voltage transmission system.

Capability - see Installed Capability and Operable Capability.

Capacity - The rated continuous load-carrying ability, expressed in megawatts (MW),

megavolt-amperes (MVA), or megavolt-amperes-reactive (MVAR) of generation,

transmission, or other electrical equipment.

Cascading - Uncontrolled successive loss of system elements triggered by an incident

at any location. Cascading results in widespread service interruption, which cannot be

restrained from sequentially spreading beyond an area predetermined by appropriate

studies.

Clearing Price - see Energy Clearing Price.

Contingency - Unexpected failure or outage of a system component, such as a

generator, transmission line, circuit breaker, switch, or other electrical element. A.

contingency also may include multiple components, which are related by situations

leading to simultaneous component outages.

- ' B- ' : 1 :

EE-RM-STD-98-440 COMMENT 132

EE-RM/STD-9B;.440 # 13b< ,,', - '", - - .. -

Appendix B ','" 

Glossary 

This glossary provides defInitions of some of the terms listed in the Notation list as 

well as many others 'used throughout the report and some others that are related to the 

fIeld but not expressly mentioned. In the text of this report, terms that are defIned in the 

glossary appear in italics the fIrst time they are used. 

Adequacy - Ability of the electric system to supply the aggregate electrical demand and 

energy requirements of customers at all times, taking into account scheduled and 

reasonably expected unscheduled outages of system elements. 

AnciUary Services - A number of functions, such as reserves and reactive power, that 

are necessary to support operations of the transmission system. 

Apparent Power - Product of the volts and amperes. It comprises both real and 

reactive power, usually expressed in kilovolt-amperes (kVA) or megavolt-amperes 

(MYA). 

Availability - Measure of time that a generating unit, transmission line, or other facility 

is capable of providing service, whether or not it actually is in service. Typically, this 

measure is expressed as a percent available for the period under consideration. ' '. ,> ' 

Bulk-power System - The portion of an electric power system that encompasses 'the 

generation resources, system control, and high-voltage transmission system. 

Capability - see Installed Capability and Operable Capability. 

Capacity - The rated continuous load-carrying ability, expressed in megawatts (MW), 

megavolt-amperes (MY A)', or megavolt-amperes-reactive (MY AR) of generation, 

transmission, or other electrical equipment. 

Cascading - Uncontrolled successive loss of system elements triggered by an incident 

at any location. Cascading results in widespread service interruption, which cannot be 

restrained from sequentially spreading beyond an area predetermined by appropriate ' 

studies. ' 

Clearing Price - see Energy Clearing Price. 

Contingency - Unexpected failure or outage of a system component, such as a 

generator, transmission line, circuit breaker, switch, or other electrical element. A , 

contingency also may include multiple components, which are related by situations 

leading to simultaneous component outages. ' 

. ;. 

f -
EE-RM/STD-98-440 -4

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999

Control Area -Electric system or systems, bounded by interconnection metering and

telemetry, capable of controlling generation to maintain its interchange schedule with

other control areas and contributing to frequency regulation of the interconnection.

Curtailment - Reduction in the scheduled capacity or energy delivery.

Demand-Side Management - Programs that affect customer use of electricity, both the

timing (sometimes referred to as load management) and the amount (sometimes referred

to as energy efficiency).

Dispatch - Operating control of an integrated electric system involving operations such

as assignment of levels of output to specific generating stations and other sources of

supply; control of transmission lines, substations, and equipment; operation of principal

interties and switching; and scheduling of energy transactions.

Distribution Network- A network of electrical lines from a substation (which is the

terminus of the transmission network) to a series of transformers (and eventually to the

ultimate customer).

Distribution System - Portion of an electric system that "transports" electricity from

the bulk-power system to retail customers, consisting primarily of low-voltage lines and

transformers.

Disturbance - Unplanned event that produces an abnormal system condition.

Electrical Energy - The generation or use of electric power by a device over a period

of time, expressed in kilowatt-hour (kWh), megawatt-hour (MWh), or gigawatt-hour

(GWh).

Electric System or Electric Power System - An interconnected combination of

generation, transmission, and distribution components that make up an electric utility, an

electric utility and one or more independent power producers (IPPs), or group of utilities

and one or more IPPs.

Electric Utility - Corporation, person, agency, authority, or other legal entity or

instrumentality that owns or operates facilities for the generation, transmission,

distribution, or sale of electric energy primarily for use by the public and is defined as a

utility under the statutes and rules by which it is regulated. An electric utility can be

investor-owned, cooperatively owned, or government-owned (owned by a federal agency,

crown corporation, state, provincial government, municipal government, and public

power district).

Emergency - Any abnormal system condition that requires automatic or immediate

manual action to prevent or limit loss of transmission facilities or generation supply that

could adversely affect the reliability of the electric system.

B-2

EE-RM-STD-98-440 COMMENT 132

EE-RM/STD-98-440 -4f:::-1 ~ 

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999 

Control Area - Electric system or systems, bounded by interconnection metering and .. 

telemetry, capable of controlling generation to maintain its interchange schedule with 

other control areas and contributing to frequency regulation of the interconnection. 

Curtailment - Reduction in the scheduled capacity or energy delivery. 

Demand-Side Management - Programs that affect customer use of electricity, both the 

timing (sometimes referred to as load management) and the amount (sometimes referred 

to as energy efficiency). 

Dispatch - Operating control of an integrated electric system involving operations such 

as assignment oflevels of output to specific generating stations and other sources of 

supply; control of transmission lines, substations, and equipment; operation of principal 

interties and switching; and scheduling of energy transactions. 

Distribution Network - A network of electrical lines from a substation (which is the 

terminus of the transmission network) to a series of transformers (and eventually to the 

ultimate customer). 

Distribution System - Portion of an electric system that "transports" electricity from 

the bulk-power system to retail customers, consisting primarily oflow-voltage lines and 

transformers. 

Disturbance - Unplanned event that produc~s an abnormal system condition. 

". '- ". 

Electrical Energy - The generation or use of electric power by a device over a period . . . ... 

B-2 

of time, expressed in kilowatt-hour (kWh), megawatt-hour (MWh), or gigawatt-hour . 

(GWh). 

Electric System or Electric Power System - An interconnected combination of 

generation, transmission, and distribution components that make up an electric utility, an 

electric utility and one or more independent power producers (IPPs), or group of utilities 

and one or more IPPs. 

Electric Utility - Corporation, person, agency, authority, or other legal entity or 

instrumentality that owns or operates facilities for the generation, transmission, 

distribution, or sale of electric energy primarily for use by the public and is defined as a 

utility under the statutes and rules by which it is regulated. An electric utility caD be 

investor-owned, cooperatively owned, or government-owned (owned by a federal agency,' .. 

crown corporation, state, provincial government, municipal government,. and public 

power district). 

Emergency - Any abnormal system condition that requires automatic orirnrnedlate 

manual action to prevent or limit loss of transmission facilities or generation supply tha.t • 

could adversely affect the reliability of the electric system. 

- .~ 

. -:-,' 

- .... 

- -
EE-RM/STD-98-440 _ /5^? -.

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999

Energy Clearing Price - The price at which the market is able to match the last unit of

energy a specific seller is willing to sell with the last unit of energy a specific purchaser is

willing to buy. '. '

Federal Energy Regulatory Commission (FERC)- Independent federal agency

within the U.S. Department of Energy that, among other responsibilities, regulates the

transmission and wholesale sales of electricity in interstate commerce.

Firm Power or Purchase - Power or power-producing capacity intended to be

available at all times during the period covered by a guaranteed commitment to deliver,

even under adverse conditions.

Forced Outage - Removal from service availability of a generating unit, transmission

line, or other facility for emergency reasons or a condition in which the equipment is

unavailable because of unanticipated failure.

Frequency - Rate, in cycles per second (or Hertz, Hz), at which voltage and current

oscillate in electric power systems. The reference frequency in North American

Interconnections is 60 Hz.

Generation Reserves - see Reserve.

Generating Unit -An electric generator together with its prime mover (e.g., steam

from boiler).

Grid - System of interconnected power lines and generators that is managed so that the

generators are dispatched as needed to meet the requirements of the customers connected

to the grid at various points. Gridco is sometimes used to identify an independent

company responsible for the operation of the grid.

Independent System Operator (ISO)- A neutral operator responsible for maintaining

the generation-load balance of the system in real time. The ISO performs its function by

monitoring and controlling the transmission system and some generating units to ensure

that generation matches loads.

Installed Capability- Seasonal (i.e., winter and summer) maximum load-carrying

ability of a generating unit, excluding capacity required for station use. ,

Interconnection - When capitalized, any one of the major electric system networks in

North America. When not capitalized, the facilities that connect two systems or control .

areas. In addition, an interconnection refers to the facilities that connect a nonutility

generator to a control area or system.

Interruptible Rate - Electricity rate that, in accordance with contractual arrangements,

allows interruption of consumer load by direct control of the utility system operator or by

action of the consumer at the direct request of the system operator. It usually involves -

commercial and industrial consumers. In some instances, the load reduction may be

'-B-3

EE-RM-STD-98-440 COMMENT 132

EE.RM/STD.98-440_tF-13~'. : 

Report of the DOE Power Outage Study Team on Electn"c Reliability Events of the Summer of /999 

Energy Clearing Price - The price at which the market is able to match the iast unit of 

energy a specific seller is willing to sell with the last unit of energy a specific purchaser is, 

willing to buy. 

Federal Energy Regulatory Commission (FERC) -Independent federal agency 

within the U.S. Department of Energy that, among other responsibilities, regulates the 

transmission and wholesale sales of electricity in interstate commerce. 

Firm Power or Purchase - Power or power-producing capacity intended to be 

available at all times during the period covered by a guaranteed commitment to deliver, 

even under adverse conditions. 

Forced Outage - Removal from service availability of a generating unit, transmission 

line, or other facility for emergency reasons or a condition in which the equipment is 

unavailable because of unanticipated failure. 

Frequency - Rate, in cycles per second (or Hertz, Hz), at which voltage and current 

oscillate in electric power systems. The reference frequency in North American 

Interconnections is 60 Hz. 

Generation Reserves - see Reserve. 

Generating Unit - An electric generator together with its prime mover (e.g., steam 

from boiler). 

Grid - System of interconnected power lines and generators that is managed so that the 

generators are dispatched as needed to meet the requirements of the customers connected 

to the grid at various points. Gridco is sometimes used to identify an independent 

company responsible for the operation of the grid. 

Independent System Operator (ISO) - A neutral operator responsible for maintaining 

the generation-load balance of the system in real time. The ISO performs its function by 

monitoring and controlling the transmission system and some generating units to ensure 

that generation matches loads. 

Installed Capability- Seasonal (i.e., winter and summer) maximum 'load-c3rrymg 

ability of a generating unit, excluding capacity required for station use.' 

Interconnection - When capitalized, anyone of the major electric system networks in 

North America. When not capitalized, the facilities that connect two systems or control" 

areas. In addition, an interconnection refers to the facilities that connect a nonutility 

generator to a control area or system. 

Interruptible Rate - Electricity rate that, in accordance with contractual arrangements, , 

allows interruption of consumer load by direct control of the utility system operator or py , action of the consumer at the direct request of the system operator. It usually involves . 

commercial and industrial consumers. In some instances, the load reduction may be ' ':, " 

B-3,' 

.'.- ... 

. ,". 
EE-RM/STD-98-440-8-&/4/$ 3

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999 - - .

affected by direct action of the system operator (remote tripping) after notice to the --

consumer in accordance with contractual provisions.

Load -A consumer of electric energy; also the amount of power (sometimes called

demand) consumed by a utility system, individual customer, or electrical deviceLoad Pocket - Geographical area in which electricity demand sometimes exceeds local

generation capability and in which there is an electricity import limitation as a result of

transmission constraints.

Load Shedding - The process of deliberately removing (either manually or

automatically) preselected customer demand from a power system in response to an

abnormal condition in order to maintain the integrity of the system and minimize overall

customer outages.

Market Clearing Price of Electricity - see Energy Clearing Price.

Marketers - Commercial entities that buy and sell electricity.

Must-Run Resources - Generation designated to operate at a specific level and not

available for dispatch.

Network Distribution - Method of distributing electric power to a densely populated

area, where a network or grid of low-voltage conductors covers an area of several city

blocks to a few square miles. The grid is solidly connected and is fed from multiple

distribution feeders.

Nonfirm Capacity, Power, or Purchase - Power or power-producing capacity.

supplied or available under a commitment having limited or no assured availability.

Nonspinning Reserve - Generation capacity that is not being utilized but that can be

activated and used to provide assistance with little notification.

North American Electric Reliability Council (NERC) - A not-for-profit company

formed by the electric utility industry in 1968 to promote the reliability of the electricity

supply in North America. NERC consists of 10 Regional Reliability Councils and one

Affiliate whose members account for virtually all the electricity supplied in the United

States, Canada, and a portion of Baja California Norte, Mexico. The members of these

Councils are from all segments of the electricity supply industry -investor-owned, ':

federal, rural electric cooperative, state/municipal, and provincial utilities, independent

power producers, and power marketers. The 10 NERC Regional Reliability Councils are

East Central Area Reliability Coordination Agreement, Electric Reliability Council of

Texas, Florida Reliability Coordinating Council, Mid-Atlantic Area Council, Mid-.

America Interconnected Network, Mid-Continent Area Power Pool, Northeast Power

Coordinating Council, Southeastern Electric Reliability Council, Southwest Power Pool,

and Western Systems Coordinating Council. The Affiliate is the Alaskan Systems

Coordination Council. .

B-4

EE-RM-STD-98-440 COMMENT 132

~ .. 

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, 

c, 

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EE-RM/STO-9S-44o--# / ~,:~ ,,' 

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999 

B-4 

affected by direct action of the system operator (remote tripping) after notice to the ' 

consumer in accordance with contractual provisions, 

Load - A consumer of electric energy; also the amount of power (sometimes call,ed 

demand) consumed by a utility system, individual customer, or electrical device', 

" 

- ' .. 

Load Pocket - Geographical area in which electricity demand sometimes exceeds local 

generation capability and in which there is an electricity import limitation as a result of 

transmission constraints. 

Load Shedding - The process of deliberately removing (either manually or 

automatically) preselected customer demand from a power system in response to an 

abnormal condition in order to maintain the integrity of the system and minimize overall 

customer outages. 

Market Clearing Price of Electricity - see Energy Clearing Price. 

Marketers - Commercial entities that buy and sell electricity. 

Must-Run Resources - Generation designated to operate at a specific level and not 

available for dispatch. 

Network Distribution - Method of distributing electric power to a densely populated, 

area, where a network or grid of low-voltage conductors covers an area of several city 

blocks to a few square miles. The grid is solidly connected and is fed from multiple 

distribution feeders. 

Nonfirm Capacity, Power, or Purchase - Power or power-producing capacity , 

supplied or available under a commitment having limited or no assured availability. 

Nonspinning Reserve - Generation capacity that is not bemg utilized but that can be 

activated and used to provide assistance with little notification. 

North American Electric Reliability Council (NERC) - A not-for-profit company 

formed by the electric utility industry in 1968 to promote the reliability of the electricity . 

supply in North America. NERC consists of 10 Regional Reliability Councils arid one 

Affiliate whose members account for virtually all the electricity supplied in the United 

States, Canada, and a pOItion of Baja California Norte, Mexico. The members of these 

Councils are from all segments of the electricity supply industry - investor-owned, 

federal, rural electric cooperative, state/municipal, and provincial utilities, independent 

power producers, and power marketers. The 10 NERC Regional Reliability Councils are' , " 

East Central Area Reliability Coordination Agreement, Electric Reliability Council of 

Texas, Florida Reliability Coordinating Council, Mid-Atlantic Area Council, Mid- , 

America Interconnected Network, Mid-Continent Area Power Pool, Northeast Power 

Coordinating Council, Southeastern Electric Reliability Council, Southwest Power Pooi, 

and Western'Systems Coordinating Council. The Affiliate is the Alaskan Systems 

Coordination Council. 

, " 

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EE-RM/STbD98-440 .- 43» ~.~- l .r1 = _- a. . · .- .

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999

Open-Access Same-Time Information System (OASIS) - An electronic posting

system for transmission access data that allows all transmission customers to view the

data simultaneously.

Operable Capability-The portion of installed capability of a generating unit that is in

operation or available to operate in the hour.

Operating Reserve- That capability above firm system demand required to provide for

regulation, load forecasting error, equipment forced and scheduled outages, and local area

protection. It includes both spinning and nonspinning reserve.

Peak Demand or Load - The greatest demand that occurs during a specified period of

time.

Power Pool - Entity established to coordinate short-term operations to maintain system

stability and achieve least-cost dispatch. The dispatch provides backup supplies, shortterm excess sales, reactive power support, and spinning reserve. Historically, some of

these services were provided on an unpriced basis as part of the power pool members'

utility franchise obligations. Coordinating short-term operations includes the aggregation

and firming of power from various generators, arranging exchanges between generators,

and establishing (or enforcing) the rules of conduct for wholesale transactions. The pool

may own, manage, and/or operate the transmission lines (i.e., wires) or be an independent

entity that manages the transactions between entities. Often, the power pool is not meant

to provide transmission access and pricing or to provide settlement mechanisms if

differences between contracted volumes among buyers and sellers exist.

Reactive Power - Portion of electricity that establishes and sustains the electric and

magnetic fields of alterating-current equipment. Reactive power must be supplied to

most types of magnetic equipment, such as motors and transformers. It also must supply

the reactive losses on transmission facilities. Reactive power is provided by generators,

synchronous condensers, or electrostatic equipment such as capacitors and directly

influences electric system voltage. It is usually expressed in kilovars (kVAR) or

megavars (MVAR).

Real Power - Rate of producing, transferring, or using electrical energy, usually

expressed in kilowatts (kW) or megawatts (MW).

Reliability - Degree of performance of the elements of the bulk-power system that

results in electricity being delivered to customers within accepted standards and in the

amount desired. Reliability may be measured by the frequency, duration, and magnitude

of adverse effects on the electric supply. Electric system reliability can be addressed by

considering two basic and functional aspects of the electric system -adequacy and

security.

Reserve -Electric power generating capacity in excess of the system load projected for

a given time period. It consists of two sources: spinning reserve and supplemental

reserve.

-'" ' . * ': '- *~~~~~~~

EE-RM-STD-98-440 COMMENT 132

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Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999 

Open-Access Same-Time Information System (OASIS) - An electronic posting 

system for transmission access data that allows all transmission customers to view the 

data simultaneously. 

Operable Capability - The portion of installed capability of a generating unit that is in' .' 

operation or available to operate in the hour. 

Operating Reserve - That capability above firm system demand required to provide for 

regulation, load forecasting error, equipment forced and scheduled outages, and local area 

protection. It includes both spinning and nonspinning reserve. 

Peak Demand or Load - The gr~test demand that OCcurs during a specified period of 

time. 

Power Pool - Entity established to coordinate short-term operations to maintain system 

stability and achieve least-cost dispatch. The dispatch provides backup supplies, short- . 

term excess sales, reactive power support, and spinning reserve. Historically, some of 

these services were provided on an unpriced basis as part of the power pool members~ 

utility franchise obligations. Coordinating short-term operations includes the aggregation 

and firming of power from various generators, arranging exchanges between generators, 

and establishing (or enforcing) the rules of conduct for wholesale transactions. The pool . 

may own, manage, and/or operate the transmission lines (i.e., wires) or be an independent 

entity that manages the trlmsactions between entities. Often, the power pool is not meant· 

to provide transmission access and pricing or to provide settlement mechanisms if 

differences between contracted volumes among buyers and sellers exist. 

Reactive Power - Portion of electricity that establishes and sustains the electric and 

magnetic fields of alternating-current equipment. Reactive power must be supplied to 

most types of magnetic equipment, such as motors and transformers. It also must supply 

the reactive losses on transmission facilities. Reactive power is provided by generators, 

synchronous condensers, or electrostatic equipment such as capacitors and directly 

influences electric system voltage. It is usually expressed in kilovars (kV AR) or 

megavars (MY AR). 

Real Power - Rate of producing, transferring, or using electrical energy" usually 

express~ in kilowatts (kW) or megawatts (MW). 

Reliability - Degree of performance of the elements of the bulk-power system that . 

results in electricity being delivered to customers within accepted standards and in the 

amount desired. Reliability may be measured by the frequency, duration, and magriitude 

of adverse effects on the electric supply. Electric system reliability can ~ addressed by 

considering two basic and functional aspects of the electric system - adequacy and 

security. . '. . 

Reserve - Electric power generating capacity in excess of the system load projected for 

a given time period. It consists of two sources: spinning reserve and supplemental 

reserve. 
EE-RM/STD-98-440 - ·

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999 -

Retail Sales -With regard to the electric industry, electrical energy supplied.for : .::- .: '

residential, commercial, and industrial end-use purposes. Other small end-use classes,

such as agriculture and street lighting, also are included.

Schedule-Agreed-upon transaction size (megawatts), start and end time, beginning

and ending ramp times and rate, and type required for delivery and receipt of power and

energy between the contracting parties and the control area(s) involved in the transaction.

Security - Ability of the electric system to withstand sudden disturbances, such as

electric short circuits or unanticipated loss of system elements.

Security Coordinator - One of 23 entities established by NERC with the responsibility

and authority to direct actions aimed at maintaining real-time security for a control area,

group of control areas, NERC subregion, or NERC region. ..

Short-Notice or Short-Term Transaction - Transaction for the transfer of net energy

from one region to another, made with little time between the transaction and the transfer

(typically, less than one hour).

Spinning Reserve -Ancillary service that provides additional capacity from electricity

generators that are on line, loaded to less than their maximum output, and available to

serve customer demand immediately should a contingency occur.

Stability - Ability of an electric system to maintain a state of equilibrium during normal

and abnormal system conditions or disturbances. .

Supplemental Reserve - Ancillary service that provides additional capacity from

electricity generators that can be used to respond to a contingency within a short period,

usually 10 minutes.

System -see Electric System.

System Operator - Individual at an electric system control center whose responsibility

it is to monitor and control that electric system in real time.

Tariff - Schedule detailing the terms, conditions, and rate information applicable to

various types of electric service.

Topology -Structure and layout of a system.

Transmission - Interconnected group of lines and associated equipment for the

movement or transfer of electric energy between points of supply and points at which it is

transformed for delivery to customers or is delivered to other electric systems.

Unit - see Generating Unit.

B-6

i' . ** ' * .a~~~~~~ .

EE-RM-STD-98-440 COMMENT 132

EE-RM/STD-98-440 -# 13~- .. . . . .. . Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999 

Retail Sales - With regard to the electric industry, electrical energysuppliedJor:~· -

residential, commercial, and industrial end-use purposes. Other small end-use classes, 

such as agriculture and street lighting, also are incl~ded. 

Schedule - Agreed-upon transaction size (megawatts), start and end time, beginning·· 

and ending ramp times and rate, and type required for delivery and receipt of power and 

energy between the contracting parties and the control area(s) involved in the transaction. 

Security - Ability of the electric system to withstand sudden disturbances, such as 

electric short circuits or unanticipated loss of system elements. 

Security Coordinator - One of23 entities established by NERC with the responsibility 

and authority to direct actions aimed at maintaining real-time security for a control area, 

group of control areas, NERC subregion, or NERC region. 

Short-Notice or Short-Term Transaction :-Transaction for the transfer of net energy 

from one region to another, made with little time between the transaction and the transfer 

(typically, less than one hour). 

Spinning Reserve - Ancillary service that provides additional capacity from electricity 

generators that are on line, loaded tei less than their maximum output, and available to 

serve customer demand immediately should a contingency occur. 

Stability - Ability of an electric system to maintain a state of equilibrium during normal 

and abnormal system conditions or disturbances. 

Supplemental Reserve - Ancillary service that provides additional capacity from 

electricity generators that can be used to respond to a contingency within a short period, 

usually 10 minutes. 

System - see Electric System. 

System Operator - Individual at an electric system control center whose responsibility 

it is to monitor and control that electric system in real time. 

Tariff ---; Schedule detailing the terms, conditions, and rate information applicable to 

various types of electric service. 

Topology - Structure and layout of a system. 

Transmission - Interconnected group oflines and associated equipment for the . : 

movement or transfer of electric energy between points of supply and points at which it is 

transformed for delivery to customers or is delivered to other electric systems ..... 

Unit - see Generating Unit. 

.." .. -', 

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E. ERM /STD-98-440 _.._. / 

Report of the DOE Power Outage Study Team on Electric Reliability Events of the Summer of 1999

Unit Commitment- Process of determining which generators should be operated each

day to meet the daily demand of the system.

Utility - see Electric Utility.

Volt-Ampere-Reactive (VAR) - Unit of measure of the power that maintains the

constantly varying electric and magnetic fields associated with alternating-current

circuits. See Reactive Power.

Voltage - The unit of measure of electric potential.

Voltage Collapse - An event that occurs when an electric system does not have

adequate reactive support to maintain voltage stability. Voltage collapse may result in

outage of system elements and may include interruption in service to customers.

Wholesale Electricity Market - Purchase and sale of power, according to agreements

with varying lengths and lead times, among power marketers, power producers, and other

wholesale entities.

NW,7

EE-RM-STD-98-440 COMMENT 132

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Report of the DOE Power Outage Study TeQm on Electric Reliability Events of the Summer of 1999 . 

Unit Commitment -l?rocess of detennining which generators sh(;mld be operated each ". 

day to meet the daily demand of the system. 

Utility - see Electric Utility: 

Volt-Ampere-Reactive (V AR) - Unit of measure of the power that maintains the 

constantly varying electric and magnetic fields associated with alternating-current 

circuits. See Reactive Power. 

Voltage - The unit of measure of electric potential. 

Voltage Collapse - An event that occurs when an electric system does not have 

adequate reactive support to maintain voltage stability. Voltage collapse may result in 

outage of system elements and may include interruption in service to customers. 

Wholesale Electricity Market - Purchase and sale of power, according to agreements 

with varying lengths and lead times, among power marketers, power producers, and other 

wholesale entities. 

"