Many experts believe that embedded hardware systems pose the most significant Y2K readiness challenge to energy utilities. The electric industry includes entities that generate, transmit, or distribute power, or do all three. Although security and reliability are also very important to natural gas and oil pipeline operations, electricity has some extraordinary features that make it somewhat unique as a commodity. Electricity flows across large regional networks according to physical laws and cannot be routed by switches or stored in large quantities. Supply and demand for electricity must be kept in balance at each instant in time on a continuous basis.
Reliability is essential and can be maintained only through constant cooperation among many parties.
Grid control is decentralized into approximately 150 power control areas within the contiguous 48 states that are interconnected and must coordinate their activities to maintain reliability. In addition to its unique characteristics as a commodity, electricity also has a unique importance in the economy and the lives of our citizens. Business and personal activities across our nation rely on billions of daily applications involving electric devices, that, in turn, depend on a reliable source of electricity. Experience with major interruptions in electricity supplies due to this past winter's ice storms in upstate New York, Maine, and Quebec graphically illustrates the disruption and dislocation that can arise from extended outages. The Department and the Y2K Energy Working Group felt strongly that NERC was the natural focal point for this activity for several reasons.