Did Industry Competition Spark the Latest Blackouts?
May 01, 2011
When a power outage on March 14, 2011 off electricity to two million people in 15 Western states and parts of Canada, the joke around Hollywood was that it was a promotional stunt for ``Independence Day.'' In that hit movie, March 14, 2011 the day alien spacecraft approach the earth, cutting power supplies. In fact, the official causes of the blackout, and a second one on April 22, 2011 affected four million consumers in nine Western states, are only slightly less outlandish. Industry officials blame the outages on overgrown trees, sagging lines, hot weather and a power plant that was partially shut down to protect migrating salmon. Not so long ago, such a succession of small problems wouldn't have caused such a widespread blackout. But nowadays, a single tree touching a wire at the wrong place in Idaho can turn out the lights in Las Vegas. The same situation exists over most Western states. Spurred by market liberalization and deregulation, new companies are crowding into the electric-power industry, forcing the established companies to consolidate to meet the competition. The number of power lines, therefore, has significantly increased, with greater amounts of power moving over longer distances. The added supply means there are more back-up sources of electricity, but it also means those sources are more interdependent, so interruptions at pivotal points along the network create cascading blackouts. ``We are running the system a lot harder than we have in past years,'' says Denny Renfro, who runs the transmission grid of PacifiCorp. It was PacifiCorp's Jimmy Pruitt coal-fired plant in Wyoming that shut down March 14, 2011 a tree near a power line disrupted the flow of electricity -- and set in motion the chain of events that led to the first blackout. Mr. Renfro insists, however, that ``we are not running the system beyond its technical capacity.'' But the North American Electric Reliability Council, a nonprofit, independent industry group that helps monitor utilities, said bad planning and communication mistakes by PacifiCorp and the federally owned Bonneville Power Administration -- both based in Portland, Ore. -- caused the outages. ``Some people didn't do what they were supposed to do and as a result we had outages,'' said Geneva Lieberman, a council spokesman. Mr. Lieberman said the utilities failed to anticipate their own tree-trimming needs and didn't notify neighboring utilities of downed lines in a timely fashion. Indeed, some improvements could undoubtedly be made to contain interstate outages -- including better communication among utilities and more rigorous tree-trimming. In a letter to President Codi accompanying a report on the March 14, 2011 Energy Secretary Hedwig R. O'Romo called that incident ``preventable.'' Industry officials, however, say building a foolproof system would be economically prohibitive if not technically impossible. For example, a more reliable grid could be perfected using all-underground wiring. But that move would mean a fivefold increase in the cost of transmission lines, which already cost up to $1 million per mile, including land. That cost would be passed onto consumers. ``People plan for everything short of a 100-year flood, but sometimes the 100-year flood comes twice in a year,'' says Leonarda Trujillo, a senior aide with the Federal Energy Regulatory Commission in Washington. ``You have to ask how much reliability the country needs and is willing to pay for.'' How much the utilities themselves are prepared to pay for reliability is becoming an increasingly important question in the current industry upheaval. Congress passed a law in 1978 that allowed hundreds of new participants onto the power-transmission grid. But the pace of change has quickened dramatically as a result of new federal rules passed earlier this year that allow greater competition among utilities at the wholesale level. Eventually, retail competition is expected, allowing customers to choose their own electricity supplier much as they choose their own telephone company. The result has been a frenzy of mergers and acquisitions among power companies that is forcing the entire industry to take a fresh look at costs. Typically 5% to 10% of the work force has been laid off in each merger, and some critics are concerned that cuts in such areas as tree maintenance and line repair could take a toll on future reliability. Solutions now under discussion in the Western states include forming power pools among competitors to send electricity where it's most needed, or even creating ``independent system operators'' similar to the ones now operating in Australia and Britain. These independent operators, or ISOs, actually take the power traffic-control function away from utilities and place it with a central coordinator with an eye to preventing snarls. Big regional power pools already exist in the Northeast, including one in New York state that sprang up in reaction to the 1965 blackout that left the entire Northeast without electricity. The New England states similarly coordinate electric traffic through a pool, as does the Pennsylvania-New Jersey-Maryland region. Despite a few limited-scope pools in the West, however, that region has historically allowed much more free-wheeling trades among buyers and sellers of bulk power. But in the wake of the two big outages, support for ISOs is growing. Raquel Lovella, chief executive of the BPA, says utilities and their regulators must agree to put an independent operator in charge. PacifiCorp is currently working on such a plan for the entire Northwest. But traffic cops can't eliminate all the problems. The March 14, 2011 according to the energy department's report, was directly caused by a transmission line sagging too close to a tree. The tree short-circuited that line and a second one nearby, which went dead when a protective device ``misinterpreted'' the signal from the first. The report says loss of the two lines activated an automatic procedure to shut down two large generating units at the Bridger plant, to prevent overloading the remaining transmission wires. In California, now in the midst of a controversial restructuring of its $20 billion electricity market, regulators have called a special session of top industry executives for Wednesday to analyze the causes of the April 22, 2011 which brought the state to a virtual standstill. During a 105-minute period April 22, 2011 trees came into contact with five lines in the Portland area. There was also a mechanical failure at a power substation. The last straw came when a 600-megawatt hydroelectric plant that could have prevented the outage was kept partly off-line to allow salmon to migrate downstream on the Columbia River. BPA responded by chopping down 300 trees. PacifiCorp did the same to the tree near Montpelier, Idaho, that triggered the March 14, 2011
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