Report says rush to competition reduces electrical reliability

By Associated Press, 1/5/2000

WASHINGTON (AP) Electric providers may have avoided the Y2K bug, but the industry's rush toward competition is making America's power system less reliable, an Energy Department task force said Wednesday.

The task force examined power disruptions during peak electricity demand last summer in Chicago, New York City, Texas and other areas in the mid-Atlantic and Gulf Coast states.

''Aging infrastructure and increased demand for power have strained many transmission and distribution systems to the point of interrupting service,'' said the interim task force report. It said some utilities, in focusing on surviving in a competitive market, cut spending on areas aimed at reliability.

Increased electricity use and new demands caused by the trend toward competition among power providers ''are stressing the electrical system'' and increasing the risk of temporary blackouts or brownouts during peak demand periods, the report continued.

Energy Secretary Bill Richardson said cooperation between industry and the government in dealing with the Y2K computer glitch ''was a good step toward achieving a more reliable electric grid.''

But he said the report by the department's task force investigating power disruptions last summer was evidence that additional steps must be taken to ensure electricity reliability. He urged Congress to enact legislation aimed at increasing reliability of the power grids.

The interim report, given to Richardson this week with a final version expected in March, found that electric utilities were undergoing fundamental change from operating as local monopolies to becoming rivals in an increasingly competitive market.

The disruptions last summer ''demonstrate that the necessary operating practices, regulatory policies and technological tools for dealing with the changes are not yet in place to guarantee an acceptable level of reliability,'' said the report.

The task force, made up of power industry experts from the government and private industry, was asked to examine power disruptions and electricity price spikes that occurred during high electricity demand last summer.

They included outages in Chicago, New York City, Long Island, New Jersey, the mid-Atlantic from Virginia to Delaware, Mississippi, Arkansas, Texas and Louisiana as well as some non-outage electricity grid disturbances in New England and the mid-Atlantic states.

The task force said competitive pressures make it more difficult to coordinate the flow of electricity since more parties participate.

''Unfortunately the development of reliability management reforms, tools, technologies and operating procedures has lagged behind economic reforms in the electric industry,'' said the report.

''In anticipation of competitive markets, some utilities have adopted a strategy of cost-cutting that involves reduced spending on reliability... The overall effect has been that infrastructure for reliability assurance has been considerably eroded.''

[ENDS]

-- John Whitley (jwhitley@inforamp.net), January 06, 2000