The Next Blackout

Five or six years ago, when it was certain states really were going to break up their public electric companies, federal regulators knew the health of the transmission system would decide whether a competitive market would work. So they did what good regulators do – they formed one of those commissions that look at difficult, theoretical problems and issue reports that almost no one wants to read. That report is being read closely now, and such embarrassing reading it is. Issued in 1998, “Maintaining Reliability in a Competitive U.S. Electricity Industry” wasn’t entirely ignored at the time, but it was ignored enough so that the recent blackout seemed like a nasty I-told-you-so.

That is unfortunate because the report was hardly alone in describing that by undoing the vertical monopoly of the public utility, states were also undoing the oversight of the system. The Clinton administration wanted greater oversight of the electric grid but was rejected by Congress; grid oversight is in the energy bill from the Bush administration that has been stalled for two years. The result apparently was seen earlier this month, when the largest blackout in U.S. history spread in ways that it should not have through the East, Midwest and Canada.

The ’98 report recommended more authority for the Federal Energy Regulatory Commission, changes in the structure of regional reliability councils and that FERC solve how regional transmission enhancements would be paid for, among other suggestions. Had all these steps been taken swiftly, the North American Electric Reliability Council, which is charged with protecting the gird, may not have three months ago pinpointed the Midwest as the region most likely to face “large, unanticipated power flows” this summer because of the grid configuration.

There is much more to be done, including a search for ways to reduce demand for power. Time-of-day pricing might further reduce the stress on the lines. And Congress should also look at how renewable energy, which typically is better distributed than fossil-fuel plants, might reduce bottlenecks. None of these is likely to provide major savings, but taken together they may make the difference in whether a grid stays up or crashes.

Five years and $6 billion after Washington recognized the vulnerability of transmission lines, Congress understands it must act. Many of the report’s recommendations still make sense; a change from voluntary to mandatory standards for transmission companies is a minimum. The Senate’s version of an industry-based, North America-wide electric reliability organization may need to be rethought. FERC almost certainly will have to assume more responsibility in the building of a national grid.

The breadth of changes that may be needed suggests they are more than what the conference committee on energy can handle in the short time between Congress’ return next month and the end of the session, scheduled for the first week in October, though likely sometime later. The politics of keeping these reforms in the energy bill being debated are that the White House wants to use the popularity of transmission improvements to help pass unpopular energy bill provisions such as drilling in the Arctic National Wildlife Refuge.

There would be an argument for adding the transmission oversight reform to the work of the conference committee on the energy bill if the overall bill weren’t so contentious. But the House and Senate would do better to carefully consider the reviews of what happened recently, the long-standing concerns about transmission and a broader range of solutions than could be offered in conference in separate legislation. And they ought to do it without waiting for the next major blackout to strike.