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More Power Outages Possible

Story Filed: Tuesday, March 14, 2000 2:25 AM EST

WASHINGTON (AP) -- This summer could see a repeat of power outages if reliability problems in a rapidly changing electricity industry are not addressed, Energy Secretary Bill Richardson warned.

Addressing a group of mayors and local officials on Monday, Richardson urged that they help convince Congress to enact legislation that would require mandatory reliability standards for wholesale power producers.

``While demand for electricity is soaring ... the reliability of our electric grid is at times faltering, mainly because policy makers haven't kept pace with rapid changes in the electric utility industry,'' Richardson said.

He released an Energy Department report that concluded the transition to electricity competition has strained transmission and distribution lines, and caused some utilities to focus on competing for markets, cutting costs and maximizing prices, instead of assuring that power is kept flowing.

A draft of the report, including its key findings, was made public as an interim document in January.

But Richardson, speaking to the National League of Cities, used the analysis to reiterate his call for Congress to pass legislation governing the new, more competitive electricity industry or risk ``more long, hot summers of outages in America's cities.''

For several years, lawmakers have been trying to craft legislation that would establish a national program of electricity industry deregulation, ending the historic monopolies utilities have had in their local service areas.

Twenty-four states already are well along to a competitive electricity market and in some states such as California and Pennsylvania people can choose their electricity supplier, although the actual power still comes over the same local distribution systems.

But a national electricity deregulation bill has been stymied by disagreements among various segments of the $200 billion electric power industry, and opposition from some states where electricity already is cheap. There also has been controversy over what role the federal government should play as opposed to the states, which traditionally have regulated electric utilities, and whether a federal law should require an openly competitive market, or allow states to make that decision.

Citing power disruptions last summer, Richardson told a cities' conference that ``without action (on the federal level) things could get worse before they get better.''

Last week, Richardson told a conference of state regulators that the system of voluntary reliability rules, established by the industry itself, is inadequate in the current competitive market system.

``We need mandatory reliability standards for (wholesale) power providers,'' Richardson reiterated Monday.

Richardson also has raised concerns about large power providers manipulating prices.

Despite the movement toward competition, electricity supply in some parts of the country remains ``highly concentrated in the hands of only a few companies,'' Richardson said.

``This raises a warning flag that these companies will be able to dominate the market and raise prices,'' he recently told a conference of state utility regulators. He accused ``a handful of utilities and other organizations'' of using a ``state's rights'' argument to block federal rules needed to ensure reliability and market power abuses.

The DOE report released Monday said that while many states have made significant progress in developing competitive electricity markets, their efforts to develop market-based mechanisms to ensure against power disruptions have lagged behind.

The report examined power disruptions and electricity price spikes that occurred during high electricity demand last summer and how to prevent a repeat of the same problems this summer.

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

-- - (, March 14, 2000


Not to rehash an old argument (but I will anyway!), but this is a very interesting article in light of the fact that some people blamed last year's outages on "early implementations of Y2K-remediated components." Of course, now that we have 20-20 hindsight, it's becoming clearer that the outages are more indicative of problems with the overall infrastructure of the electrical industry, rather than a computer bug.

-- (hmm@hmm.hmm), March 14, 2000.

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