US Energy Sec. Bill Richardson reissues summer blackout warning

Speaking in Houston, US Energy Sec. Bill Richardson reiterated his belief that the nation's electric system is in a precarious position with a growing likelihood for system failure in some parts of the country.Blackouts and brownouts this summer could boost chances for passage of federal legislation restructuring the U.S. electric industry, a Department of Energy source said in Houston Friday at a forum on the state of the industry.


Kate Thomas
OGJ Online

HOUSTON�Speaking in Houston Friday, US Energy Sec. Bill Richardson reiterated his belief that the US electric system is in a precarious position with a growing likelihood for system failure in some parts of the country. As states scramble to avoid blame, blackouts and brownouts this summer could boost chances for passage of federal legislation restructuring the US electric industry, a Department of Energy source said at a forum on the state of the industry.

"I am really worried there will be blackouts and brownouts this summer," Richardson said. Despite criticism, Richardson stuck to his position that the US has the grid of a "third world nation."

"We think it is crucial for Congress to enact restructuring legislation," he said. "We think that is key to having a modern electricity grid."

Chances of federal legislation being adopted have improved, in Richardson's opinion, to 55% from about 50%. If problems occur this summer, the DOE source said, states will be looking for cover from outraged consumers and will turn to the federal government to fix the problem.

Regions that could experience problems this summer, Richardson said, are California, some parts of the Southwest, and the Northeast. He said Texas appears to be in good shape, thanks to new generating capacity scheduled to be in place this summer and a restructuring that will give Texas consumers a choice of electricity providers in 2002.

Brett Perlman, a commissioner with the Texas Public Utility Commission, observed eight plants totaling 4,779 Mw are scheduled to begin operating this summer, enough to serve the electricity needs of more than 1 million Texas homes. Another 15 power plants, totaling 9,105 Mw are under construction in the state with operational start dates between fall 2000 and the end of 2002. Last year, Texas' electricity demand peaked at 66,000 Mw, and total capacity was 70,112 Mw. This year, the PUC is projecting summer demand will hit 68,577 Mw and capacity is 75,464.

Within the Electric Reliability Council of Texas, the bulk system serving about 85% of the state's load, peak demand is projected to reach 56,945 Mw this summer, while, Perlman said, installed capacity by the end of July will reach 63,071 Mw. TXU Corp. Executive Vice-Pres. Paul Puckett said ERCOT's reserve margin will be about 18%.

Transmission issues
Perlman said most outages are the result of local distribution equipment failures, not bulk generation outages or transmission shortages. Reliant Energy Inc. Senior Vice-Pres. Steve Schaffer said his company believes there will be ample generation available this summer despite a May heat wave. "We are amazed by the early temperature changes," he explained. "We had some problems because the temperatures got too high so early.

Siting transmission could become more complex under deregulation, Schaeffer said, since transmission line owners and generators will no longer be owned by the same company, limiting joint planning. Others speakers expressed concern about convincing the public of the need to construction additional transmission capacity. However, Puckett said TXU is investing about $150 million in transmission capacity additions and improvements.

Many issues will resolve themselves if getting access to the grid were easier, said Steve Kean, Enron Corp. executive vice-president. "That is a big part of the barriers we have to fix today," he said. "If we get federal legislation, we can solve some of these problems. We need federal legislation to get the grid open so state programs can be successful."

In particular, Kean said, the Tennessee Valley Authority and Bonneville Power Administration should be required to offer open access to their presently closed transmission systems. Some speakers advised the Federal Energy Regulatory Commission to take the same approach to opening transmission lines to independent generators as was used in opening natural gas transmission pipelines.

Industrial companies will fight a move to get rid of the Public Utility Regulatory Policies Act, said Marty Buckley, vice-president of energy for Air Liquide America Corp., unless similar provisions are enacted in new federal legislation. PURPA requires utilities to buy power from qualified independent power producers, usually cogenerators, at a price that reflects what costs the utilities avoid by buying power from the facility rather than building generation. Industrial companies also want to preserve their interconnection rights, he said.

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