ENERGY [D] |
U.S. ELECTRIC POWER GRID
The U.S. power transmission system is in urgent need of modernization. Growth in electricity demand and investment in new power plants has not been matched by investment in new transmission facilities. Maintenance expenditures have decreased 1% per year since 1992. Existing transmission facilities were not designed for the current level of demand, resulting in an increased number of "bottlenecks," which increase costs to consumers and elevate the risk of blackouts.
In 2003, the most recent year for which complete data are available, the total U.S. net generation of electricity rose slightly to 3.883 billion kilowatt hours. This represents a 0.6% growth in electricity generation over the 2002 level; however, it is significantly below the average annual growth rate of 2.4% between 1992 and 2003.[1]
To distribute that power, the U.S. electric transmission grid consists of nearly 160,000 miles of high-voltage (230 kilovolts and greater) transmission lines. In 1999, America's electric utilities spent more than $3 billion maintaining and operating these links to customers, and $2.3 billion on construction expenditures (including replacements, additions and improvements).[2]
Despite these investments, the state of the grid remains a cause for deep concern among experts. The Consumer Energy Council of America (CECA), a national association of utility officials, state regulators and consumer advocates, warned this winter that support for new investment in the transmission grid is declining.
The CECA noted that investment in the transmission grid was at a low of $83 million per year from 1975 to 1999. It increased to $286 million annually from 1999 through 2003. Although the investment increases are good, total U.S. transmission capacity decreased by approximately 19% per year between 1992 and 2002. Investment in transmission lines during the next 10 years is expected to be $3 billion to $4 billion per year, while the line-miles of transmission added will be only one third the rate of electricity demand. In addition, transmission maintenance expenditures have decreased at a rate of one percent annually since 1992, which can affect the reliability of the system.
In 2002, the U.S. Department of Energy was equally blunt:
"There is growing evidence that the U.S. transmission system is in urgent need of modernization. The system has become congested because growth in electricity demand and investment in new generation facilities have not been matched by investment in new transmission facilities. Transmission problems have been compounded by the incomplete transition to fair and efficient competitive wholesale electricity markets. Because the existing transmission system was not designed to meet present demand, daily transmission constraints or `bottlenecks' increase electricity costs to consumers and increase the risk of blackouts."
Those fears were realized in August 2003, when the grid failed during the blackout that hit the Midwest, Northeast and portions of Canada. A series of power plants and transmission lines went offline because of instability in the transmission system in three states. The loss of these plants and transmission lines led to greater instability in the regional power transmission system; within four hours, there was a rapid cascade of additional plant and transmission line outages and widespread power outages. The blackout affected as many as 50 million customers in the United States and Canada, as well as a wide range of vital services and commerce. Air and ground transportation systems shut down, trapping people far from home; drinking water systems and sewage processing plants stopped operating, manufacturing was disrupted and some emergency communications systems stopped functioning. The lost productivity and revenue have been estimated in the billions of dollars.
In a letter to Congress in February 2004, the North American Electric Reliability Council (NERC), a consortium of public and private power producers that seeks to enforce compliance with voluntary reliability standards, was blunt in its assessment of the performance of the North American transmission grid:
"NERC's analysis of the actions and events that led to the blackout showed that several violations of NERC operating policies contributed directly to the August [2003] outage. This is yet another clear signal that voluntary compliance with reliability rules is no longer adequate, and underscores the urgent need for Congress to authorize the creation of a mandatory reliability system that provides for the establishment and enforcement of reliability rules by an independent, industry-led electric reliability organization, subject to oversight by the Federal Energy Regulatory Commission (FERC) within the United States."[3]
Not all utilities own transmission lines (that is, they are not vertically integrated), and no independent power producers or power marketers own transmission lines. Over the years, these transmission lines have evolved into three major national networks (power grids), which also include smaller groupings or power pools. The major networks consist of extra-high-voltage connections between individual utilities designed to permit the transfer of electrical energy from one part of the network to another. These transfers are restricted, on occasion, because of a lack of contractual arrangements or because of inadequate transmission capability.[4]
Over the past 10 years, utilities have been reluctant to put major investment into transmission lines without knowing how deregulation would affect these assets; therefore, the growth of the grid was slow and remains so. While the level of new transmission lines being constructed is low, the upgrading of existing transmission assets for a number of utilities is a major effort. Upgrades would provide the fastest and most economical approach to improvement of the grid, but there is a limit to the improvement using this approach.
Thus, the future of the U.S. transmission network is uncertain and is a continuing concern. Overall use of the transmission system is growing without significant additions of new construction or upgrades. Approval of new projects and the acquisition of new rights-of-way have been difficult. Many customers oppose having new transmission facilities built nearby. These transmission facilities support interstate commerce; but the siting and approval are generally a state and local governmental responsibility. In addition, the prelude to deregulation created and continues, to some degree, to cause limited investment in the transmission system.
The transmission grid is intended to be flexible, reliable and open to all exchanges, regardless of where the suppliers and consumers of energy are located. But neither the existing transmission grid nor its current management infrastructure can fully support this diverse and open exchange. The existing system was built for local needs, and is struggling to meet the demands of a global system brought about by deregulation. Electricity transactions that are highly desirable from a market standpoint may be quite different from the transactions for which the transmission grid was designed, and may stress the limits of safe operation.
The risks that they pose may not be recognized in time to avert major system emergencies, and, when emergencies occur, they may be of unexpected types that are difficult to manage without loss of customer load.
Meanwhile, new technology may alleviate the worst of the problem. Distributed generation--the small-scale production of electricity in fuel cells located at or near customers' homes and businesses--has the potential to improve the reliability of the power supply, reduce the cost of electricity and lower emissions of air pollutants, according to the Congressional Budget Office.
Policy Options
A safe, reliable electrical transmission grid is vital to the security and the economic health of the nation. The U.S. grid can no longer be allowed to operate under weak voluntary reliability guidelines from industry. The nation cannot afford to continue a piecemeal approach to the siting, construction and repair of the national transmission grid.
U.S. Energy Information Administration, Electric Power Annual 2003, December 2004
U.S. Federal Energy Regulatory Commission, Strategic Plan FY2004-FY2008, November 2004
North American Electric Reliability Council, NERC Acts to Strengthen Grid Reliability, February 2004
U.S. Government Accountability Office, Electricity Restructuring: 2003 Blackout Identifies Crisis and Opportunity for the Electricity Sector, November 2003
Congressional Budget Office, Prospects for Distributed Electricity Generation, September 2003
U.S. Energy Information Administration, Electricity Transmission Fact Sheet, August 2003
U.S. Energy Information Administration, The Changing Structure of the Electric Power Industry Infrastructure, October 2002
U.S. Department of Energy, National Transmission Grid Study, May 2002
Edison Electric Institute, Energy Infrastructure: Electricity Transmission Lines, February 2002
ASCE Policy Statement 144, "Energy Policy," 2004
ASCE Policy Statement 299, "Infrastructure Improvement Policy," 2003
ASCE Policy Statement 453, "Federal Capital Budgeting," 2003
ASCE Policy Statement 484, "Generation and Transmission Capacity," 2004
A safe, reliable electrical transmission grid is vital to the security and the economic health of the nation. The U.S. grid can no longer be allowed to operate under weak voluntary reliability guidelines from industry. The nation cannot afford to continue a piecemeal approach to the siting, construction and repair of the national transmission grid.
- Congress must require strict federal oversight of the conditions and operation of the grid by the FERC. In turn, FERC must adopt stringent, mandatory national standards for the safe operation, construction and maintenance of the transmission grid nationwide.
- Right-of-way acquisition must be accelerated under federal oversight.
Sources
Consumer Energy Council of America, Keeping the Power Flowing, January 2005
U.S. Energy Information Administration, Electric Power Annual 2003, December 2004
U.S. Federal Energy Regulatory Commission, Strategic Plan FY2004-FY2008, November 2004
North American Electric Reliability Council, NERC Acts to Strengthen Grid Reliability, February 2004
U.S. Government Accountability Office, Electricity Restructuring: 2003 Blackout Identifies Crisis and Opportunity for the Electricity Sector, November 2003
Congressional Budget Office, Prospects for Distributed Electricity Generation, September 2003
U.S. Energy Information Administration, Electricity Transmission Fact Sheet, August 2003
U.S. Energy Information Administration, The Changing Structure of the Electric Power Industry Infrastructure, October 2002
U.S. Department of Energy, National Transmission Grid Study, May 2002
Edison Electric Institute, Energy Infrastructure: Electricity Transmission Lines, February 2002
ASCE Policy Statement 144, "Energy Policy," 2004
ASCE Policy Statement 299, "Infrastructure Improvement Policy," 2003
ASCE Policy Statement 453, "Federal Capital Budgeting," 2003
ASCE Policy Statement 484, "Generation and Transmission Capacity," 2004
[1] In 2001, the U.S. actually experienced a decrease of two percent over all in electric power production. The decrease was unusual, in that net U.S. generation has historically increased from year to year. It was only the second time in more than 50 years that there was a decrease in net generation, according to the Energy Information Administration of the U.S. Energy Department (EIA).
[2] Investor-owned utilities own 73% of the transmission lines, federally owned utilities own 13%, and public utilities and cooperative utilities own 14%, according to data from the EIA.
[3] In November 2004, 15 months after the Northeast blackout, FERC announced plans to "[o]versee the development and enforcement of mandatory grid-reliability standards to protect the bulk power supply."
[4] The three networks are the Eastern Interconnect, the Western Interconnect and the Texas Interconnect. The Texas Interconnect is not interconnected with the other two networks (except by certain direct current lines). The other two networks have limited interconnections to each other. Both the Western and the Texas Interconnect are linked with different parts of Mexico.The Eastern and Western Interconnects are completely integrated with most of Canada or have links to the Quebec Province power grid. Virtually all U.S. utilities are interconnected with at least one other utility by these three major grids; the exceptions are utilities in Alaska and Hawaii. The interconnected utilities within each power grid coordinate operations, and buy and sell power among themselves. Within each of these power grids, different types of equipment and facilities are owned by many different entities.
[3] In November 2004, 15 months after the Northeast blackout, FERC announced plans to "[o]versee the development and enforcement of mandatory grid-reliability standards to protect the bulk power supply."
[4] The three networks are the Eastern Interconnect, the Western Interconnect and the Texas Interconnect. The Texas Interconnect is not interconnected with the other two networks (except by certain direct current lines). The other two networks have limited interconnections to each other. Both the Western and the Texas Interconnect are linked with different parts of Mexico.The Eastern and Western Interconnects are completely integrated with most of Canada or have links to the Quebec Province power grid. Virtually all U.S. utilities are interconnected with at least one other utility by these three major grids; the exceptions are utilities in Alaska and Hawaii. The interconnected utilities within each power grid coordinate operations, and buy and sell power among themselves. Within each of these power grids, different types of equipment and facilities are owned by many different entities.
