Delivering a Shock to the System

This is not about y2k, in fact it is not even mentioned, however, it may play an important part. It appears that our power electric transmission system is rather shaky and under-maintained. So, for those anticipating shunting power around the country for y2k, it could conceivably cause some problems.

This article is from Engineering News Record, the magazine of record for the heavy industrial construction industry. The people that read this magazine are the ones who build the world's industrial plants and infrastructure. I subscribed to it for many years, and thanks to Marianne, I just recently found that they have a web site and this is their cover article this week. You experts out there might read it through and comment. Some of the information, as a non-electrical man, was very disturbing to me. Particularly some of the information I have marked with XXX.

Note for you nay-sayers - this source, "Engineering News Record" is very very tough to doubt, so don't even try. This is a front cover story. It is written for and by professionals in the heavy industrial construction industry.

http://www.enr.com/new/c0712.asp

============================= copyrighted material. For discussion only.

Delivering a Shock to the System

By Thomas F. Armistead

Who could have imagined today's electricity market 10 years ago? Utility companies sell their generating plants-including nuclear plants-to private developers who operate coast-to-coast and even overseas. Power marketers trade wholesale kilowatt-hours like pork bellies, with price spikes sometimes shooting into the stratosphere. Developers build powerplants "on spec," taking their chances on power sales in the competitive market.

But while power generation has been the focus of so much attention of late, the North American electricity transmission system has been neglected. That's about to change. New government proposals are raising hopes that uncertainties now hampering transmission grid expansion may finally be dispelled, XXX allowing long-deferred construction to begin.

In May, the Federal Energy Regulatory Commission proposed restructuring the electrical transmission system by mandating formation of regional transmission organizations (RTOs). These are envisioned as independent, regional collaborations of electricity producers with authority to operate and maintain the reliability of transmission systems.

The action, coming three years after FERC's orders 888 and 889 began to deregulate the wholesale electricity industry, is the commission's first attempt to give undivided attention to transmission. XXX "There's a paralysis of confusion that is probably demotivating organizations to make transmission investments," says Bruce A. Renz, vice president for energy development support at American Electric Power Co., Columbus, Ohio. XXX "There aren't any incentives for anybody to build transmission," adds George C. Loehr, an Albuquerque-based consultant. Transmission construction today is as stagnant as generation construction was two years ago. FERC's action was the fruit of more than a year of public discussions aimed at developing a consensus on transmission restructuring. To some, it's long overdue.

XXX "Since the whole deregulation issue arose 10 years ago, utilities have been very cautious about investing capital in transmission," says Charles Irby, president of Irby Construction Co., Jackson, Miss. He says utilities seem to have responded to restructuring like deer in the headlights of a car at night. "They know change is coming, but don't know where to jump."

Data from the Princeton, N.J.-based North American Electric Reliability Council (NERC) confirm that investment in bulk transmission has fallen off. NERC's Reliability Assessment 1998-2007 notes that most transmission projects planned for the next 10 years are intended to reinforce parts of the system to alleviate local problems. "Most of our work is in upgrading the transmission lines," adds Lester Walcott, president of Commonwealth Associates Inc., Jackson, Mich. "You don't see the [extra-high voltage] projects that you used to."

But the focus on purely local improvements is part of the grid's problem. What we call the grid began as central generation stations, usually downtown, serving locally concentrated loads, says David E. Wojick, a power industry consultant in Star Tannery, Va. XXX As the local grids expanded, they interconnected to share load, but remained locally focused. The system's flaws were exposed by the 1965 blackout that struck the northeastern U.S. and adjacent areas in Canada.

That led to the formation of 10 regional reliability councils (see map), whose members are the utilities in the region. The utilities retain ownership and control of their grids, but share data and coordinate system expansions as necessary for reliability in their regions. Today, the North American transmission net consists of three large interconnections-Eastern, Western and Electric Reliability Council of Texas (ERCOT)-that are internally synchronized and linked by high-voltage dc lines.

But "the country never built a national grid. We linked a bunch of regional grids," says Neil Palmer, president of public-affairs consultant Neil Palmer & Associates, Elm Grove, Wis. The RTOs that FERC wants are to be regional-scope entities with the power to order improvements for more evenly integrated regional grids. Despite regulatory uncertainty, efforts to close some of the gaps are beginning, notably in Wisconsin and Texas. XXX But approvals come hard and many other projects are needed. Well-known bottlenecks on the grid are scattered around the East and Midwest. Yet NERC statistics show that only 6,588 miles of new transmission at 230-kv and above are planned in all of North America in the next 10 years.

XXX XXX FERC-mandated open access to transmission lines is imposing unprecedented stresses on the grid, highlighting another improvement need. "Long-distance wheeling is creating patterns of flows that we've never seen before, and nobody knows who's doing it," says Josi Delgado, electric system operations vice president at Wisconsin Electric Power Co., Milwaukee. Under the old regulatory regime, lines and generation plants were planned, sited, permitted and built in tandem. Systems were designed to carry power from known generation sites to known load centers. Now, proliferating generation generation plants may be sited anywhere on the system and they serve loads that could be anywhere. XXX NERC cites increased use of transmission loading relief (TLR)-a procedure that allows a system operator to refuse transactions that will overload its system-as evidence that the system is becoming overstressed by unpredictable power flows. "You know you have a problem when TLRs are necessary even in off-peak periods," says one industry expert.

SEPARATION ANXIETY Kiah Harris, management systems group manager for Burns & McDonnell, Kansas City, blames the "insidious" divorce of generation from transmission planning responsibilities for blinding the system. Before, "the construction of powerplants went hand-in-hand with construction of transmission lines and everybody knew the role of the generation with the transmission components," he says. Now he sees thousands of megawatts of non-utility generation capacity coming on line in 2001 and 2002. "It's hard to tell where the stresses will be" in the transmission system, he says.

Solving this problem promises to be somewhat more complex than just closing gaps in the grid. New EHV transmission lines may have to be built in entirely new directions. "I think we're talking about fairly major construction projects," says Terra Group Senior Partner Robert Wasserstrom. But siting new lines presents a Gordian knot of difficulties. In the past, utilities holding joint responsibility for generation and transmission planning had incentives to site transmission lines. "Now what incentive does a utility have to site a line for others to sell power?" asks one senior regulatory official.

Opposition to line construction adds to the delays. "When transmission lines were first being built, the people bringing the power were heroes," says Charles Irby. After a while, it took the threat of eminent domain to get an easement. "Every decade it becomes more and more difficult," he says. Neil Palmer adds, "If you're going to build a line of more than a few miles, it's almost inconceivable that someone won't say no. The difficulty rises even up to leaders of states who have not been willing to address these issues."

Keeping a low profile and minimizing disturbance can overcome some resistance. Common tactics in line siting include co-locating new lines with existing lines, building inside highway or railroad rights-of-way and installing cables underground. Using existing easements bypasses some permitting hurdles, and burying cables, though costly, reduces clutter. XXX "High-level transmission construction could be in the same sit uation as building a new nuclear powerplant-very difficult," says John Makens, a U.S. Energy Dept. economist and transmission affairs analyst. XXX XXX He fears it will take a few brownouts to soften opposition to transmission line construction. "People won't act till they hurt, but you don't want to wait that long," says Makens. George Loehr adds, "I think there's going to be a dearth of construction until we have a couple of big blackouts."

LONG WAIT It may not take much longer. Community resistance has already stretched lead times for new transmission lines out five to 10 years. A new natural-gas-fired generation plant can be built in two, and generation already has a head start, observers say. The system probably cannot wait for the new lines.

But technology may yet help to buy some time. A program called Flexible ac Transmission System (FACTS) at the Electric Power Research Institute, Palo Alto, Calif., has produced several generations of a device, based on solid-state power electronics and microprocessors, that allows system operators unprecedented levels of control over power flow, network instabilities and voltage. In pilot installations on systems of the Tennessee Valley Authority, AEP and Pacific Gas & Electric Co. over the last five years, devices in the FACTS family have boosted actual power transfer by 21 to 33% without construction of a single foot of new transmission line, participants say.

"FACTS technology gives you the ability to get more out of the transmission that already exists," says AEP's Renz. AEP last year installed a uniform power-flow controller using FACTS technology on a new 138-kv line in Kentucky that Renz says is performing as specified (ENR 6/29/98 p. 20). "But it's not cheap," he cautions. The cost of AEP's device was one-third of the $90-million total cost of the system expansion. "The systems, the signals and the incentives [for installing FACTS technology] haven't been worked out yet."

PRIME TIME Despite the cost, the New York Power Authority is installing a convertible static compensator, the latest generation of FACTS technology, at a system pinch-point in the center of the state. One benefit will be to wring 240 Mw more out of the system's power transfer capability. NYPA's faith in the FACTS technology is supported by the participation of 21 other U.S. and Canadian utilities, which are co-funding the project to gain access to the technology as it is demonstrated. Cautioning that he cannot speak for the others, Renz admits, "One could perhaps conclude that these other utilities perceive the potential [of FACTS technology] and the risk is much lower." With such broad participation, FACTS very soon may be ready for prime time.

Formation of regional transmission organizations such as FERC is suggesting already has occurred in several areas. ERCOT ISO was the first to form, established on Jan. 1, 1997. Five others have followed-in California, Pennsylvania-New Jersey- Maryland, New England, New York and, late last year, the Midwest. Analysts at doe's Energy Information Administration contend that most of them were established in areas with a history of tight power pools, thus easing their transformation into ISOs.

Wisconsin Electric's Delgado, who is also Midwest ISO's chairman, says the organization has a regional plan for transmission based on its members' knowledge of the region's congestion points. XXX "The system was designed by individual lines to serve the load in their own service territories," he says. "Nobody had an incentive to close the gaps." Now the ISO has both the incentive and the authority, Delgado says. It will operate as a regional network, rather than as a group of interconnected local nets, he concludes.

But consultant David Wojick criticizes RTOs for being nothing more than the same old central planning in a new form. "The central machinery is so incredibly ponderous," he contends, making it unsuitable for the fast-paced, flexible response required in today's competitive electricity market.

Wojick is unhappy with FERC's requirement for regional planning to maintain system reliability. "You don't do that in a competitive market," he notes. He proposes leaving the transmission grid expansion to the free market, which could lead to an explosion of new merchant transmission line construction, such as has occurred in the telecommunications and natural gas industries. The concept is not entirely far-fetched. Seattle-based R.W. Beck Inc. has done system studies for merchant transmission lines and will announce a new line very soon, says Everett Chartier, principal. XXX "This may be the kick in the pants the system needs.

-- Anonymous, July 14, 1999

Answers

Thanks xBob.. fascinating article. I notice that its main focus is on transmission. I would love to see a similar article on generation, since PG&E (my power supplier) and many others, seem to be selling off their generating plants as fast as possible. I would expect to see that corners have been cut and projects delayed in that area too. Does anyone have any info on this?

-- Anonymous, July 14, 1999

Bob,

Thank you. My friend has been telling me that the electricity could be down before and without regard to Y2K. I had no indication that thiscould at all be true. I said this to her just yesterday. So this article indicates clearly that, as usual, she is right. It's not a happy thought, but here it is.

-- Anonymous, July 14, 1999

What this article really says is:

Transmission is the major capitol expense of any large company. Main gird lines (345 and 500 kV) can cost well over $1,000,000 per mile to build. The cost is probably higher now that you have to take into account all of the environmental studies that you have to do nowadays. Everyone wants the benefits of electricity but no one wants a 500 kV line in their back yard or up on a near by hill screwing up the view.

It was easier for companies to put in a natural gas generating station. But you can only do that so much before the lines become too heavily loaded.

My hunch is that we will see older lines upgraded before we see much new construction.

As for Lindas comments on generation. PG&E had to sell the generation. Due to the deregulation of the market they had to separate the business. Because the plants have been sold doesnt mean that they will be shut down or moved. Just that someone else will run them.

-- Anonymous, July 14, 1999