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Session 5.

Session 5. Balancing Act: Reliability & Commercial Use. David Wojick, Consultant. “You’re not selling electrons; if you sold bricks, you’d be selling electrons.”. So what are we selling?. A service A reliable service But what does that mean, “reliable”?

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Session 5.

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  1. Session 5. Balancing Act: Reliability & Commercial Use

  2. David Wojick, Consultant “You’re not selling electrons; if you soldbricks, you’d be selling electrons.”

  3. So what are we selling? • A service • A reliable service • But what does that mean, “reliable”? • I don’t know what “reliability” is, but I know what it ain’t • Blackouts, brownouts, etc. – when electric service isn’t there when I want/need it • (and I want/need it 24/7)

  4. It’s Gotta be Really Reliable: Jack Welch’s Six Sigma (Defects Per Million Operations – DPMO) Allowed 3.4 DPMO w/ 6Σ (5Σ is 320 DPMO) Electricity: one hr. blackout every 33.4 yrs. New York City – George’s Career (1962-2005): • 43 yrs. – 3 blackouts – ’65, ’77, ’03 – 66 hrs. • 175 DPMO – between 5 & 6Σ Generation Adequacy: • 1 day in 10 yrs. = 274 DPMO – close to 5Σ Best system: as fail safe as possible

  5. Pay for the Level of Reliability You Need ? Problems: • Nature of transmission systems prevent providing better reliability to individual customers. • Many different participants, and/or other systems, may have to spend money to improve reliability in one system.

  6. Gallia est omnis…. • Distribution: Local blackouts – people can see the cause – people react…. • Generation: Shortages, public appeals, brownouts, rolling blackouts (local) – price spikes – people react…. • Transmission: Failure of Bulk Power System – cause not always obvious – total blackouts over large areas – people react….

  7. RELIABILITY: CAN THE MARKET PROVIDE • Distribution: Yes, but mostly limited to large industrial & commercial • Generation: Yes, thru massive DSM – but, will people accept • Transmission: No, NO, NO !!!

  8. CAN THE MARKET PROVIDE RELIABILITY COST vs. RELIABILITY • “Balance between cost & reliability” – no such thing! • Reliability a base line – non-negotiable • Comparable to air safety

  9. “The physics of the system hasn’t changed; the business has.”

  10. NERC and Its Role A Short History of Reliability Before 1965 • Individual system criteria • Fair degree of cooperation – e.g., joint studies • Some organized groups – e.g., PJM, MAIN 1965 to 1997 • Growth of Regional Reliability Councils (RRCs) RRC Reliability Criteria Culture of Cooperation & Coordination Interregional groups, studies (e.g., MEN, VEM, VAST) 1968 – NERC established by the RRCs Voluntary conformance – voluntary?! “Peer pressure” – common interests

  11. A Tortured Path 1992 • FERC: anyone can build & own generation 1993 to 1997 • Debate within NERC – “mandatory” vs. “voluntary” Jan. 1997 • NERC Board: Conformance with NERC (& RRC) criteria should be mandatory July 1998 • NERC Board expanded – 9 “independent” members to be added • NERC to become NAERO

  12. … and so to bed BUT • NERC/NAERO does not have legal authority to mandate conformance, or apply sanctions • neither does FERC • ergo, Energy Bill Are mandatory conformance & sanctions a solution in search of a problem? Or, are they required by the introduction of competition, and the shift in culture Anyway, already mandatory in NPCC (incl. NY)

  13. Major Present Threat Significant degradation of criteria in proposed revision to NERC Standard FAC 008-1 thru 013-1 (a.k.a. Standard 600) Future reliability is under grave threat NERC “Version 0” Standards – spin I Fear the Greeks Even When They Bear New Paradigms

  14. Three Steps to Reliability (or maybe four) 1. Establish Criteria • Rigorous, thorough, clear and unambiguous, fair and non-discriminatory, measurable 2. Plan & operate in conformance • Generators • Transmission owners • Electric Service Providers (ESPs), a.k.a. ESCOs • Power marketers • System Operators/control areas/ISOs/RTOs (or their functional or moral equivalents) 3. Monitor & assess conformance 4. Sanction non-conformers

  15. Reliability – National Level • NERC (North American Electric Reliability Council) – minimum reliability standards • NAESB (North American Energy Standards Board) – commercial standards • Regional Reliability Councils – regional standards – must be consistent with NERC standards

  16. Reliability – Regional & Local • NPCC (Northeast Power Coordinating Council) – regional standards/criteria • NYISO (New York Independent System Operator) – operate NYS system, run commercial market • NYSRC (New York State Reliability Council) – develop reliability standards/criteria, assess compliance with them

  17. “Electricity isn’t a commodity; it's a phenomenon.” Joseph Swidler, former Chairman of Federal Power Commission, and NY PSC “Reliability is in everyone’s best interest.” George C. Loehr

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