BLACKOUT ACTION NEEDED

Reference: FINAL REPORT: BLACKOUT ACTION NEEDED

Blackouts are inevitable. In the 1980s, many integrated utilities used to plan generation capacity using probabilistic techniques to allow 24 hours of loss of load in 10 years. That can be said to be a measure of supply side risk management, based on the development of resources on the supply side. Lets name that as an "iron" short run strategy to mitigate systemic risk, which involve costly reserves and fuel consumption.

I am suggesting that there is a complementary "bit" short run strategy - demand side risk management - to mitigate systemic risk, which I introduced in an article entitled "An Alternative Business Case for Demand Response (www.energypulse.net) and complemented in the article "a Dominican strategy (Power & Energy Review, May-June 2006)." Such strategy should be based on what I termed the development of resources on the demand side, which requires a complete and fully functional deregulation reform, as re-regulation - with just open transmission access - has been shown to be very costly or lead to an unstable state.

The "bit" short run strategy should be considered in two of the reliability research suggested in the blackout report, which are: "Investigation of protection and control alternatives to slow or stop the spread of a cascading power outage, including demand response initiatives to slow or halt voltage collapse, and "Study of obstacles to the economic deployment of demand response capability and distributed generation."

The main obstacle to demand response initiatives and economic deployment is the dynamic structure of the power system arising from a mistaken restructuring that separates transmission from distribution - open transmission access - at an interface that is not modular in real time. The obstacle is based on the "native load" concept that was kept in the 2005 Energy Bill. Deployment will involve large and continuous retail marketing efforts, as customers requirements will evolve. The new structure that supports the new value chain - wholesale, retail, customer - is a T&D utility that handles only wires and takes care of short run and long run systemic risk and market administration. For further information see my comments under the article "Divorcing Electricity Sales from Profits Creates Win-Win for Utilities and Customers"(www.energupulse.net)"