With Arnie seeking to rescue California, the electricity crisis shifts to the opposite coast. How did it happen? [published in the same issue of Utility Week as "Total Recall"]


By Quentin Langley

Dateline 01 September 2003

Just before 16:10 Eastern Daylight Time on Thursday 14th of August automatic failsafe relays operated by ISO New England detected anomalies in the current from the neighbouring Independent System Operator in New York. At this point it is not clear whether the anomalies were in the frequency or the voltage, but either way the circuit breakers tripped in within four seconds and broke the connection. One hundred kilometres to the south west, on the boundary of New York state and New Jersey, similar circuit breakers severed the connection between New York and the PJM ISO, covering an area that spans seven states from Pennsylvania to parts of Ohio.

“We were very pleased with the way our system worked,” explained Ray Dotter of PJM. “Our sensing equipment detected fluctuations and isolated that section. The combination of automatic and manual systems operated exactly as designed”. That is not to say that neither ISO New England or PJM suffered any problems. PJM lost 7% of its load. ISO New England was exporting electricity to New York at the time so it had an immediate over-capacity. As a result customers on the New York border in Connecticut, Vermont and Massachusetts lost power. In Vermont the power was restored almost immediately; in western Massachusetts it took just over an hour and in south west Connecticut a little over twelve hours. But compared with the three ISOs covering New York, the Mid-West and Ontario there is no doubt that New England and PJM got off very lightly.

The areas affected in both the PJM and New England were those closest to New York. Both Connecticut and New Jersey are in the New York City commuter belt. Connecticut is leafier – think Surrey – and New Jersey more industrial – think Essex.

But the question, of course, is not so much why did their systems operate as designed, but why the catastrophic failure in three ISOs covering 50 million consumers in two countries? Fifty million is a little less than the population of the UK, but the area covered is the equivalent of the whole of western Europe and the electricity load around 130% of maximum UK demand.

As yet the answers are unclear. “There are a great many possibilities,” continued Dotter, “and we are co-operating with the federal investigation which is examining the records line by line and datapoint by datapoint. Equipment can malfunction, it can be improperly set or an unanticipated set of circumstances can arise”. Automatic systems have considerable strengths, including being able to react in seconds or even fractions of a second, but can only react to a pre-determined set of triggers.

The question the federal investigation will be most keen to answer is this: are occasional system failures – and by occasional we have to mean every few decades – inevitable, or is there a systemic failure which a change in government policy can alleviate?

Fred Smith of the Competitive Enterprise Institute is quite clear that the problem is systemic and will probably never be traced to a single human or mechanical failure. “It is a common feature of congested systems – we see it on our roads, in air travel and on your railways in the UK – that the most minor problem will have knock on effects. Occasionally these will reach catastrophic proportions. Congested systems are inherently unstable”.

And, according to Smith, congestion on the American electricity grid is no accident. “It dates to the 1930s. The thinking of the so-called progressive era was a horror of bigness. Big was automatically bad. We don’t have national electricity suppliers for the same reason we don’t have national banks. Congress banned them. Instead we have a patchwork of locally regulated monopolies.”

The only consistent pattern of regulation is of the grid itself. There is a maximum rate of return on investments in transmission systems. For Smith this too is a key problem. “Companies don’t invest in transmission because their profits are controlled. It is more economic to invest elsewhere. We have de-regulated generation and there has been tremendous investment. It is time to de-regulate transmission”.

Nor does America have the types of demand management that are common in the UK. There are no night meters with cheaper off-peak electricity, though some commercial customers have interruptible contracts where they buy electricity at discounted rates on the understanding that supply can be cut at peak times.

“The federal government has the power to act, under the interstate commerce clause of the constitution. The states do not have the power to regulate transmission, so if federal regulations are repealed the market can invest in solving the problem. The federal government also has rights of way, such as roads and vast tracts of land, that it can open up to companies investing in transmission”.

But none of this is to say that Smith is optimistic about the future: “Never underestimate the power of politicians to make a bad situation worse. Democrats are trying to solve the problem of over-regulation with more regulation. There are too many Republicans calling for a massive programme of federal investment in transmission. A foolish idea -- allowing bureaucracies, which are after all institutions defined by their ability to create long queues (congestion) the task of reducing congestion is not wise. And why spend taxpayers’ money? Just repeal the laws that make it illegal for the private sector to invest. No-one who has ever used government roads can believe that government action is an automatic solution to congestion. ‘Progressive’-era laws have distorted the natural evolution of this market. Just as water will naturally flow downhill, investment will naturally flow to where it is needed, including to new technologies like smart networks and superconductors.”

But could a blackout on a similar scale hit the UK? National Grid, itself a major investor in both New York state and in New England, is reluctant to commit itself. Stewart Larque pointed out that “we don’t really know what happened so it is difficult to say whether it could happen here”. Instead he invites people to look at the Grid’s record, and it is true that despite the difficulties in South London last week there has never been a UK blackout as extensive as that in the US. The company’s reluctance to comment is understandable. Early media reports blamed the Niagara Mohawk generating facility for the entire blackout. This turned out to be hasty media speculation – not least because Niagara Mohawk is a distribution network not a generating facility, but it is owned by National Grid.

David Anderson, Chairman of the Energy Board of the Institution of Civil Engineers is clear that the British system is less vulnerable than the American, but that it is not to say it is immune as shown by last week’s failure in South London. “The supply system to central London is a complex web. There is a 400 KV circuit circling the capital like the M25 and a 275 KV circuit that is equivalent to the Circle Line. There are around 10 major radial lines feeding in towards the centre. A fault on any two of these may cause local operational difficulty as demonstrated in South London, but would be unlikely to cause a major system collapse such as occurred in the US eastern states, which would be more akin the loss of the entire UK grid.

“I get the impression that the American system is not as modern as ours and relies on largely self-sufficient local networks and not an integrated mesh type grid controlled by one national operator. In the US the transmission of power over long linear circuits running north south probably meant that the failure of one or two circuits would mean that the others would become overloaded and cascade failure inevitable if load was not shed to compensate. I suspect that the UK grid with major interconnectors transmitting power in from Scotland and France would cope better with similar serious generation interruption.”

Still, Anderson is not so optimistic about the future and the Institution’s analysis of potential future problems echoes Smith’s views on the US today: “Ofgem has a duty to balance economic, environmental and security concerns, but I see a strong emphasis on keeping prices low. That means there are strict profit controls on investment in transmission and as a result our network is ageing”.

Copyright © Quentin Langley 01 September 2003

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