"Deregulation increased the vulnerability of the grid to failure"

[MichaeltheGreat]

Originally posted by Ted Striker
So, MTG, what in your opinion should we be doing as a nation to upgrade our existing power grid?

Other than routine maintenance and ongoing upgrades to telemetry and status reporting systems, virtually nothing at all, with the very limited exception of some substation upgrades at a very few common bottlenecks.

Let me explain:

If you reduce inter-system load, the existing grid on a national or RRC scale has a huge amount of surplus capacity. Grid stability (i.e. phase imbalance and under/over voltage and current levels, plus reactive demand) is almost exclusively a function of distance. with a small contributor from generator age and efficiency. You have voltage drops and reactive load increases every mile you go on the lines, and you get phase balance issues at every transformer and switchyard. So reducing inter-system load reduces stability impacts on the RRC and national scale system as well.

Prior to the disaster model of restructuring chosen for California, there was a proposed competing model rejected by the CPUC because they couldn't understand how it works, and being down the street from PG&E's headquarters, the CPUC staff had their noses up the asses of their good buddies and neighbors.

The basics of this restructuring model were that the end user at any level was free to contract with whoever they wanted, but the buyer who made this choice had to pay what was called a "transmission congestion charge" - that is, if you gave a bunch of Utah folks black lung but got real cheap coal power, you'd have to pay on a variable basis for the impacts you imposed on the regional transmission system - so if everyone tried to go to that source for power, and overloaded that section of the grid, they'd price themselves out, and closer in generators that had higher generation costs, but lower transmission impacts, would start to balance. The idea is that by realistically reflecting total impact costs on both generation and transmission, you'd get the lowest level of system impact, and the best market price at the same time.

The flip side of it, was that the areas of the state which were the most generation hostile, such as the bay area, and the SF peninsula in particular, would pay for their choice of forcing remote generation to come in from a distance, so they'd internalize costs they'd been externalizing to others. That was what really killed it, but it was an all around superior model for setting market prices than the one California adopted.

That type of congestion charge system, with improved incentives (not subsidies, just removal of new and active barriers) for load reduction, self and distributed generation, etc. would solve the problem for a lot less money, but it won't put the money or the power in the pockets of the majority of the big vested interests who want to maintain the current system, or pass it off so they can impose rate increases and get cost plus corporate pork under a Federal regulatory mandate.

[Sprayber]

Originally posted by Sava
nah I didn't see your guys' replies... but I now know that MtG is smarter than industry experts, executives, and regulators...

I'm interested in your response to MTG's last few posts. And please avoid these They really don't constitute a response.

[PLATO]

Mtg, Great analysis! I'm not an industry expert, but I feel like one after reading your last few posts. Thanks for shedding some light on the situation (no pun intended!)

[Lefty Scaevola]

Sava, Read your article yourself, dimwit
"Deregulation is actually a misnomer for the restructuring of the power industry, because only the generation of electricity was freed from strict government controls, beginning in 1992. Companies were allowed to charge market-based rates for generating electricity, creating the financial incentive to build more power plants.
But the transmission of electricity over high-voltage lines and the distribution into homes and buildings remained regulated. Power companies received only a relatively low, government-set return on their investment in the grid, so they allocated far less money to improving transmission reliability than to building power plants."

The dereulgated part, generation is doing fine, the still regulated parts are crap.

[MichaeltheGreat]

I always love the "poor starving utilities getting only low, government-set returns" propaganda that the utilities have been putting out for years.

On the private side of the industry, we don't get any guaranteed returns at all, certainly nothing like cost plus.

Ever since PURPA in 1978, regulated utilities have magically found more and more of their costs were on the transmission, distribution and services side, and that generation was magically lean. They preserved most of that when restructuring came into being - keeping their wires side fat and gold plated.

Some utilities are less blatant that others, but a lot of them have capital and ratebased operating costs 40-60% higher than what they should be. And that's nothing to do with union vs. non-union contractors. For all intents and purposes, there is no non-union high voltage electrical contracting, and I sure wouldn't hire one for normal distribution voltages or higher.

[Berzerker]

Sava -

Deregulation is actually a misnomer for the restructuring of the power industry, because only the generation of electricity was freed from strict government controls, beginning in 1992. Companies were allowed to charge market-based rates for generating electricity, creating the financial incentive to build more power plants.

But the transmission of electricity over high-voltage lines and the distribution into homes and buildings remained regulated.

Sava, did you read this before giving your post a title?

[Berzerker]

Oh yeah, Sava, you blamed this on the GOP last time since they took control of the House in 1994, but according to the article, it began in 1992 so the Dems had 2 years.

[Goingonit]

This power outage is the fault of pretty much every politician who has held office in North America for the last thirty years - neither Democrats nor Republicans invested in the transmission grid. Yes, deregulation was manifestly dumb, but that doesn't mean only politicians who supported deregulation are to blame.

On a side note, Ontario still hasn't returned to full generation capacity since the blackout. You think your electrical system is crappy.

[Sava]

Originally posted by MichaeltheGreat
I am an industry expert, dufus. It's what I do for a living.

and you know more than everyone else, too...

But it's obvious that your position has you biased towards deregulation despite it's failings.

Oh yeah, Sava, you blamed this on the GOP last time since they took control of the House in 1994, but according to the article, it began in 1992 so the Dems had 2 years.

I did no such thing. I don't know where you got this idea... And despite your selective reading, I've consistently labeled Clinton as de-reg friendly.

[DinoDoc]

Originally posted by Sava
and you know more than everyone else, too...

But it's obvious that your position has you biased towards deregulation despite it's failings.

Where have you disproven anything he's said?

[Sava]

Where have you disproven anything he's said?

Where has he disproven anything the article has said?

[Imran Siddiqui]

His first post on this thread.

[Arrian]

But it's obvious that your position has you biased towards deregulation despite it's failings

And your political ideology doesn't bias you in the other direction?

So, faced with two people arguing over a topic I don't really know anything about, who am I to believe? One or both might be biased. Therefore, I can only go on the quality of their posts. Yours mainly consist of sarcastic one-liners and smileys. I'll go with the other guy.

-Arrian

[MichaeltheGreat]

Originally posted by Sava
and you know more than everyone else, too...

More than the vast majority, yes, that's why they pay me.

But it's obvious that your position has you biased towards deregulation despite it's failings.

What market failure in generation, or maintenance or operating failure on a non-regulated generation asset contributed to the NE grid problem?

I'm not biased towards deregulation except in those areas where things should be deregulated.

[MichaeltheGreat]

Originally posted by Goingonit
This power outage is the fault of pretty much every politician who has held office in North America for the last thirty years - neither Democrats nor Republicans invested in the transmission grid.

They can't really invest in what they don't own. I haven't done enough work on east coast power to know state level coops and power projects, but the Federal ones have been stable for decades, and they only run lines from their generators to delivery points. The rest of it is private sector.

It's also incorrect that there's been no investment in the transmission grid in the northeast in that time - there's been hundreds of projects worth billions of dollars, and if someone went to the trouble of digging up different utilities' general rate case filings with their regulators, the amounts and locations of all those transmission service projects are reflected in rate case filings.

It's convenient political spin, and goes with the agenda of (a) blaming someone else and (b) saying "we're gonna do something about it, give us more money" to say nothing's been done. Reality is that if you didn't have investment over the last 30 years, a lot of areas would be without power for hours of nearly every day.

Yes, deregulation was manifestly dumb, but that doesn't mean only politicians who supported deregulation are to blame.

Retail rates for power in much of the deregulated areas of the US are about what they were in 1985 while ICOP, which reflects the results of large scale open access and open market pricing, has actually gone down significantly since the mid 80's.

On a side note, Ontario still hasn't returned to full generation capacity since the blackout. You think your electrical system is crappy.

Sounds more like a lack of adequate black start capability, or synchronization problems. What's your approximate mix of generator types, or are you primarily importers of hydro from other parts of Canada?