Originally posted by Energy Central


August 24, 2004 | By Stephen Heins

On August 13th and 14th, 2003, Americans and Canadians received a vivid illustration of the potential damage caused by electrical outages when a massive blackout hit both Canada and the U.S. in the Northeast and Upper Midwest. While headlines screamed “third-world electrical infrastructure” and “$100 billion needed to up-date North American electrical grid,” the United States Congress has been conducting a yearlong debate about national energy policy, including various proposed solutions for the U.S. electrical grid. First, it is worth noting some of the details of the blackout. All totaled, 100 power plants, including 22 nuclear reactors in the U.S. and Canada, were shut down. Some 50 million people over a 9,300 square mile area were without power, including New York, New Jersey, Ohio, Pennsylvania, Michigan, Connecticut, Vermont, Massachusetts, and much of Ontario. In fact, within the first three minutes of the outage, 21 power plants were shut down. There are some infrastructure lessons to be learned from this latest reminder of just how frail and interdependent the North American electrical grid is. They are the following:

  • There are large generation facilities and transmission components, which are sited far from end users;
  • There are thousands of miles of unprotected transmission lines;
  • There are a few transmission links and nodes critical to an dequate power supply, which means they are vulnerable to widespread outages;
  • We can never take human error out of electrical grid.

Before either Canada or the U.S. decides to haul out its pitchfork to distribute bails of money into long-term programs of questionable merit without proper testing, it is worth examining some of the suggestions being proposed. They encourage federal governments, individual states and provinces and businesses to employ sustainable energy efficiencies. After all, energy efficiency is the quickest, cleanest and cheapest new source of energy. Recently, the American Council for an Energy Efficient Economy conducted a study, entitled “The Technical, Economic and Achievable Potential for Energy Efficiency in the United States: A Meta-Analysis of Recent Studies,” that shows a 24% reduction of all electricity usage could be achieved in the U.S. through a number of energy efficiencies such as lighting, HVAC, compressed air, and daylight harvesting. According to the study, a savings of as much as one hundred thousand Megawatts (or, the equivalent of 200 500 Megawatt power plants) is possible virtually overnight. This solution offers a major opportunity to be cost-effective and environmentally sound, without all of the political baggage associated with a continental, national or regional approach to an energy policy. In addition, this constructive first step to a balanced energy policy could begin tomorrow and it would guarantee immediate and significant electrical capacity relief.

It is worth noting the festering problems that led to last year’s electrical grid meltdown. Unlike the Federal Communication Commission, the Federal Energy Regulatory Commission (FERC) does not have a strong, national mandate that gives its efforts more teeth and sway. Here in the U.S., FERC is forced to act as more of an advisory body with a “bully pulpit.” Coupled with the standard opposition represented by the Not-In-My-Back-Yard crowd and a myriad of environmental regulations, we can expect the time necessary to create a broad coalition of voluntary compliance to be measured in five or ten year increments, much too long since a solution is needed now. Then, there is the matter of cooperation whereby contiguous states, regions or nations are able to agree on the proper course an inter-connection of electrical grids should follow. After watching Connecticut and New York do battle over the Cross Sound Cable and the 300 Megawatts of electrical power Connecticut still delivered to Long Island in the aftermath of the Blackout, sad to say, it could be said that cooperation between states or regions is possible only in the most extreme of circumstances. A sense of history helps explain why the U.S. Congress has engaged in a protracted and rancorous debate over national energy issues. The sobering truth is that the U.S. has never had a comprehensive energy policy. In fact, the only way the Senate could agree on a generic 2003 energy bill to debate was to adopt 2002’s energy bill with the proviso that every provision in that energy bill was susceptible to change. Many people refer to the latest version as “the bill that leaves no lobbyist behind.”

In addition, the United States and Canada must confront other infrastructure issues especially where the laws of physics meet the laws of economics, and the laws of return on investment meet the laws of financing. As far as the laws of physics go, electrons traveling over transmission lines cannot be controlled in the same way water through a pipeline can. Electrons simply go their own way. Also, without adequate transmission lines which have solid returns on investment, no utility will have the necessary incentive to build them and no financial institution will have the incentive to invest in them. Finally, there is the issue of asking local, regional and national utilities to employ sustainable energy efficiency strategies, which would reduce the base load and peak-load demand of their customers. Here, the individual utility would be asked to sacrifice a sizable portion of its revenue stream to effectuate any such energy efficiency. If provided, however, a return on energy efficiency comparable to the one given for transmission, supply and production, utilities will be able to justify to their shareowners their investments to reduce demand and make energy efficiency a growing part of their business platform.

Ultimately, a sustainable energy efficiency strategy may be the only solution every stakeholder in the energy policy debate (regulators, politicians, consumers, utilities, environmentalist, etc.) can agree on, especially if utilities and transmission lines are allowed to receive an adequate return on investment. By taking large amounts of current consumption off the North American grid through an energy efficiency strategy, both governments can take a more rational approach to transmission issues and new power plants. Economic development, states rights, global competitiveness, inter-governmental cooperation and the North American environment would be the benefactors of such an approach.