The Year that Was, and a Look Ahead

Steven Brown, editor in chief

2006 was a big year for electric power industry news, as provisions of the Energy Policy Act of 2005 began to take shape and the U.S. set records for power demand. Here’s a look back at some of the biggest headlines of 2006 that will continue to develop throughout 2007 and beyond.

NERC Becomes ERO

In July, NERC received a long overdue boost to its power when it was approved as the Electric Reliability Organization for the U.S. As the ERO, NERC now has legal authority to enforce reliability standards and levy fines for noncompliance.

Outlook: I’m really looking forward to watching this story unfold. Who will be the first big violator of NERC standards? What kind of penalties will be handed down for noncompliance? Will we see a utility “fudge” its reliability numbers to avoid penalties? How much difference can the ERO really make in a system that’s already 99.9 percent reliable?

DOE Takes on Transmission Congestion

In August the DOE released its National Electric Transmission Congestion Study. Based on the study’s research, the Secretary of Energy may select and designate geographic areas as “National Interest Electric Transmission Corridors.” (See this issue’s cover story for much more information.)

Outlook: The DOE has yet to name any area a “national interest corridor” but two areas-Southern California and the Atlantic Coast from New York to northern Virginia-have been deemed “critical.” If those areas, or others, are deemed of “national interest,” FERC may have an opportunity to exercise its backstop siting authority, which sets the stage for fireworks between the feds, environmentalists and state’s rights advocates. Will changing venue from state to federal really speed up the siting process?

A Mighty Wind

As of late October, the American Wind Energy Association (AWEA) reported that the U.S. wind industry was on track to install a record 2,750 MW of generating capacity in 2006. AWEA predicted that 2007 would be yet another record-breaking year, with the possibility of another 3,000 to 3,500 MW of wind generation coming online.

Outlook: The volatility of natural gas prices, the environmental impacts of coal, and state-mandated renewable portfolio standards have all played a part in fueling the recent boom in renewable energy production. Wind energy, in particular, is enjoying a heyday, but there’s one problem with all that wind power coming on-line: where wind is, transmission generally isn’t. Look for the combination of the ERO’s authority, the DOE’s stab at transmission congestion, and the renewable boom to spur needed investment in transmission.

Texas Grid Getting Smarter

In early 2006, CenterPoint Energy announced a limited deployment of “intelligent grid” technology using BPL as the communications medium. Later in 2006, TXU Electric Delivery purchased 400,000 new meters with BPL capabilities in what the utility’s VP of asset management termed “a major step forward in TXU Electric Delivery’s drive to develop the nation’s first automated, smart electric grid.”

Outlook: These two news items out of Texas might not have had quite the “bang” as some of the other headlines mentioned above, but I believe they’ll have a big impact on the future of power delivery. TXU and CenterPoint are leading a small but growing contingent of utilities intent on using BPL as the foundation for more intelligent distribution systems. If these utilities find success, we may see a revolution in utility automation. It likely won’t come in 2007, but we’re getting closer.

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