FERC last week directed transmission-operating utilities to file reports at the Commission detailing their vegetation management practices in transmission corridors by June 17 and, in a related move, issued a policy statement that clarifies FERC’s power grid reliability policies and objectives.

In the vegetation management order, FERC sought to minimize the risk of another regional blackout and ordered all entities that own, operate or control designated transmission facilities to report on their vegetation management practices by June 17.

The order, applicable to the lower 48 states, is directed to approximately 200 transmission providers, regardless of whether they are subject to FERC’s jurisdiction as a public utility, in accordance with FERC’s reporting authority. Designated transmission facilities are power lines of 230-kV or higher as well as tie-line interconnection facilities between control areas or balancing authority areas — regardless of voltage rating — and critical lines as previously designated by a regional reliability council.

FERC Chairman Patrick Wood underscored the point that the vegetation management order is “not an attempt to expand jurisdiction over entities that we don’t regulate. It’s an attempt to get a comprehensive picture of what’s going on here in the United States or North America and allow states and other utilities to know what’s going on” with neighboring states and utilities “in a relatively uniform format fashion so that the information is actually useful” to utilities, customers and regulators.

“I would hope that any utility that has to answer by June the 17th about the status of their vegetation management is going to have addressed any open item on their vegetation management punch list by June the 16th” before the company sends in its report to FERC, Wood added. “The bottom line is we want to know before we get into the hot summer” that power companies are fulfilling their vegetation management responsibilities.

He also said that the issue of power reliability “won’t be just a passing item on our agenda — it will be an institutional part of our agency and we’re here to stay on this issue.”

“There has been debate about the extent of the Commission’s jurisdiction over reliability and I would like to underscore that I think that our approach in the policy statement is very clearly within our authority,” noted FERC Commissioner Suedeen Kelly.

“There is an open access transmission tariff which exists — a pro forma tariff — and in that tariff, the utilities that are subject to it are responsible for complying with reliability and by our first policy statement here, we make a very strong case that compliance with reliability means compliance with NERC standards,” she went on to say. “I am very pleased that the Commission has taken this step towards enforcing reliability standards.”

Subject to confidentiality protection accorded critical energy infrastructure information, the order directs transmission providers to:

The reports must also be submitted to appropriate state regulatory commissions, NERC and the relevant reliability coordinators.

Based upon the information received, FERC will report to Congress on vegetation management practices in the U.S. Section 311 of the Federal Power Act allows FERC to obtain information from all utilities, including those not otherwise subject to Commission jurisdiction, in order to report to Congress on recommendations for legislation.

FERC will share this information with the members of the National Association of Regulatory Utility Commissioners’ ad hoc committee on critical information infrastructure and work with them to develop appropriate and effective ways to regulate transmission line vegetation management.

FERC noted that the failure to adequately maintain vegetation transmission line rights-of-way has been identified as a major cause of the August 2003 blackout and was a common factor in several earlier regional power outages. A joint U.S.-Canada task force report compared last year’s blackout with seven previous major outages and concluded that power line contact with trees was a common factor among the outages.

FERC said its policy statement on power system reliability addresses the need to expeditiously modify the North American Electric Reliability Council’s (NERC) reliability standards in order to make these rules clear and enforceable.

The Commission emphasized public utility compliance with reliability standards, stating that “Good Utility Practice” includes compliance with these standards. The policy states that FERC, consistent with its authority, will consider taking utility-specific action on a case-by-case basis to address significant reliability problems or compliance with good utility practice.

The policy statement also addresses recovery of prudent reliability costs. Specifically, FERC assures public utilities that it will approve applications to recover prudently incurred reliability-related costs.

The policy statement also deals with the need for communication and cooperation between FERC and the states, as well as Canada and Mexico.

The U.S.-Canada joint task force examining the Aug. 14, 2003 blackout issued a final report related to the outage earlier this month and offered up dozens of recommendations.

In response to those recommendations, FERC’s policy statement immediately takes the following steps:

Among its 46 recommendations, the U.S.-Canada task force says that U.S. and Canadian regulatory authorities should work with NERC, the regional councils and the power industry to develop and implement a new funding mechanism for NERC and the regional councils based on a surcharge in transmission rates. The purpose would be to ensure that NERC and the councils are appropriately funded to meet their changing responsibilities without dependence on the parties that they oversee.

©Copyright 2004 Intelligence Press Inc. Allrights reserved. The preceding news report may not be republishedor redistributed, in whole or in part, in any form, without priorwritten consent of Intelligence Press, Inc.