FERC Chairman Pat Wood last Wednesday said that electric reliability tops his agency’s agenda in 2004, and to that end, the Commission is moving to establish a new unit that will be responsible for reliability-related audits.

“In the coming weeks and months, you’re going to see FERC go from zero to 60 on the issue of grid reliability,” Wood told reporters at a press briefing in Washington, DC. “It’s past time for the Commission as a regulator of the bulk power system to act on grid reliability issues.”

The FERC chairman said that he would like to see a regular program of Commission reliability audits. The Congress and the White House have given FERC an extra $5 million in the current fiscal year that is earmarked for reliability. “With that funding, we are in the process now of establishing a new reliability division staffed with up to 30 engineers and support technicians to include both new hires from outside” of the Commission, as well as “deploy our internal talent, which has been pretty busy on the blackout since August.”

Wood said that reliability audits “will be the responsibility of this new division.” The new division will be part of FERC’s Office of Markets, Tariffs and Rates. “We will work with NERC to develop audit programs, tougher audit programs, to determine whether reliability coordinators and control area operators — the ground zero for the transmission grid itself — are complying with NERC’s adopted standards and whether they’re performing to the level that those standards set for minimum compliance with reliability.”

He said that FERC is reexamining the Commission’s role and legal construct “under which we can assure reliable operation of the nation’s transmission grid.” FERC’s preference, “of course, remains that Congress pass the reliability legislation that is in the pending energy bill. That would give us affirmative, overt authority and very crisp processes to oversee the mandatory reliability rules in conjunction with a multi-national North American reliability organization.”

But the timing of any action in Congress on the comprehensive energy bill remains up in the air. The measure, which failed to pass the Senate in 2003, is expected to be taken up for consideration this month. “Even if Congress does pass the bill in the next session, we’ve got to get started today in order to make sure that as the system comes up for its peak stress across the country, which is in the summer, that we have taken steps to protect customers, to put utilities and other users of the grid on notice, that the standards that have been voluntary for the past 35 years are no longer just voluntary, but are compulsory.”

FERC last month directed its staff to proceed with an order to direct transmission operators to report violations of the currently voluntary NERC reliability standards. “That is actually not being done on any sort of consistent manner today, and so reporting to us as well as to NERC is a step that we have taken, and I expect that a formal order on that vote will be issued by the Commission in the coming week,” Wood added.

The Commission in December ordered Ohio-based FirstEnergy Corp. to hire experts who will in turn prepare a study on the adequacy of transmission and generation facilities in Northeastern Ohio.

“If this study reveals significant problems, we will work with the Ohio Public Utilities Commission, with the Midwest Independent System Operator, which has significant controls over that system, with PJM, which has significant controls over other parts of that system, and the local utilities to determine how to make the needed improvements,” Wood noted.

A recent interim report prepared by a joint U.S.-Canada task force examining the Aug. 14 blackout called into question some of FirstEnergy’s actions prior to the historic outages and concluded that the utility and the Midwest Independent Transmission System Operator violated some of NERC’s voluntary reliability rules.

Meanwhile, Wood said that with its new budget authority, FERC will be issuing requests for proposals for reliability-related research in the coming months. “One example that I’m talking about here is grid architecture,” Wood said. “We want to look at the grid architecture and ask, for example, how we might design a grid using extra high-voltage transmission and more direct current ties, which are not very prominent throughout the grid in North America, to provide a more robust system that is less susceptible to the cascading failures of the sort that we saw go around the Great Lakes region all the way over to New York.”

Wood said this research would build on the work that has been done by the Department of Energy’s (DOE) Office of Energy Transmission and Distribution, as well as the national grid transmission study completed by DOE.

FERC also wants to scrutinize operator training. “We want to take a look at how the best operators in the country are trained, how that training is reinforced through practice and through daily operations, what are the common skills and content that need to be held by these individuals,” the chairman said.

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