News & Trends

Reliability Moves Ahead
Reliability initiatives continue to gain steam. According to the North American Electricity Reliability Council’s (NERC’s) 2003-2012 Reliability Assessment, released last December, transmission systems in North America are expected to perform reliably in the near term, although in some areas these systems are reaching their reliability limits. NERC notes that some portions of the grid will not be able to transmit the output of all new generating units to their targeted markets.

Several factors will play into the future reliability of the system, according to NERC, including ensuring supply adequacy in a competitive environment, the expected pace of transmission investment, emerging technical concerns, increasing dependency on natural gas for electric generation, and transmission planning.

Expressing concern over the failure of Congress to enact reliability legislation in 2003, Michehl R. Gent, NERC president and CEO, observed that “it is more important than ever that NERC’s reliability rules are followed by all if we are to prevent future blackouts.”

On February 10, NERC issued a resolution to “obtain full compliance with all existing and future reliability standards and...to use all legitimate means available to achieve that end.” NERC’s investigation into the blackout discovered that a failure to adhere to reliability standards had contributed directly to the blackout. NERC’s board further recommended a series of strategic and technical initiatives designed to strengthen reliability enforcement.

Citing the need for reliability standards, the failure to pass energy legislation, and the blackout, electric utility CEOs also are recommending that NERC take the lead in formalizing new electric reliability standards. In a resolution passed by the Edison Electric Institute (EEI) board of directors in January, the industry suggested that NERC take prompt action to implement strategic initiatives to strengthen reliability, including readiness audits of control areas and reliability coordinators, enhanced compliance performance reviews, vegetation management surveys, and recommendations tracking.

The role of the Federal Energy Regulatory Commission (FERC) should be one of “supporting and providing oversight to the NERC initiatives,” according to the resolution.

“We are pleased that the commission wants to take an active role in helping achieve a goal we all share—that of making certain our bulk power system is the world’s most reliable,” said Tom Kuhn, EEI’s president. “Consistent with the reliability provisions approved by both the Senate and House as part of the comprehensive energy bill, our CEOs believe strongly that the expertise to make this happens resides within NERC and the industry, with FERC in an important oversight role.”

Kuhn also pointed out that the preferred route is quick enactment of the comprehensive national energy legislation, which contains provisions for creation of a national electric reliability organization to develop and enforce new reliability standards that would be binding on all market participants. “That is obviously the ideal approach,” Kuhn commented.

In its absence, though, the industry expressed its commitment to developing and enforcing reliability standards that take regional differences into account.

Jon Stewart for President
It seems many young Americans think there’s a lot to laugh about in terms of the presidential candidate race.

According to a recent survey by the Pew Research Center for the People and the Press conducted from December 19, 2003, to January 4, 2004, the under-30 age group relies more on comedy shows (like Comedy Central’s “Daily Show,” hosted by Jon Stewart) for information about this year’s election campaigns than ever before. About 21 percent of young people claim comedy shows are their regular source of election information over network news and newspapers, according to the survey. And the number of young people getting news from nightly network news shows is also down from 2000, from 39 percent to 23 percent.

But it’s not all funny: This same group performed abysmally in a simple knowledge questionnaire about the candidates. The survey asked two questions—to identify the candidate who served as an Army general and the candidate who served as House majority leader (Wesley Clark and Richard Gephardt, who both have quit the race). More than two-thirds of those who watch comedy shows, late night television, morning TV shows, and local television for information about the campaigns were unable to answer either question. In contrast, people who use the internet, listen to National Public Radio or other talk radio shows, read news magazines and daily newspapers, and watch public television or the Sunday morning political talk shows are the most knowledgeable about the subject. Sixty percent of this group could correctly answer at least one of the two candidate questions, and a third could answer both.

The survey also found a significant rise in internet usage for election information—13 percent today said they get most of their political news from the internet, compared to 9 percent in 2000. That puts the internet on par with such traditional outlets as public television broadcasts, Sunday morning news programs, and the weekly news magazines. (Still, 38 percent of internet users say they use major news organizations’ websites, like nytimes.com or cnn.com, according to the survey.) The increase in internet usage is occurring across the board in terms of age, with 40 percent of people ages 30-49 and 27 percent of people ages 50-64 regularly or sometimes going online for news.

About 20 percent of young people say they get most of their election news from the internet. And more young people cite news magazines like “60 Minutes” and “20/20” as regular sources for campaign information: 26 percent today compared to 18 percent in 2000. Since people who used these sources performed relatively well on the knowledge questionnaire, it’s safe to say not everyone will be yukking it up at the polls in 2024.

Wind’s Boom and Bust
Wind power experienced a nearly record-breaking year in terms of growth in capacity last year. Nearly 1,687 megawatts (MW) of new wind capacity—enough to serve the electricity needs of approximately 425,000 average homes—were installed in 2003, according to the American Wind Energy Association (AWEA). Current installed capacity in the United States is now over 6,370 MW, with utility-scale wind turbines installed in 30 states.

That performance might not be matched in 2004, however, due to Congress’s inability to get comprehensive energy legislation passed, including a three-year extension of the wind energy production tax credit. The credit expired on December 31, 2003, leading to layoffs, stalled projects, and a negative near-term market outlook, says AWEA.

Over the last five years, U.S. wind capacity has expanded at an annual average rate of 28 percent. “The record in 2001 and 2003 shows that the wind industry can ramp up quickly to meet the nation’s power needs,” said Randall Swisher, AWEA executive director. “Our members tell us that 2004 could have been an even better year than 2003 had the [production tax credit] extension in the energy bill gone into effect.”

Other items of note:

• New wind capacity will displace emissions of 3 million tons of carbon dioxide.
  
• Oklahoma, Illinois, and Ohio saw the first installations of large-scale wind turbines.
  
• Both Spanish turbine manufacturer Gamesa and Indian manufacturer Suzlon installed their first machines in the United States, in Minnesota.
  
• Minnesota added the most new wind power (226 MW) of any state in 2003, behind only California and Texas in terms of total capacity.

PORTALS TO ENVIRONMENTAL PROGRESS

Both the Environmental Protection Agency (EPA) and the Department of Energy (DOE) recently launched websites that aim to further environmental objectives by providing users with more information about environmental technologies and by encouraging industry to become active in reducing greenhouse gas emissions.
     The Environmental Technology Opportunities Portal - www.epa.gov/etop - promotes programs that foster development of new cost-effective environmental technologies and relays existing environmental technology information (such as best available technologies for air, water, and waste treatment and control). The portal also relays funding opportunities, information, and links to several EPA programs that assist in development and commercialization and others that foster the use and acceptance of innovative technologies.
     The Climate Vision program - www.climatevision.gov - is the administration’s effort to lead industry to voluntarily reduce their greenhouse gas emissions. The website is designed to support the program by providing companies a way to track their progress reducing emissions and as a resource for technical information.

Regulators OK with Customer Service Quality
New research by Navigant Consulting shows that regulators are satisfied overall with customer service levels and don’t necessarily need to adopt across-the-board mandatory customer service quality (CSQ) standards.

A recent proposal for a national call center answer time model rule by the National Association of Regulatory Utility Commissioners (NARUC) brought attention to the issue of CSQ measures and their relationship with merger and acquisition activity, cost-cutting, and challenges with restoration in some areas. Still, utilities report customer satisfaction levels are rising or holding constant—improved productivity has allowed utilities to cut customer service spending without affecting satisfaction, according to the study. Navigant cited a JD Power & Associates statistic that customer satisfaction with utility customer services, such as billing and call handling, has been rising over the last several years.

The Navigant study found that across the nation, there is little consistency in how CSQ standards have been applied, but this is due to things like regional and utility differences. Regulators in most states have negotiated CSQ standards with each utility on a case-by-case basis. Moreover, in most states, regulators are satisfied with energy utility customer service performance.

The research also revealed that some regulators view customer complaint rates as an indicator of customer satisfaction and service quality, and most or all regulators are highly sensitive to complaints and complaint resolution compliance—suggesting that if customers begin to voice complaints loudly about their utility, regulators will be more likely to take a hard look at CSQ standards.

Another way of ensuring higher customer service performance is through performance based rate-making (PBR), a method not always trusted by regulators, according to Navigant, but one that is flexible and most often favored by industry. In fact, 19 states already have PBR rate agreements that include CSQ standards in their utility rate plans.

Pennsylvania and New Jersey are already developing standards for mandatory compliance by utilities. The Pennsylvania public utility commission will introduce its model early this year—a prescriptive standard for utilities, expected to include contact center answer time regulations. The New Jersey Board of Public Utilities is seeking to initiate a consumer report card initiative that measures the performance of utilities in five areas: consumer service performance; consumer satisfaction; system reliability and safety; pricing; and financial profiles.

The study found several barriers to implementing benchmarks.

• Regional factors such as geography, weather, distribution system configuration, customer demographics, and differences in regulation have an impact on performance and vary across utilities.
  
• Customer and regulator expectations for service quality also differ regionally. Aligning costs, which are regulated at a state level, with a national standard will be extremely complex.
  
• Establishing a consistent and transparent set of measurement and reporting processes represents the single most problematic design challenge for regional or national standardization of CSQ standards.

If regulators do follow a mandatory CSQ standard model in lieu of existing models or PBR models, Navigant recommends that they be aligned, balanced, controllable, measurable, flexible, and verifiable.

Black Snow
Soot may be responsible for 25 percent of observed global warming over the past century, say National Aeronautics and Space Administration (NASA) scientists. This is because black soot in white snow alters the way sunlight reflects off the snow and (as your sixth-grade science teacher taught you) darker substances absorb more light than lighter ones. Soot (or carbon) in icy and snowy regions, therefore, absorbs more (and reflects less) of the sun’s light and speeds up the melting process.

“Black carbon reduces the amount of energy reflected by snow back into space,” said Dr. James Hansen, a researcher at NASA’s Goddard Institute for Space Studies in New York. “This provides a positive feedback (i.e. warming); as glaciers and ice sheets melt, they tend to get even dirtier.”

The effect of black snow, neglected in previous studies, could be a factor contributing to early springs in the Northern Hemisphere, thinning Arctic sea ice, melting glaciers, and permafrost. Soot also was not included in discussions by the United Nations’ Intergovernmental Panel on Climate Change.

© 2008 Edison Electric Institute