EEI Commends FERC For Its Support Of Industy Spare Transformer Sharing Program

Washington, DC () - The Edison Electric Institute commends federal energy regulators for approving an electric industry program that will strengthen the sector's ability to restore the nation's transmission system more quickly in the event of a terrorist attack.

Commenting on the order by the Federal Energy Regulatory Commission approving the Spare Transformer Equipment Program (STEP), Jim Fama, EEI's executive director for energy delivery, said "federal support for this program is critical. We applaud the Commission's leadership in acting quickly and decisively to support STEP."

The Spare Transformer Equipment Program represents a coordinated approach to increasing the utility industry's inventory of spare transformers and streamlining the process of transferring those transformers to affected utilities in the event of a transmission outage caused by a terrorist attack.

Under the program, each participating utility is required to maintain and, if necessary, acquire a specific number of transformers. STEP requires each participating utility to sell its spare transformers to any other participating utility that suffers a "triggering event," defined as an act of terrorism that destroys or disables one or more substations and results in the declared state of emergency by the President of the United States.

Any investor-owned, government-owned or rural electric cooperative utility in the United States or Canada may participate in the program, and currently 47 utilities, representing more than 60 percent of the FERC-jurisidictional transmission system, are members.

Fama singled out two elements in the September 21 FERC order that he said will be instrumental in ensuring the program's success. The first is FERC's determination that the sharing arrangement under the Agreement is prudent, which will support participants who seek to recover costs of participation in rates; the second is the Commission's pre-approval of the transfer of spare transformers from one utility to another in the event of a terrorist attack.

"These critical elements in the Commission's order will help us build momentum for this program by encouraging other utilities across all ownership structures to join STEP, which will significantly broaden the scope of its reach," said Fama, who also noted that states such as South Carolina have already signaled that they too will assure cost recovery at the state regulatory level for program participation. "We certainly hope that will become a trend nationwide," added Fama.

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The Edison Electric Institute (EEI) is the association of U.S. shareholder-owned electric companies. Our members serve 95 percent of the ultimate customers in the shareholder-owned segment of the industry, and represent approximately 70 percent of the U.S. electric power industry. We also have more than 65 International electric companies as Affiliate members, and more than 170 industry suppliers and related organizations as Associate members.