Tom Adams

December 8, 2003

Energy Probe’s presentation to the US-Canada Power System Outage Task Force 2003

Thank you, on behalf of Energy Probe, for the opportunity to present our ideas on how to reduce the risk of widespread power disruptions in future.

Energy Probe is a 24 year old citizen-based environmental and consumer research and advocacy organization dedicated to promoting environmentally responsible and economically efficient solutions to Canada’s energy problems.

Recognizing that the scope of the interim blackout report focused on its proximate causes, Energy Probe considers the report to be thorough. In the second stage of its deliberations, we urge the Outage Task Force to analyze the design philosophy that allowed avoidable vulnerability to be built into our power system.

The proximate causes of the August 2003 blackout were a series of routine failures. The blackout demonstrates the vulnerability of our power system – a vulnerability due primarily to its design. A more decentralized power system, more modular in its design and less reliant on large power flows across great distances, could provide substantial reliability advantages as well as significant environmental and economic advantages.

We need a power grid that develops toward the more web-like structure of the Internet, rather than the existing structure, which resembles the oldest mainframe computer/terminal systems.

On August 14th, proximate operational deficiencies and flawed designs permitted a widespread collapse without external initiating events. Consider the damage our power system could suffer if the architects of the September 11th attacks, or their students, aim their ingenious malice at the power system.

A more decentralized model is urgently needed so that our power system can develop greater resilience in the event of mechanical failures or malicious attacks. Reactive power, which is essential to maintain power system reliability, is far more effective when generated close to consumers rather than being transported long distances over the high voltage transmission system. Numerous small power plants provide diversity, reducing the reliability impacts of individual generator outages relative to reliance on fewer but larger stations. High efficiency cogeneration stations reduce not only fuel costs and emissions but also customer impacts in the event of impaired fuel supplies. Locally generated power reduces reliance on inherently vulnerable transmission networks. We draw attention to the fact that many of Ontario’s large nuclear generators were power sinks, not sources, following the blackout, resulting in Ontario’s post blackout emergency.

While ruling out terrorism as a cause of the blackout, the report notes that the power system "has been, and continues to be, the target of malicious individuals and groups intent on disrupting the electric power system."

Decentralization is not the only lesson we should learn from the 2003 blackout. Utility regulators must pay attention to reliability. The Ohio Public Utilities Commission regulates First Energy, the U.S. utility at the centre of the blackout investigation. Notwithstanding the long catalogue of First Energy’s deficiencies, the Ohio Public Utilities Commission is not mentioned in the interim report. In the U.K., regulators use corporate self-interest to promote reliability. Electricity provider pay fines directly to affected customers in the event of outages. Not surprisingly, since this system was introduced, customers have received more reliable service.

The report also identified a major deficiency in the competence of the Canadian Nuclear Safety Commission (CNSC): CNSC staff were unable to immediately activate the CNSC’s Emergency Operation Centre because of loss of power to the CNSC’s head office building. Instead, CNSC staff established communications with licensees and the U.S. NRC from other locations. Happily, the CNSC did not have to cope with any nuclear emergencies during the blackout. The CNSC must establish and maintain a working emergency management plan.

Post script:

After making its formal presentation, Energy Probe asked for an opportunity to respond to comments from other presenters in order to clarify Energy Probe’s initial remarks. What follows is a summary of that statement.

Energy Probe was asked during the morning break to clarify its views on the appropriate role of transmission interconnections between Ontario and surrounding jurisdictions in light of our advocacy of decentralization.

Some groups presenting their views to the Task Force, such as CUPE National, are of the view that Ontario should not have electrical interconnections with the United States, that interconnection and commercial trade between utilities in Ontario and some utilities in neighbouring states is "dragging us into a swamp." Energy Probe takes the opposite view.

Decentalization and interconnection are compatible, not incompatible. The essence of decentralization is maximizing customer choices in sources of supply. Interconnection in Ontario is not just an additional option for consumers, it is an essential element of our power system’s reliability.

Ontario is the Canadian province most operationally reliant on large two-way flows of power across international boundaries. Without the access to electricity across international boundaries Ontario would have suffered rolling blackouts during the winter of 2002-2003, during August and September 2002, in May 1999, and throughout extended periods in 1990.

Some have pointed to Quebec’s favourable experience with reliability during the August 14th blackout, suggesting that Ontario should adopt Quebec’s practice of operating its power system as a power island, isolated from the rest of the Eastern North American Grid. That advice is ill-considered. Before the ice storm of 1998 and the August 2003 events, Quebec’s power reliability statistics were much poorer than Ontario’s.

For practical reasons – indeed necessity – Ontario’s primary interconnections are with Michigan and New York. Happily, regions of the U.S. with the capability to help meet Ontario needs, like New York and PJM, are, driven by competition, rapidly modernizing, expanding, and decentralizing their generation capabilities.

If the internationalization of interconnections is to flourish as it should, policy makers must be mindful of the constitutional arrangements that apply to electricity in Canada. Unlike in the U.S., the Canadian federal government has little constitutional authority in electricity matters. As a consequence, the Canadian federal government is relatively uninformed about electricity matters. Happily, the Canadian National Energy Board has recently started to address this gap by undertaking some inquires, albeit limited, into the reliability implications of interconnections.

Successful continued international cooperation in electricity – a trading relationship that has historically yielded rich public interest benefits on both sides of the border – will require an opportunity for Ontario’s active participatio