Janet McFarland
Globe and Mail
August 18, 2003

North America will see more power outages unless it deals not only with the engineering flaws that allowed last week’s blackout to spread within seconds across Ontario and eight U.S. states, but also with the policy flaws that have left electricity systems routinely on the knife edge of capacity.

Almost instantly, experts were debating how North American jurisdictions can boost their generating capacity, improve inadequate transmission systems and even restructure the basic architecture of how electricity is supplied to consumers.

The blackout has especially rekindled the debate in Ontario, where the provincial government last year sidelined its project to deregulate the retail electricity market, announcing a price cap on retail electricity rates. Private companies have suspended their plans to build new power plants in the province, saying the capped rate is not enough to cover costs.

Ontario New Democratic Party Leader Howard Hampton said that the power failure that swept across the province demonstrates the need to keep electricity in government hands.

"It’s too essential to be put in the hands of companies that put profit before reliability."

Others argued that the blackout sends the opposite message, demonstrating that the private sector should be given more encouragement to build power plants to fill a growing demand for electricity.

Jan Carr, an independent electricity consultant at Barker Dunn & Rossi in Toronto, said most regions in North America have long relied on a centralized system of huge power plants that supply electricity across long distances.

He said electricity deregulation should encourage private companies to build a larger number of smaller power plants that are closer to the communities they supply. The result is a power system that can bounce back more easily when another part of the grid has suffered a failure.

Indeed, greater flexibility was touted as one of the long-term benefits that was to have come from Ontario’s scuttled electricity deregulation.

"That clearly would lead to a reduction in the propensity for [power failures] to happen," Mr. Carr said. "When you break the system up, you have an easier job of balancing generation with [demand] on a regional basis."

He said New York has been especially prone to blackouts because so much of its electricity must be imported over long distances, making it vulnerable to problems at any point over a large network.

Peter Budd, a Toronto lawyer who is chairman of the Ontario Energy Association, said the issues that must be tackled first are engineering problems. He said Thursday’s blackout was not the result of inadequate supplies, despite the hot weather. He said Ontario has had many days with higher demand.

"We were not at the cliff," he said. "And what I’m hearing is that the operators were shocked. Obviously it was a system failure."

Mr. Budd said the problems were technical engineering issues, and must be studied and solved to try to protect against similar cascading blackouts in the future.

"The interconnected nature of an electricity market is the best safeguard we have. Just periodically, technically, it goes awry," he said. "I hope the engineers are able to determine what happened and look to find engineering solutions that will automatically isolate one jurisdiction from another in those kinds of crisis moments."

But Tom Adams, executive director of Energy Probe in Toronto, said technical improvements must be matched by broader fixes that make the electricity system more reliable.

"There are ways of improving the inherent reliability of the system and making it less vulnerable, so that we aren’t so reliant on engineered protections."

For example, a more decentralized power grid would improve the system’s reliability, because no single element would have as big a role to play, he said.

"[Today], a few generating stations or transmission elements are carrying these gigantic loads. It puts more eggs in one basket."

While tight supplies of electricity can exacerbate system problems, Thursday’s failure was spread through the transmission system, where power lines overloaded like dominoes. Each line tripped its switches and shut down, pushing electricity onto adjoining lines, which then in turn overloaded and shut down in a cascade.

It is estimated the entire system spanning areas including Ontario, New York, New Jersey, Ohio, Pennsylvania and Michigan shut down within 10 seconds.

Mr. Carr said the transmission system is so overloaded that there is little ability to adapt and switch transmission routes when lines fail. "The [transmission] highway has to be sufficiently broad, with high enough capacity that it can withstand a shock and allow traffic to start flowing in a different direction."

In a report issued Friday, UBS Securities Canada Inc. electricity analysts Andrew Kuske and Ronald Barone said North America’s electricity transmission grid "is facing a looming crisis" and estimated that the equivalent of $48-billion in grid investment is needed over the next decade.

The industry’s roots are in monopoly franchises that were built regionally and lack "horizontal" market reach, creating a fragile grid. The analysts said the North American Electric Reliability Council "has been largely ineffective" at dealing with the lack of investment in transmission systems.

"For the last 20 years, there has been a decline in annual transmission capacity and investment," they said. "This investment decline has come at a time when peak demand for electricity has grown considerably."

The trend is expected to get worse, with growth in annual demand between 2001 and 2010 estimated to far outpace growth in transmission systems.

Mr. Adams of Energy Probe said transmission systems have been starved for cash.

"We have transmission lines in service that are 70 years old and were designed to operate for 20 or 30 years. It’s absolutely a miracle of engineering that the work that was done back in the Thirties is still hanging in there."