Ensure appropriate investment in transmission and generation infrastructure;
Recognize and respect regional industry differences and preferences;
Encourage cost-effective and not overly complex regional solutions;
Support rational long-term generation resource arrangements that are in turn supported by long-term transmission service provided at just and reasonable rates;
Foster well-functioning wholesale electric markets; and
Ensure that public utility sellers of power at market-based rates
charge “just and reasonable” prices.
EXCERPT FROM THE EXECUTIVE SUMMARY:
Almost all bulk electric power in the United States is generated, transported and consumed in an alternating current (AC) network. Elements of AC systems produce and consume two kinds of power: real power (measured in watts) and reactive power (measured in volt-amperes reactive, or var). Real power accomplishes useful work (e.g., running motors and lighting lamps). Reactive power supports the voltages that must be controlled for system reliability.
Reactive power supply is essential for reliably operating the electric transmission system. Inadequate reactive power has led to voltage collapses and has been a major cause of several recent major power outages worldwide. And while the August 2003 blackout in the United States and Canada was not due to a voltage collapse as that term has been traditionally used, the final report of the U.S.-Canada Power System Outage Task Force (April 2004) said that “insufficient reactive power was an issue in the blackout.” Dynamic capacitive reactive power supplies were exhausted in the period leading up to the blackout.
Excerpt from the Executive Summary:
It is time to take stock of the Federal Energy Regulatory Commission’s (“FERC”) electric restructuring policies. APPA believes substantial “mid-course corrections” to FERC’s policies are needed to fix existing Regional Transmission Organizations (“RTOs”) and to encourage non- RTO alternatives in those regions where RTOs are not likely to form.
To protect electric consumers, as the Federal Power Act (“FPA”) requires, FERC should reorient its policies to make sure electric consumers in fact— not just in economic theory—benefit from electric restructuring.