Distribution Reliability and Power Quality-The Next Industry Time Bomb

DISTRIBUTION RELIABILITY AND POWER QUALITY:
THE NEXT INDUSTRY TIME BOMB?

By
Kevin M. Harper, Senior Associate Consultant
Michael D. Mount, Vice President
Richard J. Rudden, President & CEO
R.J. Rudden Associates, Inc.
SUMMARY
The country’s transmission network desperately needs expansion and improved reliability to enable the
rapid and efficient development of competitive markets. Lurking under the bushes, however, are a variety
of risks pertaining to distribution service reliability and power quality. These have even farther-reaching
implications for the economic health and physical well being of the nation.
Few would argue the increased importance of electric reliability and power quality in our integrated
circuit dependent world. Businesses and consumers have become ever more dependent on reliable, high
quality electric service as a result of the widespread adoption of technology. As the impact of the semi-
conductor expands, customers, particularly businesses, and regulators are increasing their focus on
understanding and improving both reliability and power quality.
Recent research performed by R.J. Rudden Associates, Inc. (Rudden) suggests that distribution reliability
is potentially at risk in many parts of the country, and, in some cases, will be inadequate without the
required investments by operating utilities and a commensurate commitment by regulatory commissions
to provide the necessary economic incentives and rate relief. This article describes the research and
analysis of trends related to load growth, reliability, and distribution-related operating expenses and
capital investments that Rudden has undertaken on a national scale. Particular focus is paid to the
implications of these trends for reliability and the quality of power. We also review recent regulatory
trends and suggest some customer-focused management actions to ensure adequate power quality in the
future.
IMPORTANCE OF DISTRIBUTION RELIABILITY AND POWER QUALITY
Distribution service reliability and power quality has significantly grown in importance for a number of
reasons:
• Reliability and power quality are distribution issues, first and foremost. Distribution problems
have a more direct impact on the ultimate customer than generation or transmission. The Edison
Electric Institute (EEI) notes in a report published last year that 92% of all outages in the year
2000 resulted from distribution level causes, based upon a survey it conducted of 58 member
companies.1 The report indicates that generation, transmission, and transmission substation
problems were often masked from customers due to the mitigation effects of multiple alternative
feeds and other redundant systems.
1
Edison Electric Institute; 2000 Reliability Report; June 2001; page 11.
© Copyright 2002 R.J. Rudden Associates, Inc. Not to be reproduced or distributed without permission
R.J. Rudden Associates, Inc.

898 Veterans Memorial Highway ! Hauppauge, New York 11788 Tel: 631.348.4090 ! Fax: 631.348.4097 ! Web Site: www.rjrudden.com
Distribution Reliability and Power Quality:
The Next Industry Time Bomb?
• The increased dependence of our economy on technology and integrated circuits, and the related
escalating economic impact of outages, makes modern-day life distribution-reliant
• Customers expect that quality power will be provided as necessary to all segments of the
economy, and the lack of such quality will not be tolerated
• Research suggests that there has been a historical under-investment in distribution system
expansion and maintenance
• Uncertainties related to cost recovery have made some utilities reluctant to make the necessary
investment
TRANSMISSION SYSTEM CONCERNS
From 1988 to 1998, the demand for electricity increased by 30%, but the capacity of the nation’s transmission
system expanded by only half that rate.1 Not only have high voltage transmission lines become nearly impossible
to build in some geographic areas, but also a utility that invests in new transmission exposes itself to large
regulatory risks and will earn only a minimal regulated rate of return on the investment. In addition, utilities do
not presently know the regulatory and market rules that will be in place over the life of the transmission asset, or
who will own or control the investment once it is made. Under these circumstances, utilities have shown an
understandable reluctance to make any investments other than those absolutely necessary to maintain system
reliability.
Recent industry literature and studies show that many industry observers have focused on the need to increase
transmission system capacity and investment. A report written on behalf of EEI states that there has been a
significant under-investment in transmission facilities throughout the country over the past two decades. This
report concluded that $56 billion in transmission investments over the next 10 years is required to return the
national infrastructure to a level similar to where it was before 1982 and notes that only $35 billion in
transmission investments are currently being planned.2
Our research yielded similar results. Total transmission plant for a group of 29 utilities analyzed by us increased
at an average rate of 0.6% per year from 1997 to 2000, and 1.4% per year from 1994 to 2000. This average
growth in transmission plant has been less than the average percentage growth in the number of customers, kWh
sales, and peak loads. Generally speaking, the results for each of the individual 10 North American Reliability
Council (NERC) regions are similar to those for the nation as a whole.
Another measure of the under-investment in transmission facilities is the growth in the number of transmission
loading relief (TLR) events in recent years. TLR Level 2 or above events, as reported by the NERC, have grown
significantly from 305 in 1998 to 358 in 1999, to 1,033 in 2000, and then declining slightly to 920 in 2001.3
In addition to load growth, the nation’s transmission system will continue to undergo stress as a result of the rapid
increase in the economic trading of electricity. Increased investment in the transmission system will, no doubt, be
required to meet past and future load growth to provide reliable service and to foster the development of
competitive markets.
__________________________
1
EPRI white paper: The Western States Power Crisis: Imperatives and Opportunities; Electric Power Research Institute;
June 25, 2001; page 2.
2
Hirst, Eric, and Kirby, Brendan; Transmission Planning for a Restructuring U.S. Electric Industry; June 2001; pages 5, 7,
and 9.
3
Drawn from North American Electric Reliability Council Transmission Loading Relief Procedure Logs.
2
LOAD GROWTH TRENDS
Load and customer growth have been the traditional primary drivers of capital investments in distribution
systems. The Energy Information Administration (EIA) reports that total U.S. electric demand increased
by 2.5% per year between 1997 and 2000 and 2.7% per year from 1994 to 2000, while total electricity
consumption increased 2.6% per year from 1997 to 2000 and 2.8% from 1994 to 2000.2 It projects that
electricity consumption will continue to increase at a somewhat lower rate in the future, predicting that
total consumption will increase an average of 1.8% per year from 2000 to 2020.3
Our own research confirms EIA’s historical growth figures. We examined the peak load growth of 29
electric utilities that include the largest utilities within each of the NERC 10 reliability regions and found
that annual peak load growth for this group averaged 2.4% from 1997 to 2000, and 2.6% per year from
1994 to 2000. Growth in energy consumption averaged 1.9% per year from both 1997 to 2000 and from
1994 to 2000. This relationship between growth in peak load and energy consumption suggests a
significantly more capacity-intensive utilization of distribution facilities and holds clear implications for
the future adequacy of capacity reserves and reliability.
Peak load growth and total consumption, without question, will continue to be important factors
underlying electric utilities’ distribution-related capital expenditures. The increased dependence on
reliable service and power quality in our technology-driven economy, however, may well prove to have
an even greater impact on utilities’ capital expansion plans.
RELIABILITY TRENDS
While reported reliability data is an important starting point for any discussion of the issues addressed by
this article, it does not tell the whole story. We will begin by citing some reported EEI reliability data,
and will then discuss more subtle trends that we have observed not only in the data, but also in “the field.”
EEI reports averages for the major reliability indices in two ways.1 First, averages are provided with
“major storms” excluded (the majority of the reporting companies defined “major storm” as one that
effects 10% or more of their customers). Averages are also provided with “all interruptions” included.
The EEI report also includes data from similar surveys conducted in 1998 and 1999 which, together with
the 2000 data, provide three (3) years of data and two (2) years of trending. The table below is based
upon EEI’s reported results for the three-year period ending 2000.4 For those unfamiliar with standard
reliability indices, the system average interruption frequency index (SAIFI) is a measure of the number of
average outages experienced by customers in one year. The system average interruption duration index
(SAIDI) is a measure of the average duration of outages experienced per customer per year. The
momentary average interruption frequency index (MAIFI) is a measure of the number of momentary
interruptions experienced by each customer per year. Reliability performance, as characterized in this
table, has improved between 1998 and 2000.
2
Energy Information Administration; Annual Energy Review (2000); December 2000; pages 219 and 245.
3
Energy Information Administration; Annual Energy Outlook 2002; DOE/EIA-0383 (2002); December 2001;
page 72.
4
Edison Electric Institute; 2000 Reliability Report; June 2001; pages 5-7.
3
National Reliability Trends (1998 - 2000)
Reliability Index 1998-2000 Trend
Excluding Major Storms SAIFI Measurable Improvement
SAIDI Some Decline
MAIFI Significant Improvement
Including Major Storms SAIFI Some Improvement
SAIDI Some Decline
MAIFI Measurable Improvement
Does this chart suggest that electric reliability is under control? On the surface, yes. Further analysis,
however, shows that the reliability improvements shown for the years covered by the EEI survey do not
accurately depict the full story of what might be really happening for several reasons. Other factors that
we will now discuss include the impacts of weather, variations between regions and specific utilities, the
age of facilities, limitations in the indices themselves, customer expectations and cost of outages.
IMPACT OF WEATHER
First, in recent years, many distribution systems have been spared the kinds of weather (e.g., severe heat
and cold) that typically stress systems and test reliability; reported reliability results, consequently, are
better than they would have been under more severe, or even normal, weather conditions. Some utilities,
their regulators and the public, therefore, may have become complacent over the issue, thereby creating
unrealistic expectations, promoting a false sense of security, and eventually setting the stage for greater
physical reliability and sociopolitical problems in the future.
UTILITY AND REGIONAL VARIATIONS
Second, national averages tend to mask variations in reliability performance among individual utilities
and between regions. The data below demonstrates this by showing those NERC regions with reliability
performance below the national averages.5
5
4
Regions With Sub-Average Reliability (1998-2000)
Reliability Index Regions With Performance Below

National Averages
Excluding Major Storms SAIFI ERCOT/FRCC/MAAC/MAIN/SERC/SPP
SAIDI ERCOT/MAAC/MAIN/SERC/SPP
MAIFI ERCOT/FRCC/MAIN/SPP
Including Major Storms SAIFI ERCOT/MAPP/SERC/SPP/WSCC
SAIDI SERC/SPP
MAIFI ERCOT/FRCC/SPP
AGING INFRASTRUCTURE
The third reason why reported reliability results mask reality pertains to the rapidly aging condition of
distribution systems throughout the country. Our knowledge of the distribution systems of a number of
electric utilities suggests that the continuing aging of the nation’s distribution infrastructure will have a
direct adverse impact on reliability in the near future. This view is echoed in a Department of Energy
(DOE) Power Outage Study Team (POST) study, published in 2000, that investigated a series of outages
that occurred in the summer of 1999. The POST investigation found that “the aging infrastructure and
increased demand for power have strained many transmission and distribution systems to the point of
interrupting service. In many cases, state and federal regulatory policies are not providing adequate
incentives for utilities to maintain and upgrade facilities to provide an acceptable level of reliability.” The
report further states that the “problem is not that we have not learned from past outages. Rather, it is that
in many instances, we have not taken the necessary steps to design and implement the solutions.”6
LIMITATIONS OF RELIABILITY INDICES
Fourth, reliability indices tell only part of the story from the perspective of the ultimate customer. The
traditional reliability indices shown above do not adequately capture the notion of power quality, which
will continue to become increasingly important to all customer groups. A small voltage dip or
momentary loss of power might have gone largely unnoticed in years past. In our microprocessor driven
world, even with the smallest of micro-outages, we are greeted with a blinking microwave, our computer-
operated production floors screech to a halt, and our multi-floor office buildings teeming with warm
bodies sit idle as the telephone and e-mail servers reboot.
6
U.S. Department of Energy’s Power Outage Study Team; Findings From the Summer of 1999; January 2000;
page S-2.
5
CUSTOMER EXPECTATIONS
As important as the above statistics are, they do not address a critical question: what do customers require
and expect with regard to reliability and power quality? The answer to this question is of course critical
in an era of increasing customer expectations, competition and regulatory activism. Insight into this
aspect was provided by a survey of large customers, conducted by the EEI at the Spring 2000 EEI
National Account Conference, which focused on reliability-related matters. Revealing results from this
survey include:
• When asked how customer service provided by distribution companies to national account
customers has changed during the previous three years, 17% said that service had declined
significantly and 37% responded that service had declined some
• When asked where electricity reliability is a major concern for national account customers, 44%
responded nationally, 14% said in most states, and 37% responded in a few states
• When asked what an acceptable total amount of annual outage time for a typical national account
facility to experience was, 22% said less than five (5) seconds, 4% said less than one (1) minute,
6% said less than five (5) minutes, and 50% responded less than an hour
• When asked how often national account customers make site selection for new facilities based on
electricity reliability, 5% responded always and 39% said that they were beginning to do so
• When asked whether they were planning future expenditures to improve reliability at facilities,
49% responded yes 7
COST OF OUTAGES
Estimates of the economic impact of reliability and power quality problems that are borne by residential
and business customers vary significantly. One study conducted by J.M. Clemmensen in 1993, for
example, estimated that the national cost associated with commercial and manufacturing outages is
$38.9 billion.8 Another study estimated the cost at between $104 and $164 billion, with an additional cost
of $15 to $24 billion associated with power quality problems.9 A third estimate, published by the Electric
Power Research Institute (EPRI), states that total losses to U.S. businesses resulting from power outages
approach $400 billion per year.10 Regardless of which estimate might be the most accurate, the estimates
are staggering.
7
8
The J. M. Clemmensen 1993 study was referenced in Eto, Joseph; Koomey, Jonathan; Lehman, Byran; Martin,
Nathan; Mills, Evan; Webber, Carrie; and Worrell, Ernst; Scoping Study on Trends in the Economic Value of
Electricity Reliability to the U.S. Economy; E.O. Lawrence Berkeley National Laboratory; June 2001; page 15.
9
Reported in Power Quality and the New Economy; Energy; June 22, 2001; adapted from The Cost of Power
Disturbances to Industrial and Digital Economies; Electric Power Research Institute; August 2001.
10
The EPRI study was referenced in Eto, Joseph; Koomey, Jonathan; Lehman, Byran; Martin, Nathan; Mills, Evan;
Webber, Carrie; and Worrell, Ernst; Scoping Study on Trends in the Economic Value of Electricity Reliability to
the U.S. Economy; E.O. Lawrence Berkeley National Laboratory; June 2001; page 15.
6
COST OF OUTAGES
Let’s look in more detail at one of the more recent estimates on the cost of outages cited in the article. EPRI’s
Consortium for Electric Infrastructure for a Digital Society (CEIDS) commissioned an evaluation of the costs
imposed on American businesses from power outages and other power quality problems. Primen, an EPRI
affiliate, drew up a random sample of 985 businesses for which power quality problems were assumed a priori to
be particularly costly.
The survey found that three large sectors of the U.S. economy are particularly sensitive to power disturbances;
namely, the digital economy (DE), continuous process manufacturing (CPM), and fabrication and essential
services (FES) sectors. The survey sample was drawn from these sectors. The DE sector includes firms that rely
heavily on data storage and retrieval, data processing, or research and development operations (e.g., data storage,
telecommunications, and retrieval services, and the financial industry). The CPM sector includes manufacturing
facilities that continuously feed raw materials through an industrial process (e.g., paper; chemicals; petroleum;
and primary metals). Finally, the FES sector includes all other manufacturing industries, plus utilities and
transportation facilities.
The study found that, collectively, $45.7 billion are lost per year by businesses in these three sectors alone. The
majority of this loss ($29.2 billion) is in the FES sector. DE firms lose $13.5 billion to outages annually, and the
greatest losses per establishment are among CPM firms.
The extrapolated study results suggest that across all business sectors, the U.S. economy is losing between $104
billion and $164 billion a year to outages and an additional $15 billion to $24 billion to other power quality
problems.1
___________________________
1
Reported in Power Quality and the New Economy; Energy; June 22, 2001; adapted from The Cost of Power Disturbances
to Industrial and Digital Economies; Electric Power Research Institute; August 2001.
BUDGET TRENDS
Based on our research, utilities have been recently expanding their distribution networks more rapidly
than the growth in the number of customers, revenues, kWh sales, and peak loads. This research included
a review of historical distribution investments, and operations and maintenance (O&M) expenses, for
selected utilities in each of ten NERC reliability regions. Our interviews with a number of the personnel
at some of the utilities indicate this trend may reflect an effort to “catch up” to historical under-investment
and, to a degree, a reaction to certain major events. The graph below illustrates the historical growth in
distribution plant and O&M expenses relative to growth in peak load over two time periods, 1994 to 2000
and 1997 to 2000.
7
Historical Growth in Distribution Plant

and O&M Expenses
8.0%
7.0%
6.0% 5.7%
Growth 4.7%
4.3%
4.0%
Peak Load Peak Load

2.6% 2.4%
2.0%
1994-2000 1997-2000
Total Distribution Plant Total Distribution O&M Expenses
When we evaluated the trends in distribution-related capital expenditures, we found it useful to consider
two separate categories, each with different characteristics:
• Local distribution-related investments made for reliability purposes, including system expansion
and replacements
• Local distribution-related investments made to meet projected load growth
Based upon the results of our research of distribution-related budget trends and interviews with utility
personnel, we expect that the following will occur with regard to both of these categories:
• Local reliability-related investments are expected to increase relative to historical trends, peaking
in the 2003 to 2005 timeframe, and then decreasing, thereafter, below current levels
• Local load growth investments are expected to continue at above average levels for the next few
years and then fall back to normal levels thereafter
INCREASED REGULATORY FOCUS
Several utilities, including Commonwealth Edison and Entergy, suffered major reliability problems over
the past five years. Aggrieved customers prompted regulators and legislators to take action. As a result,
an increased regulatory focus on reliability and power quality developed in many states, along with an
increase in the establishment of performance-based regulation (PBR) mechanisms that focus on reliability
and power quality.
For example, according to a recent study, 27 states currently have reliability standards in place as
compared to only three (3) in 1996. Six (6) other states have pending regulations. Twenty-one (21) states
8
require reliability levels to be monitored and reported, while 11 states now have penalties and awards for
performance. Eight (8) states now enforce performance standards.11
Our own independent research confirms the increased focus of state regulatory commissions on
reliability. The Iowa Utilities Board (IUB), for example, recently proposed rules to maintain service
quality. Concerned over a staff report stating that ‘‘reliability rules may be necessary to ensure that
emerging electric competition and other factors do not diminish the quality of service Iowans have come
to expect”, the IUB opened a docket to consider new electric utility standards and reporting requirements,
covering both transmission and distribution facilities for any utility with 25,000 or more customers. The
IUB is presently considering new regulations that define reliability, set standards, and mandate reporting
and record-keeping requirements over a seven-year period.12
In a number of jurisdictions utilities must now meet service quality standards set by state regulators or
face fines, in Massachusetts up to 2% of annual transmission and distribution revenues …a potentially
very significant penalty by almost any measure. In 2000, the Massachusetts Department of
Telecommunications & Energy (DTE) set performance benchmarks in a number of areas, including
electric service reliability. Each utility will be evaluated against its own performance during the previous
10 years, using the widely accepted SAIDI measure. The DTE decided to not impose penalties for
momentary outages, voltage surges or other power quality problems at this time, although it directed
utilities to begin collecting data because it may impose such penalties in the future. In the interim, the
DTE said that utilities should develop standards with individual customers based on power quality
measurements taken at customer sites.13
Finally, the Michigan Public Service Commission (MPSC) has begun a process to develop administrative
rules and standards for service quality and reliability, as required by the Customer Choice and Electricity
Reliability Act of 2000. As part of this process, the MPSC is considering the imposition of penalties for
utilities that do not meet certain performance standards. The MPSC has proposed to adopt four
performance standards involving the measurement of system outages, of which three relate to the utility's
ability to restore service under various conditions, while the fourth involves “same-circuit repetitive
interruptions.” 14, 15
As stated earlier, and commensurate with the increase in state regulatory commission focus on reliability
and power quality, there has been an increase in the number of reliability-related PBR mechanisms that
have been implemented throughout the country. In a report prepared by the Regulatory Assistance
Project, a consulting group, the following utility-specific reliability-related PBR standards were
identified:16
11
Reported in In the Reliablity Hot Seat; Transmission & Distribution World; February 2002; based on a
presentation by Cheryl Warren (Navigant Consulting, Inc.) entitled Reliability Horizon at the at the October 2001
IEEE/PES T&D Conference.
12
Reported in Iowa Utilities Board Proposes Rules to Maintain Service Quality in New Era; Platts Retail Energy;
February 8, 2002; page 6.
13
Reported in Mass. Regulators Mandate Service Quality Standards, Threaten Fines; Electric Utility Week;
August 28, 2000, page 13.
14
Reported in Performance Standards, Penalties Proposed for Mich. Power Companies; Retail Services Report;
July 20, 2001; page 7.
15
Press release; Michigan Public Service Commission; December 20, 2001.
16
Regulatory Assistance Project; Performance-Based Regulation for Distribution Utilities; December 2000;
page 21.
9
Illustrative Service Standards for PBRs
SAIDI SAIFI
Utility (Minutes) (Minutes)
Boston Edison Company 108.8 1.0
Central Maine Power Company - 2.0
Commonwealth Electric Company 115.0 1.5
Energy Gulf States 158.0 2.6
Maine Public Service - 3.1
Pacific Gas & Electric Company 145.0 1.5
Public Service Company of Colorado 79.0 -
San Diego Gas & Electric Company 52.0 0.9
Southern California Edison Company 55.0 -
RATE CONSIDERATIONS
Improving reliability and power quality requires, among other things, dollars, in the form of both capital
expenditures and O&M expenses. There will also be an increase in the costs incurred by utilities to
respond to increased regulatory oversight, as well as potential penalties if performance does not meet
expectations. Many utilities, however, are presently operating under rate freezes or moratoria, either in
fact, or “perceived to exist.” Consequently, distribution utilities face a real challenge of cost recovery.
Utilities will need to work very closely with regulators to explain the objectives and expected results of
increased efforts to improve distribution reliability and the need to recover the associated costs. Utilities
need to focus on recovering incremental costs from incremental revenues from tariffed rates as part of an
overall regulatory strategy. For example, they will need to examine rate unbundling strategies that will
effectively and equitably align the incremental costs of distribution expansion and reinforcement with the
revenues from those customers and incremental loads who are responsible for those costs. Also,
traditional “value of service” concepts may be called upon to address the financing requirements for
improved levels of power quality. For example, to the extent that certain customer classes require higher
reliability and power quality, they may need to be identified as premium service customers within the
tariff or under special contracts, and the costs associated with providing this “premium service” should be
recovered from them.
Not only do utilities need to be innovative in how they approach reliability and power quality problems,
they must also be innovative in how they charge for their services and recover their incremental capital
expenditures and O&M expenses.
MANAGEMENT CONSIDERATIONS
While it is true that the solutions for reliability and power quality problems are largely engineering and
operational in nature, achieving the results required to meet customer needs will also require changes to
the manner in which reliability issues are managed. For example, many utilities still lack good geo-
10
spatial reliability data that is critical to analyzing reliability issues and fine-tuning the use of ever-limited
maintenance and investment dollars.
Utilities need to establish reliability and power quality as a core business strategy and take a longer-term
view of performance improvement. Being a regulated distribution utility unquestionably requires focused
attention on reliability and power quality. Once reliability and power quality have been established as a
priority business strategy, performance objectives need to be established. To achieve these performance
objectives, utilities may find it necessary to reorganize to provide the appropriate multi-disciplinary focus.
Motivating and incenting employees towards these new objectives may also require examining
management practices and bonus programs. Revised programs must also include the systematic review of
design, construction, monitoring, and reporting practices that affect reliability.
Utilities will also find it necessary to improve their methodologies and tools to properly assess reliability
problems and perhaps increase the number of personnel with direct responsibility for reliability and power
quality. As noted in a DOE report, limitations in current system planning and operation assessment
methodologies and tools include:
• Inaccuracies and errors in planning and simulation models – a lack of realism and significant
differences between model-predicted behavior and actual system behavior has been evident in
recent major outages
• Inadequate treatment of multiple contingencies and correlated failures – current reliance on
planning for the loss of any single element is inadequate in the new environment
• Lack of probabilistic reliability criteria and the lack of tools that translate long-range planning
criteria into operational planning and implementation – current probabilistic long-term reliability
planning is generally not applicable in short-term operations and implementation
• Inadequate maintenance planning
• Inadequate real-time dynamic transmission rating tools and models
• Inadequate short-term and long-term load planning
• Limitations of data collection and system monitoring – inadequate static and dynamic system
performance data, inadequate component performance data, and so forth
• Control design and hardware – uncertainties in system controls, and so forth 17
CONCLUSION
Distribution utilities must elevate their focus on reliability and power quality, and establish them as
primary strategic objectives. While utilities have made significant investments in distribution systems
and appear to have maintained reasonable levels of distribution reliability, many of their systems have not
been sufficiently stressed to truly test the boundaries of present preparedness. Further, while recent
investment has been high, there is at least some sentiment in the industry that there is a lot yet to be done,
and utilities must still overcome years of under investment. This prognosis appears to be particularly
17
Consortium of Electric Reliability Technology Solutions; Grid of the Future White Paper on Accommodating
Uncertainty in Planning and Operations; U.S. Department of Energy; December 1999; pages 13-17.
11
applicable to markets that are evolving into open access. Regulators, customers and utilities must work
together to develop mutually agreeable power quality standards and objectives, a common set of
expectations, and a realistic vision of the quality of service required for twenty-first century life. In a
more immediate sense, utility management teams need to take all actions necessary to ensure that
reliability and quality related problems do not become mission adverse, and do not negatively impact
customer and regulatory relations and, ultimately, earnings performance.
12

Distribution Reliability and Power Quality-The Next Industry Time Bomb

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DISTRIBUTION RELIABILITY AND POWER QUALITY:

THE NEXT INDUSTRY TIME BOMB?

IMPORTANCE OF DISTRIBUTION RELIABILITY AND POWER QUALITY

R.J. Rudden Associates, Inc.

TRANSMISSION SYSTEM CONCERNS

LOAD GROWTH TRENDS

National Reliability Trends (1998 - 2000)

Reliability Index 1998-2000 Trend

Excluding Major Storms SAIFI Measurable Improvement

SAIDI Some Decline

MAIFI Significant Improvement

Including Major Storms SAIFI Some Improvement

SAIDI Some Decline

MAIFI Measurable Improvement

UTILITY AND REGIONAL VARIATIONS

Regions With Sub-Average Reliability (1998-2000)

Reliability Index Regions With Performance Below

Excluding Major Storms SAIFI ERCOT/FRCC/MAAC/MAIN/SERC/SPP

Including Major Storms SAIFI ERCOT/MAPP/SERC/SPP/WSCC

LIMITATIONS OF RELIABILITY INDICES

Historical Growth in Distribution Plant

Peak Load Peak Load

INCREASED REGULATORY FOCUS

Illustrative Service Standards for PBRs

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