Written in April 1998
[ Top Ten Myths About Electric Deregulation ]
by George C. Loehr
as appeared in the 15 April 98 issue of Public Utilities Fortnightly
http://www.elucem.com/electricity/column/topten.html
Myth
Reliability in the Restructured, Deregulated Industry Will be Just as High as in the Past
Reality
Don't bet on it! In fact, it's far more likely that deregulation and restructuring will lead to major degradation in bulk power system reliability. There are many reasons for this, some of which have already been touched on above. But here are a few of the most important:
Complication -- Assuring reliability used to be fairly straightforward--not easy, but straightforward. There were a limited number of players, a relatively simple infrastructure, and virtually universal commitment to the goals of reliability and conformance with criteria. Perhaps most important, there was a culture best characterized by cooperation and coordination. In the "new world order," we now have an almost limitless number of participants, a very complex (and becoming even more so) infrastructure, little commitment to the goals of reliability, a "how can we beat it" attitude toward criteria by many--and a culture characterized at best by competition and confidentiality, and at worst by distrust, litigation and authoritarianism.
Legalism -- Conformance with criteria is becoming an exercise in what we can get away with; how far can we go to just avoid violating the rules; and a search for loopholes. Conformance is "mandatory", and punishment assured. What a far cry from the days of so-called "voluntary" conformance, when players obeyed the rules because it was the right thing to do (how quaint!), and because they understood that reliability was in the best interest of all, and you couldn't expect others to respect the rules if you didn't follow them yourself. That's a way of functioning which the bureaucratic mind simply cannot conceive of, and yet it's the way most of North America functioned for more than a generation. And functioned very well, thank you, as the record clearly demonstrates.
Politicization -- Now that the reliability infrastructure has made conformance with reliability standards "mandatory," which apparently it cannot legally do without governmental authorization, reliability's Pandora's box has been opened to politicians and bureaucrats. But, of course, this is the inevitable outcome of the regulatory takeover of the industry's own organizations. A federal "backstop," we are told, must be provided, government must review and sanction all standards, and reliability is OK as long as it doesn't get in the way of the market. The judgment of professional experts will be replaced by political expediency.
Expediency -- Many of the industry's own organizations which were established for the purpose of promoting reliability have in essence sold their birthright. They have judged that the pragmatic course is to follow the politically correct approach, "if you can't beat Ãem, join Ãem." Some did this because they genuinely believed they had no alternative, and this was a less-than-perfect way to maintain at least some leverage vis-a-vis reliability. Some did it to survive. Some saw opportunities to build new empires. A few became "true believers." And some simply lacked the courage. All have been, in my view, misguided.
The bottom line is this: we will see more blackouts. It may take just a few months, or it may take years (we are dealing with the subtleties of probability), but it will happen, make no mistake about it. If this is so, one might ask, how come so few people have said it?! Ah, there's the rub! Well, for one thing, engineers love order--and most of the people who would agree with me are also engineers. We don't like to rock the boat. We'd rather work from within, and we have a devotion to authority which is sometimes far too strong. Many believe that, given the present situation, the only way to help reliability is to work from within and try to make the best of a bad situation. And, some of us would like to keep our jobs! There's been a kind of blanket of silence thrown over the whole industry. It's not written down anywhere, but everyone knows that speaking out, even in private meetings, may, to paraphrase the Surgeon General, be dangerous to your career. Everyone knows, too, that decisions will be made at the top, and contrary opinions are not welcome; one organization actually bragged about turning itself into a "top down" organization.
What happens next? Well, it's far too late to stop this train, no matter what happens in the near term. We'll all have to sit tight and hope for the best. And do what we each can--because, in the final analysis, that's all we can do
