US Blackout Illuminates Problems

01 October 2003
By Hamish Fraser

Many commentators have argued that the Northeast U.S. blackout of 2003 was caused by insufficient transmission investment. However, while NERA Special Consultant Hamish Fraser agrees that this may be in part to blame, in this article he asserts that it is far more likely that the problem was the result of organization, not infrastructure -- that there was more than one entity with overlapping authority and each assumed the other would act; in this instance none of them did in time. Mr. Fraser argues that the myriad of regional authorities in the industry is an organizational structure that was appropriate 80 years ago but is antiquated today. Deregulation of generation has necessitated increased overlapping responsibilities, and has caused the transmission system to be used in ways for which it was not initially designed.

To solve the problem, Mr. Fraser does not advocate a single national transmission company or single regulatory entity for all things transmission; rather, he calls for a national review and overhaul of what utilities should be doing regarding system reliability, who should be regulating them and setting standards, and what should be done to clean up the mess of overlaps.

This article was published in the September/October issue of Energy International, published by the Charlton Media Group.