Statement of The Honorable Kyle E. McSlarrow
Senate Committee on Governmental Affairs
"Keeping the Lights On : The Federal Role in Managing the Nation's Electricity"
September, 10 2003
Good morning, and thank you for inviting me to address the status of the U.S.-Canada Power Outage Task Force investigation into the August 14th blackout, as well as the Administration's views on how we can ensure a more robust transmission system in the future.
It's been just under a month since the widespread power outage that temporarily disrupted life and economic activity in large segments of the northeastern and mid-western United States, and parts of the Canadian province of Ontario. And in that month, we have made good progress in our effort to determine the causes.
Within a few hours of last month's blackout, President Bush and Prime Minister Chretien ordered a cooperative investigation into the incident. Top government officials from both countries - and scores of technical and engineering experts - have been hard at work ever since to determine exactly what caused this outage, how it was allowed to spread to such a large area, and what can be done to reduce the chances of such an incident in the future.
The Task Force is co-chaired by Energy Secretary Abraham and Canadian Natural Resources Minister Herb Dhaliwal. The U.S. members of the Task Force are Tom Ridge, Secretary of Homeland Security; Pat Wood, Chairman of the Federal Energy Regulatory Commission; and Nils Diaz, Chairman of the Nuclear Regulatory Commission. The Canadian members are Deputy Prime Minister John Manley; Kenneth Vollman, Chairman of the National Energy Board; and Linda J. Keen, President and CEO of the Canadian Nuclear Safety Commission.
The Task Force has been working on a number of fronts to collect and assess information on the blackout, visiting power plants and control facilities, interviewing grid operators and utility personnel, and analyzing vast amounts of computer and communications data relating to the incident.
The investigation team is making good progress with the formulation of a timeline of events that led up to the blackout. That detailed sequence of occurrences will serve as the primary framework for piecing together all the facts and events that will lead us to definitive answers about what happened.
The Task Force is gathering and analyzing information on tens of thousands of individual events that happened across thousands of square miles. All that information is being collected, compiled, sequenced and verified so we can be sure that our conclusions are complete, correct and credible.
It's an extremely complex undertaking to analyze and understand all these simultaneous events on such a large expanse of the grid. This outage took about 34,000 miles of our nation's 150,000 miles of high-voltage transmission lines out of service. More than 290 power generation units were tripped off line or shut down. Thousands of substations, switching facilities, circuit-protection devices, and other pieces of specialized equipment were affected, and a very large number of people, policies and procedures were involved.
To expedite the complicated work of sorting through all this, the U.S.-Canada Task Force is organized into three Working Groups focusing on specific aspects of the August 14th outage.
Our Electric System Working Group, led by experts at the Energy Department and the Federal Energy Regulatory Commission along with Natural Resources Canada, is focusing on the transmission infrastructure and its workings and management.
The Nuclear Power Working Group, managed by the Nuclear Regulatory Commission and the Canadian Nuclear Safety Commission, is looking at how nuclear plants in the affected area performed during the outage.
And our Security Working Group, managed by the Department of Homeland Security and the Canadian government's Privy Council Office, is looking at all the security aspects of the incident, including cyber security.
Each Working Group also consists of technical, management and engineering experts appointed by the governors of each U.S. state affected and the Province of Ontario, in addition to the governmental agencies involved in the investigation.
In addition to the Department of Homeland Security, the Security Working Group also includes agents of the U.S. Secret Service and the F.B.I, as well as experts from the Department of Energy laboratories. From Canada, the Security Working Group includes representatives of the Office of Critical Infrastructure Protection and Emergency Preparedness, the Royal Canadian Mounted Police, the Canadian Security Intelligence Service and the Ontario Ministry of Public Safety and Security.
The Nuclear Power Working Group is visiting the U.S. and Canadian nuclear power facilities that were affected by the outage and examining their performance during the incident. So far, the Working Group has been able to determine that all the nuclear plants shut down automatically when power disturbances were detected on the grid - performing exactly as they were designed.
It is a testament to the scale of the event on August 14th that of the 103 nuclear power plants operating across the United States, 70 plants detected some level of grid disturbance but accommodated the fluctuations and remained on-line. All the affected nuclear plants are now all back on-line and performing normally.
The Electric System Working Group has the largest challenge in the investigation because of the sheer size and complexity of the infrastructure. This group, working with technical experts at organizations such as the Independent System Operators from the affected regions and the North American Electric Reliability Council - an industry association formed following a major 1965 blackout to help assure grid reliability -- will be looking at the flow of events surrounding the blackout and determining how they are interrelated. This team also is focusing on the control mechanisms that were designed to keep the blackout from spreading to other areas.
Technical support for the Electric System Working Group is being provided by the Energy Department's Consortium for Electric Reliability Technology Solutions - a group of experts from our national laboratories, and a number of universities, with broad experience in transmission and power delivery issues.
This team, which has investigated a number of major power outages including the 1999 blackouts in the West, includes some of the world's foremost experts in transmission reliability issues, grid configuration, transmission engineering, wholesale power markets, outage recovery and power system dynamics. In addition, we have recruited transmission experts from the Bonneville Power Administration to help in the investigation. These experts led the team that examined the 1996 blackouts in the West.
This group also was instrumental in producing last year's comprehensive National Transmission Grid Study that outlined the requirements for bringing our transmission system up to 21st century standards. These technical and engineering professionals are devoting their full attention to the work of the Task Force to help ensure an efficient and high-quality investigation.
In addition to putting together the timeline and analyzing data from control centers and other sources, our investigators have completed on-site interviews with most of the control room operators of the affected utilities. We hope to complete the first round of interviews very soon.
Once we have determined the causes of the blackout, we will enter Phase 2 of the Task Force's two-part assignment, which is formulating recommendations to address the specific problems we uncover. Any recommendations the joint U.S.-Canada Task Force makes will likely focus on technical standards for operation and maintenance of the grid, and on the management of performance of the grid, in order to more quickly correct the problems we identify.
We are determined to complete this inquiry in a timely manner. We hope to have conclusions and recommendations in a matter of weeks - not months. As Secretary Abraham has said, we will not compromise quality for speed. We want answers quickly, but we want to make sure they are the right answers.
Beyond the investigation of the specific causes of the August blackout and the Task Force's recommended remedies for those causes, there is also the broader focus on the federal role in electricity reliability. Both the Department of Energy and the Federal Energy Regulatory Commission have launched a number of initiatives aimed at making our nation's transmission grid more efficient and reliable.
The President's National Energy Policy noted that one of the greatest energy challenges facing America is the need to use 21st century technology to improve our nation's aging energy infrastructure, which has not kept pace with growing demand or with fundamental changes in our electricity markets.
Since the President's first days in office, the Administration has strongly supported proposals to establish mandatory and enforceable reliability rules to reduce the risk of power outages. We are pleased that both the House and Senate included provisions to establish mandatory and enforceable reliability standards.
The Administration also has supported proposals that would expand investment in transmission and generation facilities by repealing the Public Utility Holding Company Act, which has limited the resources that could be invested in the transmission system by restricting certain types of investors. The Administration supports provisions to advance the development and deployment of new technology necessary to fully modernize the grid, such as higher-capacity power lines and advanced monitoring and communications equipment.
The National Energy Policy also called for the transmission Grid Study that was completed in May 2002. The study outlines the current condition of our transmission system and recommends ways to promote the expansion of overall transmission capacity, elimination of transmission bottlenecks, enhancement of the grid's technical efficiency and improvement of the system's overall reliability.
The Grid Study's recommendations included establishing an Office of Electric Transmission and Distribution at the Department of Energy, which is now helping lead the investigation of the August blackout. The recommendations also include developing new technologies such as superconductivity, which will allow more electricity to be shipped over smaller wires.
The Administration strongly supports measures to provide greater regulatory certainty for transmission expansion, including provisions in the House version of H.R. 6 providing for last-resort federal siting authority for high-priority transmission lines; and providing for the coordination and streamlining of transmission permitting activities across federal lands.
The Administration also supports options that would allow for increased rates of return on new transmission investments, including clarifying that FERC has the authority to provide incentive-based rates to promote capital investment in new transmission and technological upgrades to existing transmission.
We support the goal of regional coordination and planning through the mechanism of voluntary regional transmission organizations that would provide certainty to the marketplace, prevent undue discrimination, and assist in eliminating transmission constraints.
The Administration supports provisions to increase civil and criminal penalties for violations of the Federal Power Act. And we support changes in federal tax law to allow the recognition of gain over eight years for the sale or disposition of transmission assets as part of restructuring and to allow rural electric cooperatives to provide open access to their transmission systems without losing their tax-exempt status.
Investment in our electric transmission system has lagged behind the needs of the marketplace. Action is needed now to help the investment in the grid catch up to the growth in electricity demand and the new requirements of the competitive wholesale power markets, which are saving consumers billions of dollars each year. Private industry and federal, state and local governments must work together to ensure that our electricity transmission system will meet the nation's needs for reliable and affordable electricity in the 21st century.
In addition, government research and development has a role to play. That is why the President's '04 budget request includes additional funding for high-capacity transmission line technologies such as superconductivity and for real-time grid-management tools and other transmission-enhancing initiatives.
Our electric delivery system is the backbone of the U.S. economy. While investing in the necessary upgrades seems expensive, the cost is just a small fraction of the overall economy that it supports. We cannot afford to let such a vital component of our infrastructure fail to meet the nation's growing needs. Thank you for inviting me here today, and I would be pleased to answer any questions.
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