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Prepared Witness Testimony The House Committee on Energy and Commerce
Blackout 2003: How Did It Happen and Why?
Full Committee on Energy and Commerce
Mr. William J. Museler
Good morning, ladies and gentlemen. My name is William J. Museler, and I am the President and Chief Executive Officer of the New York Independent System Operator, or NYISO. I appreciate the opportunity to brief the Committee on what we know so far about the August 14, 2003 blackout and our restoration operations. My testimony today will focus on the questions raised by the Committee in the Notice of Hearing. Immediately prior to coming to the NYISO, I was the Executive Vice President of the Transmission/Power Supply Group of the Tennessee Valley Authority, which in terms of MW served, is the size of New York. Prior to that, I was Vice President of Electric Operations at Long Island Lighting Company. I serve as the Chairman of the ISO/RTO Council, and have served on the NERC Board and as Chairman of the Southeast Electric Reliability Council. I am a graduate of Pratt Institute and Worcester Polytechnic Institute. The NYISO was created to operate New York's bulk transmission system and administer the wholesale electricity markets. We are a New York not-for-profit organization and started operation in 1999. As you know, we are pervasively regulated by the Federal Energy Regulatory Commission ("FERC"). As provided in the Federal Power Act, we are also regulated with respect to certain financings by the New York State Public Service Commission. ISOs, and later regional transmission organizations ("RTOs"), were established to help implement the FERC's policies of partial deregulation as originally set forth in its Order 888, issued in 1996. In its order, FERC set forth certain functions of ISOs and, in a later order, of entities with similar functions such as RTOs. ISOs and RTOs generally act as the primary interface between generators, transmission owners and other participants in the wholesale electric marketplace. ISOs and RTOs accomplish this by dispatching the power system in their control area (i.e., directing the power plants to generate a specific amount of power at a specific time) to supply electricity to customers while maintaining safety and reliability. In addition, ISOs generally facilitate and administer a number of different electricity markets, thereby providing market participants with the ability to sell and purchase various services on an unbundled basis. The primary market function of ISOs or RTOs is to ensure fair and non-discriminatory access to the transmission system. As such, ISOs are meant to be independent of any individual market participant or any one class of participants. Reliability and security of the transmission system represent the other critical functions for a system operator. For example, the NYISO, in accordance with NERC, the Northeast Power Coordinating Council ("NPCC") and the New York State Reliability Council ("NYSRC") rules, implements and adheres to reliability standards intended to ensure that the integrated New York State electric system has enough generating capacity, including reserves, to provide a reliable power supply. Although ISOs play a key role in ensuring reliability, ISOs have only operational control of the bulk power system. They do not generate power, or own any generating or transmission equipment. They do not have any financial interest in any transactions for the generation or sale of electricity. I would like to make clear at the outset the areas that we know and those that we do not. While I am, of course, aware of what has been in the press regarding the events that initiated the blackout in a significant part of the Eastern Interconnection, I am not yet able to tell you anything in detail about those events because they have not yet been determined in detail, and details in this case are extremely important. Because the initiating events happened in a very short period of time - really just a matter of seconds - and happened away from New York, understanding them fully depends largely on interpreting electronic data that we do not have. The International Commission formed by President Bush and Prime Minister Jean Chretien of Canada is being given the data and is undertaking its interpretation. We are, of course, cooperating fully in this investigation. The U.S. end of that investigation is well underway and is headed by the Department of Energy. Like you, I'm anxiously awaiting their conclusions. In addition to outside investigations, the NYISO began its own investigation and analysis within hours of the event. The NYISO is reviewing its own records to determine the precise sequence of events that took down major portions of the New York system within fractions of a second. We have, in our preliminary analysis, identified two uncontrollable power swings that led to the New York system disturbance that occurred at about 4:11:00 p.m. Up until the event, our system was operating normally, well within applicable criteria and with adequate reserves. There had been a routine scheduling call with adjoining control areas that occurred only 11 minutes before the event (at 4:00:00 p.m.) without indication of a problem. The first indication of a possible problem somewhere on the Eastern Interconnection occurred at 4:09:09 p.m. in the form of a counter-clockwise 700 MW power swing that flowed from the PJM control area through New York into the Ontario control area (which is operated by the Independent Electricity Marker Operator or "IMO"). The 700 MW power swing did not, however, create a system contingency on the New York system (i.e., the system was still secure and within intended operating criteria). This 700 MW power swing was not a very unusual occurrence and thus did not alarm the operators. Such a swing usually indicates that a power plant or transmission element has failed in another region. A second counter-clockwise 1100 MW power swing occurred a minute later, at 4:10:40 p.m., again flowing from the PJM control area through New York into the Ontario control area. At this point, there were approximately 2700 MW flowing through this New York transmission corridor, consisting of approximately 900 MW of normal flow compounded by the 700 MW and 1100 MW power swings. Our preliminary data indicates that seconds thereafter, a 2700 MW reverse power swing either from or through Ontario into the New York system occurred, which instantaneously took down major portions of the New York system. However, several hydro plants in upstate New York, as well as the Quebec tie line, remained in service, as did the majority of the upstate transmission system. Thus, about 20% of the New York load continued to receive service during the disturbance. Unfortunately, New York City was completely without service at this point. Immediately after the event, the NYISO began implementing its restoration plan. The first step in the restoration process involves stabilizing the system and restoring our ties to the neighboring control areas. After that, the process of bringing power plants and outside sources back online must take place, including the delicate balancing of the power they can supply with the demand in the individual area being restored. If the demand were greater than the supply, the system would crash in the affected area, and fortunately that did not occur. Within about three hours, we were able to restore one major tie to the remainder of the Eastern Interconnection at Ramapo. The first major power plant was returned to service in just under an hour after that, and a few minutes later we re-established a transmission path to New York City. Throughout the next day, there was a painstaking process of bringing generators back to the system and re-energizing lines. Statewide service was completely restored by 10:30 p.m. Friday, August 15th. The restoration process followed NYISO's pre-arranged plan and it worked well. Preliminary analyses indicate that the New York system operated as designed, given the event, and that the power swings New York experienced were beyond anything the system had been designed to withstand. In an occurrence such as the recent blackout, the greatest danger to electric service is potential damage to the system itself-the power plants and the transmission lines. Had that kind of damage occurred, it could have taken days, weeks, or even months to restore. Fortunately, the complex protective mechanisms that had been installed on New York's transmission system and on its power plants worked as intended and no serious damage was done. This protection shortened the restoration process considerably. We do not know at this time what equipment, design, or process improvements would be required to prevent a reoccurrence of the August 14th blackout. It is important to understand that the facts must drive the measures taken to prevent a reoccurrence of the August 14th blackout. Until the cause of the cascading blackouts is ascertained, we cannot anticipate what design changes, preventive equipment, or process improvements should be put in place. Needless to say, we will thoroughly review our own operations to determine if they can be improved, and all of our data and analyses will be forwarded to NERC for use in the International Commission's investigation. The events that so affected New York on August 14th are not yet known in sufficient detail to plan and implement specific solutions. However, we believe it makes sense to examine the known problems that could give rise to other reliability concerns in the future. We believe that the reliability standards set by the NERC, which are now voluntary, should be made mandatory. That issue is now before the Congress in the energy legislation now before a conference committee. We also believe those standards should mandate significantly improved communications and operating protocols among the various regions of the country, since we are now painfully aware of the extent to which events in one region can affect neighboring regions. Right now, there is no expectation that a non-adjacent system operator would communicate to other, non-contiguous control areas the existence of a condition or disturbance on its system, which is outside of allowable operating limits. Neither, is there an obligation on the control area's neighbors to communicate to the control area any information they obtain regarding problems on other systems. Communications alone, unfortunately, will not prevent a future blackout from occurring. The goal of having better communication is to enable ISOs and RTOs to take anticipatory action, if required, as soon as a system condition or disturbance becomes apparent anywhere on the Interconnection. Of course, there is no guarantee that prior knowledge or notice will translate into anticipatory action that can prevent a system disturbance. There are some actions that can be taken in New York to help ensure that other reliability problems do not arise. New York has been short of generation in the recent past and projections indicate that deficiencies are likely again later this decade. That shortage will grow and will represent both a reliability concern and, in our new competitive markets, a cost to consumers. The NYISO has already reformed its capacity markets to encourage investment in needed facilities and is working with neighboring regions to develop regional capacity markets. New York's transmission grid and its internal planning process needs to be strengthened. Current incentives for building transmission are inadequate. Likewise, inter-regional planning processes should be improved, and in the case of interstate facilities, a federal override (backstop authority) may be appropriate. I should note that this problem also has a continuous upward effect on electricity prices, since congestion on our transmission grid inhibits the free trade in electricity that the competitive markets were designed to foster. In this brief statement, I have tried to respond to the Committee's questions and to summarize the state of the investigations into what we know about how we handled the recent blackout in New York. I have tried to do so without speculating on things about which it is premature to draw conclusions. Needless to say, once the results of the international investigation are available, the NYISO will move aggressively to implement appropriate changes, as indicated by that investigation. Finally, I have taken the opportunity to alert the Committee to some of the measures, which can help to avoid future problems. I want to thank the Committee for the opportunity to come here today, and we will be cooperating with the Committee and the on-going inquiries into the outage.
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