Although interconnections among utilities improve reliability and lower costs, they also increase risks. The three major North American Interconnections are large, complicated machines that contain a variety of elements operated by different entities. Problems in one area can, if not quickly corrected, cascade into bigger problems that affect a large region. The 1965 blackout in the Northeastern U.S. snd Ontario, Canada, was the first major example of such a problem. The western U.S. suffered two major outages during the summer of 1996 that affected 14 states, two Canadian provinces, and a small part of Mexico.

NERC’s members are the ten Regional Reliablility Councils whos members come from all segments of the electrical industry: investor-owned utilities; federal power agencies;rural electric cooperatives; state, municipal and provincial utilities; independent power producers; power marketers; and end-use customers. These entities account for virtually all the electricity supplied in the United States, Canada and a portion of Baja California Norte, Mexico.

ECAR – Bulk Systems Perform Well
The bulk electric systems in the East Central Area Reliability Coordination Agreement (ECAR) will continue to perform well in meetin g forecast demand obligations over a wide range of anticipated system conditions as long as established operating limits and procedures are followed and proposed projects are completed in a timely manner. Particular concern remains regarding the delay of the American Electric Power (AEP) 765 kV project in southeastern ECAR, which is needed to guard against potential widespread interruptions. The Region’s criteria for resource adequacy will be satisfied throuh at least 2006. This assumes that capacity resources are available outside ECAR when needed, and that the average annual generating unit availability is maintained at or above levels experienced in recent years. After 2006, additional capacity beyond year-end 2002 levels will be needed to maintain resource adequacy. The actual amount of announced generation that is built will determine the adequacy of the generation resources beyond 2006.

ECAR membership currently consists of 18 full members and 30 associate members serving more than 38 million people in a 194,000 square mile region covering all or part of the states of Michigan, Indiana, Kentucky, Ohio, Virginia, West Virginia, Pennsylvania, Maryland, and Tennessee.

ERCOT – Secure and Adequate System
In 2002, the Electric Reliability Council of Texas (ERCOT) will complete its first full year of operation as a single control area Region and Interconnection, continuing open access to the transmission system for wholesale transactions and enabling retail customers to choose their electric suppliers. Although there have been challenges in operating new control systems under a unique market design, ERCOT has been successful in maintaining a secure and adequate electric system.

After a reduction in summer peak demand from 2000 to 2001 due to milder weather and a slow down in the economy, it is expected that 2002 demand will rebound to the level experienced in 2000. Demand is projected to increase around 4% each year in the near term and drop back to a 2.5-3% growth in the long term of the 2002-2011 assessment period.

Approximately 6000 MW of new generating capacity began operating in 2001. Of this new capacity, 915 MW was wind powered, with the balance being natural gas fueled. The ERCOT market continues to attract new generation projects with an additional 7,200 MW of new generation planned to start operation in 2002. Summer capacity margins for 2002 are expected to be 23.6%. Although announced additional capacity declines after 2004, short lead times for new generation should enable new capacity needed by the market to be built in this assessment period to maintain adequate margins. In addition, ERCOT is implementing capabilities in its systems that will allow loads to respond to the market and act as resources by reducing their demand.

A number of major transmission projects will be completed during this assessment period. These projects will help relieve problems that prohibit unconstrained operation of generation in ERCOT. These constraints limit imports into the Dallas-Fort Worth and Houston demand centers from the south and west. The long lead times and difficulty in building new transmission facilities will likely require implementation of ERCOT Congestion Management Procedures on an ongoing basis during the period.

ERCOT has 138 members and two adjunct members that represent independent retail providers, generators and power marketers and investor-owned, municipal and cooperative utilities, and retail consumers. It is a summer-peaking Region responsible for about 85% of the electric demand in the state of Texas. ERCOT serves a population of over 14 million in a geographic area of about 200,000 square miles with over 70,000 MW of generating capacity and 37,000 miles of transmission lines.

FRCC – Meeting Regional Reserve Margin
The Florida Reliability Coordinating Council (FRCC) expects to have adequate generating capacity reserves and transmission system capability to meet the Regional reserve margin standard throughout the 2002-2011 assessment period.

FRCC members continue to operate and exchange information in an effort to maintain the reliability of the bulk electric system. As a Region of NERC, FRCC has developed a formal reliability assessment process by which a committee and working group structure is utilized to annually review and assess reliability issues that either exist or have potential for developing. This process determines what planning and operating studies will be performed during the year to address those issues. The results of these studies are utilized so that FRCC remains ready to meet the reliability needs of today’s changing environment.

FRCC membership includes 32 members of which 12 operate control areas in the Florida Peninsula. FRCC membership includes investor-owned utilities, cooperative systems, municipals, power marketers, and independent power producers. The Region covers about 50,000 square miles.

MAAC – Bulk Transmission Meets Requirements
Generation resources are expected to be adequate in the Mid-Atlantic Area Council (MAAC) during the next ten years. Consistent with the MAAC Reliability Principles and Standards and in accordance with the PJM Open Access Tariff, PJM is currently evaluating generator interconnection requests for over 50,000 MW of new generating capacity expected by 2007. MAAC believes that sufficient capacity will be added to meet the MAAC adequacy objective that the probability of demand exceeding available resources will be no greater, on the average, than one day in ten years.

Based on identified system enhancements, the bulk transmission capability over the next five years is expected to meet MAAC criteria requirements. In addition to the direct connect transmission facilities associated with new generating capacity, several transmission reinforcement projects are expected to be in service by 2005. Other transmission projects are also being evaluated by PJM through the PJM Regional Transmission Expansion Planning Process. It is reasonable to expect sufficient transmission will be added to meet MAAC criteria.

MAAC serves over 22 million people in a nearly 50,000 square mile area in the Mid -Atlantic Region. The Region includes all of Delaware and the District of Columbia, major portions of Pennsylvania, New Jersey, and Maryland, and a small part of Virginia. MAAC comprises less than 2% of the land area of the contiguous United States but serves 8% of the electrical demand. There are 200 members of MAAC.

MAIN – Planning for New Generation
Within the Mid -America Interconnected Network (MAIN) generation resources are expected to be adequate over the next ten years based on current demand forecasts. Planning for the integration of new generation into the transmission grid and transmission reservations, particularly in regard to roll over rights, continues to be a major challenge.

For the planning horizon, MAIN expects its transmission system to perform adequately with the proposed reinforcements completed on schedule.

MAIN continues to be a reliability coordinator and an OASIS node, performing real-time monitoring to ensure reliability.

The 38 members and seven associate members of MAIN include 17 control areas and other organizations involved in Regional energy markets. MAIN is a summer-peaking Region serving a population of approximately 20 million in a geographic area of about 150,000 square miles. MAIN encompasses portions of Iowa, most of Illinois, the eastern third of Missouri, the eastern two -thirds of Wisconsin, and most of the Upper Peninsula of Michigan.

MAPP – Natural Gas-fired combustion Turbines
For the period 2004-2011, currently projected capacity reported in the Mid -Continent Area Power Pool (MAPP) U.S. region is below MAPP requirements for reserve capacity obligations, but MAPP does not expect any capacity deficits to occur during the next ten years. If demand forecast uncertainty is taken into account, the Region may be below its reserve requirement by 2004 summer and 4,626 MW below the requirement by 2011 summer. MAPP-U.S. utilities have committed to provide an additional 2,800 MW of new generation during this period. Most utilities in the Region propose to install natural gas-fired combustion turbines with short construction lead time to meet capacity obligations.

The MAPP transmission systems are adequate to meet the committed needs of the member systems and will continue to meet reliability criteria throughout the period. The system is expected to be highly utilized due to continuing power marketing activity, and is expected to be managed within its secure limits, which may not meet all market needs. Current MAPP studies identified the need to monitor additional facilities and define new flow gates. Potential restrictions to energy transfers have emerged as bi-directional between Iowa and Illinois as well as the previously realized limitations from the Twin Cities (Minneapolis-St. Paul) area to Iowa and Wisconsin.

MAPP membership includes 108 utility and nonutility systems. The MAPP Region covers all or portions of Iowa, Illinois, Minnesota, Nebraska, North and South Dakota, Michigan, Montana, Wisconsin, and the provinces of Manitoba and Saskatchewan.

The total geographic area is 900,000 square miles with a population of 18 million.

NPCC – New Merchant Generating Capacity
The continuing challenge to the Northeast Power Coordinating Council (NPCC) is the assimilation of new merchant generating capacity to ensure resource adequacy. These plants must be brought on line in a timely manner, and the transmission network must be sufficient to fully integrate this new generation.

NPCC is a voluntary, non-profit organization. Its 36 members represent transmission providers, transmission customers, and ISOs serving the northeastern United States and central and eastern Canada. Also included are five non-voting memberships extended to regulatory agencies with jurisdiction over participants in the electricity market in northeastern North America as well as public -interest organizations expressing interest in the reliability of electric service in the Region. The geographic area covered by NPCC, approximately one million square miles, includes the state of New York, the six New England states, and the provinces of Ontario, QuÈbec, New Brunswick, and Nova Scotia.

SERC – 33,000 MW New Generating Capacity
The Southeastern Electric Reliability Council (SERC) is expected to have adequate generating and transmission capacity to supply the forecast peak demand and energy requirements throughout the ten-year assessment period. Projected capacity margins for the Region range from 9.9 to 12.7%. Member systems are planning to add nearly 33,000 MW of new generating capacity over the next ten years. Approximately 6,400 MW or 19.5% of this planned generation is identified as natural gas-fueled simple -cycle or combined-cycle combustion turbine; the remainder is mainly unspecified capacity or purchases. A survey of transmission providers indicates that over 243,000 MW of generation is proposed or under development in the Region. Planned transmission additions include over 2,600 miles of new 230 kV and 500 kV transmission lines. SERC members are planning to invest nearly $7 billion over the next five years in new and upgraded transmission facilities.

SERC membership includes 37 members and 27 associate members. The SERC Region includes portions of 13 states in the southeastern United States, and covers an area of approximately 464,000 square miles. SERC is divided geographically into four diverse sub-regions that are identified as Entergy, Southern, Tennessee Valley Authority (TVA), and the Virginia -Carolinas Area (VACAR).

SPP – Consistent Growth in Demand
The Southwest Power Pool (SPP) anticipates consistent growth in demand and energy consumption over the next ten years. Adequate generation capacity will be available over the short term to meet native network load needs with committed generation resources meeting minimum capacity margins. Beyond the short term, adequate capacity margins will be highly dependant on the availability of the market to provide the necessary generation resources.

The SPP bulk transmission system will reliably serve native network demand for the short term while incremental system flows from commercial transmission reservations will most likely utilize any remaining transmission capacity. Several transmission upgrades have been identified either to accommodate transmission service under the SPP Open Access Transmission Tariff (SPP-OATT) or to meet specific transmission owner import/export needs. Future network analysis becomes less exact and more difficult due to the large number of proposed merchant plant additions without firm commitments for transmission service. From the time of a commitment made by a generator to SPP for transmission service, the remaining time required for completion of the generation project is often less than the lead time required for the construction upgrades necessary to provide transmission service; in some cases, much less.

SPP, currently consisting of 52 members, serves more than 4 million customers, and covers a geographic area of 400,000 square miles containing a population of over 18 million people. In covering a wide political, philosophical, and operational spectrum, SPP’s current membership consists of 14 investor-owned utilities, seven municipal systems, eight generation and transmission cooperatives, three state authorities and one federal government agency, one wholesale generator, and 18 power marketers. SPP has more than 350 electric industry employees on various organizational groups that bring together unmatched expertise to deal with tough reliability and equity issues. An administrative and technical staff of approximately 100 persons facilitates the organization’s activities and services. Primary offices are located in Little Rock, Arkansas and a branch office is located in Hilliard, Ohio.

WECC – Capacity Construction of 81,055 MW
The utility environment is changing. A number of important issues within the Western Electric Coordinating Council (WECC) that must be responsibly managed to maintain Regional system reliability.

WECC anticipates addressing these issues in large part by continuing its tradition of being proactive, and positioning itself as an organization to effectively accommodate change and meet the challenges that lie ahead.

WECC’s outlook regarding the reliability of the interconnected electric system in the west for each of the four subregions that comprise the Western Interconnection-Northwest Power Pool area, Rocky Mountain Power area, Arizona-New Mexico-Southern Nevada Power area, and California-Mexico Power area.

Projected capacity margins and fuel supplies are anticipated to be adequate to ensure reliable operation in all areas of the Region during 2002-2011. However, in summer 2002, the Arizona-New Mexico-Southern Nevada Power area’s 10.7% projected capacity margin is tight. Expected capacity adequacy for summer 2002 is thoroughly addressed in the WECC 2002 Summer Assessment report. Capacity margins in the Arizona-New Mexico-Southern Nevada subregion improve beyond 2002.

The determination of capacity margin adequacy over the next ten years assumes the timely construction of approximately 81,055 MW of net new generation, which is up dramatically from the 56,849 MW reported last year. The capacity margin adequacy also assumes average weather conditions. If multiple areas peak simultaneously, portions of the Region may need to issue public appeals for customers to reduce their electricity consumption, and other measures may be instituted as necessary to ensure that adequate operating reserves are maintained. The transmission system is considered adequate for firm and most economy energy transfers.

NORTHWEST POWER POOL AREA
The Northwest Power Pool (NWPP) area is comprised of all or major portions of the states of Idaho, Montana, Nevada, Oregon, Utah, Washington, and Wyoming; a small portion of northern California; and the Canadian provinces of British Columbia and Alberta. For the period from 2001 through 2011, peak demand and annual energy requirements are projected to grow at respective annual compound rates of 2.5 and 1.9%. With a significant percentage of hydro generation in the Region, the ability to meet peak demand is expected to be adequate for the next ten years. The ability to meet sustained seasonal energy requirements over the ten-year period is dependent on new generation additions. Resource capacity margins for this winter peaking area range between 26.6 and 32.0% of firm peak demand for the next ten years.

ROCKY MOUNTAIN POWER AREA
The Rocky Mountain Power area (RMPA) consists of Colorado, eastern Wyoming, and portions of western Nebraska and South Dakota. The RMPA may experience its annual peak demand in either the summer or winter season due to variations in weather. Over the period from 2001 through 2011, peak demand and annual energy requirements are projected to grow at an annual compound rate of 2.3%. Resource capacity margins range between 12.9 and 21.8% of firm peak demand for the next ten years.

ARIZONA-NEW MEXICO-SOUTHERN NEVADA POWER AREA
The Arizona-New Mexico-Southern Nevada Power area consists of Arizona, most of New Mexico, the westernmost part of Texas, southern Nevada, and a portion of Southeastern California. Over the period from 2001 through 2011, peak demand and annual energy requirements are projected to grow at respective annual compound rates of 3.1 and 2.9%. Resource capacity margins for this summer peaking area range between 10.7 and 31.3% of firm peak demand for the next ten years. The ability to meet sustained seasonal energy requirements over the ten-year period is dependent on new generation additions.

CALIFORNIA-MEXICO POWER AREA
The California -Mexico Power Area encompasses most of California and the northern portion of Baja California, Mexico. Restructuring of the electric industry in California has added much uncertainty to future adequacy projections of generating capacity, energy production by merchant power producers, and effects of customer energy efficiency and demand-side management programs. Recognizing that future forecast uncertainty exists, peak demands and annual energy requirements are currently projected to grow at respective annual compound rates of 2.4 and 1.3% from 2001 through 2011. Projected resource capacity margins range between 13.9 and 44.8% of firm peak demand for the next ten years.

WECC has 145 members and encompasses about 1.8 million square miles in 14 western states, two Canadian provinces, and a portion of Baja California Norte, Mexico. Extremes in population and demand densities, in addition to long distances between demand centers and electric generation sources, characterize the Region. The Region is subdivided into four areas: the Northwest Power Pool Area, which is winter peaking and heavily dependent on hydroelectric generation (62% of installed capacity); the Rocky Mountain Power Area, which can be either summer or winter peaking with a 13% hydroelectric and 60% coal-fired generating capacity mix; the Arizona-New Mexico-Southern Nevada Power Area, which is summer peaking with a 14% nuclear and 36% coal-fired generating capacity mix; and the California-Mexico Power Area, which is summer peaking and heavily dependent on gas-fired generating units (52% of installed capacity).