Michehl R. Gent is the President and Chief Executive Officer of the North American Electric Reliability Council (NERC) and is the lead policy person for assuring a reliable bulk electricity supply system in North America. Mr. Gent joined NERC in 1980 as Executive Vice President and was elected President in 1982. Prior to joining NERC, he served for seven years as the General Manager of the Florida Electric Power Coordinating Group – a voluntary power pool for all of Florida’s electric utilities. Before Florida, he worked for ten years with the Los Angeles Department of Water & Power in both operations and planning positions.

His education has been in engineering and business, having earned his BSEE at Texas A&M and MSEE at the University of Southern California. He has taught in the graduate schools of USC and Loyola, and is a registered professional engineer.

NERC to Congressman W.J. Tauzin, Chairman, Committee on Energy and Commerce:

CONGRESSMAN TAUZIN: What were the basic causes and contributing events that led to the August 14th blackout and its severity?

Describe (a) the location, character and proximate cause of the initial disruption in the transmission and supply of electricity; and (b) the “cascading” effect of the disruption through multiple utility systems and States.

PRESIDENT GENT: The outage on August 14th affected electric systems in the states of Michigan, Ohio, Pennsylvania, New York, New Jersey, Verm-ont, Massachusetts, and Connecticut, as well as the province of Ontario, Canada. NERC technical staff along with people from the Consortium for Electric Reliability Technology Solutions (“CERTS”), acting as the designated representative of the U.S. Department of Energy (“DOE”), have been jointly conducting a fact-finding investigation of the events leading up to the August 14th blackout. The investigation is ongoing, and no causal conclusions can yet be drawn.

NERC is receiving massive amounts of data from the affected systems as well as relevant data from other systems within the Eastern Interconnection. NERC has appointed an expert steering group to guide its part of the investigation, to focus the inquiry and make sure that all of the right questions are being asked.

NERC’s work will enable NERC to fulfill its own requirements to determine what happened, whether violations of NERC rules occurred, whether NERC needs to revise its rules, and what other steps need to be taken to avoid a recurrence. In order for the investigation to be complete, NERC and DOE have requested data from the affected companies starting at 8 a.m. on August 14. This will enable the investigators to form a clear picture of how that day started and what events through the course of the day may have contributed to or set the stage for events later in the day. Because that data is still being accumulated and has not been fully evaluated, it is too soon to determine whether or not events earlier in the day may have contributed in any way to the outage. One focus of the investigation as it goes forward will be why protocols and procedures that exist to prevent problems in one part of the grid from spreading did not prevent the cascading outage across such a wide area.

CONGRESSMAN TAUZIN: What efforts have been taken to secure the supply, transmission and distribution of electricity since the blackouts of 1965 and 1977 in the Northeast, and why were these efforts apparently inadequate to prevent the blackout or otherwise minimize the area affected? What efforts have been undertaken in other parts of the country to prevent blackouts and how effective have these efforts been in preventing or minimizing blackouts?

PRESIDENT GENT: The nature of NERC’s responsibilities, the international makeup of its membership, and the physics of interconnected electric systems demand unity, discipline, and compliance with NERC and regional reliability standards. Currently, these reliability responsibilities are carried out through voluntary cooperation and peer review, with virtually no enforcement powers, sanctions, or penalties for non-compliance. This is largely because NERC does not have the statutory authority to enforce compliance with its reliability standards.

Despite its lack of authority, NERC has made every effort to continuously clarify and upgrade its reliability standards as the electric industry has evolved. NERC has also enhanced its monitoring of compliance with its standards by individual entities, independent system operators, and Regional Reliability Councils. NERC has an established peer review process that is conducted through its committees and independent Board of Trustees. NERC uses this process to promote compliance by industry participants with existing reliability standards.

NERC’s industry-based standards development and compliance processes have worked reasonably well since NERC was established. Although we do know something went very wrong on August 14, it is too soon to tell whether it is the result of a failure of a particular entity or entities to comply with NERC standards, whether we did not have in place the kind of standards that would have prevented this blackout from occurring, or whether there were other causes. We are asking these very questions among many others as our investigation into the blackout proceeds.

CONGRESSMAN TAUZIN: What equipment, measures or procedures worked as intended on August 14th to prevent even greater disruption to the supply of electricity, to prevent greater damage to the generation and transmission system, and to bring generation back on line after the disruption?

PRESIDENT GENT: It is too early to identify specific equipment, measures, or procedures that worked as intended on August 14. In more general terms, however, large parts of the Eastern Interconnection did not suffer the blackout. Protective relays within the distressed area operated to remove transmission lines, transformers, and generating units from service before they suffered physical damage. The system is designed to do that. The fact that the transmission lines, transformers, and generating units did not suffer physical damage is what made it possible to restore the system and service to customers as quickly as happened after the blackout.

Another element that worked as intended was the restoration plans themselves. Restoring a system from a blackout requires a very careful choreography of reenergizing transmission lines from generators that were still on line inside the blacked-out area as well as from systems from outside the blacked-out area, restoring station power to the off-line generating units so that they can be restarted, synchronizing those generators to the Interconnection, and then constantly balancing generation and demand as additional units and additional customers are restored to service.

CONGRESSMAN TAUZIN: How can the nation’s electric system, including both transmission capacity and reliability, be improved to prevent a recurrence of the events of August 14th? Please identify what measures may need to be taken by all involved in the governmental and nongovernmental sectors.

PRESIDENT GENT: Until more is known about the cause or causes of the August 14th blackout, it is premature to make recommendations on measures needed to prevent a recurrence. Apart from the particulars of the August 14th outage and without knowing whether or not violations of reliability rules occurred then, one important step for Congress to take to strengthen the reliability of the bulk power system in general would be to pass legislation to make the reliability rules mandatory and enforceable. NERC and a broad coalition of industry, governmental, and customer groups have been supporting legislation that would authorize creation of an industry-led self-regulatory organization, subject to oversight by the Federal Energy Regulatory Commission within the United States, to set and enforce reliability rules for the bulk power system. The comprehensive energy bills that have passed both the House and the Senate have versions of that reliability legislation.

NERC To Congressman John Dingell, Committee on Energy & Commerce

CONGRESSMAN DINGELL: In your testimony before the Subcommittee on Energy and air quality on March 13, 2003, you state the following:

NERC’s rules, which are not now enforceable, have generally been followed, but that is starting to change. As economic and political pressures on electricity suppliers increase and as the vertically integrated companies are being disaggregated, NERC is seeing an increase in the number and severity of rules violations.

a. Could you expand on this statement by providing specific examples of such violations?
b. Without citing any company by name, are any of these companies located in the regions affected by last month’s blackout?
c. To your knowledge did any of these rules violations play a part in the blackout?

PRESIDENT GENT: Since the inception of the North American Electric Reliability Council in 1968, compliance with its reliability standards has been voluntary. While NERC monitors the utilities for compliance with certain operating and planning standards, it has no means to enforce compliance with those standards.

For many years, NERC has monitored compliance with those operating standards that require minute-to minute generation and demand balancing within each of about 140 control areas. NERC has also conducted reliability assessments each year that assess the generation and transmission expansion plans within each Regional Reliability Council against that Council’s own reliability standards. NERC also analyzes system disturbances and unusual occurrences for “lessons learned,” which helps us improve our reliability standards, reliability assessment procedures, operator training, and operating procedures.

In 1999, the NERC Board of Trustees implemented a Compliance Enforcement Program (CEP) to establish a more systematic review of compliance with NERC and regional reliability standards, and to expand the number of reliability standards that NERC monitors for compliance. While NERC cannot assess penalties and sanctions for non-compliance, we do calculate simulated penalties that would have been assessed under a system of mandatory compliance. The CEP also provides actual compliance statistics for several of NERC’s reliability standards that we have never before been able to track.

NERC reviewed 27 compliance measures in 2002, including 10 from our planning standards and 17 from our operating policies. The CEP found that the Regional Councils and their members are about 94% in compliance with these measures. The 6% non-compliance represents 97 planning standards violations and 444 operating policy violations, with simulated penalties of just over $9 million.

CONGRESSMAN DINGELL: A widely-reported analysis of the blackout sequence of events, performed by the International Transmission Company (ITC), indicates that transmission lines and one generating unit in the northern Ohio service territory of FirstEnergy Corp. went out of service from approximately 2:00 p.m. until 4:06 p.m., when ITC noticed a reversal of 200 MW of power flowing from Ohio to Michigan. According to ITC, before this reversal occurred no one from the FirstEnergy Corporation notified ITC of service disruptions on its system that could affect ITC’s system.

a. Are there NERC and/or East Central Area Reliability Council (ECAR) protocols in place that govern a situation in which a utility should notify a neighboring utility that it is experiencing service problems that could affect the neighbor?
b. If yes, could you please cite the specific guideline or protocol.
c. If not, why aren’t such protocols in place?

PRESIDENT GENT: NERC’s operating policies include a number of requirements for information sharing and notification. Specifically, the introduction to Operating Policy 5, “Emergency Operations,” Section A, “Coordination with Other Systems,” states:

“A system, control area, or pool that is experiencing or anticipating an operating emergency shall communicate its current and future status to neighboring systems, control areas, or pools and throughout the interconnection. Systems able to provide emergency assistance shall make known their capabilities.”

The policy then lists the following specific requirements:

Notifying other systems. A system shall inform other systems in their Region or subregion, through predetermined communication paths, whenever the following situations are anticipated or arise:

• System is burdening others. The system’s condition is burdening other systems or reducing the reliability of the Interconnection.

• Insufficient resources. The system is unable to purchase capacity to meet its demand and reserve requirements on a day-ahead basis or at the start of any hour.

• Lack of single contingency coverage. The system’s line loadings and voltage/reactive levels are such that a single contingency could threaten the reliability of the Interconnection.

• Emergency actions for inability to purchase capacity. The system anticipates 3% or greater voltage reduction or public appeals because of an inability to purchase emergency capacity.

• Emergency actions for other reasons. The system has instituted 3% or greater voltage reduction, public appeals for demand reduction, or load shedding for other than local problems.

• Sabotage incident. The system suspects or has identified a multi-site sabotage occurrence, or single- site sabotage of a critical facility.

• Hotline use. When a condition is identified that could threaten the reliability of the Interconnection or when firm load shedding is anticipated, the affected CONTROL AREA, via their RELIABILITY COORDINATOR, shall utilize the Interconnection-wide telecommunications network.

CONGRESSMAN DINGELL: Both International Transmission Company and FirstEnergy Corp. are participating members in the Midwest Independent Transmission System Operator (MISO). The homepage for MISO states, among other things, that “The Midwest ISO’s role is to ensure equal access to the transmission system and to maintain or improve electric system reliability in the Midwest.” The homepage goes on to state, in the section entitled “Security Coordination,” that “Computer systems will continually analyze forecasted and actual system conditions. An extensive voice and data communications network will enable constant communications between the Midwest ISO, its members and neighboring regions.”

a. What role does Midwest ISO have in monitoring events occurring in each of its members’ respective service territories?
b. What are the responsibilities that Midwest ISO has to inform member organizations that service problems in one territory could affect another?
c. Based on your investigation to date, what actions did Midwest ISO take to attempt to avert the blackout crisis?

PRESIDENT GENT: As a NERC-certified reliability coordinator, Midwest ISO’s role and responsibilities related to monitoring events within its reliability area are defined in NERC Policy 9, “Reliability Coordinator Procedures.” These procedures include:

• Planning for next-day operations, including reliability analyses and identifying special operating procedures that might be needed.

• Analyzing current day operating conditions.

• Implementing the Interconnection-wide transmission loading relief (“TLR”) procedure or local procedures to mitigate overloads on the transmission system.

NERC policy regarding monitoring requirements for reliability coordinators includes:

• Monitoring the parameters that may have significant impacts within the reliability area and with neighboring reliability areas with respect to:

• Actual flows versus limits at key facilities (particularly inter-Control Area, inter-Regional and inter-reliability area interfaces). The reliability coordinator will identify the cause of the constraint and coordinate loading relief by requesting appropriate corrective action according to previously established procedures.

• System frequency and resolution of significant frequency errors, deviations, and real-time trends. The reliability coordinator will monitor system frequency and work with its control areas and neighboring reliability coordinators to identify the source of frequency deviations and real-time trends and aid in the establishment of corrective actions.

The Midwest ISO’s responsibilities to inform control area operators and other reliability coordinators of system conditions in one control area that could affect another control area are those required under NERC Policy 9. In general, a reliability coordinator has the responsibility to notify control areas and other reliability coordinators of conditions monitored by the reliability coordinator that may have a reliability impact on other reliability areas.

Some notification requirements are specific and quantitative, such as the requirement to initiate a reliability coordinator hotline conference call when Interconnection frequency error in excess of 0.03 Hz (Eastern Interconnection) is observed for more than twenty minutes. Other notification requirements are dependent upon the judgment of the reliability coor-dinator, such as if a transmission loading condition or system voltage is deemed critical to bulk system reliability.

The investigation of the August 14 outage is ongoing. An examination of the actions of all involv-ed reliability coordinators will be one aspect of the investigation. The investigation has not yet addressed those issues.