Now is the time for all electric utilities to get involved with the Spare Transformer Equipment Program (STEP). STEP continues to grow and represent the best of what the electric power industry can accomplish by working together for a common cause.

STEP was conceived following the 9/11 terrorist attacks and formally launched in 2006 to address the specific threat of attacks on utility substations. Given the long lead times in manufacturing substation transformers — typically about two years — along with the reality that most transformers are manufactured offshore, STEP created an innovative sharing arrangement among electric utilities to make efficient use of the industry's existing spare transformers. Today, STEP comprises 49 transmission providers whose service territories cover approximately 70% of the U.S. transmission grid.

Sale of Transformers

Similar to the mutual assistance programs that utilities rely on for help following severe storms or natural disasters, STEP works because utilities agree to help one another. But unlike the voluntary assistance program, STEP carries with it a binding obligation to provide a transformer or transformers if called upon by another STEP participant.

STEP operates under a contract called the Spare Transformer Sharing Agreement. The agreement requires participating utilities to sell their spare transformers to any other participating utility that suffers a “triggering event,” defined as an act of terrorism that destroys or disables one or more substations and results in the president of the United States declaring a state of emergency.

The sale of a substation transformer ordinarily would require the approval of the Federal Energy Regulatory Commission (FERC). But given the need to act quickly in the case of an emergency, FERC has given blanket authorization approval for sales pursuant on the condition that the participating utilities complete the required paperwork within 30 days of any transformer sale and again when the final sales terms have been established. In its September 2006 order, FERC stated that the program among electric utilities on electric transformer sharing will maintain the integrity of the nation's transmission system in the event of a future terrorist strike. Each of the participating utilities also has secured pre-approvals from their state commissions for any such transfers.

Managing Inventory

The electric utilities participating in STEP manage the program through an equipment committee and an executive committee. EEI serves as the day-to-day program manager. To ensure that adequate transformer reserves are being maintained, STEP participants annually determine their obligations based on the worst-case requirements for each voltage class of transformer represented in STEP. Each year, the STEP membership runs an exercise to validate and improve upon the program's processes and communications.

Today, about 50,000 MVA of spare transformer capacity has been committed to date in a wide range of equipment classes.

Benefits of Membership

Ensuring that a spare transformer will be available if needed in the case of a terrorist attack is the main reason for membership in STEP. But participation in STEP carries with it other benefits as well. STEP participation also:

• Creates the capability for members to share information, confidentially, regarding their existing spare transformers.

• Get Involved

  Facilitates the voluntary sharing of transformers due to normal failures or other emergencies that do not rise to the level of a triggering event.

• Enables its participants to interact regularly, which leads to more efficient planning.

• Allows its participants to share other equipment.

• Examines issues surrounding the transportation of transformers in an efficient and prompt manner.

The Spare Transformer Equipment Program is open to any investor-owned utility, government-owned utility or rural electric cooperative in the United States or Canada that owns transformers. If your organization is not part of this industry-driven program, I encourage you to find out more.

For information on STEP, please contact Keith Walters, P.E., manager, Spare Transformer Equipment Program, 202-365-1783 or STEP@eei.org.

James P. Fama (jfama@eei.org) joined the Edison Electric Institute in April 2002 as executive director, Energy Delivery. Prior to joining EEI, Fama was senior counsel with the Washington, D.C., office of LeBoeuf, Lamb, Greene and MacRae. He also has served as deputy general counsel for Florida Power Corp. in St. Petersburg, Florida, and the assistant general counsel for the Bonneville Power Administration in Portland, Oregon.