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2 Today's Grid and the Evolving System of the Future
Pages 17-49

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From page 17...
... consumers. State utility regulators (or, in the case of publicly Finding: Approaches to assure resilience should consider that components of electricity infrastructure have long 3  The Federal Energy Regulatory Commission has approved the follow­­­   ing definition of "bulk energy system" as developed by The North American lifetimes and that how the grid and its various institutions, Electric Reliability Corporation: "All transmission elements operated at 100 kV or higher and real power and reactive power resources connected at 1  Readers interested in a more detailed description might look at DOE   100 kV or higher.
From page 18...
... Although these merged so as to provide power to customers over larger investor-owned and publicly owned systems are physically and larger service territories. In other parts of the country, connected, their transmission and distribution systems often utilities serve smaller numbers of customers, particularly in have different configurations, voltage ranges, and technology rural regions where local electric cooperatives and munici- demands; are owned and/or operated by different parties; are pally owned utilities continue to be the dominant providers subject to different types of regulatory oversight; and are of electric service.
From page 19...
... The terms and conditions Federal utilities/Power marketing administrations 8 of sales to retail electricity customers, including operations, cost allocation, and cost recovery for local transmission Other transmission companies 15 and distribution service, are subject to regulation by state TOTAL 1,954 regulatory agencies in those areas served by investor-owned NOTE: Investor-owned utilities deliver 68 percent of electricity service to retail customers. Cooperatives, municipal utilities, and other publicly owned 4  "Wholesale sales of electricity" are sales of power for resale to others,   utilities deliver 13 percent, 12 percent, and 6 percent to retail customers, re while "retail sales of electricity" are sales to ultimate, end-use customers.
From page 20...
... For example, although the FPA gives FERC Additional impetus came from federal policies that supported authority over transmission service in interstate commerce the introduction of relatively small-scale, economical generand wholesale sales of electricity, the states have regulatory ating technologies owned by non-utility companies, which authority over siting of transmission lines (including the right led to requirements that utilities open up their transmission to condemn right-of-way)
From page 21...
... This makes it very difficult to generalize about population in the United States are members of organized industry structure across, and even within, states. At present wholesale electricity markets where a regional transmission this heterogeneous "electricity industry" reflects the varied organization (RTO)
From page 22...
... 22 ENHANCING THE RESILIENCE OF THE NATION'S ELECTRICITY SYSTEM FIGURE 2.5  Map of regional transmission organizations' (RTO) and independent system operators' (ISO)
From page 23...
... customers are able to install distributed generation on their With respect to reliability issues, FERC has responsibility premises. As a result of these variations across the states, the for assuring adherence to mandatory reliability standards for regulatory framework under which the electric grid oper- the electric industry.
From page 24...
... SoCo owns generation assets with a total capacity over 44,000 MW, transmission lines, and four subsidiary distribution utilities. SoCo's electric utilities collectively serve a population of approximately 9 million people (SoCO, 2017)
From page 25...
... . Physical Structure 10  Technologies that allow control of AC power flows include phase   Most of the electricity supplied to today's bulk power shifting transformers and other emerging power electronics-based flexible AC transmission system devices that are becoming more available and system is generated by large, central generating stations, giving operators more control than ever.
From page 26...
... the 60 Hz frequency is regulated by each balancing authority Most power outages occur on the local distribution sys- re-dispatching generation every few seconds through a wide tem. Outages are less frequent on the transmission system.
From page 27...
... : identification and San Francisco, and other high-density urban areas -- provide documentation of the critical cyber assets associated with critical assets that multiple pathways through which electric service may be support reliable operation of the bulk power system (CIP-002) ; minimum provided to customers.
From page 28...
... Typically, utilities collect data on the uncertain loads of customers for the foreseeable future. the length and frequency of outages that result from events on the local distribution systems, and some utilities (par- Finding: There is no single organization responsible for manticularly investor-owned utilities with encouragement from datory reliability standards in electric distribution systems in regulators)
From page 29...
... . Some customers have been suspicious often local distribution utilities only monitor circuit breaker of technologies that they view not only as expensive, but also
From page 30...
... , while others automatically Finding: There is wide variation across the United States in disconnect during a disturbance. Interim standards issued by the level of technological sophistication, penetration of sen sors, deployment of advanced communications technologies, and level of automation deployed by distribution utilities.
From page 31...
... A resilience investment may be particularly valuable in the face of high-impact di through collaboration with others. sasters and threats that utility systems have not faced before, While reliability metrics are more established and widely like national-scale natural disasters or man-made cyber and used than resilience metrics, there remain many opportuni physical attacks [p.
From page 32...
... A survey of publicly owned ating resilience than other critical infrastructure sectors. utilities in 2013 indicated that two-thirds of the responding There are myriad resilience metrics proposed in research and utilities excluded outages caused by major events when most remain immature (Willis and Loa, 2015)
From page 33...
... reasonable price levels, maintaining the reliability of the Critical services without power for more whole system has become more complicated with divided than N hours (e.g., N> hours or backup responsibility. At the bulk power supply level today, reli fuel requirement)
From page 34...
... tricity suppliers.19 In the end, regardless of the form of the institution, reliability and resilience begins at home -- at the Recommendation 2.2: The Department of Energy should distribution level with the customer. engage the North American Electric Reliability Corporation, Because electricity customers value both the reliability the National Association of Regulatory Utility Commissionand resilience of the system, developing metrics and incen- ers, the National Rural Electric Cooperative Association, and tives (or disincentives)
From page 35...
... In combination bulk power and local distribution systems. Importantly, but with a decade of flat electricity demand (EIA, 2016b)
From page 36...
... ; • Mandated the introduction of increasingly efficient electric appliances into the marketplace; • Supported utilities' investments in advanced meters and other technologies (e.g., through the American Recovery and Reinvestment Act of 2009) ; • Required mandatory reliability standards and authorized incentive rate of returns on some transmission investments on the bulk power system (both under the EPAct of 2008)
From page 37...
... assure that all customers pay their fair share of the costs of At the distribution-system and retail electric level, the rel- maintaining a reliable and resilient grid. The approaches atively rapid emergence of DERs has accelerated pressure on under discussion across the country for the future roles of the regulators, utilities, and other stakeholders to address aspects local distribution utility include the "enhanced status quo," of the traditional utility business model, which has supported the "network service provider," the "market enabler," and the grid investments largely through rates that recover significant "solutions integrator" (De Martini and Kristov, 2015; State
From page 38...
... has business models are relevant for resilience considerations in responsibility for balancing demand and supply as light of the fact that each poses different implications for the well as distribution network reliability for a distribuentity(ies) responsible for supporting resilience on the grid: tion area to an interchange point with the bulk power system operator.
From page 39...
... Bulk power system planners regulatory environment in which they are operated. While may not be aware of DERs, and their load forecasts may not they can contribute to reliability and resilience, absent reflect the locations and types of DERs appearing or expected effective planning and an appropriate regulatory environto appear on the system (NERC, 2016b)
From page 40...
... Further, while the over the past few years. There is also significant experi electric system operates as a network, following laws of ence among a number of utilities and third-party aggrega physics on an interconnected grid rather than ownership tors implementing and operating "smart grid" technologies or contract paths, the natural gas system is not a network that include operation of distributed generation, storage, industry.
From page 41...
... The electric and gas systems are already experiencing strains at their intersection. To date, integration issues related Emerging Electric Grid Jurisdictional Challenges to increased gas-fired generation have caused rotating power outages in the Electric Reliability Council of Texas during Historically, and despite the state-to-state and regional the big freeze of 2011.
From page 42...
... lations that dictate authority over electric grid activities are Whether such a transformation will occur, and what form it stressed by the rapidly changing composition of resources might take, will likely have profound effects on the future and services involved with the delivery of energy, resulting evolution of the system. Will federal authority be expanded to include a larger role at the level of the distribution system 23  These   recent cases have clarified a few different jurisdictional prin- (Figure 2.10)
From page 43...
... In addition, local distribution to assure (among other things) that legacy agreements and procedures shall be established whereby costs associated with utilities' planning to provide service the services offered shall promote current best practices of to those customers are addressed, according to traditional interconnection for distributed generation, including but not limited to practices stipulated in model codes adopted by as- cost-incurrence and equity principles of utility regulation.
From page 44...
... The committee asked several state regulatory agencies whether, in their jurisdictions, an entity other than the local Legal Implementation of Non-Utility Microgrids distribution utility could build a small microgrid (e.g., less Today in most of the United States, state law grants than a few 10s of MW) , sell electric power to other entities, exclusive service territories to legacy distribution utilities, and be interconnected to the distribution utility.
From page 45...
... Climate distributed generation could be "islanded" so as to provide change will likely also result in new demands for electric some limited service in the event of a large-area, long- power including larger air conditioning loads and, in some duration blackout of the bulk power system. How the incre- locations, an increased demand for power to pump water.
From page 46...
... . The only new plants under construction in the United would be competitive with pumped hydro storage, chemiStates are in the service territory of vertically integrated utili- cally based, and capable of seasonal storage.
From page 47...
... 2016a. "North American Electric Reliability Corporation InterconThese five observations carry profound implications for nections." https://energy.gov/sites/prod/files/oeprod/Documentsand the future resilience of the power system.
From page 48...
... NERC (North American Electric Reliability Corporation)
From page 49...
... http://www.nerc.com/comm/Other/ Developing Resilience Metrics for the Electricity, Oil, and Gas Sec essntlrlbltysrvcstskfrcDL/May%202016%20Meeting%20Materials.pdf. tors in the United States.


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