Docket:  UE-991168
Electric Reliability -- Rulemaking


Staff:   Mark Anderson, Regulatory Consultant
   Graciela Etchart, Utility Rate Research Specialist 
   Doug Kilpatrick, Electric Industry Coordinator
   David Dittemore, Utility Engineer
   Marjorie Schaer, Administrative Law Judge
   Jeffrey Showman, Policy Analyst
   

Recommendation:

Direct the Secretary to file a preproposal statement of inquiry (CR 101) in 
Docket UE-991168 to initiate rulemaking concerning Electric Companies’ 
reliability.

Discussion:

At present, regulation of reliability that applies to all jurisdictional 
electric utilities is limited to a few general requirements.  Electric 
companies are required by rule to provide “adequate service,” “avoid 
interruptions” and “reestablish service with a minimum of delay.”  Electric 
companies are also required to install equipment that allows them to track the 
operating characteristics of their system.  Beyond this, each utility is 
required to set a standard system frequency and determine a standard set of 
voltages, from which a “permissible variation” is allowed.  (WAC 480-100-076 
Service Responsibilities; WAC 480-100-186  Standard frequency; and WAC 
480-100-191 Standard voltage and permissible variation)

Electricity supply and reliability have become increasingly important to the 
health and welfare of the citizens of our state.  While electricity has always 
been used for important purposes, it has become one of the most important 
resources of a modern, technological society.  The advent of the computer has 
given electric power even greater value, which will likely only increase in the 
foreseeable future.  Critical applications, in every sector of our economy, are 
now dependent on electricity; from medical care and banking to food 
preservation and home businesses.  Reliable electric power is required for 
convenience, safety and normal business operations everywhere. Commission 
Regulatory Services Division Staff  believe that the more important electricity 
becomes, the more important it is to define “adequate” service, in order to 
allow customers to make important economic decisions, to promote equity, and to 
be sure our utilities are well managed.      

After two years of investigation, staff have found that utility reliability 
statistics are so imprecise, unavailable or nonexistent, that we cannot say 
with confidence that past levels of reliability are being maintained.  Further, 
there is a very real possibility that reliability could suffer in an 
environment where preparations are being made for increased competition.  While 
incentives to increase reliability may also arise from market forces (e.g. to 
attract or retain customers), our inability to track reliability in the first 
place means we will not know whether reliability is increasing or decreasing in 
the future, except, perhaps, until it becomes obvious.

Staff envision development of a rather brief rule, modeled after the Least Cost 
Planning Rule (WAC 480-100-251), in which each electric company would be 
required to create its own Reliability Plan, to be submitted to the Commission 
and periodically updated, containing specific requirements for each utility.  
This could result in different requirements for each utility, respecting the 
differences that exist in company preferences, capabilities and geographic 
conditions. 
 
An important element of the rule, as staff foresees it, would be requirements 
for the measuring, storing and reporting of reliability data.  Staff would like 
to see incremental improvements in the accuracy, level of detail, and 
consistency of reliability measurements, for both service interruptions and 
power quality.  

Staff recommends that one element of reliability - supply sufficiency - not be 
a subject of this rulemaking, but be taken up in the eventual review of the 
existing Least Cost Planning Rule. Supply issues have become increasingly 
complex in light of potential deregulation and require further analysis before 
they are addressed. 

In directing this rulemaking, staff will schedule public meetings and workshops 
with broad notice to interested persons, inviting regulated utilities, their 
customers, and other interested parties to participate. 

Therefore, Staff recommends that the Commission direct the Secretary to file a 
preproposal statement of inquiry (CR 101) in Docket UE-991168 to initiate 
rulemaking relating to Electric Companies’ distribution system reliability.