How the Grid was built (and why Energy companies are hustling us into paying for their Smart Grid)

Eventually I happened across a Web site for a lawyer in the Midwest, Carol Overland, who specializes in opposing the utilities’ proposals to build towers across beauty spots or increase power generation in nature reserves. “Transmission lines have become transmission lies,” she told me when I finally intercepted her on the phone between utility commission appearances. Her deep knowledge of the industry made her sure of one thing: The industry does not want to increase transmission capacity in order to better serve the public. Rather, it is there to facilitate the burgeoning long-distance trade in wholesale electricity between the power companies themselves.

But the regulators and the U.S. Energy Secretary will not pay for better, smarter power lines merely to help the utility traders.
“Investments must be ‘reasonable and prudent.’ Opportunity to play the market is not reasonable and prudent,” said Overland, “so it’s not a reason to build a transmission line.” That is why the representations are made to the regulators in terms of “peak load,” i.e., ever-growing demand. “Planning for peak load is a transmission lie,” said Overland. “Utilities have incentive to overstate need when they build for peaks. The higher the peak they build for (with peaks occurring only several times annually), the deeper the off-peak valley and the more electricity they can sell on the market when generation is available but not ‘needed.’ Conservation and peak shaving is against their interest because it lowers peak and lessens the valley of market sales.”

Overland claimed that “overloading the lines with bulk power transfers at off-peak times” caused the 2003 outage. In the 2005 legislation, as part of the response to the 2003 blackout, the Federal Energy Regulatory Commission (FERC) was given limited powers over transmission lines, and an industry organization called North American Electric Reliability Corporation (NERC) was handed the job of reporting to FERC on reliability issues. Overland’s point of view received some supporting evidence when a NERC spokeswoman told me the organization was unable to issue comparative reports on the reliability of the eight regions that make up the U.S. grid. Indeed, NERC does not offer any data about reliability or electricity usage on its Web site, although it does sell this information, which seems inappropriate for a federally mandated organization, as it inhibits monitoring of its own effectiveness. NERC, it appears, is just acreature of the electricity industry, funded by the utility companies and its board stuffed with retired utility- and power-industry fat cats, not a single one of whom represents the consumer. The whole setup feels to me like the industry’s covering up its dirty secrets.

But nobody is questioning the grid, asking whether it made sense to organize things this way. Sure, the blackout served to indicate how fragile is this electrical edifice that we all take for granted every day, yet not once did anyone suggest that perhaps we should not have a grid.