The Near-Term Fix

How to mitigate transmission risk before the next big blackout.

By now there has been much industry analysis and finger-pointing over what happened on Aug. 14. Will we get a definitive answer to why the lights went out in the Northeast, Midwest, and Canada? Even after we've identified all the causal factors, the most important question to be asking ourselves as an industry is, Why?

Reducing the risk of a repeat performance should be of vital interest to today's owners and operators of transmission assets. What can be done right now, rather than what can be accomplished years from now, should be the foremost question on the minds of CEOs and CFOs. After all, no matter how many fingers point at pending legislation, expanded infrastructure, and new technology, owners and operators are the ones who take the heat when power goes out in their service territories. Greater short-term due diligence is needed to mitigate the impending risks: legal and regulatory exposure, unrecoverable revenue during service interruption, and damage to regional economies.

A few major hurdles simply cannot be crossed in the short term. Pending legislation will take between months and years to pass, and even longer until associated financial incentives may be realized; and it will take billions to build new infrastructure and implement new technologies so wholesalers can freely wheel energy across the country. A host of environmental hurdles will delay action even further. But new legislation and bigger power lines, even if we had them tomorrow, won't solve the immediate problem: the threat of failure. These expensive, long-term solutions do not address the root problem of transmission operations and risk management. What can be done in the short term?