BLACKOUT 2003

1
BLACKOUT 2003

• What Happened
• And Where We Go From Here
• An AEP Perspective

Photo The Associated Press
2
Who Is AEP?

• Largest owner of electric generation in the U.S.
  38,000 MW capacity
• Largest U.S. transmission owner 39,000 miles of
  transmission line
• Central role in Eastern U.S. grid
• Almost 5 million customers
• 11-state service area

3
Kingsport Power

• Kingsport Power Company facts.
• 45,600 customers
• Wholesale power supply from APCO
• Low, stable rates

4
What HappenedOn August 14?

• Blackout cascade happened in nine seconds
• The cause(s) are still not known
• The initial event did not occur on AEPs system
• AEP will not speculate on what started the
  blackout, or what happened to or on other systems.

5
Summary What Happened at AEP On August 14?

• The AEP system held
• AEPs protective systems automatically performed
  as designed to isolate the AEP grid
• AEP operators performed and communicated as they
  should
• Load and generation stayed in balance

6
Where Was The Blackout?
Map CNN.com

• Major urban areas affected New York City,
  Toronto, Detroit and Cleveland
• Area referred to as Lake Erie Loop

7
What Can AEP Say?

• AEP first detected possible problems on
  interconnection lines with FirstEnergy prior to
  the blackout
• AEP immediately and appropriately contacted
  FirstEnergy and our reliability coordinator, PJM
• AEP maintained contact with FirstEnergy and PJM
  throughout the event

8
What Can AEP Say?

• Power flows increased to meet needs outside the
  AEP system
• AEP load/generation remained in balance
• When power flows on AEP lines exceeded safe
  levels, automatic protective devices began
  opening or tripping off lines
• Equipment was protected from damage and longer
  outage avoided
• Because AEP did not go down, our system supported
  others in restoration efforts

9
What Can AEP Say?

• Cascading outages avoided across AEP and possibly
  far beyond
• AEP helped sustain other systems
• Public safety issues were avoided
• Some systems held and others did not
• We cant speculate about performance of other
  systems

10
Relevant Transmission Issues

• U.S. transmission grid is not being used the way
  it was originally intended
• Built for native load local customers of local
  companies
• Now being used for extensive wholesale
  transactions across wide regions
• Ours is not a Third World Grid strongest grid
  in the world
• However, it is being continually stressed by
  wholesale flows

11
What Will Facilitate Grid Improvements?

• Regulatory certainty
• Cost recovery
• Siting
• Coordinated communications among entities
  overseeing the grid
• Mandatory transmission reliability standards
• Consensus on use of grid
• Balance between markets and reliability but
  tipped toward reliability
• No reliability, no markets

12
Regulatory Uncertainties

• Cost recovery
• Multiple regulators time lags
• 765-kV costs 1.8 million per mile to build
• Siting issues
• Siting increasingly difficult (NIMBY)
• Permitting processes vary sometimes many
  agencies have approval rights
• AEP spent 13 years to get approval for one line

13
Coordinated CommunicationsAre Vital To
Reliability

• We do not have nor could we have one single
  RTO owner or operator in the U.S.
• Communications between various entities managing
  the grid are of paramount importance
• Coordination efforts are ongoing we must have
  continuous improvements
• Planning/operations
• Emergency response

14
Who Handles Reliability Now?

• The North American Electric Reliability Council
  (NERC) and 10 regional reliability councils
• NERC/regional councils develop standards for
  long-term reliability and system planning
• Organized after Blackout of 1965
• Voluntary participation
• RTOs such as PJM and the Midwest ISO perform
  some short-term reliability responsibilities
• PJM is AEPs reliability coordinator

15
What Does AEP Advocate?

• Regulatory certainty to promote infrastructure
  investments
• Mandatory transmission reliability standards
• Implemented and enforced by NERC
• Equitable treatment of transmission owners as
  well as generators
• Ensure fair compensation for use of transmission
  lines
• Resolution of state/federal jurisdiction issues
  without putting utilities in the middle

16
A Final Word.

• The U.S. Department of Energy is conducting an
  intensive investigation with assistance from NERC
• Others are conducting investigations as well
• Please keep an open mind and wait for the
  official investigation results