Massive Power Outage Demonstrates Need for Energy Legislation

ROSSLYN, Va., -- The massive power outage that affected the Midwest and Northeast clearly demonstrates the need for additional investment in the power grid, generation (including distributed generation near loads), and energy efficiency to increase reliability and reduce system electric load, according to the National Electrical Manufacturers Association (NEMA).

"President Bush's National Energy Plan of 2001 and energy legislation pending in Congress provide a framework for policy makers to resolve these issues, and Congress should promptly pass energy legislation," says NEMA President Malcolm O'Hagan. "The president's energy plan and energy legislation in Congress have been improperly characterized by some as focused mostly on oil drilling. On the contrary, it is a balanced plan, containing provisions for (1) energy production, including electricity production, (2) upgrades in the transmission and distribution systems, and (3) conservation, including standards for products to use electricity effectively and efficiently. While the precise reasons for this outage are under investigation, the inadequate investment in transmission has been known for some time and solutions should be implemented without waiting for detailed studies."

The pending energy legislation includes provisions that, had they been in effect for a reasonable period of time, would have prevented or at least limited the impact of yesterday's outage:

-- Mandatory and enforceable transmission reliability standards

-- Regional transmission planning and operation

-- Transmission rate structures that encourage increased capacity, reliability, security, economic and energy efficiency, deployment of advanced technology, distributed generation, and reduced peak use, particularly on existing transmission corridors

-- Advanced electric meters and time of use electric rates to reduce energy use at peak times

-- Increased efficiency in the federal government, the nation's largest energy user, including product purchase specifications, such as for high efficiency NEMA Premium(tm) motors and Energy Star(tm) products

-- Energy efficiency standards for numerous products including transformers, compact fluorescent lamps, torchiere lamps, traffic signals, and lighted exit signs

-- Tax incentives for wind energy, grid expansion, and efficient commercial buildings

-- Research and development provisions on advanced end-use technologies including the Next Generation Lighting Initiative, and on advanced fossil, nuclear, and renewables generation. In particular, the energy efficient commercial buildings tax incentive would in the near term result in a reduction of electricity demand for lighting, the largest commercial use, through retrofits with higher efficiency products.

Based on an understanding of the event as of Friday morning, August 15, the disturbance appears to have been largely caused by the loss of several major transmission lines in the upper Midwestern United States or Canada, which caused additional lines to go out of service as well as major fossil and nuclear plants.

"While detailed investigations are certainly necessary to determine the causes of this outage, decision makers must address the fundamental technology issues and risks to the economy imposed by under-investment in the electricity infrastructure," said O'Hagan. "A study won't turn the lights back on."

NEMA is the leading trade association in the United States representing the interests of electroindustry manufacturers. Founded in 1926 and headquartered near Washington, D.C., its 400 member companies manufacture products used in the generation, transmission and distribution, control, and end-use of electricity. Domestic shipments of electrical products within the NEMA scope exceed $100 billion.

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