The blackout of 2003 and its connection to open access

This white paper discussed the implications of deregulation and policy implementation in the electric power industry, as well recommending changes for greater security and reliability. There have been significant benefits from the introduction of competition in the wholesale electricity market. However, the attempt to reorganize a very complicated industry without ensuring an adequate set of balances between risks and rewards has had mixed results. Reliability problems and threats have not increased as a result of policies, they have increased as a result of the ways in which policies have been implemented. It was suggested that transmission owner-operators are accountable for system security, and have the means to make the system secure in real time. However, North American Electric Reliability Council (NERC), regional councils, Federal Energy Regulatory Commission (FERC) and regional transmission organizations all have a role in system reliability. State regulators and the general public must hold utility owner-operators accountable. It was suggested that there must be a logical and clear allocation of reliability functions among the participants in the electricity network. Costs and responsibilities must be allocated equitably among all participants in and users of the electric system. In addition, sharing and implementation of best practices was recommended, as well as the participation of CEOs in the boards of NERC and in regional reliability councils. It was also suggested that executives in charge of utility operations should be certified to ensure a full awareness of reliability rules. It was recommended that utilities bear responsibility for implementing energy policies at the federal and state levels, including open access and competition. It was concluded that significant transmission construction is needed to support economic development and competitive regional wholesale markets