That incident, if nothing else, it seems to me, proved conclusively that the Federal Power Commission needs added tools in law to oversee the reliability of electric power systems on a nationwide basis since the systems are now mostly interconnected.

An interconnected nationwide system of electric utility companies offers great potential for insuring reliability of service. But we must also recognize that it can have the exact reverse effect unless carefully planned and supervised because an interconnected system can only be as strong as its weakest link.

One of the purposes of my bill is to give the Federal Power Commission broad new authority to coordinate utility planning so as to assure that interconnected utility systems are balanced and supervised to virtually eliminate the possibility of widespread power failures.

It is essential that the present limited authority of the FPC be extended to all major transmission and generating facilities, including nuclear powerplants.

H.R. 7052 also provides for strong new consumer and environmental protections which have my full support. To keep tabs on this area, the proposed legislation creates an independent National Council on the Environment with veto power over proposals deemed detrimental to the public interest.

There has not been a major overhaul of the Federal Power Act in 35 years and, clearly, such an overhaul is overdue.

Mr. Chairman, I urge approval of H.R. 7052, "The Electric Reliability Act of 1969."

Mr. MACDONALD. Thank you, Mr. Dulski, for your brief statement. It has been a pleasure to hear from you this morning. Rest assured that the committee will consider your views.

Mr. DULSKI. Thank you, Mr. Chairman, for allowing me the time to present my statement.

Mr. MACDONALD. At this point I would like to insert in the record a letter received by me on March 24 from the Federal Power Commission, the office of the Chairman, signed by Lee C. White, which reads as follows:

DEAR MR. CHAIRMAN: Confirming our telephone conversation of Friday, this is to advise that Vice Chairman Bagge, accompanied by Mr. F. Stewart Brown, Chief Engineer of the Commission, and Richard A. Solomon, our general counsel, will begin the presentation of the Federal Power Commission statement on the reliability pending before your subcommittee.

A longstanding prior commitment to appear before the Committee on Ways and Means at 10 a.m. Tuesday, March 25th, the exact time of the beginning of your hearings will of necessity make me somewhat late to your hearing. The staff of the Ways and Means Committee has assured me that every effort will be made to see to it that I am the first witness and that I will be excused as quickly as possible to move to your hearing.

Your understanding and cooperation are greatly appreciated and I will certainly be available for your hearing at the earliest possible minute. Sincerely,

LEE C. WHITE, Chairman.

So with that as a background, I would like to advise the subcommittee that the chairman explained at length that this is a very important hearing before the Ways and Means Committee on taxation and rate regulation which affects his department very directly.

He indicated orally as well as by letter that he will make every effort to be here as soon as possible and he has assured me that if

he cannot appear during this session that he will be more than willing to appear for examination by members of the committee who will go through his comments as read by his colleagues.

Vice-Chairman Bagge, with that you may proceed.

STATEMENT OF HON. CARL E. BAGGE, VICE CHAIRMAN, FEDERAL POWER COMMISSION; ACCOMPANIED BY F. STEWART BROWN, CHIEF ENGINEER, AND RICHARD A. SOLOMON, GENERAL COUNSEL

Mr. BAGGE. When, as we anticipate, the chairman appears, I will retreat to the front row and let him continue.

This is the statement of the Chairman Lee C. White, and I will adhere to the text because it has been carefully reviewed by my colleagues and, therefore, it is appropriate to read from the text before you.

STATEMENT OF HON. LEE C. WHITE, CHAIRMAN, FEDERAL POWER COMMISSION, READ BY HON. CARL E. BAGGE, VICE CHAIRMAN

Mr. Chairman and gentlemen of the subcommittee, 15 months ago we testified before this subcommittee on electric reliability legislation in the 90th Congress.1 The bill that the Federal Power Commission proposed at that time with the endorsement of President Johnson's administration, has been reintroduced by Congressman Long of Maryland, H.R. 489, Congressman Murphy, H.R. 1253, and Congressman Patten, H.R. 5841, and a version based on the FPC bill has been introduced by Congressman Moss, H.R. 7016, and Congressman Ottinger, H.R. 7052, and Chairman Macdonald, H.R. 7186, and 38 others.2 Most recently the National Association of Regulatory Utility Commissioners, NARUC, the Association of State Commissions endorsed a third version.3

I shall later outline the significant and creative concepts that the two new versions offer the Congress. First, I would like to report where the electric utility industry stands today in relation to the goals we discussed 15 months ago; goals for reliable and adequate and efficient bulk power supply in every region of the country consistent with the proper conservation and utilization of natural resources, including environmental resources. Easier goals to state in general I may add than to define in precise detail.

My presentation is divided into four parts:

I. An overview of where the Nation now stands with respect to reliability and adequacy of its power supply.

II. A summary of what the industry has done, the roles played by the State and Federal commissions, and some of the remaining areas of institutional concerns.

III. How the growing public concern for environmental matters relates to critical bulk power supply needs.

IV. The alternative legislatíve proposals.

1 Hearing held Dec. 5, 1967, on H.R. 10721, H.R. 10722, H.R. 10727, H.R. 12322 et al. (Not printed.)

2 The companion measure is S. 1071, introduced by Senators Kennedy, Hart, and Tydings. * We understand the NARUC bill has been transmitted to each member of the subcommittee and will be discussed by Chairman Doub of the Maryland Public Service Commission when he appears in these hearings.

I. WHERE THE NATION STANDS AS TO THE ADEQUACY AND RELIABILITY OF ITS BULK POWER SUPPLY.—AN OVERVIEW

At the outset, let me present the Commission's evaluation of the industry's progress in the last few years to improve reliability and our general appraisal of the Nation's vulnerability to power failures and major deficiencies in power supply. The industry is composed of many entities and the preparedness of utilities is more advanced in some areas than in others, in making this summary, however, I must necessarily generalize. Moreover, while our information reflects a good sampling of how things stand, my report is not derived from a systematic collection of statistics on all the significant matters of reliability since the machinery for such collection has not been established.

A. Reliability

Is the Nation more or less vulnerable to the repetition of the major power failures such as occurred in the Northeast on November 9, 1965, and in the Middle Atlantic States on June 5, 1967? A recurrence of such an event either in that area or some place else, is not impossible: but the probability of a recurrence of comparable magnitude and duration is being reduced, and in another year or two will be substantially reduced.

Through more urging on the part of the Commission and with the helpful support of many State commissions, the industry has responded to the plea to provide insurance against total blackouts, by installing automatic load shedding relays to make possible an immediate balancing of area load with generation in the event that a severe electrical impact causes the formation of an electrical island. You will recall that this occurred in 1965, that the major southeast New York-New England island was grossly deficient in generation and that no automatic devices were available for taking over the balancing of generation and load nor were operators equipped with instructions for manual balancing. The utilities in the northeast are now equipped to shed loads automatically up to 25 percent of total load, with provisions for further relief by manual operation.

A recent national survey by the Commission's staff of 160 electric utility systems which supply 90 percent of the Nation's power demands disclosed that about nine out of ten of these utilities have adopted automatic load shedding plans. Most of them report that automatic load shedding relays are in service. A few expect to complete installations during 1969 and four major companies in the East Central area which only recently initiated automatic programs expect to have their equipment ready for service by the end of 1970.

But while carefully planned load shedding is a sensible and essential insurance program against the unnecessary recurrence of major failures, it is far from being a panacea. It does nothing to prevent such failures and should be called upon only in the rarest of circumstances, where preventive actions prove inadequate. had the Northeastern load shedding programs been in effect in November 1965 they should have enabled some utility service to continue and the remaining service to

4 See F.P.C.. "Northeast Power Failure: A Report to the President" (December 1965 p. 44: F.P.C.. "Prevention of Power Failures" (1967), vol. I. pp. 91-92. A minority of the utilities had installed automatic load shedding relays prior to the November 1965 blacken: Moreover, poorly planned load shedding could actually aggravate a disturbance.

be restored more quickly. But inadequate capacity of the backbone transmission grid would nonetheless have resulted in the breakup of systems followed by a series of more localized power interruptions. Load shedding relays cannot prevent the formation of an electrical island. And such prevention goes to the heart of the proper design of interconnected power systems, namely adequate and well planned generation and a strong transmission network one that is planned with a major reserve capacity to withstand sudden impacts such as the loss of a major generating station or the sudden outage of a heavily loaded element of the transmission system.

A power failure which interrupted portions of the load of five principal electric utility systems serving Florida in January provides a good illustration of the key points of my discussion.

The disturbance was initiated by a short circuit on a transmission line in the vicinity of Ft. Lauderdale, accompanied by, in sequence, the misoperation of protective equipment which disconnected two high voltage transformer banks from service at Florida Light & Power Co.'s Point Everglades generating plant, which in turn disconnected the entire plant. The plant was generating about 1,100 megawatts. amounting to nearly 40 percent of the company's load at the time and about 20 percent of the total load of the five Florida systems. This major loss in generation caused a sudden rush of power into Florida from the interconnected utility systems to the north and throughout the United States to make up the deficiency. This high flow of power overstressed and disconnected the relatively low capacity lines in northern Florida, causing practically the entire State to become an electrical island. Frequency immediately dropped from its normal value of 60 eveles per second down to 58% cycles where it was stabilized by the action of automatic load shedding in the amount of nearly 500 megawatts throughout the State.

The output of the connected generating units was raised sufficiently in the next few minutes to bring frequency in the island up to normal, permitting reconnection with utility systems to the north. Service was restored to some of the interrupted loads within a matter of 7 minutes and to nearly all within 37 minutes. I am convinced that a complete blackout of the State of Florida was prevented only by the protection of the automatic load shedding relays. I am also convinced that utilities in the State of Florida are exposed to having to call upon this insurance factor, load shedding relief, much more frequently than should be the case, and may need to do so until the strength of their interconnections with systems to the north have substantially increased.

The Commission under its order No. 331 (36 FPC 1084), reports on power failures which occur at voltages of 69 kilovolts or higher and involve load interruptions of 25,000 kilowatts or more for 15 minutes or longer. We have been collecting this information since December 1966. The rate of these occurrences is surprisingly uniform averaging just under 100 per year. Most of these are small failures, the majority being less than 100,000 kilowatts and the duration of the average is from 15 to 30 minutes.

Many are caused by weather disturbances, but at the same time there are many reports citing failures in equipment and misoperation. It is noteworthy however, that here the precipitating causes of

major failures are often similar in type to the cause of only minor interruptions. What keeps any precipitating cause from turning into a major failure depends upon the proper operation of equipment which is sequentially brought into action and the inherent stability or strength of the network to resist cascading into electrical islands. The Florida incident, mentioned a moment ago, came about as the result of two sequential failures, first, the line fault and second the misoperation of protective devices for the transformers. We have received enough reports of this nature to believe that there are weak networks, that system maintenance can stand much improvement and that many protective devices which are rarely called into service, may not be able to provide the protective insurance which their presence implies.

B. Adequacy

The second dimension of reliability is adequacy so we treat that separate from blackout.

An important part of my status summary is to inform you about problems that may arise in meeting peakloads over prolonged and extreme seasonal peak demand periods. It is our concern that such occurrences may become much more critical than already experienced. Such deficiencies which may encompass sizable geographic areas are of equal or even greater concern to the Commission than blackouts. The latter, as severe as they are and as endangering as they can be to the public welfare, have a limited time duration, but areawide deficiencies can extend over days and weeks and again can remain a threat for even months.

Deficiencies can arise for a variety of reasons including the lack of timely planning, inadequate leadtime in ordering equipment, underestimating of peakloads, delays in the manufacture of equipment and the construction of facilities, and the development of major defects of equipment during or following installation, and serious delays in securing rights-of-way, particularly for major transmission facilities. As these situations arise, it has been necessary for utilities in an area to frequently reduce voltage in order to cut back on load demands or invoke other forms of load curtailment and to import power from neighboring systems to the extent that it is available and can be safely carried by the transmission network.

System design criteria have been postulated which provide for the loss of major generating units or a total plan or a major transmission line, or even a corridor of lines, but the criteria for taking care of an area deficiency remain undeveloped. The problem is particularly difficult because it involves very extensive coordination in planning. I anticipate that the ability to transfer large block of power in any direction over and above strictly accountable requirements will someday become a leading criterion in the planning of interconnected networks.

Our emphasis on this problem can be more clearly appreciated in realizing that power systems 10 to 20 years from now may have concentrations in single plant locations of 2,000 or 3,000 or 4,000 megawatts or more of power and that major interconnecting transmission circuits and corridors will or should have similar carrying capacities. It is also clear that the interests of our national defense may require a very free transfer of power from area to area.