The Energy Policy Act's Reliability Provisions: Uncontroversial, Yes, but Doomed to Ineffectiveness?

10

Greg Williams is a Partner in theWashington, DC, office of the lawfirm of Bracewell & Giuliani LLP,

where he counsels U.S. and Canadianclients in both the electric and natural

gas industries on matters such asmerchant transmission development,RTO development, rate regulation,

industry restructuring, energymarketing, and natural gas pipeline

development. Prior to enteringprivate practice, Mr. Williamspracticed at the Federal Energy

Regulatory Commission for a decadebefore serving first as a trial attorneyand then as an appellate attorney. Heholds a J.D. from the University of

Baltimore Law School.

Andrea R. Robinson is anAssociate in Bracewell and Giuliani’sWashington office, where she works

within the Energy andTelecommunications Markets andRegulation Section, focusing on

regulatory work for natural gas andelectric clients before FERC and fortelecommunications clients before the

Federal CommunicationsCommission.

The authors are extremely grateful toJohn J. Bartus, of counsel at Bracewell

& Giuliani, for crystallizing theirthinking on these issues and helpingto organize the manuscript. The viewexpressed in this article are those ofthe authors and not necessarily thoseof Bracewell & Giuliani or its clients.

1040-6190/$–see front matter # 2005 Els

The Energy Policy Act’sReliability Provisions:Uncontroversial, Yes, butDoomed to Ineffectiveness?

The electric industry grew up and matured under aregulatory regime that fostered reliable service asconsistent with the service providers’ best economicinterests. But changes in the focus and structure of theelectric industry have put strains on that regime – asstarkly revealed in the 2003 blackout. Efforts to adoptenforceable reliability standards depend on the threat ofpenalties to outweigh the profit incentives that underminereliability. It is not clear that those penalties will work.

Greg Williams and Andrea R. Robinson

I. Introduction

Arguably the centerpiece, and

certainly among the least contro-

versial provisions, of the Energy

Policy Act of 2005 is Subtitle A to

the Electricity Title, namely the

‘‘Reliability Standards.’’1 Born out

of the Northeast blackout of

August 2003, the Reliability Sub-

title essentially transmutes what

have been voluntary reliability

evier Inc. All rights reserved., doi:/10.1016/j.

standards into mandatory relia-

bility standards, enforceable by

penalty. This article questions

whether those new mandatory

reliability standards will ade-

quately address the reliability

issues now facing the electric

power industry in the United

States, or whether they will turn

out to be off target or incomplete.

W hile the Reliability Subti-

tle was sold as first aid for

tej.2005.11.005 The Electricity Journal

Figure 1: The Reliability Triangle

Ja

the 2003 blackout, the mission is

broader. The history of the electric

power business in the U.S. sug-

gests that a recent systemic shift in

industry focus was at the root of

the 2003 blackout, and as a result,

the Reliability Subtitle’s pre-

scription for relief may not quite

match the disease. The mandatory

reliability provisions have some

potential for positive effect, but a

potential tempered by the very

shift in industry focus that

engendered the need for these

reliability provisions in the first

place.

II. Historic IndustryStructure

In the early years of the Twen-

tieth Century, Samuel Insull

effected a unique bargain with the

leaders of the city of Chicago: his

company would light the city

with electric power, in exchange

for a broad franchise and regula-

tion of his company’s rates by the

state public service commission.2

That arrangement provided the

structure for the privately owned

electric utility business nation-

wide.3

T hat regulatory structure

formed, in effect, a ‘‘relia-

bility triangle’’ among the utility

provider (which at that time was

vertically integrated to include

generation, transmission, and

distribution functions), the con-

sumers, and the regulator (the

state commission) (Figure 1). The

reliability triangle presumes that

electric consumers are primarily

concerned with reliability, as

n./Feb. 2006, Vol. 19, Issue 1 1040-6190/$–s

opposed to rates: if faced with the

prospect of receiving 10 percent

lower rates in exchange for 10

percent less reliable service, most

consumers would presumably

prefer to pay more for electric

service and not have to worry

whether the lights will come on

when the switch is flicked. The

consumer demands that the reg-

ulator ensure reliable electric

service. The regulator (who is

responsive, directly or indirectly,

to the consumer/voter), in turn,

enforces reliable service by con-

trolling the utility’s purse strings.4

Finally, the utility (anxious as a

profit-making enterprise to max-

imize its returns) makes reliable

service to consumers ‘‘job one.’’5

Significantly, under this

arrangement, reliable electric

service is not an adjunct to prof-

itability for utilities, or an adjunct

to the service demands of consu-

mers, or an adjunct to the self-

perceived responsibilities of the

regulator. The great virtue of the

reliability triangle is that it pro-

motes reliable service as a matter

of foremost self-interest for each

of the principal electric industry

participants—utility, consumer,

and regulator. The result, proven

over 80 years, was the most reli-

able electric grid in the world.6

While, at the industry’s outset,

the utilities’ focus was almost

ee front matter # 2005 Elsevier Inc. All rights

exclusively insular, over time,

inter-utility interconnections

became commonplace. The inter-

connections helped reduce the

cost of generation (via shared

costs) and the cost of reliability

(via lower capacity margins).7 But

the interconnections also raised

the prospect of cascading failures

(blackouts) by propagating failure

in one system to other connected

systems.

T he first major blackout

occurred in 1965 in the

Northeast, prompting the crea-

tion of the North American Elec-

tric Reliability Council (NERC).8

NERC is a self-regulatory body

set up by the privately owned

utilities to ensure reliable opera-

tion of the bulk power system –

and hence to prevent future sys-

tem-wide blackouts – without

government mandate.9 NERC

operates through regional coun-

cils that strive to have the utilities

in their region voluntarily imple-

ment reliability standards pro-

mulgated by NERC and the

regional councils.10

III. The IndustryChanges Focus

The 1978 Public Utility Regu-

latory Policy Act (PURPA)11

marked the beginning of a change

of focus of the electric utility

industry. PURPA promoted the

advent of non-utility generators

as competitive suppliers of elec-

tricity in the bulk (wholesale)

market.12 Thereafter, as indepen-

dent (non-utility) generators

began to proliferate, FERC found

reserved., doi:/10.1016/j.tej.2005.11.005 11

Figure 2: The Effect of Order No. 2000 and Other Changes on the Reliability Triangle

12

that because independent gen-

erators exercised no market

power, their bulk sales of electri-

city did not need to be cost-

regulated.13 The result was

further proliferation of indepen-

dent generators.14

R oughly at the same time,

Congress mandated,

in the 1992 Energy Policy Act,

that utilities must provide

transmission service for these

new competitive generators.15

In furtherance of the ’92 Act,

FERC followed with Order No.

888, which required utilities to

provide ‘‘open-access’’ transmis-

sion service.16

Thereafter, wholesale electric

transactions surged. The surge

resulted not only from non-utility

generators, but also from utilities’

affiliates permitted to sell electri-

city in bulk at non-regulated (i.e.,

market) rates.17

These new developments

changed the focus of many utili-

ties. From what had been a single-

minded, profit-driven focus on

reliability, many utilities found

that their profit maximization

objective now had two masters:

profits in retail service were still

subject to the reliability triangle,

but profits in wholesale service, to

varying extents, turned on max-

imizing market sales over the

transmission grid even at the

expense of reliability. At the

extremes, the two masters could

conflict, as market sales might

have to yield to reliable service.

As a result, many utilities became

open to compromising reliability

based on the economic justifica-

tion that it cost less to violate the


reliability standards than to fol-

low them.18 As a consequence of

the shift in industry focus – from

reliability toward competition –

many utilities found themselves

of mixed motives, thus clouding

the clear message of the reliability

triangle.19

IV. Change in IndustryStructure

Further change came with

FERC’s Order No. 2000 effort to

foster independent (i.e., non-uti-

lity) operation of the grid. To

maximize the competitive poten-

tial of what FERC hoped to be

regional electricity markets, FERC

encouraged the formation of

region wide independent trans-

mission system operators

(ISOs).20 According to FERC’s

direction, ISOs would have

‘‘functional control’’ of the trans-

mission grid, with ultimate

authority for short-term reliabil-

ity.21 But in practice, the utilities

and the ISOs each had some

imprecise share of control over

the transmission grid and grid

reliability, as ‘‘functional control’’

became the subject of imprecise

(and untested) contract allocation

between the ISOs and transmis-

sion-owning utilities.22


This change has had an effect

on the reliability triangle. To the

extent that grid reliability is under

ISO control, the tripartite bond

among utility, regulator, and

consumer is decoupled. Unlike

the utility, the ISO answers to

FERC rather than to the state

regulator. And there is no privity

between the consumer and ISO or

between the consumer and FERC.

If ISO fails to deliver reliable

service, there is no profit incentive

at work that might be utilized to

bring ISO into line, nor are FERC

regulators’ careers so directly at

stake. Thus, the new structure

creates a detour from the straight-

line reliability-driven relation-

ships that previously existed

(Figure 2).

In addition, a potential

‘‘reliability gap’’ is created by the

new structure. The insertion of the

ISO into the grid operation equa-

tion means that there are two

entities potentially responsible for

making critical reliability deci-

sions. Under Order No. 2000,

FERC required that ISO have

operational authority for the grid,

including exclusive authority for

maintaining the short term relia-

bility of the transmission grid

under its control.’’23 But FERC was

fuzzy about the ISO’s actual exer-

cise of that operational control,24


Given the changesin industry focusand structure,the August 2003blackout washardlysurprising.

Ja

and the implementing agreements

between the grid operator (the

ISO) and the transmission owners

reflect that fuzziness.

F or example, in New England,

the Transmission Owners

Operating Agreement between

the transmission owners and the

ISO provides that the ISO shall

take necessary actions to plan and

maintain short-term reliability

and system security, but the

transmission owner shall direct,

operate, and maintain its trans-

mission facilities and local control

centers.25 The NYISO Transmis-

sion Owner’s Agreement

describes two classes of trans-

mission facilities: those under

which the ISO has day-to-day

operational control and those

where the transmission owner is

responsible for notifying the ISO

with respect to action.26 The

NYISO Agreement provides that

the ISO shall ‘‘direct the operation

and coordinate the maintenance

of certain facilities . . .’’27; while

the transmission owners ‘‘shall

operate and maintain the facilities

. . . in accordance with the terms of

the Agreement . . . and ISO

Procedures.’’28 The MISO RTO

Transmission Owner’s Agree-

ment provides that MISO shall

have functional control of the

transmission facilities, and that

the transmission owners shall

physically operate the facilities,

subject to MISO direction.29

Unless the delineation of

responsibility is absolutely clear,

a ‘‘reliability gap’’ potential exists

in the fuzzy boundaries between

the utility and the ISO. When a

reliability crisis occurs, even the

n./Feb. 2006, Vol. 19, Issue 1 1040-6190/$–s

slightest hesitancy caused by

fuzzy lines of responsibility could

lead to a reliability cascade.30

G iven those changes in

industry focus and struc-

ture, the August 2003 blackout

was hardly surprising.31 Utilities

in the affected area had economic

incentives to lean on neighbors

and evade compliance with

voluntary reliability standards.32

Lines of responsibility between

the utilities and the ISOs were

vague.33 And the ISOs involved

were subject to no regulator-

imposed sanction.34 All these

factors contributed to the black-

out, and they persist.

V. The 2003 BlackoutReport

The 2003 Blackout Report failed

to address the changes in the

electric industry, discussed

above, that were at the root of the

problem.35 The Blackout Report

did identify ISOs (primarily

MISO) as contributing to the

problem.36 But the Blackout

Report did not suggest any


change in or elimination of the

ISOs’ reliability role or, for that

matter, any sanction whatsoever

directed to the ISOs for their role

in the Blackout.37 Instead, the

Report focused primarily on the

need for mandatory, rather than

voluntary, reliability standards.38

The conclusions of that Report led

directly to the legislation that now

appears in the Reliability Subti-

tle.39

VI. The Energy PolicyAct of 2005

The Reliability Subtitle estab-

lishes a system of mandatory and

enforceable reliability standards

in a new Section 215 of the Federal

Power Act.40 Under Section 215,

FERC will certify a single

nationwide Electric Reliability

Organization (ERO).41 The ERO

may, pursuant to FERC rule,

delegate authority to a qualified

Regional Entity for the purpose of

(1) proposing reliability standards

to the ERO, and also (2) enforcing

those standards.42 While FERC

has not yet certified the ERO,

NERC, and the various NERC

regions are likely candidates to be

the ERO and the Regional Enti-

ties.

The ERO will develop reliabil-

ity standards, subject to FERC

approval.43 Either the ERO/

Regional Entity or FERC can

impose a penalty on a ‘‘user,

owner, or operator of the bulk

power system’’ for a violation of

the FERC-approved reliability

standards.44 FERC can also order

compliance with a reliability


The Section215 penalty

mechanism mayfall short in two

respects related tothe likelihood of

enforcement.

14

standard for violation, or antici-

pated violation, of that stan-

dard.45

I n late summer, FERC issued a

Notice of Proposed Rulemak-

ing to implement Section 215.46

On the subject of penalties,

FERC’s NOPR discusses both

monetary penalties and non-

monetary penalties. FERC offers

that non-monetary penalties

could include ‘‘limitations on

activities, functions, operations,

and other appropriate sanctions,

including the establishment of a

publicly available watch list

composed of major violators.’’47

While FERC does not specifically

say so, presumably the non-

monetary penalties could apply to

any entity subject to its jurisdic-

tion under Section 215 (i.e., users,

owners, and operators of the

grid). That would include RTOs

and ISOs.

In connection with enforce-

ment, FERC’s NOPR recognizes

the need to strike a balance

between protecting the due pro-

cess rights of entities being pro-

secuted on the one hand, and

preventing further compromise to

reliability on the other. The

NOPR’s discussion about the

process (e.g., what constitutes

adequate notice to the violator,

what should be the notice to

FERC, how public the proceeding

should be, what should be

the internal appeal process

within the ERO, and what

should be and what should

trigger the appeal process to

FERC) makes it apparent that

Section 215 enforcement will

come at a high cost.48


VII. Analysis of Section215’s RemedialMechanism

Essentially, Section 215’s

response to the 2003 Blackout is to

attempt to compel electric service

providers to ensure reliability by

means of a standard government

command-and-control mechan-

ism – i.e., imposition of standards,

and penalties for violations of

those standards. On the premise

that governmental objectives

are best achieved if they are

aligned with the subjects’ pre-

dispositions, Section 215’s

remedy addresses part, but not

all, of the problem.

Under the electric industry’s

‘‘reliability triangle’’ paradigm,

all interests were aligned in

favor of assuring reliable service.

The relatively recent electric

industry paradigm shift has

altered that alignment in three

respects:

(1) Some electric service provi-

ders are no longer single-mind-

edly focused on providing retail

service. Now, electric service

providers, more and more, derive


profit from providing wholesale

services that are outside of the

state commission’s reliability-first

scrutiny. Thus, utility profit

motives that had once been

clearly and solely aligned with

reliable service are now con-

flicted. When reliable service col-

lides with the economic potential

of a wholesale service, reliability

may be compromised.

T he Section 215 penalty

mechanism attempts to

address the service providers’

conflicted profit motives. The

mechanism should work for that

purpose if the penalty is large

enough to outweigh any profits

from efforts that conflict with

reliable service. However, if the

penalty is perceived as too small,

or unlikely to be enforced or

invoked, the penalty will not

work to forestall the predisposi-

tion to profit from the non-relia-

bility driven activity. The Section

215 penalty mechanism may fall

short in two respects related to the

likelihood of enforcement.

The likelihood of a penalty’s

implementation is a function, at

least to some extent, of the ‘‘due

process’’ surrounding enforce-

ment. The greater the ‘‘process,’’

the less likely a meaningful pen-

alty will be imposed. In addition,

as has been recognized in other

contexts, a deficiency of com-

mand-and-control regulation is

the cost to administer it.49 Sub-

stantial costs for enforcement

tend to mitigate against enforce-

ment. FERC’s decisions in its

NOPR regarding enforcement

‘‘process’’ could have a significant

bearing on the likelihood of


Ja

reliability standards enforcement,

which could, in turn, erode

reliability.

In sum, while the section 215

mechanism appears to be direc-

tionally correct to address service

providers’ conflicted motives,

whether it is sufficient for that

purpose will depend upon the

penalty’s deterrent effect, based

on both the size and likelihood of

the penalty. For now the jury is

out—at least until completion of

FERC’s NOPR—on whether Sec-

tion 215 will suffice.

(2) The electric industry para-

digm shift has added, in many

areas, a new entity into the mix of

ensuring reliable service. Under

FERC’s direction, an ISO has pri-

mary responsibility for short-term

reliability within the ISO’s sphere

of grid influence. In practice, all

existing ISOs operate on a not-for-

profit basis. All costs incurred by

the ISO are ultimately passed on to

its transmission customers. It is

difficult to understand how a

monetary penalty potential in

connection with a reliability fail-

ure would have any serious

deterrent effect upon a non-profit

ISO. The monetary penalty would

be socialized and passed along to

system customers, who bear all

ISO-incurred costs. The penalty

would have no direct connection

to the compensation of the ISO

employees responsible for the

reliability failure.

FERC’s NOPR does discuss the

possibility of non-monetary

penalties. It is possible that non-

monetary penalties could be

fashioned to establish a clear

nexus between the assurance of

n./Feb. 2006, Vol. 19, Issue 1 1040-6190/$–s

reliable service by an ISO and the

foremost objective of the ISO

leaders: job preservation. Perhaps

reliability failures by an ISO could

trigger ISO personnel dismissals.

Thus, a ‘‘sword of Damocles’’

would hang over the ISO, much as

it does over the state commissions

under the reliability triangle.

While such a result might

logically be appropriate, its

realistic prospects appear dim.

The 2003 Blackout Report cited

MISO with three separate NERC

violations contributing to the

blackout.50 Nevertheless, the

Blackout Report’s recommenda-

tions included no sanctions

against MISO.

(3) The command-and-control

reliability enforcement model is

confounded in an additional way

by the ISO. While ISO is nominally

ultimately responsible for short-

term reliability, in fact, as dis-

cussed above, reliability is a

shared function – between the ISO

and the transmission-owning uti-

lities. In these circumstances, pre-

cise responsibility for a blackout

will almost surely be cloudy, and

penalties for reliability infractions


cannot be clearly targeted to the

responsible entity. Targeting

penalties to wrongdoing is made

even more difficult where, as in

NYISO and ISO-New England,

for example, contractual indem-

nities might immunize the

wrongdoers. Both the NYISO and

ISO-New England Transmission

Owners Operating Agreements

contain broad indemnity

provisions that require the ISO

to indemnify the transmission

owner for actions taken in

response to the ISO direction.51

These indemnity provisions might

enable a penalty to be shifted from

transmission owner to ISO, and

thence socialized to transmission

customers. In order for reliability

penalties to have the desired

deterrent effect, there must be a

unity of responsible and

penalty-liable entities. When both

Alphonse and Garcon share

responsibility for the blackout,

what is the proper deterrent

penalty for each?

VIII. Conclusion

The electric industry grew up

and matured under a regulatory

regime that fostered reliable ser-

vice as consistent with the service

providers’ best economic inter-

ests. Recent changes in both the

focus and structure of the electric

industry have put some strains on

that reliability-regime. Those

strains contributed to the 2003

blackout.

T he Blackout Report, and its

progeny the Reliability

Subtitle (Section 215), attempt to


16

address the 2003 Blackout by

means of enforceable reliability

standards. That command-and-

control mechanism fosters relia-

bility to the extent the penalty and

its likelihood of enforcement are

perceived to outweigh conflicting

profit incentives. It is not clear

that will be the case.

M oreover, the Section 215

remedy does not appear

to address at all the industry’s

structural change—i.e., the

advent of ISOs. Section 215’s

financial penalties (1) have no

deterrent effect on non-profit

ISOs, and (2) do not bridge the

communications gap resulting

from multiple arbiters of grid

reliability. FERC may address the

former in its rules implementing

Section 215, but not the latter.&

Endnotes:

1. Domenici-Barton Energy Policy Actof 2005, Pub. L. No. 109-58, § 1211, 119Stat. 594 (2005) (EPAct of 2005).

2. THOMAS P. HUGHES, NETWORKS OF

POWER 205–207 (Baltimore: JohnsHopkins University Press 1993) (1983).

3. See Rudy Perkins, ElectricityDeregulation, EnvironmentalExternalities, and the Limitations of Price,39 B.C. L. REV. 993, 999–1000 (1998).

4. State regulatory commissions havebroad discretion within which toregulate utility rates. The SupremeCourt has held that the onlyconstitutional limitation on theexercise of that authority by a statecommission is that the net effect of arate decision may not be confiscatory.Duquesne Light Co. v. Brasch, 488 U.S.299, 310 (1989).

5. Directionally, the regulatorymechanism—cost-of-service rates—also fostered reliable service. Undercost-of-service regulation, utilitieshave a financial incentive to maximize


infrastructure because the more theyinvest in the system, the more theyreceive in return. The more robust theinfrastructure, the more profitable theutility.

6. See Robert E. Burns, et al., After theLights Went Out, ELEC. J., Jan./Feb.2005; Eugene P. Coyle, Economists’Stories, and Culpability in Deregulation,ELEC. J., Oct. 2002; Michael T. Burr,Power Flux: Generators Struggle to Planfor the Future as They Cope with anUnstable Present, PUB. UTIL.FORTNIGHTLY, Dec. 2003, at 22.

7. Jose Delgado, the Blackout of 2003and its Connection to Open Access 2(2005) (white paper produced for theU.S.-Canada Power System OutageTask Force Technical Workshops onCompetition and Reliability in NorthAmerican Energy Markets, held inWashington, DC, Sept. 15 andToronto, Sept. 28.

8. U.S.-CANADA POWER SYSTEM OUTAGE

TASK FORCE, AUGUST 14TH BLACKOUT:CAUSES AND RECOMMENDATIONS 104(2004) (hereinafter ‘‘Blackout Report’’).

9. Charles G. Stalon, State-FederalRelations in the Economic Regulation ofEnergy, 7 YALE J. ON REG. 427, 442(1990); see also Scott Heck, Lights out forNew Jersey: The August 2003 Blackoutand the End of Electricity Regulation inNew Jersey, 29 SETON HALL LEGIS. J. 279,282 (2004).

10. Id., at 10–12.

11. Public Utility Regulatory PolicyAct (PURPA), 16 U.S.C. 824a-3(h)(2004).


12. Hon. Richard J. Cudahy, PURPA:The Intersection of Competition andRegulatory Policy, 16 ENERGY L. J. 419,421–422 (1995).

13. Promoting Wholesale CompetitionThrough Open Access Non-Discriminatory Transmission Services byPublic Utilities; Recovery of StrandedCosts by Public Utilities and TransmittingUtilities, Order No. 888, FERC Stats. &Regs. � 31,036, at P31,643 (May 10,1996) (Order No. 888).

14. Id.

15. Energy Policy Act of 1992, 42U.S.C. 2297, et seq. (2004).

16. See generally Order No. 888, supranote 13.

17. Regional TransmissionOrganizations, Order No. 2000, FERCStats. & Regs. � 31,089, PP30,996-30,999 (Jan. 6, 2000) (Order No. 2000).

18. David N. Cook, General Counsel,NERC, Prepared Testimony before theU.S. Senate Governmental AffairsCommittee (June 28, 2001), S. Hrg. 107-156, at 515.

19. As the president of AmericanTransmission Co. recently put it: ‘‘Theattention of the industry – utilities,marketers, regulators and customers –was focused [now] on ensuring fairaccess to transmission capacity andpromoting robust competition in theenergy markets, rather than onreliability.’’ Delgado, supra note 7, at 4.

20. Order No. 2000, supra note 17, atPP30,992-30,995.

21. Id., at P31,103.

22. See, e.g., MISO and NYISOtransmission operating agreements forfirm point-to-point transmissionservice, available at http://www.midwestiso.org/emt/docs/Attachments.pdf and http://www.nyiso.com/public/webdocs/documents/tariffs/oatt/att_a.pdf.

23. Order 2000, supra note 17, atP31,103.

24. Id.

25. ISO-NE Transmission OperatingAgreement, � 3.02 and � 3.06.

26. Agreement between NYISO andTransmission Owners, � 2.01.


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http://www.lawseminars.com/seminars/06BSEWA.php



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27. Id., � 3.01.

28. Id., � 2.02.

29. MISO Transmission OwnersOperating Agreement, Appendix E.

30. Blackout Report, supra note 8, at109.

31. To quote one industryobserver: ‘‘The specific conditionsthat led to the blackout of 2003were only one more bad day in asequence of steadily worsening daysin network operations. The blackoutcould have happened earlier or later,there or elsewhere.’’ Delgado, supranote 7, at 4.

32. Cook, supra note 18.

33. Hughes, supra note 2, at 109.

34. Blackout Report, supra note 8, at20, 140–170. ISOs are subject toexclusive FERC jurisdiction, and FERChas no mechanism currently in placethat operates to induce the ISOs tobehave in ways that encouragereliability.

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35. See generally Blackout Report,supra note 8.

36. Id., at 20.

37. Id., at 140–170.

38. Id.

39. See, e.g., Senate Consideration ofConference Report, CONG. REC. PS9335(July 29, 2005).

40. EPAct of 2005, supra note 1, at §1211.

41. Id.

42. Id.

43. Id.

44. Id.

45. Id. Section 215 does not promptstate action to ensure reliability withinthe state not inconsistent with Section215. § 215(i)(3).

46. Rules Concerning Certification of theElectric Reliability Organization; andProcedures for the Establishment,

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1 Miami Coaltrans h

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Dubai, United

Arab Emirates

IIR Middle East h

Washington Institute for

Public-Private

Partnerships, Inc

h

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Atlanta Trade Fair Group h

La Jolla, CA Institute of the

Americas

h

h

1 Cologne, Germany Pennwell h


Approval, and Enforcement of ElectricReliability Standards, 112 FERC � 61,239(Sept. 1, 2005).

47. Id., at P 66.

48. Id., at PP 58–73.

49. Jeffrey M. Hirsch, EmissionsAllowance Trading under the Clean AirAct: A Model for Future EnvironmentalRegulations?, 7 N.Y.U. ENVTL. L.J. 352(1999). See also Byron Swift, EmissionsTrading and Hot Spots: A Review of theMajor Programs, BNA ENVIRONMENT

REPORTER, Vol. 35, No. 19 (2004) (‘‘[Theacid rain program under Title IV] hasbeen called one of the most effectiveemissions reduction programs,principally because it achievessignificant and permanent reductionsat very low compliance costs’’).

50. Blackout Report, supra note 8, at22, fn 2.

51. Agreement between NYISO andTransmission Owners, � 5.03; ISO-New England Transmission OperatingAgreement, � 9.01.

ontact

eb: http://www.platts.com/Events/

C601/index.html

ttp://www.lawseminars.com/

eminars/06BSEWA.php

ttp://conferenceboard.ca/conf/

an06/energy-infra/overview.htm

ttp://www.coaltrans.com/default.

sp?Page=11&eventid=ECK121

ttp://www.middleeastelectricity.com/

ttp://www.ip3.org/t2006/

_workshops_1603.htm

ttp://www.electricpowerexpo.com/index.asp

ttp://iamericas.org/events/event.

tml?eid=2006-2301E&isnw=1

ttp://pge06.events.pennnet.com/






http://conferenceboard.ca/conf/jan06/energy-infra/overview.htm

http://conferenceboard.ca/conf/jan06/energy-infra/overview.htm

http://www.coaltrans.com/default.asp?Page=11&eventid=ECK121

http://www.coaltrans.com/default.asp?Page=11&eventid=ECK121

http://www.middleeastelectricity.com/

http://www.ip3.org/t2006/t_workshops_1603.htm

http://www.ip3.org/t2006/t_workshops_1603.htm

http://www.electricpowerexpo.com/index.asp

http://iamericas.org/events/event.html?eid=2006-2301E&isnw=1

http://iamericas.org/events/event.html?eid=2006-2301E&isnw=1

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Documents

The Energy Policy Act's Reliability Provisions: Uncontroversial, Yes, but Doomed to Ineffectiveness?