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PSC expected to act quickly on electrical reliability targets

CHARLESTON, W.Va. -- Members of the state Public Service Commission hope to move quickly in their review of a settlement that would require West Virginia's first-ever reliability standards for electric utilities.

Commission Chairman Michael Albert said the commission would issue an order on the matter as soon as possible. The settlement requires PSC approval before it can take effect.

Albert and commissioners Jon McKinney and Ryan Palmer held a brief hearing Thursday morning to hear about the settlement reached between PSC staff and consumer advocates and the state's largest electric utilities, subsidiaries of FirstEnergy and American Electric Power.

Last month, the utilities agreed to meet much stronger versions of electrical system reliability targets than they had originally proposed, after PSC staff and consumer advocates harshly criticized the industry recommendations.

Under the proposed settlement, though, West Virginia utilities would have more time -- until 2014 -- to comply with the standards. PSC staff and consumer advocates had wanted the rules to apply immediately, and utilities had wanted them deferred until 2016 or 2018.

"The utilities agreed to more stringent targets than they originally proposed, but they have a little more time to get there," said George Blankenship, FirstEnergy's director of state affairs for West Virginia, who testified as a joint witness to explain the deal to commissioners.

Blankenship noted that the deal requires utilities to submit annual reliability reports to the commission. If utilities don't meet their targets, they have to explain why, and submit plans for how they would improve, Blankenship said.

Since January, utilities, PSC staff and other parties have been debating in commission filings their proposals for power companies to comply with new agency rules aimed at setting electrical system reliability targets.

The targets are based on three indices that grade how frequently electrical systems go down, how long those systems are down, and how long customers themselves go without power.

West Virginia was one of only 12 states listed in a 2005 Edison Electric Institute study as having no targets for utility reliability as well as no requirement for power companies to report reliability data to the PSC. A study by the U.S. Department of Energy found power outages in West Virginia take nearly four times longer to fix than the national average.

The lack of reliability standards came to light in 2010, when the commission investigated widespread blackouts across West Virginia following a winter storm in mid-December 2009. After that, the PSC in July 2011 rewrote its statewide rules to require new reliability targets.

The issue arose again this summer, after a series of late-June thunderstorms left thousands of state residents without power, some for a week or more.

Setting electrical system reliability targets involves complicated formulas that include averaging power outage frequency and duration, and accounting for acceptable deviations from those averages.

Under the new standards, for example, Appalachian Power's target is to have no more than 2.5 power outages per customer per year. And the average duration of all outages for all customers is supposed to meet a minimum target of no more than 230 minutes long.

Blankenship told commissioners the new standards would be in effect from 2014 to 2018, when utilities are required to submit new recommendations for the reliability targets. He also noted that, in the settlement, the parties did not agree to how reliability targets should be calculated. All sides could be arguing over that again when new utility proposals are submitted in 2018, Blankenship said.

Reach Ken Ward Jr. at kward@wvgazette.com or 304-348-1702.


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