[UTILITIES] 'SUBCOMMITTEE ON TECHNOLOGY
COMMITTEE ON SCIENCE
U.S. HOUSE OF REPRESENTATIVES
WASHINGTON D.C. 20515
Millennium Short Circuit: The Y2K Effect on
Energy Utilities
Thursday, May 14, 1998
2:00 p.m. - 4:00 p.m.
2318 Rayburn House Office Building
OBJECTIVES
To determine the business vulnerabilities, system risks, and safety issues presented by the Year 2000
computer problem on energy utilities.
To discuss the strategies being employed to avoid interruptions in the normal delivery of power to
American homes and businesses.
To review the potential Year 2000 impact on the delivery and distribution of our nation's current electric
supply grid and the contingency plans necessary if it fails.
BACKGROUND
This will be the eighth hearing on the Year 2000 (Y2K) computer problem by the Technology Subcommittee.
The Year 2000 problem has the potential to severely disrupt our nation's ability to deliver energy to the
American public, which is a vital industry necessary to maintain our personal and economic quality of life. In
the February 4, 1998 Executive Order issued by the President, the newly created Year 2000 Conversion
Council identified the electric power generation system, as a critical national and local priority.
Over the past two years, the Technology Subcommittee has been actively engaged in reviewing the Year 2000
computer problem. Through a series of oversight hearings and legislative initiatives, the Technology
Subcommittee has raised awareness of the Year 2000 problem and pushed both the public and private sectors
in the United States to act expeditiously to correct the problem in a timely manner.
Utility Regulatory Web
Electric utilities are regulated primarily by the states, but there is an important federal role. The Federal Power
Act (FPA) and the Public Utility Holding Company Act (PUHCA) of 1935
established a regime of regulating electric utilities that gave specific and separate powers to the states and the
federal government.
State regulatory commissions, such as the Texas Public Utility Commission, address intrastate utility activities,
including wholesale and retail rate making. State authority currently tends to be as broad and as varied as the
states are diverse. At the least, a state public utility commission will have authority over retail rates, and often
over investment and debt. At the other end of the spectrum, the state regulatory body will oversee many facets
of utility operation. Despite this diversity, the essential mission of the state regulator is the establishment of
retail electric prices.
Under the FPA, federal economic regulation addresses wholesale transactions and rates for electric power
flowing in interstate commerce. Federal regulation followed state regulation and is premised on the need to fill
the regulatory vacuum resulting from the Constitutional inability of states to regulate interstate commerce. In
this bifurcation of regulatory jurisdiction, federal regulation is limited and intended to supplement state
regulation.
The Federal Energy Regulatory Commission (FERC) has the principal functions at the federal level for the
economic regulation of the electricity utility industry, including financial transactions, wholesale rate regulation,
interconnection and wheeling of wholesale electricity, and ensuring adequate and reliable service. FERC is an
independent regulatory agency within the Department of Energy that regulates the transmission and sale for
resale of natural gas in interstate commerce, regulates the transmission of oil by pipeline in interstate
commerce, regulates the transmission and wholesale sales of electricity in interstate commerce, licenses and
inspects private, municipal and state hydroelectric projects, oversees related environmental matters and
administers accounting and financial reporting regulations and conducts of jurisdictional companies.
The U.S. Nuclear Regulatory Commission (NRC) is an independent agency established by the U.S. Congress
under the Energy Reorganization Act of 1974 to ensure adequate protection of the public health and safety, the
common defense and security, and the environment in the use of nuclear materials in the United States. The
NRC's scope of responsibility includes regulation of:
commercial nuclear power reactors, and the disposal of nuclear materials and waste.
Hearing Summary
The hearing will explore the vulnerabilities of electric utilities to the Year 2000 problem. What role, if any, the
Federal Government should play in reducing risk associated with the problem, and how Year 2000 compliance
can be coordinated through the myriad of regulatory bodies that control energy utilities.
Witnesses
There will be one panel of five witnesses.
The panel includes Mr. Hugh L. Thompson, Jr., Deputy Executive Director for Regulatory Programs of the
NRC; Ms. Kathleen M Hirning, Chief Information Officer of the FERC; Mr. John L. Laakso, Executive
Director of the Texas Public Utilities Commission; Mr. Kenneth P. Cohn, Computer Services Manager of
Potomac Electric Power Company (PEPCO) of Washington, D.C.; and Mr. Richard Cowles, Director, Year
2000 Industry Solution, Tara\R.W. Beck, LLC, Penns Grove, N.J.
house.gov |
