The following is a good read about the effects of deregulation and lawmakers mandated wheeling on what is essentially the worlds largest machine that is not designed for wheeling:
http://physicist.org/tip/INPHFA/vol-9/iss-5/p8.html
The bits I like,
Under the new rules:
Quote:
Figure 2. Electric power does not travel just by the shortest route from source to sink, but also by parallel flow paths through other parts of the system (a). Where the network jogs around large geographical obstacles, such as the Rocky Mountains in the West or the Great Lakes in the East, loop flows around the obstacle are set up that can drive as much as 1 GW of power in a circle, taking up transmission line capacity without delivering power to consumers (b).
Quote:
The new regulations envisioned trading electricity like a commodity. Generating companies would sell their power for the best price they could get, and utilities would buy at the lowest price possible. For this concept to work, it was imperative to compel utilities that owned transmission lines to carry power from other companies’ generators in the same way as they carried their own, even if the power went to a third party. FERC’s Order 888 mandated the wheeling of electric power across utility lines in 1996. But that order remained in litigation until March 4, 2000, when the U.S. Supreme Court validated it and it went into force.
In the four years between the issuance of Order 888 and its full implementation, engineers began to warn that the new rules ignored the physics of the grid. The new policies “ do not recognize the single-machine characteristics of the electric-power network,” Casazza wrote in 1998. “The new rule balkanized control over the single machine,” he explains. “It is like having every player in an orchestra use their own tunes.”
In the view of Casazza and many other experts, the key error in the new rules was to view electricity as a commodity rather than as an essential service. Commodities can be shipped from point A through line B to point C, but power shifts affect the entire singlemachine system. As a result, increased longdistance trading of electric power would create dangerous levels of congestion on transmission lines where controllers did not expect them and could not deal with them.
The problems would be compounded, engineers warned, as independent power producers added new generating units at essentially random locations determined by low labor costs, lax local regulations, or tax incentives. If generators were added far from the main consuming areas, the total quantity of power flows would rapidly increase, overloading transmission lines. “ The system was never designed to handle long-distance wheeling,” notes Loren Toole, a transmission-system analyst at Los Alamos National Laboratory.
At the same time, data needed to predict and react to system stress—such as basic information on the quantity of energy flows—began disappearing, treated by utilities as competitive information and kept secret. “Starting in 1998, the utilities stopped reporting on blackout statistics as well,” says Ben Carreras of Oak Ridge National Laboratory, so system reliability could no longer be accurately assessed.
Finally, the separation into generation and transmission companies resulted in an inadequate amount of reactive power, which is current 90 deg out of phase with the voltage. Reactive power is needed to maintain voltage, and longer-distance transmission increases the need for it. However, only generating companies can produce reactive power, and with the new rules, they do not benefit from it. In fact, reactive-power production reduces the amount of deliverable power produced. So transmission companies, under the new rules, cannot require generating companies to produce enough reactive power to stabilize voltages and increase system stability.
