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Sunday, January 24, 2010

CRS Issue Statement on Electric Power Sector

Stan Mark Kaplan, Coordinator
Specialist in Energy and Environmental Policy

Larry Parker
Specialist in Energy and Environmental Policy

Adam Vann
Legislative Attorney

Paul W. Parfomak
Specialist in Energy and Infrastructure Policy

Beth A. Roberts
Information Research Specialist

The electric power industry is in the process of transformation. Since 1978, technology improvements, changes in the economics for generating electricity, and new federal laws and regulations (such as the Public Utility Regulatory Policies Act of 1978, the Energy Policy Acts of 1992 and 2005, the Energy Independence and Security Act of 2007, and Federal Energy Regulatory Commission (FERC) orders, have created a new competitive landscape for electricity. Competition is occurring on the wholesale level, and some states have moved toward retail competition. Other states have retreated from open markets due to concerns over impacts on power prices. Congress continues to face the issue of how much to intervene to ensure a reliable and affordable supply of electricity throughout the United States. 

The electric utility system is vulnerable to outages due to system operator errors, weather-related damage, terrorist attacks, and shortages of transmission and generating capacity. The blackout of 2003 in the Northeast, Midwest, and Canada highlighted the need for operations improvements and greater standardization of operating rules. Pursuant to the Energy Policy Act of 2005, FERC named the North American Electric Reliability Corp. (NERC) as the electric reliability organization (ERO) required by the act. The ERO is developing mandatory and enforceable standards for the sector to ensure bulk power reliability

Date of Report: January 15, 2010
Number of Pages: 3
Order Number: IS40272
Price: $7.95

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