EPRI board releases report detailing vision for the future for U.S. electric power

PALO ALTO, Calif., Aug. 25, 2003 — The latest Northeast power outage is another vivid reminder of the essential nature of electricity — it is the nation’s indispensable engine of prosperity and quality of life.

Yet the infrastructure is aging and clearly must be modernized. The just-published report from the Electric Power Research Institute (EPRI), “The Electric Sector Framework for the Future,” examines the current challenges facing the electricity sector in the U.S. and outlines a Framework for Action to help guide future economic, regulatory, and technical direction.

The report was developed under the direction of the EPRI Board of Directors using input from a broad cross section of stakeholders both inside and outside the industry, including utilities, federal and state regulators, industry and business, consumer groups, labor unions, and environmentalists. EPRI engaged more than 100 organizations over a one-year period, and held a series of five regional workshops to shape and refine the report.

“The report lays out a widely shared, coherent vision of the future — to restore a highly reliable, affordable, environmentally friendly power system that provides essential public services and supports the economic aspirations of all types of customers — residential, commercial, and industrial,” said Kurt Yeager, president and CEO of EPRI.

Technology becomes an important enabler of this vision, referred to in the report as the “21st Century Transformation.” This transformation involves achieving five overarching goals:

* Stabilize electricity markets — restore the financial health of the electricity sector, clarifying regulatory jurisdictions and providing adequate incentives for investment.

* Provide for the public good — recognize the important role that electricity plays in sustaining the health, safety and welfare of society, and make provisions to ensure the availability of the essential public-good services associated with electricity today.

* Protect the environment — recognize the increasing role electricity will play in delivering clean energy to the consumer.

* Educate and empower the consumer — make consumers full partners in the electricity marketplace so that consumer benefits can be expanded.

* Unleash technical innovation — transform the aging electricity system into a smart, interactive, electronically controlled system fully capable of supporting a “digital society.”

According to Mark Gabriel, EPRI’s vice president of marketing and client relations, “With this transformed system, the electricity sector will be encouraged and able to invest in new innovative technology that ensures operational effectiveness, minimizes impact on the environment, and supports the evolving needs of the U.S. economy and society.”

The transformation will be enabled by technical innovations including:

* digital control of the power delivery network,

* the integration of electricity and communications,

* transformation of the meter into a two-way energy/information portal,

* integration of distributed energy resources into the network, and

* a robust advanced power generation portfolio, including the refining of coal.

Earl Nye, chairman of the EPRI Board, and chairman and chief executive of TXU, said, “The extreme complexity of the situation — adequacy of the power system, economics, and the environmental consequences of our action — brings us to this critical juncture. We cannot look at the past to move forward.”

Tennessee Valley Authority CEO and EPRI Board member, Glenn McCullough, who also chairs EPRI’s Membership and Strategic Issues Committee, called the report a “declaration of interdependence” by the industry.

EPRI’s Yeager said, “Although the electricity industry’s ‘obligation to serve’ may have been blurred by the recent turmoil of restructuring (deregulation), the industry is still seen publicly and politically as accountable for keeping the lights on. The nation’s current economic situation provides a temporary window of opportunity to develop and build broad public support for the critical actions needed to keep the sector — and the nation’s vital electricity supply capability — robust, resilient, and secure.”

To access the two-volume report or a report summary, visit http://www.epri.com/corporate/esff/viewpdfs.asp.

EPRI, headquartered in Palo Alto, Calif., was established in 1973 as a center for public interest energy and environmental research. EPRI’s collaborative science and technology development program now spans nearly every area of power generation, delivery and use. More than 1,000 energy organizations and public institutions in 40 countries participate in EPRI’s global technical and business program.

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Visit EPRI’s electronic press room at http://www.epri.com/corporate/discover_epri/news/index.html.