Todd Snitchler is president and CEO of the Electric Power Supply Association.
The U.S. power system is facing “unprecedented” and “widespread” reliability risks this winter, according to the nation’s grid reliability coordinator, the North American Electric Reliability Corporation. Industry experts and operators have been sounding the alarm for years, warning of the challenges of forcing the energy transition too quickly and not investing in the retention and addition of needed dispatchable sources of power required to have a well-functioning, reliable grid. Indeed, these warnings played out this summer in California, with 10 days of extreme heat that put the Western grid in a perilous condition requiring emergency conservation from consumers using social media to solicit a response to conserve power. This is not an approach that will ensure reliable grid operation.
The Federal Energy Regulatory Commission, the regulatory agency that oversees the reliability of the bulk power system, has the authority to create conditions that can minimize the risk of failures. FERC’s decisions impacting infrastructure, generation resources, and market performance in recent years have resulted in unnecessary challenges to the grid’s reliable operation. To ensure Americans have access to reliable and affordable energy, President Biden and his administration must ensure that FERC nominees and commissioners are committed to FERC’s core mission of ensuring adequate energy infrastructure, reliable power, and well-functioning markets in a fuel-neutral manner.
According to NERC’s 2023 Winter Assessment, Texas, the Northeast, the Midwest, and Southeast are all at the highest risk of emergency conditions this winter. In the report, NERC outlines the lack of preparedness for extreme cold weather and the possibility of forced outages or other emergency responses as a result. The terrible toll of Winter Storm Uri is a sad reminder of just how devastating and deadly it can be to have the power go out during an extended period of cold weather.
The risks of power outages are compounded by an uptick in demand, coupled with the rapid transition to clean energy sources and underinvestment in dispatchable resources, like natural gas. Energy sources like wind and solar are non-dispatchable, meaning they generate power when conditions allow, not when specifically required. A lack of widespread battery deployment and limits on the amount of power that can be stored perpetuates this challenge, meaning dispatchable sources of power are necessary components of the power grid that work with renewables to make sure power demand is always fully supplied.
There is no question that EPSA members are participating in the transition to a low-carbon grid, but that transition must be based in reality. The current regulatory regime is not approaching this challenge with the holistic planning mentality required. FERC, in particular, has delayed permitting for critical infrastructure projects like the Mountain Valley Pipeline through additional environmental and economic studies, despite acknowledgment from lawmakers of the pipeline’s necessity to provide Americans in the Southeast with reliable and affordable fuel sources for lower-emitting, dispatchable resources that enable the further deployment of non-dispatchable, zero-emission resources. The delay of projects like this has created frustration and bipartisan calls for permitting reform.
FERC’s attempt to shift regional transmission planning and cost allocation is another example of the agency’s attempt to prematurely reshape the grid’s power mix, leading to more reliability issues. Not only would FERC’s proposed policy favor non-dispatchable sources of power, but it would force states that select their own energy mix to shoulder the cost of other states’ conflicting policy choices. In reality, natural gas and other dispatchable sources of power enable the growth and deployment of non-dispatchable resources, making their integration into a reliable power system crucial to overall clean energy success.
In the Northeast, natural gas pipelines were blocked, leaving New Englanders dependent on more expensive natural gas imported from foreign countries with less stringent environmental standards, rather than the abundant resources they could have received from the neighboring Marcellus Shale region. The region is also planning to rely on wind and solar generation to deliver adequate power. Depending on resources that are behind schedule and yet to be constructed is a fast track to leaving Americans in the dark and cold through the long winter season.
In the Midwest, the Midcontinent Independent System Operator is facing shortfalls as coal and nuclear plants, which are utility owned, rate-based assets, retire. Importantly, these are not competitive resources under economic pressure to perform, and there are no clear replacements lined up to ensure the region’s power supply does not dip below its required reserve margin.
California is facing similar issues, the state’s high demand for energy is complicated by droughts that hamper hydroelectric energy, leaving the state reliant on non-dispatchable sources of power like wind and solar that cannot be dispatched in emergencies or through extreme weather. To avoid rolling blackouts in September, California turned to the very natural gas generation it seeks to retire; at one point natural gas generation made up as much as 60% of the state’s energy mix, allowing Californians to stay cool during a heat wave without risking blackouts, showing how reliant even a state like California is on dispatchable resources to ensure reliability.
NERC’s sobering report is not the first wake-up call regulators and legislators have heard, but it should be the most concerning. Lawmakers should take note before they begin to face capacity shortfalls across the country. One of the most important, cost-effective, and easiest things they can do is fill the forthcoming vacancy at FERC with someone who understands that supporting the energy transition and ensuring the grid has adequate access to dispatchable power throughout the year are not mutually exclusive goals. We can do both by taking a holistic approach, and indeed must do so or risk disastrous consequences.
The United States is one of the top energy producers in the world, and Americans should not have to doubt their ability to stay warm and have reliable power this winter. We expect the power grid to keep the refrigerator humming, car charging, and economy running. It’s imperative the Biden administration nominates a FERC commissioner who can set our power grid up for success by prioritizing its safety, reliability, and affordability.