August 1, 2018 by John Moore, Director, Sustainable FERC Project & Gillian Giannetti, Staff Attorney, Sustainable FERC Project
The Federal Energy Regulatory Commission (FERC) held its annual conference on electric system reliability this week. Unsurprisingly, the topic of resilience was featured throughout and the message from most energy experts was clear: power grids should focus on implementing “no regrets” actions—or those that will improve grid resilience against all potential threats—as opposed to narrowly focusing on “fuel security,” the pet issue of U.S. Department of Energy Secretary Rick Perry.
This wise approach ensures that regional grids are focusing on steps that will improve the customer experience. In contrast, narrowly focusing on fuel security is misguided and misses the target, since fuel supply issues cause a miniscule percentage (0.00007 percent) of customer outage-hours. Focusing just on the type of fuel also risks goals being manipulated for political ends and to support illegal actions like the proposed coal and nuclear bailout.
Examples of “No Regrets” Actions
The experts at the conference raised several examples of “no regrets” actions that regional grids and the North American Electric Reliability Corporation (NERC) (which develops and enforces grid Reliability Standards) can take to improve reliability and resilience. Many of these recommendations are consistent with a report issued in May that was commissioned by NRDC and Environmental Defense Fund. That report, written by Alison Silverstein (a panelist at the conference), Rob Gramlich, and Michael Goggin, was praised repeatedly by FERC Commissioner Robert Powelson during his conference remarks. These recommendations include:
- Perform forward-looking, fuel-agnostic grid assessments to identify the actions that will most improve the customer experience. As Ms. Silverstein noted, “many of the disruptions that occur have common consequences regardless of the thing that caused it.” As such, FERC must “not just get too focused on what is the cause of the problem but spend a lot more time working on the common consequences and common methods and processes to recover” from threats. A North Carolina utility representative similarly noted that FERC, the regional grids, and utilities should choose actions carefully and be mindful of the impact that new “policies, procedures and positions … [have] at the end of the day on folks paying their bills.”
- Focus on improving the distribution system, the poles and wires that deliver electricity to our homes and businesses. According to government data, 90 percent of electricity service interruptions occur on the distribution system. So, FERC, NERC, and the grids should focus on reliability and resilience measures that both strengthen the distribution system and reduce customers’ dependence on it. Examples include things as seemingly minor yet critical as tree-trimming (given that downed trees cause many customer outages) to broader goals such as improving gas-electric coordination, supporting the integration of rooftop solar and other distributed energy resources, increasing energy efficiency and demand response, and improving cybersecurity.
- Increase coordination and cooperation across regional grids. For example, a representative from the New York Independent System Operator (NYISO) stated that he had seen “a tremendous amount of resiliency offered by transmission interconnects with [NYISO’s] neighbors,” both during emergencies and in day-to-day operations. Similarly, a representative from American Electric Power noted that more coordination among regions would enable grids to harness the “full capability” of the multiple regions during high-impact events. Likewise, NRDC and other public interest organizations’ joint comments to FERC this Spring supported more coordination among neighboring grid regions to improve both resilience and day-to-day reliability.
- Support programs that increase the interconnectivity between urban and rural communities, such as the expansion of broadband access in rural areas. This was an area of particular interest to FERC Commissioner Neil Chatterjee, who is passionate about rural issues.
Examples of Things FERC Should Avoid
Many panelists told FERC and NERC to avoid imposing prescriptive and limiting answers to these reliability and resilience questions. This includes avoiding the imposition of universal fuel security standards. While NERC CEO Jim Robb stated that he is not “close-minded” to the imposition of fuel security standards, he also felt (and we agree) that NERC, in coordination with the regional grids, is able to address any fuel security issues that may arise within its existing procedures.
Most importantly, the government should avoid hurting the pocketbooks of ordinary people without a benefit. The proposed coal and nuclear bailout—not mentioned at the conference yet the elephant in the room—is a prime example. While cost estimates vary widely (see here, here, and here as some examples), experts, including industry groups, agree that a bailout for aging and uneconomic coal and nuclear power would cost customers billions of dollars. It would also potentially undermine grid reliability and resilience rather than strengthen it.
Without a demonstrated crisis for which the bailout is tailored to successfully address, such a policy would be a raw deal to U.S. energy consumers.
That’s a result that all of us would regret.
The views expressed in this blog are those of the author, and do not necessarily represent the views of the Sustainable FERC Project or Natural Resources Defense Council.