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Senate Hearing on Bomb Cyclone's Energy Impact Rejoins NOPR Debate

FERC has set aside the Department of Energy's (DOE) controversial notice of proposed rulemaking (NOPR) that would have subsidized the coal and nuclear industries, but the debate about electric grid reliability, resiliency and fuel mix continues.

At a hearing of the Senate Energy and Natural Resources Committee in Washington, DC, Tuesday, Senators from coal-heavy states repeatedly asked witnesses from regulatory agencies and independent system operators (ISO) if the grid could have withstood the 2013-2014 polar vortex and this winter's bomb cyclone without backup coal-burning plants.

"I think in this recent weather event we wouldn't have seen any widespread outages absent coal," said Federal Energy Regulatory Commission Chairman Kevin McIntyre. "That said, coal was the key contributor. It wasn't exempt from operational problems -- there were some issues as I understand it with frozen coal piles at certain sites and so on -- but it was, no question, the key contributor."

Coal provided 38% of the load on average during the bomb cyclone, but markets could have met the challenge with other resources if coal had not been part of the mix, according to Bruce Walker, assistant secretary of DOE's office of electricity delivery and energy reliability.

"But when we start relying on those other resources, things like natural gas and things like oil, we also increase our exposure, because now the critical infrastructure in this country is not the coal sitting at a plant, or a nuclear facility where I've got the nuclear fuel there; I've got to rely on thousands of miles of pipeline or transportation systems to get oil to the locations. So the challenge to manage this, particularly facing the threats we have today -- mostly physical and cybersecurity -- really should give us pause to step back and think about the diversity mix.”

Last month, FERC unanimously rejected the DOE's NOPR, which had called for changes to the nation's grid reliability and resilience policies, and instead directed operators of regional wholesale power markets "to provide information as to whether FERC and the markets need to take additional action on resilience of the bulk power system” [AD18-7].

Testimony about the more recent extreme cold snap at Tuesday's hearing demonstrated that many lessons were learned from the polar vortex, according to Chairman Lisa Murkowski.

"For example, there now appears to be improved coordination between the electric and gas systems, "she said. "The RTOs [regional transmission organizations] and FERC have reformed market rules and improved business practices. NERC [North American Electric Reliability Corp.] has updated its approaches. And that is all good news.

"The bad news is that we have not addressed the more difficult and fundamental challenges for electric and gas infrastructure. For example, gas pipeline infrastructure remains too constrained. Broader policy changes are not sufficiently taking into account increasing risks that, in future years, system operators may have to turn to intentional service interruptions -- otherwise known as 'load shedding' or rolling blackouts or brownouts -- to manage certain peak periods."

The bomb cyclone spread record low temperatures across the Northeast, but customer outages were minimal, Walker said.

"What was apparent during this weather event was the continued reliance on baseload generation and a diverse energy portfolio," he said. "Without action that recognizes the essential reliability services provided by a strategically diversified generation portfolio, we cannot guarantee the resilience of the electric grid. The grid's integrity is maintained by an abundant and diverse supply of fuel sources today, especially with onsite fuel capability. However, the real question is whether or not this diversity will be here tomorrow."

The Dec. 27-Jan. 7 cold event produced three of PJM Interconnection's 10 record winter peak demand days, but the grid and generation fleet performed well, according to PJM CEO Andrew Ott. "Even during peak demand, PJM had an abundance of reserves and capacity," he said. More than half of PJM's output during the bomb cyclone came from coal and nuclear units, he said.

"It's clear we couldn't survive without gas, we couldn't survive without coal, we couldn't survive without nuclear. We need them all in the moment. The key is, each of these bring to the table reliability characteristics. Each of these were online when we needed them...

"[But] the pricing doesn't always reflect that. Therefore, when they go off to sell their energy forward, the fact they were on for reliability during the cold weather isn't reflecting in the forward price. That's unfair, that puts them at a disadvantage and we need to fix it."

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