USEA 20th Annual State of the Energy Industry Forum
America’s Power President and CEO Michelle Bloodworth recently spoke at the United States Energy Association’s 20th Annual State of the Energy Industry Forum, participating in a panel discussion on the challenges to supplying energy resources during a time of increasing government regulations that favor some fuels over others. Ms. Bloodworth was joined by the presidents and CEOs of the American Gas Association, the American Public Power Association, the Large Public Power Council, and the National Rural Electric Cooperative.
Ms. Bloodworth’s opening statement:
Let me start by saying that America’s Power supports all electricity resources that help to maintain reliable and affordable electricity. All resource types complement each other at different times and in different ways. The coal fleet has been the foundation of the electric grid, and it will continue to be so for the foreseeable future because it delivers dependable, resilient, and affordable electricity.
But the availability of dispatchable resources is being called into question. So, I am going to begin with some of the challenges facing the U.S. coal fleet, and then share what we see as a few opportunities.
Jim Robb, President and CEO of the North American Electric Reliability Corporation (NERC), has said, “The technology for a non-synchronous type of generation grid is just not there, that it’s going to take years, and thermal dispatchable generation will be needed as a bridge to the future.” It doesn’t get any clearer than that. And he is not alone.
Federal energy officials, grid operators, and electricity providers have voiced similar warnings in more than two dozen congressional hearings in 2023 alone. Part of the reason is that coal acts as an insurance policy when other resources are not available. So, one of our biggest challenges is ensuring policymakers have an appreciation that the grid transition cannot happen without coal, which is needed when other resources are unavailable or are too expensive.
The second challenge we face is the proliferation of regulations meant to eliminate fossil resources without any regard for their impact on grid reliability. Forty percent of the U.S. coal fleet has retired, and one of the primary reasons is overly stringent Environmental Protection Agency regulations. It bears mentioning that the Agency is presently developing or implementing six rules that will force coal plants to shut down, including the much-discussed proposed Carbon Rule.
Now, let me pivot to several potential opportunities.
The first is the development of technologies to reduce emissions, and that effort is underway. America’s Power has members that are pursuing carbon capture technology and are working with the government to find a path forward. Just recently, Minnkota Power’s Project Tundra was selected as a carbon capture demonstration project by the U.S. Department of Energy. We hope that there will be more, but policymakers need to recognize that the technology is going to take time and significant investment if it is to succeed.
But the most important opportunity is to delay coal retirements at least until there is replacement capacity with the same reliability attributes, and accredited capacity as coal-fired power plants. That starts with grid operators and utility commissions more actively communicating that we urgently need to address the inevitability of a reliability crisis if the loss of fossil resources is not slowed.
The good news is that we are seeing that begin to happen. Recently, four of the largest grid operators submitted comments on the proposed Carbon Rule, writing in very clear terms that, if adopted as the Agency proposes, it could exacerbate existing grid reliability challenges.
Grid operators, state public utility commissions, and utility companies are also going beyond just issuing warnings to now take decisive steps to rollback closures. In two recent cases, PJM Interconnection and the South Dakota Public Utilities Commission asked generator owners to postpone closing coal plants in Maryland and Minnesota, citing reliability concerns. If they change course, the companies will join utilities in 13 states that have already delayed the retirement of 14,000 MW of coal-fired generation.
I would also like to add that there is an opportunity for Congress to act, and to do so with strong bipartisan support to address what the experts predict will be a reliability crisis. A recent survey found grid reliability to be a major issue across all demographics, with 85 percent of respondents concerned about electricity shortages and outages.
Finally, last week’s winter storms offer a cautionary lesson for those who think fossil fuels are easily replaced. Looking at two of the largest RTOs on one of the worst days and during peak demand, dispatchable resources, like coal, provided 90 percent of generation in the PJM region and 77 percent in the Midcontinent Independent System Operator (MISO) region. And we know from NERC’s 2023 Long-Term Reliability Assessment that replacements are lagging now and will continue to do so for years.
In closing, we encourage others to join the growing list of organizations who support slowing the retirement of coal units across the country before we further lose access to an energy resource that is critically important to ensuring a continued reliable and affordable electric grid.