On October 16, the Federal Energy Regulatory Commission (FERC) hosted a major conference focused on electric reliability. Participants discussed the urgent need to preserve baseload generation and the harm to electric reliability caused by EPA rules. You can view the entire hearing here: 2024 Reliability Technical Conference. Below are some excerpts from the conference:
FERC Commissioner Mark Christie described the gravity of the situation stating, “This country is heading towards a reliability crisis … we are seeing a rapid, unsustainable, dangerous loss of dispatchable generating resources, predominantly coal and gas. They’re retiring far too quickly for reliability.” Referencing EPA’s Carbon Rule, Commissioner Christie continued, “The best thing the federal government could do right now is if EPA withdrew its power plant rule, which is going to have a devastating impact on grid reliability [and] is going to accelerate these retirements.”
FERC Commissioner David Rosner also spoke to these concerns: “[T]he pace of change on the supply side of the equation …” poses significant challenges. He highlighted evolving threats from weather events and the decline in fuel diversity driven by recent EPA rules, emphasizing the need for a careful assessment of grid reliability.
Jim Robb, President and CEO of the North American Electric Reliability Corporation (NERC), said that “replacement generation lacks the abundant reliability characteristics of the retiring resources,” and “at the end of the day, while a lot of people would like to say we can solve this problem through transmission, we can solve this problem through batteries … we need generation in this country.”
In addition to these remarks, written testimony filed for the conference also raised serious concerns:
PJM
“PJM currently projects a potential shortfall in generation supply by the end of this decade. This is based on our observation that projects with interconnection service agreements are not constructing fast enough measured against the projected pace of retirements and load growth ….”
MISO
“The challenge is that weather-dependent electric generation resources do not possess the same operational characteristics as the power plants that are retiring. As a result, certain system reliability attributes–such as fuel assurance and dispatchability– are declining … the changing resource mix is reducing electricity reserve margins and the availability of dispatchable electricity … the MISO region is experiencing a rapid growth of wind and solar energy and the retirement of many coal and gas power plants. Because weather dependent resources have different characteristics than the thermal units they are replacing, the region is seeing a trend toward tightening reserve margins and reduced availability of dispatchable energy, creating new challenges in ensuring reliability.”
NERC
“The supply of electricity is not growing fast enough to meet the growing demand for electricity. The frequency of actual and near-miss reliability events is a warning sign. Unless reliability is appropriately prioritized during the energy transition, North America is at risk of more frequent and more serious long duration reliability disruptions, including the possibility of national consequence events … we must manage the pace of the transformation in an orderly way, which is currently not happening. Conventional generation is retiring at an unprecedented rate ….”
These comments highlight the stark contrast between EPA regulations, especially the agency’s Carbon Rule, which are designed to force coal power plants into premature retirement versus warnings by officials and experts, like those who spoke at the conference, that we need more dispatchable electricity resources to keep the lights on.
Our Proposal
America’s Power has proposed a few simple ideas to help prevent grid reliability threats from getting worse:
First, dispatchable generating capacity should not be retired until replacement capacity is in operation, not just planned or under construction. The replacement capacity should have at least the same accredited capacity and essential reliability attributes as the retiring capacity.
Second, any additional electric transmission that is needed because of the replacement capacity should be built, not just planned or under construction. (The cost of any new transmission should be considered in deciding whether it is economical to retire dispatchable capacity.)
Third, grid operators should identify and value all attributes that are necessary to maintain grid reliability.
Last, EPA must design its rules to ensure they will not undermine grid reliability. Any rules, such as the Carbon Rule, that are a threat to reliability should be rewritten or overturned by the courts.