FERC Explores How to Manage the Electric Grid to Advance Reliability

The Federal Energy Regulatory Commission (FERC) held its 2022 Reliability Technical Conference on November 10 in Washington, DC. America’s Power President and CEO Michelle Bloodworth participated during a panel discussion on “Managing the Electric Grid to Advance Reliability.” Ms. Bloodworth addressed actions that the Commission, the North American Electric Reliability Corporation (NERC), Regional Transmission Organizations (RTOs) and other stakeholders could take to ensure the reliability of the electric grid.

Read Ms. Bloodworth’s submitted comments here, and highlights below:

The coal fleet is essential for a reliable grid because (1) its high capacity value (two times greater than solar and six times greater than wind) contributes to resource adequacy, and (2) it provides fuel security and essential reliability services (frequency support, voltage control, and ramping/balancing). Unless steps are taken, massive coal plant retirements are expected during the remainder of this decade.

Besides the 110,000 megawatts that have been announced for 2022-2030, there are 93,000 MW of coal retirements that have not been incorporated into reliability planning. This is close to half of the coal fleet retiring in less than 9 years. That doesn’t include further retirements from EPA regulations. 

EPA rules will cause significantly more coal retirements unless the agency takes into account impacts on electric reliability. America’s Power estimates six EPA rules, taken together, will cause coal retirements to rise sharply during 2026-2028 and, therefore, exacerbate resource adequacy challenges in certain regions of the country long before adequate replacement generation or new transmission can be added to the grid.

FERC, NERC, EPA and others can take steps to avoid reliability problems. Because of the massive coal retirements that could occur over the next 9 years, we offer the recommendations, even though some are beyond the direct authority of FERC:

  • NERC should assess the reliability impacts of a realistic number of future coal retirements.  NERC’s 2021 “Long-Term Reliability Assessment” assumed 25,000 MW of coal retirements    during 2022-2030, even though announced coal retirements are almost 4 times greater (more than 93,000 MW) over the same period. A realistic assessment by NERC would provide a better indication of future reliability problems and a baseline against which to gauge the impacts of additional retirements, such as those caused by EPA regulations.
  • NERC should designate EPA regulations as an “emerging issue.” This would bring more collective attention to these regulations and their reliability implications and promote more effective problem solving.
  • FERC should ensure that markets are properly designed to maintain reliability. MISO, for example, has suggested a number of reliability attributes but at the same time indicated that “MISO, and the industry as a whole, are still defining attributes.” FERC should accelerate efforts to finalize reliability attributes and ensure these attributes are properly valued by electricity markets.
  • Federal agencies should conduct a Reliability Assessment (RA) for rules and policies that could adversely impact grid reliability. The RA should identify all risks to grid reliability and describe measures an agency has adopted to prevent grid reliability problems. If a rule is projected to cause the retirement of dispatchable resources, the RA should show that adequate accredited replacement capacity will be placed in service by the time retirements are projected to occur.
  • FERC should direct RTOs to determine whether their Reliability Must Run (RMR) or System Support Resource (SSR) Agreements can prevent reliability problems caused by widespread, not a few isolated, coal retirements. These typically short-term Agreements (one year or less) are a last resort measure, and we cannot afford the failure of a last resort. In addition, the reliability service might not be available unless longer-term Agreements are able to provide stability for fuel suppliers.
  • Last, there are any number of actions EPA could take on its own to avoid causing reliability problems. These include paying careful attention to the concerns of FERC, NERC and grid operators, deferring to states about how to implement many of these regulations, and making regulations as flexible as possible, not prescriptive.