Grid operators grapple with resilience issue

Source: Edward Klump, E&E News reporter • Posted: Thursday, April 19, 2018

HOUSTON — Four U.S. electric grid CEOs were on one panel yesterday. There’s only one place the discussion could start: resilience.

“Resilience is going to be sort of an aspiration, not a destination, because I don’t know that we’re ever going to say, ‘We’re there, we’re done,” said John Bear, CEO of the Midcontinent Independent System Operator (MISO).

Bear’s comments came during the Gulf Coast Power Association’s spring conference, demonstrating that resilience remains the word of the moment to describe power-sector concerns about keeping the lights on when natural or man-made disasters strike. Observers continue to watch for possible action from the Department of Energy and the Federal Energy Regulatory Commission to help struggling coal- and nuclear-fueled power plants.

Energy Secretary Rick Perry has given mixed signals on a potential response to FirstEnergy Solutions Corp., which requested help for its aging power plants (E&E News PM, April 12). Perry previously sent a proposal to FERC that suggested changing market rules to shore up baseload generation. That idea was turned back, though FERC continues to study grid resilience.

Bear said MISO believes its region is resilient right now, but there are ways to improve. The dynamic of a changing resource mix provides significant challenges, he said, as does the need to work with neighbors.

Nick Brown, CEO of the Southwest Power Pool (SPP), which has members in a central swath of the country, said thinking about the concept of resilience is appropriate. He said regions are becoming more dependent on one another because of interconnectivity. He cited cybersecurity as an area that deserves particular focus.

Andy Ott, CEO of PJM Interconnection, which has a footprint that includes parts of the Midwest and Mid-Atlantic regions, said he thinks resilience is too multidimensional to have one definition.

For example, Ott said, problems could stem from a purposeful attack instead of being an “act of God.” He said infrastructure includes the power network as well as networks tied to fuel delivery, information technology and telecommunications.

Bill Magness, CEO of the Electric Reliability Council of Texas (ERCOT), the state’s main grid operator, opened the session with a few comments before asking Bear about resilience. He later echoed Bear’s aspirational comment in saying it’s hard to imagine being done with something like cybersecurity.

Ott noted that states have different views as they realize competition means some generators could exit the market.

“The conflict there, of course, now becomes not just a conflict within the state, but now I got other states’ governors calling to say, ‘Hey, there’s a cost shift going on here,'” Ott said.

After the panel, Pat Wood III, a former Texas regulator and a former FERC chairman, wondered about what he called “D.C. navel-gazing” over resilience. He said the job of the industry is to “keep the freakin’ lights on” in the short and long term. Wood suggested a focus on areas such as integrating more wind, cybersecurity concerns and extreme weather events.

“If resilience is a code word for propping open uneconomic plants, we ought to be no part of that,” Wood said in an interview. “That needs to sink on its own poor merits.”

Thinking beyond energy

Paula Gold-Williams, CEO at CPS Energy of San Antonio, said yesterday that she understands Perry’s role and respects the creativity he has brought.

“He’s thinking about reliability,” she said in an interview yesterday. “He’s thinking about the things that are important not just to energy but to national security.”

Gold-Williams said every market is different and declined to give a preference regarding potential action on the issue. State regulators retain primary jurisdiction over Texas’ main power market.

Ott, the PJM CEO, wondered how certain states with renewable portfolio standards may proceed. That could include whether they figure out how to bring in renewables from elsewhere and how to get transmission built, or whether they look at offshore wind or different standards. Ott also is keeping an eye on developments in New England in terms of fuel security and a fairly restricted set of gas pipelines.

Regions such as SPP and ERCOT have been juggling periods with high wind penetration. And Brown said he’s watching what happens with generation assets elsewhere.

“What occurs in New England and PJM as they deal with it, I know we’re going to have to deal with the same thing,” he said.

MISO’s Bear said he will look at future FERC decisions related to storage and distributed energy resources. He suggested the best source of storage could be “a big, broad regional grid that has diversity in it.”

While resilience questions remain, there also was talk about the potential for an organized market approach in new parts of the U.S. West.

Brown touched on the struggle in the political arena to make decisions. He wished for attention on policy around distributed generation and microgrids, which he said could be a tremendous resource for wholesale markets.

The issue of inaction was part of the message James Baker III brought here yesterday, as well.

The former secretary of State under President George H.W. Bush discussed a carbon dividends plan floated last year (Greenwire, Feb. 8, 2017). Baker said it could be a way to overcome a partisan split over climate policy. The plan includes a carbon tax and aims to reduce greenhouse gas emissions and certain regulation.

Baker lamented partisan animosity between Republicans and Democrats, saying it’s hard to get things done. And he said he still has “serious doubts about exactly what effect man-made emissions may be having on the climate.”

But Baker said the future effects of a changing climate are marked by uncertainty, and he called for prudent measures to limit the scale of potential damage.

Baker said the plan he touted “can serve as a really good insurance policy just in case the Al Gores of the world happen to be right.”