Winter Storm to Test Northeast Grid as FERC Tees Up Decision on DOE Grid Rule

Via Utility Dive:

Frigid conditions in the Northeast U.S. are stepping up demands on the power grid as federal regulators prepare to act on a controversial coal and nuclear subsidy rule from the Trump administration.

Meteorologists expect Winter Storm Grayson to bring heavy snow, winds and coastal flooding to New England and the Eastern seaboard Thursday into Friday, followed by bitter cold air that could set record low temperatures.

The storm could recreate conditions similar to 2014’s Polar Vortex — an extended cold snap that pushed the PJM grid to the limit, disrupting gas flow to generators and freezing coal supplies at plants.

That episode is frequently used as justification by the Department of Energy for its proposed grid resilience rule, which would provide cost recovery to plants that keep 90 days of fuel supplies onsite. The Federal Energy Regulatory Commission is set to act on the controversial proposal on Jan. 10, and supporters of the rule say it would help ensure the grid can endure or bounce back from outages in extreme scenarios.

Critics, however, say the rule would do little to enhance the reliability or resilience of the power grid, particularly in the Northeast, where the coldest weather is forecasted this week. Grid operators have put major reliability reforms in place since the 2014 Vortex, and the cold weather is likely to reveal more about those policies’ effectiveness than the validity of the DOE’s proposal.

The Polar Vortex argument

Secretary of Energy Rick Perry and some of his key deputies have used the 2014 Polar Vortex to justify their controversial grid rule.

In October, Perry repeatedly referenced the Vortex at a House committee meeting on the DOE proposal, telling lawmakers the cost of his plan should be “secondary” to keeping the lights on in emergencies.

“We’re probably going to have another one,” Perry said of the Vortex. “And if we are, shouldn’t it be our responsibility to make sure that when your constituents turn the lights on that they’re not having to make the decision between staying warm and having light?”

Central to that argument is the assumption that coal and nuclear plants — which would be the chief beneficiaries of the DOE proposal — performed better during the Vortex than gas generators and other resources. Sean Cunningham, a former coal lobbyist who now heads DOE’s Office of Energy Policy and Systems Analysis, made that point in a speech before state utility regulators this fall.

“What if they weren’t there?” Cunningham said of the baseload plants. “The loss of generation could have been catastrophic.”

Coal and nuclear interests took up that line of argument this week, saying their generators will help ensure reliable service during this cold snap. “Attention FERC Commissioners: Coal shines when the temperature drops,” the National Mining Association wrote in a blog post.

Critics say the DOE argument overstates the contribution of coal generators, which also saw service interruptions due to frozen fuel supplies and mechanical difficulties. A review of the event from the North American Electric Reliability Corporation (NERC) found that 55% of forced outages during the Vortex affected gas generators and 26% involved coal plants.

Critics point out that a number of other resources performed better in that episode. Nuclear outages were low during the Vortex, and other resources stepped in to fill the gap left by other outages.

“When coal piles froze and extreme cold temperatures caused unexpected mechanical failures in power plants, it was wind power and demand response that kept the lights on,” Arvin Ganesan, a former Obama EPA official now at trade group Advanced Energy Economy, wrote in Utility Divethis fall.

Analysts also point out that generator outages of any type are rarely the cause of power interruptions to customers — and those that are typically don’t involve the fuel supply issue targeted by the DOE proposal. An Oct. 3 analysis from the Rhodium Group found 0.00007% of the total customer outage hours between 2012 and 2016 were due to fuel supply issues — and most of those stemmed from a coal generator. Coal plants also saw problems during last year’s hurricane season, with two generators in Texas switching to gas when their coal piles were flooded.

The posturing over coal generation is unlikely to have much credence for the current cold snap, however. While coal burn was up this week in PJM’s Mid-Atlantic electricity market, the resource has all but disappeared from the regions expected to be hit hardest by the storm. In New York and New England, a different set of resources will be put to the test — with different implications for the DOE proposal.

Read the full article here.