FERC Addresses Future Reliability Risks at Technical Conference

On October 16, 2024, the Federal Energy Regulatory Commission (FERC) held its annual Commissioner-led Reliability Technical Conference to discuss issues related to maintaining the reliability, resilience and security of the Bulk-Power System. The pressing concern for review during the meeting was the challenge that the supply of electricity is not growing fast enough to meet the growing demand from customers or replenish retiring generation.

Factors contributing to inadequate power supply include:

• Rapid transformation of the generation resource base, with incomplete replacement of the retiring generation’s load.
• Bulk power system and generation resource reliability performance challenges associated with the replacement of retired conventional units with variable inverter-based resources.
• Impact on the grid due to wide-area, long duration extreme weather events, which are becoming more frequent.
• Increased demand due to vehicle/building electrification, industrial repatriation, data-center development, and load forecasting limitations in the face of new large load developments.
• Slow development of new critical energy infrastructure necessary to support grid resilience.
• Lack of electricity and natural gas systems coordination.
• Persistent cybersecurity and physical security threats to power facilities.

Conference Overview

The conference was organized into two panels. The industry’s current and future reliability requirements were the focus of the first panel, addressing the major issue of indirectly proportionate trend lines for electricity supply and demand. The Commission and NERC explored how they can best form reliability standards that serve the new resource mix. Evolving security threats were also discussed along with ways the regulatory bodies and industry players can address them.

In Panel 2, ways to measure resource adequacy beyond traditional planning reserve margins were discussed, considering the new energy mix. FERC and NERC aimed to understand what, if anything, they can do to promote the usage of new measures. Challenges associated with the shifting landscape were also addressed, specifically the increased load growth from data centers and other large, anticipated loads. Existing resource adequacy mechanisms became a focal point and whether they can procure appropriate and sufficient resources to meet expected future demand. Lastly, FERC reinforced its commitment to work alongside states to identify and proactively mitigate resource adequacy risks.

Key Takeaways

Various speakers provided their perspectives regarding priorities and necessary actions related to policies, analysis methods and mandatory NERC standards. Examples include:

• NERC and FERC Coordination: Developing and adopting “standardized” risk-based metrics for assessment that reflect energy-limited resources, extreme weather events, and demand variability. Further, a “standardized” approach and methodology for calculating these will need to be fully detailed.
• Promoting Scenario-Based Planning: NERC is leading efforts to promote scenario-based resource adequacy assessments (e.g., worst-case scenarios, extreme weather events, accelerated retirements, and prolonged low renewable output periods.
• Encouraging States to Update IRPs (Integrated Resource Plans): States and local regulatory bodies could consider requiring utilities to incorporate these metrics and risk assessments into their IRPs.
• Preserve Needed Resources: As reserve margins continue to grow smaller, states should also be encouraged to maintain generation and fuel supplies that are critical for reliability.

Next Steps

In response to the growing reliability risks, FERC and NERC are likely to accelerate the development of standardized risk-based metrics to assess resource adequacy and resilience, prioritizing their integration into planning processes and requirements. FERC is also expected to address improving coordination between electricity and natural gas systems to mitigate energy infrastructure bottlenecks. Organizations should prepare for potential interim measures and the possibility of changes to NERC standards. NERC is advocating for slowing the retirement of critical conventional generating resources. TRC clients are advised to review the technical conference submittals and the video recording of the event to inform their business planning and NERC compliance activities.

Resources:

Technical Conference Agenda
Commissioner-Led Reliability Technical Conference
Panel 1 Discussion – Video

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