New Potential Compliance Standards Identified at FERC Technical Conference on Reliability

The recently held 2021 FERC Annual Technical Conference on the reliability of the power system highlighted a range of significant challenges facing electric utilities and generators. Over 20 expert speakers engaged with FERC commissioners addressing pressing industry issues including:

• Bulk-Power System Reliability and Security
• Managing Cyber Risks in the Electric Power Sector
• Maintaining Electric Reliability with the Changing Resource Mix Toward Decarbonization

With a focus on the reliability impact of extreme weather and the shortcomings of current system planning approaches, both NERC and FERC conference participants opened the door to potential forthcoming compliance standard enhancements or changes.

Conference Highlights and Key Takeaways

NERC Recommends Reliability Standard Enhancements

As a major participant in the conference, representatives from NERC discussed both the recently released 2021 NERC State of Reliability Report (a historical assessment of system performance) and the 2021 NERC Risk Priorities Report (a forward-looking reliability risk assessment and prioritization). The NERC speakers noted that overall reliability continues to improve despite the industry’s rapid decarbonization driven transformation. They acknowledged that recent loss of load events in California and Texas indicate that there are important challenges that the industry must overcome to maintain reliability in light of extreme weather impacts on power system performance.

NERC called the FERC Commissioner’s attention to NERC 2021 RISC Report which defined major risks to reliability as:

• Grid Transformation
• Security (Cyber and Physical)
• Extreme Events (Weather and Other Sources)
• Critical Infrastructure Interdependencies (Communications, Gas)

NERC advocated for mandatory reliability standards enhancements in the future that could include:

• Requirements that establish a process for determining the ambient temperature and weather conditions to which plants must weatherize
• Requirements for Generator Owners to identify and implement freeze protection measures for cold-weather-critical components and systems
• Generator Owner obligations to develop and implement Corrective Action Plans when their facilities experience outages, failures to start, or derates due to freezing
• New requirements and seasonal assessment protocols that better account for expected generator availability during cold weather, considering factors such as contractual arrangements for natural gas supply

Former FERC Commissioner Discusses Reliability Challenges

Former FERC Commissioner Cheryl LaFleur noted that as the generating resource mix continues its transition away from resources capable of providing energy on-call, toward decarbonized resources wholly reliant on weather as their energy sources (solar and wind), instances of energy shortfalls may occur more frequently. Coupling the variability in generation with increased electricity demand from the electrification of the heating and transportation sectors will create a significant reliability risk if not dealt with proactively.  She also noted that currently, planning processes are capacity (not energy) oriented and do not plan the power system for low probability, high impact severe weather events in a systematic manner.

LaFleur stated her view that there are three simultaneous challenges to reliability:

• The ongoing transformation of the electric generation resource mix in response to climate change
• The increasing demands on the grid due to the emerging electrification of other sectors of the economy (transportation and heating)
• The increasing severe weather events that impact grid reliability

Commissioner LaFleur also referenced the ongoing debate regarding the need for standard requirements to implement regional assessments of resource adequacy.  She expressed concern that the future power system will face increased risks related to energy adequacy and security, especially during extreme weather events. LaFleur advocated for new NERC Reliability Standards to require a forward-looking assessment of energy adequacy risks considering extreme weather events and contingences.

In general, many speakers noted that the current approach of planning the power system for the future based on recent experience may be inappropriate given the performance disconnect between the expected decarbonized generation portfolio performance and increased demand for electrification in other sectors of the economy.

Next Steps

If due to recent experience your company is planning its system based on current approaches, TRC can help assess how well your system is positioned for a more challenging future. Our technical teams have expertise in all power generation and power delivery engineering subject areas. We can provide an independent review of your current generation and delivery facilities and assess your system’s ability to perform as desired. TRC can help your company meet future requirements and performance expectations.

Resources

• FERC 2021 Technical Conference Materials (Agenda and Panelist Prepared Remarks)
• FERC 2021 Technical Conference (Media Link)
• 2021 NERC Risk Priorities Report
• 2021 NERC State of Reliability Report (2020 System Performance)

About TRC

TRC’s approach to power system planning, design and operations balances solutions that incorporate appropriate standards, regulatory requirements, compliance obligations and new knowledge from the review of disturbance analysis. TRC closely follows NERC’s disturbance analysis reports to discern trends and provide the most forward-looking guidance to its clients. Our work for public and private sector clients is a testament to our understanding of power system operations and planning and our successful application of technological solutions in a constantly evolving business and regulatory landscape. TRC advises numerous clients on how to stay ahead of the curve regarding the technical aspects of their mandatory compliance obligations.

This regulatory update is a service to TRC’s utility clients, helping keep you informed of issues that impact your company’s electric system security risks along with related topics regarding regulatory developments to help you achieve your company’s business goals.