FERC Rejects DOE Rule as Winter Storm Proves Grid Resiliency
In a blow to the coal industry, the Federal Energy Regulatory Commission (FERC) on Jan. 8 unanimously rejected further action on a proposed rule on grid resiliency pushed by the Energy Dept. FERC’s action came as a deep freeze over the Eastern seaboard began to recede.
Proponents of the rule had hoped that the cold weather would demonstrate the need for the DOE’s reforms. In fact, the opposite was true, as most power plants remained online. The cold weather showed “resilience is about transmission and distribution,” not fuel, says Rob Gramlich, president of Grid Strategies LLC.
The DOE had directed FERC to provide payments to power plants that could store 90 days of fuel on site. That would have favored coal and nuclear plants over gas plants that receive fuel through pipelines.
Energy Secretary Rick Perry called for the proposal because he said the grid was at risk from subsidized renewable resources and excessive regulations that were forcing base-load plants into retirement.
Arriving as if it were a test of that theory, Arctic air and a “bomb cyclone” blanketed much of the East Coast with snow and low temperatures on Jan. 3-4. But most power plants continued to perform. One exception was Entergy’s Pilgrim Nuclear Power Station in Plymouth, Mass., which was forced to shut down when a power line to the plant failed. Pilgrim’s closure did not result in reliability issues.
Constraints in New England’s natural gas delivery system led operators to switch to oil to fuel their plants. Oil-fired generation in New England jumped to 35% from 1% , while gas fell to 18% from 49% of the mix.
Transmission grid operator PJM Interconnection, which manages power in the mid-Atlantic and Midwest, also saw a switch in its fuel mix, with coal-fired generation producing more electricity as prices for natural gas, which is also used for heating, spiked. But there were no “significant problems,” says PJM spokesman Ray Dotter.
PJM took a close look at its system after several plants were forced to close during the 2014 polar vortex and PJM introduced changes to ensure system reliability through extreme weather that helped keep the grid running, Dotter said.
In rejecting the DOE’s proposal, FERC also issued an order initiating a new proceeding that directs transmission operators “to provide information as to whether FERC and the markets need to take additional action on resilience of the bulk power system.” Responses are due within 60 days.