Document jy8rvkR6bpjnzevKYza5KrZ69

What Five Grid Operators Said about Resilience Paul Bailey & Michelle Bloodworth ACCCE O n January 8, FERC issued an order that did two things: first, it terminated its rule on Grid Reliability and Resilience Pricing that was proposed by DOE last October to help prevent the premature retirem ent of coal and nuclear power plants* and, second, it initiated a new proceeding to evaluate the resilience of the bulk power system (BPS) in wholesale electricity m arkets." (The BPS is comprised of electricity generation and transmission facilities but not local electricity distribution networks.) As the first step in the new grid resilience proceeding, FERC asked the RTOs/ISOs (grid operators) to answer 25 questions by March 9. Comm ents from other stakeholders are due May 9. Because two-thirds of the nat'on's coal fleet*" is located in five RTO/ISO regions, we reviewed the comments of these five grid operators. These are our big-picture, nuance-free takeaways from their comments: ISO-ME has a major fuel-security risk because of t' e reg 'on 's dependence on natural gas and the retirement of coal and nuclear generating capacity. PJM supports further steps by FERC to address grid resilience. MISO, SPP and ERCOT said, in so many words, that their grids are resilient. (Note: There is no universally agreed-on definition of resilience, nor are there any criteria or metrics for determining whether the grid is resilient. This is part of the reason for the new FERC proceeding.) We also excerpted below a few statements from their comments*": ISO-NE " T e - ost s'gn'f'cant resT ence c ` allenge's fuel secur'ty - or the assurance that power plants w'll ' ave or be able to obta'n t' e fu el t' ey need to run." (p. 1 of ISO-NE comments) "ISO-NE recognizes that fu el security is just one aspect o f the bulk power syste- 's resilience; however, it is the most significant challenge fo r the New England bulk power system's resT en ce, and it currently has no defined long-term solut'on." (P-4) Page I 1 Sierra Club v. EPA 18cv3472 NDCA Tier 1 ED 002061 00084033-00001  "C' allenges w't' fu el procu re- ent, transportat'on and storage are - ost acute with natural gas ..." (p. 5) "T e s' 'ft away f r o - generators w't' on-site fu el to natural gas-fired generators rely'ng on "'ust-in-t'-e' fuel-delivery infrastructure has further exposed the V - 'tat'on o f New England's ex'st'ng fu el-d eliv ery system and heightened the reg'on's fu el secur'ty r's"." (p. 28) "... New England continues to see the retirem ent o f coal, oil, and nuclear power plants, which are needed to maintain reliability when the natural gas-fuel infrastructure is unavailable to the generators. " (p. 7) PJM "T` e Co-- 'ss'on needs to prov'de ... - etr'cs ... to apply to res'l'ence vulnerab'l'ty and t' reat analys's. " (p. 5 of PJM comments) FERC should "[rjequest that all RTOs su b - 't ... tar'ff a - en d - ents, fo r any proposed market reforms to address resilience within nine to twelve months from t' e 'ssuance o f a F'nal Order 'n t' 's doc"et." (p. 6) FERC should "[ajrt'culate 'n t' 's d o c"et t' at t' e ... RTOs ... [have] an obligation to assess res'l'ence." (p. 5) "[TV e spec'f'c [res'l'ence] r's"s to be analyzed and t' e - easur'ng cr'ter'a need to be fu rt' er developed." (p. 19) ''[T]'ere 's add't'onal w or" to be done ... 'n order to address t' ese [res'l'ence] risks that go beyond what is needed fo r - eet'ng ex'st'ng rel'ab'l'ty standards." (p. 19) "RTO w' olesale electr'c'ty, A ncillary Service markets, capac'ty - a r "ets ... were not or'g'nally des'gned w't' res'l'ence 'n - 'nd." (p. 66) MISO "MISO's g r'd 's res'l'ent." (p. 2 of MISO comments) "... MISO does not ' ave any '-- 'nent or '-- ed'ate res'l'ence concerns . . . " (p. 2) "]T]` e MISO reg'on 'as successfully ensured res'l'ence (and rel'ab'l'ty) for decades." (p. 6) "... MISO recently initiated an in-depth study to identify potential consequences that may occur in the event o f natural gas pipeline contingencies." (p. 23) "[R JesT ence 's not "ust a fu el secur'ty - atter." (p. 3) "Future res'l'ence endeavors - ust balance r's" w't' costs to c o n s u - e r s ." (p. 6) "Gr'd res'l'ence's a nat'onal 'ssue t' at broadly '- pacts t' e bul" power sy ste- . " (P- 2) SPP "SPP bel'eves t'e current NERC construct fo r cont'nually - on'tor'ng and enhancing the NERC reliability standards is sufficient to address current and fu tu re needs with regard to enhancing resilience ..." (p. 18 of SPP comments) Page I 2 Sierra Club v. EPA 18cv3472 NDCA Tier 1 ED 002061 00084033-00002  The risk of over-dependence on any particular fuel type "has been thus far - 'n'- al 'n SPP ..." (p. 5) "SPP supports fu rt' er d'scuss'on on w' 'c' types o f e x tr e -e scenar'os s' ould be considered in studies that RTOs perform ..." (p. 7) "SPP 's 'n t'e early stages o f develop'ng a study process t'at w'll focu s on generat'on ret're- ent's '-p a c t to rel'ab'l'ty and res'l'ence." (p. 8) "Changes to requirements to address resilience could increase the costs o f tran s- 'ss'on owners' sy ste- s, and t' ose 'ncreased costs would u lt'- ately '- pact transmission customers and their end-use custom ers." ( p. 19) ERCOT "ERCOT's scarc'ty pr'c'ng - e c ' a n ' s - s are des'gned to allev'ate t'e need fo r many resilience-based regulatory con trols." (p. 5 of ERCOT comments) "One o f t'e - ost cr't'cal e le -e n ts o f sy ste- res'l'ence 's ensur'ng t'at t'e transmission system is planned in such a way as to ensure continued operations follow 'ng an unexpected outage . . . " (p. 7) "If ERCOT d eter- 'nes t' at [a] ret're- ent would cause a [p roble- ], t' en ERCOT may seek to negotiate a reliability-m ust-run (RMR) agreem ent with the generat'on owner ... The availability o f RMR agreements thus provides an important reliability backstop ..." (p. 12) "Anc'llary serv'ces play a cr't'cal role 'n ensur'ng sy ste- res'l'ence." (p. 13) Black-start generators "... provide resilience by enabling restoration o f the ERCOT system in the event o f a partial or complete loss o f p ow er." (p. 15) Recently, DOE issued a report that highlights the resilience of the coal fleet during the Bomb C yclone.v The report is a case study for why we need to preserve coal-fueled generation. However, more than a third of the coal fleet nationwide has retired or is expected to retire.vi DOE thinks these retirem ents may be underestimated.TM There are any number of steps FERC could take next to ensure the BPS is resilient. However, if FERC does not act with urgency, more of the coal fleet will retire, and the resilience of the BPS will be diminished. A pril 2, 2018 ` Grid Resiliency Pricing Rule, 82 Fed. Reg. 46,940 (Oct. 10, 2017). " Order Terminating Rulemaking Proceeding, Initiating New Proceeding, and Establishing Additional Procedures, Docket No. AD18-7-000, FERC, January 8, 2018. Page I 3 Sierra Club v. EPA 18cv3472 NDCA Tier 1 ED 002061 00084033-00003 The coal fleet totaled approximately 256 GW as of January 2018. EIA, Electric Power Monthly, Release Date March 23, 2018. Coal-fueled generating capacity in the five RTO/ISO regions total 167 GW: MISO 63 GW, PJM 62 GW, SPP 26 GW, ERCOT 15 GW and ISO-NE 1.1 GW. iv Response o f ISO New England, Inc. March 9, 2018; Comments and Responses o f PJM Interconnection, L.L.C., March 9, 2018; Responses o f the Midcontinent Independent System Operator, M arch 9, 2018; Joint Comments o f the Electric Reliability Council o f Texas, Inc. and the Public Utility Commission o f Texas, March 9, 2018; Comments o f Southwest Power Pool, Inc. on Grid Resilience Issues, M arch 9, 2018. v Reliability, Resilience and the Oncoming Wave o f Retiring Baseload Units Volume 1: The Critical Role o f Thermal Units During Extreme Weather Events, March 13, 2018, DOE/NETL-2018/1881. ("DOE/NETL report") vi ACCCE, Retirement o f U.S. Coal-Fired Generating Units, January 2018. TMSee C' apter 2 ("T' e Prospect of Furt' er Large-Scale Ret'rements") of t' e DOE/NETL report. Sierra Club v. EPA 18cv3472 NDCA Tier 1 Page I 4 ED 002061 00084033-00004