Grid watchdog’s extreme weather plan splits electricity industry

By Peter Behr | 03/27/2024 06:47 AM EDT

Companies that produce power and grid operators that deliver it are at odds over response to deep freezes.

A gasoline station canopy lays on its side after high winds and heavy snow.

Downed power lines and a gasoline station canopy on its side are pictured after high winds and heavy snow from Winter Storm Elliott hit Lackawanna, New York, in 2022. John Normile/AFP via Getty Images

As extreme weather threats to the grid accelerate, the nation’s electric power industry is arguing over how to protect the public against severe freezes that have cut off power for millions of customers the past two winters.

Operators of the seven U.S. regional power networks and markets asked federal regulators to reject a proposed cold weather protection standard submitted by North American Electric Reliability (NERC) — and require faster compliance and clearer requirements.

The split between the companies that produce power and the grid operators who deliver it highlights growing tension in the electricity sector over the clean energy transition and recent failures of natural gas generation to operate in extreme weather.


The NERC-drafted cold weather standard is rife with “glaring exceptions and vague requirements” that are “subjective, unclear, and unauditable,” the U.S. grid operators and a Canadian counterpart said in theprotest filing.

The proposed rule sets requirements for protecting generators against extreme cold using historical weather records, allowing power plants to avoid regulation under certain conditions. The protest urges the Federal Energy Regulatory Commission to reduce the compliance period for weatherization of newly introduced freeze protection equipment to two years, not four, as NERC suggested.

Asked about the protest from grid operators, NERC CEO Jim Robb told E&E News on Tuesday: “There’s going to be a great amount of engineering and procurement that’s going to be necessary to weatherize some of these plants. It’s not as straightforward as it seems.

“I have some sympathy for the industry wanting to have time to get that right,” Robb said. “But if FERC comes back and says shorten up the time frame, we’ll figure out a way to do that.”

NERC develops proposed operating rules for interstate high-voltage networks, drafted by committees with strong representation from power generation companies. The proposals require final approval from FERC.

The protest last week follows previous objections filed with FERC by the grid operators — PJM Interconnection, the Midcontinent Independent System Operator, the Electric Reliability Council of Texas, the Southwest Power Pool, the California Independent System Operator, the New York Independent System Operator and ISO New England, acting as the ISO/RTO Council.

Roughly two-thirds of the U.S. population gets electricity from the seven U.S. regional transmission operators (RTOs) and independent system operators (ISOs), which must maintain critical, moment-to-moment balances between power supply and demand across multiple states.

The ISOs and the RTOs also operate power markets in which power generators of all kinds — wind, solar, gas, coal, nuclear and hydro — compete to sell power based on their power prices. In the Southeast and large parts of the western U.S., regulated utilities still produce and deliver power for regulated rates.

If approved by FERC, the new standards would allow generators to leave power plants inadequately weatherized simply because they considered the cost to be too high, the protest charged.

FERC spokesperson Celeste Miller said the commission does not respond to questions about pending matters. The five-seat commission currently has three members, though its makeup could change as the year progresses.

Deep freezes

The head of Electric Power Supply Association, representing merchant power generators, said the group has not decided whether to answer the ISO/RTO Council with a response to FERC.

“Our members are already focused on weatherization issues,” said Todd Snitchler, CEO of the Electric Power Supply Association. “They’re paying a lot of attention to this. I haven’t concerns about specific timelines,” Snitchler said in an interview.

NERC said in a filing with FERC that some of the requirements the power grid operators proposed were “unduly burdensome” and could impose prohibitive costs, particularly on generators close to retirement.

The current proposed standards initially failed to get the required approval vote and were cleared in February only after an unprecedented threat by the chair of NERC’s governing board would take the issue away from the committee and impose a solution. Enough drafting committee members changed their votes to push the plan through.

If the commission agrees with the protest from grid operators, it could send all or part of the proposed rules back to NERC for more revisions. FERC may approve or reject the proposed NERC cold weather rules entirely or in part. It can tell NERC generally what outcomes it wants, but it cannot rewrite the rules directly under a rigid process Congress has dictated.

If the proposed rules are sent back to FERC, it would be new twist for the cold weather protections. FERC called for changes following the deadly Winter Storm Uri. The storm’s below-freezing temperatures led to power outages for more than 4 million Texas customers in February 2021. It led to over 240 deaths in the state and triggered billions of dollars in higher energy prices.

Winter Storm Elliott in late 2022, which knocked out 13 percent of generation east of the Rocky Mountains outside the isolated Texas grid, and recent record heat waves in the western United States added more urgency to the call for extreme weather defenses.

NERC submitted proposed cold weather standards to FERC in late 2022. The commission approved part of that plan in February 2023, calling it an improvement over current weather defenses.

But FERC objected to exemptions that generators could claim to avoid the rules. The commission told NERC to redo these sections. That is the revised plan that went back to the regulator last month.

Under NERC’s complex process, proposed regulations — drafted by committees of scores of industry officials and engineers — cannot be sent to FERC unless approved by a supermajority of the drafting committee members, who bring their individual companies’ priorities to the table, according to participants in the process. 

Risks of failure

The back-to-back winter weather emergencies in 2021 and 2022 prompted an industrywide analysis of extreme weather threats led by the nonprofit Electric Power Research Institute (EPRI), the sector’s leading source for scientific and engineering analysis.

Working with 41 energy companies and an advisory group including federal and university laboratories, the three-year, $25 million industry-funded EPRI project seeks to project how increasingly severe weather assault of heat and cold could threaten future grid operations, and how generators should respond.

The project — Climate READi — takes a clear stand on the threat.

“Historical trends and a consensus among climate projections lead to a high degree of certainty that these events will continue to increase in frequency and intensity over the coming decades,” EPRI said in a description of the project.

Along with freezing threats from winter storms, excessive summer heat can raise temperatures of cooling water for coal, gas and nuclear reactors to unacceptable levels; cut the capacity of solar panels; and damage lithium-ion batteries, EPRI noted.

The project’s computer analysis will simulate extreme weather impacts on selected parts of the U.S. grid. Other tools will identify weather threats to key grid components, helping power industry, regulators and legislators set priorities for investments that confront vulnerabilities, said Climate READi Director Morgan Scott in an interview last week.

“We are working towards prioritization guidance that will be useful in applicable to the companies as they are making these decisions,” Scott said.

EPRI aims to release the report next spring, Scott added.

But this effort, too, must find a consensus among the enormously fragmented U.S. power sector.

The EPRI project’s charter states that the goal is an extreme weather solution that is “acceptable” to the industry, which is already deeply concerned about rising costs for clean energy generation, transmission expansion, cyber and terrorist defenses, and surges in new demand from burgeoning data centers.

Several U.S. utilities that have moved further ahead in confronting the challenge are following state regulators’ directives, says Judsen Bruzgul, senior director for climate adaptation and resilience at the ICF International consulting firm.

ICF has worked with Consolidated Edison in New York City and Duke Energy in the southeast U.S., using its climate models to help energy companies include climate threat projections into their decisionmaking on grid defenses.

“The models are trained on observations from the past,” Bruzgul said. “We’re not predicting the future, but we are trying to project our understanding of what that future could be.

“In many cases the information we have about understanding future change is good enough to make decisions,” he added. “But there is uncertainty, and we want to be able to maintain some ability to be flexible and to adapt over time.”