HOUSTON — The question "What keeps you up at night?" is common enough in the power sector that Brad Jones had reason to be ready with a quip last week. And he was.
The CEO of the New York Independent System Operator (NYISO) quoted Terry Boston, a former chief executive at PJM Interconnection, when the question came his way.
"His answer was he sleeps like a baby," Jones said. "Wakes up every three hours and cries."
The line drew a good laugh at the Gulf Coast Power Association’s spring conference here, but it also hinted at the challenge of keeping the lights on as the industry undergoes rapid change. Jones and executives from other grid organizations provided a window into their thinking in the wake of expanding renewables, low natural gas prices, environmental regulations and cyberthreats.
After introducing the question, Bill Magness, CEO of the Electric Reliability Council of Texas (ERCOT), offered that a "terrier-Chihuahua mix" affects his nights. But, really, he said he’s thinking about the ability to plan ahead and retain reliability as changes emanate from U.S. EPA, the market or somewhere else.
Jones, who joined NYISO last year after serving as chief operating officer at ERCOT, said he is most concerned about trying to balance affordability and reliability. Nick Brown, CEO of the Southwest Power Pool (SPP), steered the conversation to what he already had proclaimed a major worry: cyber issues.
"We’re no longer in a mode of solely focusing on trying to keep people out," Brown said. "We’re spending significant time and resources on recovery."
That may be a sad commentary, Brown said, but operators "can’t afford to just pretend that we’re going to be successful at keeping people out." Concerns include whether people are in undetected already and figuring out the right amount of risk mitigation, he said. Brown suggested he struggles to get "straight answers" from insurance companies that offer coverage with exclusions.
"We are the most critical of all critical infrastructures as an industry," Brown said. "We are. All the other critical infrastructures depend on us, and the cyberthreat is just huge and very disconcerting to me."
John Bear, CEO at the Midcontinent Independent System Operator (MISO), said ensuring an appropriate amount of time to reliably and affordably implement public policy changes is vital, noting progress made on wind as well as the possible effects of regulation.
"Sometimes we get looked at a little bit as naysayers, but we are the ones in charge of reliability," Bear said. "We got to make sure that it gets done right."
Grid operators have been analyzing potential effects of EPA’s Clean Power Plan, and industry observers expect electric transmission and gas pipeline projects would be needed to facilitate generation changes. The Supreme Court put the EPA plan, which aims to cut carbon dioxide emissions in the power sector, on hold earlier this year.
Renewables and load
The grid CEOs covered a lot of ground as they batted around questions for close to an hour onstage last week. Bear said both renewables and low gas prices are affecting the midcontinent, where there’s been a reduced dependence on coal for power generation.
Brown said SPP’s footprint recently saw about 48 percent penetration of wind at around 2 in the morning. Gas helps manage the changing landscape along with reliable wind forecasts, though coal remains a large part of the region’s energy mix, he said.
Magness said ERCOT has spent a lot of time on integration of renewables, too. The operator is adding a renewables desk, and he said ERCOT has looked at issues such as inertia and forecasting. Jones said a New York electricity goal of 50 percent from renewables by 2030 is a key marker, with new transmission needed to move thousands of megawatts of power.
Jones said dispatchable distributed generation can provide value, but he didn’t see the same sort of benefit for NYISO from non-dispatchable options. The CEO said he speaks carefully on the topic, though he said rooftop solar is more expensive than central station power and is hard to forecast properly.
Looking forward, SPP’s Brown said he believes there will be a slow process of changing state and federal policies to let wholesale market operators send price signals to end-use load so load can be a controlling mechanism to help balancing efforts. That’s needed, he said, given the variable aspects of wind and solar.
"Historically, as balancing authorities, we assume load is just this random event and then we chase it, most typically with big, huge thermal machines," Brown said. "And the engineer in me has always hated that."
MISO’s Bear said storage and batteries could have significant effects, and he said there have been discussions with experts and stakeholders on what roles those developments could play.
A lingering concern for Brown is the Commodity Futures Trading Commission and the potential for private rights of action being opened up to a wholesale market operator, potentially increasing litigation. SPP is working to prevent that possibility, he said.
Regardless, the conversation never seemed too far from cybersecurity. Five or six years ago, according to Bear, there wasn’t a lot of time spent on the topic. Now, he said it gets an "unbelievable" amount.
"It’s that big, black unknown," Bear said. "And we’re doing everything we can to make sure we’re as prepared as we can be."
He added: "You can’t say, ‘I’m sure we’re never going to have an event,’ right? It’s a question of how are you going to deal with it."
If there’s a penetration, Brown said, the risk for the industry is huge and growing because of dependence on cyber assets in managing markets.
"Probably the most disappointing thing that I’ve faced in my career is the amount of time that we have to spend on that," he said.
