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Publish Date: September 22, 2022 | Total runtime: 38:30
Guest: Mark Christie, commissioner, Federal Energy Regulatory Commission (FERC)
Host: Todd Snitchler, president and CEO, Electric Power Supply Association (EPSA)
TRANSCRIPT
Todd Snitchler, president and CEO, EPSA: For many Americans, Fall may come as a welcome reprieve from a summer of record heat waves and multiple close calls as the power grid reached its brink. Customers across the country, especially in California, were asked at times to conserve their energy usage—turning down the lights, taking shorter showers, and turning down the AC even as temperatures spiked.
You’re listening to Energy Solutions, a podcast from the Electric Power Supply Association, where we showcase the voices, stories, and trends behind America’s changing electric grid.
I’m your host, Todd Snitchler, EPSA’s president and CEO.
Our guest this episode is Mark Christie, one of five commissioners on the Federal Energy Regulatory Commission, which is the primary government regulator for the power grid and electricity markets. He’s voiced strong concern about making sure the power system remains reliable through the energy transition.
We had a long conversation about his priorities as a commissioner and how his many years as a state regulator in Virginia has informed how he makes his decisions that have critical impacts for the reliability, cost, and makeup of the nation’s power grid.
[To Commissioner Christie]
Thanks, Commissioner, for joining us today. We really appreciate it. I know your schedule is very full and you have lot on your plate. But I’m going to start out asking a little bit about what we think is the most critical issue facing FERC, and the entire energy industry, frankly, which is reliability. And I know you’ve made a number of comments voicing your concern with power grid reliability at the August Open Meeting, as well as at the FERC summer meeting that you and I both attended. Can you talk a little bit about that for those that maybe didn’t hear your comments and maybe share why you’re concerned? And what do you think are the primary causes for that concern that you have?
Mark Christie, commissioner, FERC: Well, you know, Todd, just like you, I was a state regulator. And I did a little bit longer than you did. I did it seventeen years, which is longer than most state regulators do it. But, so, I look at everything really from the consumer standpoint. As a state regulator, you’re worried about retail rates, because, you know, we’re the ones who have to set the retail rates, and that’s what shows up in people’s monthly bills.
Todd Snitchler: That’s right.
Mark Christie: Consumers don’t think in terms of wholesale markets, or don’t even know that FERC exists. Consumers think in terms of their monthly bills. And consumers want two things, and I think we ought to want two things:
Reliable power, at the least cost. And when I say the least cost, what I mean is obviously subject to law. Every state, and of course, federal law builds in aspects that keep it from being the absolute least cost that you could achieve power. Because from a consumer standpoint that’s what they care about. The consumer cares about: “Give me reliable power and give it to me at a price that is the least cost that it takes to get it to me.” And I don’t use the term “affordable.” You know what’s affordable for Bill Gates or Michael Bloomberg is not what’s affordable to you know, a waitress at the Cracker Barrel, so I don’t think affordable is the term we ought to be using. We ought to be looking at what is the lowest price we can get it to the waitress at the Cracker Barrel or the large manufacturing consumer. You know, industrial consumers are incredibly important in our economy. As you know, you come from Ohio, which is a midwestern state. My wife comes from Michigan. These are industrial states. I mean in the Midwest from Pennsylvania, you know, Ohio, Michigan, states like this, Indiana.
These are industrial states, and the cost of power is critically important to whether they can continue to provide jobs. So, my focus is reliability at the least cost. And I’m very concerned about both.
We are facing, I’ve said before, we’re facing a reliability crisis. We are reaching a reliability crisis. And I think, you know, the reason really comes down to this. Any engineer who’s had to run a balancing, or a system operator, balancing authority, will tell you that to keep the lights on a twenty-four/seven, 365-day basis—and that’s what people expect in America. We don’t need to put up with, you know, twelve hours of outages every day. I mean, there are places in this world that are glad to get, you know, twelve hours of power a day and the other twelve hours are off. We don’t accept that in the United States.
Todd Snitchler: That’s right.
Mark Christie: Well, to do that, you absolutely have to have what is called dispatchable generation.
Todd Snitchler: Mhm.
Mark Christie: Dispatchable generation. This is generation that can run all the time. It’s not weather dependent.
And what’s happening is, and the people in MISO have been warning us about this specifically.
Because of a lot of reasons, we’re shutting down dispatchable generation. Coal in particular, but also gas, much too quickly before the system is really set up to continue to, you know, to replace that dispatchable generation.
Todd Snitchler: Mmhm.
Mark Christie: And this is this is going on, and it’s threatening reliability.
MISO has been very explicit warning about this. NERC, which is the electric reliability organization for the whole country. And they are truly experts. They have been warning about this, not just in MISO but throughout the country, that we are shutting down dispatchable generation oftentimes years before its useful life is even over.
And we’re shutting it down too quickly. And we’re – the push is to replace this with intermittent resources like wind and solar. Well, the problem is a megawatt of nameplate coal or gas, is not equal to a megawatt of nameplate wind or solar. It’s not a one for one trade.
And so, saying, “Well, you know, we can shut down five thousand megawatts of coal or gas, as long as we get five thousand megawatts of wind or solar, nameplate,” it’s just a false premise. And I was at a meeting just yesterday with some people who run co-ops.
They’re expressing the same concern: that increasingly, you know, the system operator is running CT. Which is Combustion Turbine gas to make up for the lack of baseload.
Todd Snitchler: Mmhm.
Mark Christie: And CT, you know, which are peakers, are not made to be baseload units. They’re peakers. That’s why they’re called—
Todd Snitchler: Peak shavers, that’s right.
Mark Christie: And so, the problem, when you’re running, you know CT Peakers to keep the lights on, because you don’t have enough baseload, it’s twofold. First of all, ironically, these peakers tend to be much more heavy emissions from the GHG emissions than, say, a combined cycle gas baseload unit. So, the irony is, you’re increasing carbon emissions by running these CT peakers to keep the lights on
Todd Snitchler: Right.
Mark Christie: They also tend to be very expensive. So, you know, you’re setting a price that is much too high compared to what you could have been getting. So yeah, I’m very concerned about reliability. And of course, I haven’t even gotten into cost. You know, those are just reliability problems that we’re looking at.
Todd Snitchler: I’m curious how you think about the reliability question as we look at, you know, the various studies that have been done, and I think they’re universal, in that if we’re going to see greater electrification across the economy, whether it’s the electric vehicle front or industry or buildings, what have you, there’s going to be a fairly significant demand increase that’s going to need to be met by additional supply. And that’s going to perhaps look differently in what the supply stack includes. But we also hear from advocates quite a bit about the impacts of extreme weather. And I think we’re seeing some of that on the system today, with droughts in the West and this winter storm Uri outcome, and some of the other issues that we’re perhaps looking at in New England this winter. And should we be thinking differently about how we’re planning for the grid, looking forward, if we’re going to see that dramatic uptick in demand, along with the what is, you know, call it the “new normal” of weather events that include things like the drought out West, and the situations that we see in other parts of the country in different times of the year?
Mark Christie: Well, let’s just take what’s going to happen with if, the goals of a lot of groups, which is that you know that their, you know, slogan is “electrify everything.”
Todd Snitchler: Yep.
Mark Christie: So, let’s say that everything is electrified. The whole transportation fleet: cars, trucks,
Todd Snitchler: Mmhmm.
Mark Christie: All home heating is switched to electrification. Then obviously, you’re going to see a tremendous increase in load.
Todd Snitchler: That’s right.
Mark Christie: Which, of course, is the lingo in the business for, simply for demand, for usage.
All right, ISO New England put out a very interesting study about a month ago. And ISO New England said that as electrification increases load and as more renewables are injected into the fleet, ISO New England said that reserve margins may need to rise to 300% by 2040.
Now let’s unpack what that means.
Now, reserve margin is what a utility has to contract for or build. They can put it in their rate base if they’re allowed to by their state, and that’s another issue.
Todd Snitchler: Yep.
Mark Christie: So typically, the reserve margin, I know in PJM has been 15%. So, the load-serving utility has to keep 15%. What that means is they have to have 15% more generating capacity available to them than what their load would justify. And it’s obviously for reliability purposes.
So, ISO New England is saying that if we’re going to electrify everything in New England, which is going to dramatically increase load, which is power being consumed. And we’re going to go to meet some of the state renewable portfolio standards in New England, which are pushing for 100% renewables.
Todd Snitchler: Mhm.
Mark Christie: If both of those things happen by 2040, we’re going to have to tell load-serving utilities, “You need a reserve margin of 300%, not 15.” And, you know, that is going to be extraordinarily costly.
Todd Snitchler: Yeah, that brings us back to your concern about low cost.
Mark Christie: Let’s just be honest about it. I mean, think about, you know, I don’t even know. I mean the arithmetic on that is, you know, like 15 to 30 is okay, you’re doubling the reserve margin. Okay, 15 to 45, you’re tripling the reserve margin. This is 15 to 300. Percent.
That’s by a factor of about, by my arithmetic, about what, 20? But what we know is, that is going to be hugely expensive. Because these load-serving utilities have to buy that. They have to buy that capacity.
Todd Snitchler: Mmhmm.
Mark Christie: And so, point being, that the huge, you know, the push on electrification of everything, “electrify everything,” is going to tremendously increase load. Okay, that’s a given. And if we’re already at current load facing reliability gaps, and we’re getting warnings that the RTOs and ISOs are going to have trouble even meeting current load given the existing resources. Well, then, imagine if we double load or triple load. I mean you don’t need to be a rocket scientist or electrical engineer to see that that is not going to be, it represents tremendous threats to not only reliability, but also cost.
Todd Snitchler: Yeah, I don’t know if you’ve heard Jim Robb, who you’ve mentioned, who is the NERC, the reliability coordinator.
Mark Christie: Oh, I’ve heard him a lot, and I’ve praised him a lot because I give Jim Robb credit for the courage to speak out and say things that I’m sure there’s a lot of interest groups that don’t want to hear.
Todd Snitchler: And he has been saying now, I think more regularly that he is less enamored with the concept of reserve margin and more interested in planning around available energy. And, to use your term, more dispatchable energy in order to make sure that they can ensure reliability. I don’t know if you’ve given that a lot of thought? That seems to be, maybe where the discussion needs to head.
Mark Christie: Oh, I think the whole landscape needs to be on the table. And I’m mixing metaphors here, you know, just ridiculously. But I think, first of all it’s, understand in the United States of America we have a federal system, we still do. A lot of people would like to have everything micromanaged from Washington, but we have a federal system with fifty different states. And reliability and resource adequacy, I’ve said this repeatedly, and I’m going to continue to say it, and I know people say “Well you’re a former state regulator, of course you’re saying that.” Look. Reliability and resource adequacy ultimately is going to be the responsibility of state regulators and the policymakers that pass the laws that they have to implement.
Now, in non-RTO states that’s clearly the case. I mean in non-RTO states, most of which are still vertically integrated, most of which are still proceeding on what we call an IRP, integrated resource plan, approach. Meaning they have vertically integrated utilities, and those utilities, to a significant degree, own their own generation. They rate base it, or they either contract on a bilateral basis to get it and their state regulators are watching them very closely to see what they’re doing.
Interestingly enough, you’re not hearing about the problems in non-RTO states that you’re hearing about in the RTO states with reliability. Because in the RTO states, the push has been for the last twenty years, you know, to achieve reliability through RTO markets. Whether it’s energy markets, day ahead markets, ancillary markets, or, of course, capacity markets. And they all vary. And PJM has a capacity market, ISO New England, ISO New York have capacity markets. You know, MISO’s is residual. SPP does not have one, CAISO does not have one. So it isn’t like everybody has one. Of course, one of the most famous in the last year is Texas, which is an energy-only market, they don’t have any form of capacity market.
So, when we look at Jim Robb’s concern and we look at ISO New England saying, “We’re going to have to have a 300% reserve margin.” A lot of the problems that we’re seeing, and you know the problems with MISO’s capacity auction this spring, which by all accounts was a very bad result in terms of reliability. All these problems are coming up in RTO markets. They’re not coming up in non-RTO, vertically integrated, state regulated states. I think there’s a, that’s not coincidental. I don’t think it’s coincidental.
Todd Snitchler: Yeah, let me gently push back on that, and say that some of the states that you mentioned are not perhaps states that are putting in place policies by state policymakers that are more aggressive in terms of emissions reductions, and trying to turn over the fleet faster than perhaps some of the States in restructured markets that are trying to take that more aggressive approach. And that really leads me to one of my other questions. So, if you’ll indulge me, I’ll just skip ahead to that and talk about the tension between state regulators and federal regulators, and state policies versus federal policy, and kind of how we try to resolve and address some of the tension that clearly exists?
Mark Christie: Well, first of all, one thing I’ve learned in seventeen years, as a state regulator is, and I was a regulator in Virginia. And one thing I learned going to all the NARUC meetings and state regional meetings like OPSI. You know the PJM states, MACRUC, which is—we have a lot of acronym groups in state regulation—but they’re all meetings of state regulators, and, from the national down to regional. And I went to a lot of those and participated, and I was on the OPSI board and MACRUC, and spent a lot of time at NARUC. One thing I learned, and there, and I, and really the best benefit I obtained from all those meetings with other state regulators, is what I learned is, I know more about Virginia than you do in your state. But I don’t know anything like what you know about your state. And when I came to FERC, I didn’t all of a sudden become omniscient, and all of a sudden know more about Indiana, Minnesota, Michigan, Utah, North Carolina, than their regulators. And so I am very, very reluctant to pretend that I, or anybody else on this commission, knows more than those state regulators about what they need and what’s going on in their states. And the fact is, we do not.
And so, I approach the state-federal tension by starting off by saying, “As the federal regulator, I don’t know as much as the state regulators know in their home states.”
Todd Snitchler: Mmhm.
Mark Christie: So number one, there ought to be a thinking that, as long as you’re not violating the Federal Power Act—and I realize we do have to enforce the Federal Power Act. Of course. I mean Congress passed it, and of course we have to enforce it. That’s our job.
Todd Snitchler: Yep.
Mark Christie: But there’s a lot of play in the joints there in terms of, you know, a very term like “just and reasonable rates.” There’s a lot of, you know, that is a fairly nebulous term. I don’t think it’s that nebulous. I mean, I think what you’re trying to do with just and reasonable rates is make sure the consumer doesn’t pay any more than the consumer should pay. And that gets back to my least cost. Which is a long-winded way of saying, in America, reliability and resource—and the resource adequacy, and that’s sort of a term of art. But it really comes down to once again, do you have enough power when you need it?
The states are still the primary responsible parties for that. Now, again, that’s explicitly in the non-RTO states. No one has any question about that. But you mentioned, “But what about if they’re in an RTO? And they’ve turned over their reliability to the capacity market?”
What I would say on that, and I came out of PJM, so I’m well aware of the construct you’re talking about. Is whatever your state legislature—and if your state legislature went the full Monty, on deregulation, you know, which means you force your load serving utilities to divest their generation. That’s the full Monty.
Todd Snitchler: Correct.
Mark Christie: Even then your state retains the police power to adopt a different model. And so, you just can’t take the attitude, “Well, you know, we’ll leave it up to PJM to figure it out, or leave it up to, you know, MISO to figure”—of course, MISO, it’s a residual capacity market.
Todd Snitchler: Right.
Mark Christie: And I know it’s not easy. A state regulator once told me, from another state, we were having this conversation. This is, and I said, “Why don’t you go back to cost of service, or why don’t you go back and tell your utility to start building generation again if you’re worried about it. He was complaining about a certain capacity market in a certain RTO. And he says, “Well, we can’t put the toothpaste back in the tube.”
Well, I understand the difficulty of it. It’s not easy, but it’s not outside of your legal authority to tell your load serving utilities, if you think you’re going to be short on capacity, tell them to start building capacity again, put it in rate base, do it through bilateral contracts. I mean, there are a lot of options out there that your police power as a state still gives you the authority to do.
Todd Snitchler: It’s clear that—it seems to me that the Commission seems to be contemplating more environmental considerations in its decision making. And of course, those issues seem to be of utmost importance to a number of advocates. But there’s certainly room for disagreement, and I think it’s clear that there is some about where FERC’s actual mandate to deal with environmental questions to deliver affordable and reliable power lands. I’m curious if you’ve got a, kind of a bright line position on where you think that line needs to be drawn. And does the line move, or has it moved based on the political makeup of the Commission?
Mark Christie: Well, I look at it this way. The Federal Energy Regulatory Commission, FERC, which used to be the Federal Power Commission, has two primary duties under Federal law. One is under the Federal Power Act, which has been in effect for decades. It’s been amended, of course. But under the Federal Power Act we are first and foremost, a rate regulator.
That’s an economic regulatory function. Our job under the Federal Power Act is first and foremost to ensure that consumers in wholesale markets are not getting charged above just and reasonable rates. We’re a rate regulator. It is allocated as a consumer protection statute.
That statute has not been amended by Congress to say that FERC shall also be a second EPA.
Congress can do that, but they haven’t done it. So, we remain first and foremost under the Federal Power Act, a rate regulator. An economic regulator.
So, when we regulate—particularly, you know, applicable to the RTO markets, let’s say, or ISO markets.
You know the standard always usually comes down in all these cases to does this tariff change? Or does this proposal result in just and reasonable rates? And not unduly discriminatory? Let me add that because it’s not just “just and reasonable,” it’s “just and reasonable, and not unduly discriminatory.” Which means that we cannot discriminate among types of generation.
All right. We should not be, and cannot, legally, favor wind or solar to meet some environmental goals or attempt to hamper, you know, coal and gas. Conversely, you know there was a big controversy four years ago about whether, you know, there was an effort called the “Coal bailout” that a lot of what was, you know, whether that was accurate or not. The point being, FERC voted it down, I think, on a 5-0 vote, I think, back in 2017.
And I remember Rob Powelsen saying, you know, he was from Pennsylvania. “You know we’re not here to favor one resource over another.” And he “didn’t come to FERC to blow up the markets.”
But by the same token, okay, we shouldn’t be promoting or subsidizing, you know, indirectly or directly, wind or solar or other forms of generation either. We have to be neutral. And the Federal Power Act says be neutral.
So, I think clearly the Federal Power Act gives us the primary duty of being an economic regulator. And an economic regulator to make sure that consumers are not being charged more than just and reasonable rates. And we cannot be unduly discriminatory, meaning we can’t pick and choose and say “We want to promote these resources, because this fits the new goal of the Biden administration for whatever, you know.” That’s a—you know, GHG is an environmental policy, and that’s for Congress to decide. If Congress wants to pass a mandatory national RPS, they can do that. They haven’t done it.
Now, the Natural Gas Act is the other primary duty we have. We’re the permitting agency for interstate gas pipelines and related facilities like compressor stations, for example.
And here again the Natural Gas Act is very clear about what our duties are under the Natural Gas Act. We’re to make an economic determination of whether a pipeline is needed, and if it is, we’re supposed to prove it.
You know, we’re also under NEPA, the National Environmental Policy Act. But we’re under NEPA in the sense that every Federal agency is under NEPA. So, any facility that we permit, before we do it, we have to do a NEPA analysis. So clearly, we have environmental duties under NEPA, and we have to do that. Um, but, you know, the question is how far those go. And we’ve had a lot of debate over here, and controversy—actually going back four years, really, to how far do FERC’s duties go under NEPA? And you know, when the when the majority on this Commission try to put out a certificate policy—certificate being the CPCN, Certificate of Public Need, for these interstate pipelines. I filed a dissent, and because in my dissent I said what the majority was doing was they were basically going way beyond the authority that Natural Gas Act gave us, and they were trying to turn FERC essentially into another EPA. You know, and try to set up a regime where we could just simply reject a pipeline because of an estimate of greenhouse gas emissions. Not just from the pipe itself, but globally.
I said, “That is nowhere near—that is nowhere found in the Natural Gas Act. Nowhere in the Natural Gas Act.” And several senators, including Senator Manchin, agreed with us. And, you know, to make a long story short, the majority pulled that certificate back and made it a draft, and as it sits right now, it’s just a draft.
But I think if you know, if I was going to explain to the Rotary Club what FERC does, and I have explained to the Rotary club, the Lions Club.
We do two things primarily, you know. We regulate wholesale electricity sales under the Federal Power Act as an economic regulator. And our main duty there is to make sure that consumers are not being charged more than just and reasonable rates. And, under the Natural Gas Act, we permit pipelines.
Todd Snitchler: Mmhmm.
Mark Christie: And of course, you know we have a reliability requirement under the Federal Power Act. I think it’s Section 213 that told us to set up NERC. What we don’t have is an authority to tell states what to build or shut down. And we’re not the national IRP planner.
Todd Snitchler: Well, I think that’s helpful for those that maybe aren’t as familiar. And since you mentioned transmission, I did have a question I wanted to ask you around transmission. Because clearly, it’s occupying a lot of time at FERC right now. And I’m curious how you think about the reforms that transmission siting contemplates. I’m curious if there’s a way, or if you see kind of a rational middle approach as opposed to the two extremes. The NIMBY problem seems to have evolved into a “BANANA,” which is build absolutely nothing anytime anywhere. And that’s not going to be really effective as we look at how things are going to go if the economy does electrify and the increase in demand as we’ve been talking about.
How do you think FERC should try to keep the extremes at bay? And think about this more from a—minimize politics, and be thoughtful, and have a rational. reality-based approach to where we are and where we may end up going?
Mark Christie: I’ll just tell you from experience as a state regulator who said on literally scores of certificate proceedings for power lines—
Todd Snitchler: Mhm.
Mark Christie:—that every one of them is going to be controversial, because people simply don’t want to look at a power line. I will say this. My commission in Virginia, we approved both the Trail line. And we approved the Dominion James River crossing. So I think the premise that state commissions, you know, can’t be trusted to approve these needed power lines, and that’s why we have to have Federal backstop. I reject that totally.
Todd Snitchler: Okay.
Mark Christie: And I would use Trail and the Jamestown crossing as two examples where a state commission, my commission, you know, stood up and approved those lines, despite the tremendous controversy. And I sat in high school gyms and heard hundreds of people yelling about, on both of those, their opposition. And we went ahead and approved them. Because we had to, and because the evidence was just incontrovertible that these lines were needed. So, my view on backstop, on Federal backstop siting authority is I’m not in favor of it. But Congress passed it last year in one of the bills they passed. And if it ever comes to us on an individual case, then of course, we’ll, I’ll deal with that as an individual case, and whatever my personal feelings are, I’m not going to prejudge that case.
Todd Snitchler: Sure. Of course. It sounds like there’s a lesson for state regulators as well, which I think is a good one, which is sometimes it takes some intestinal fortitude to do the right thing in the face of opposition, if that’s the right thing. So that that’s a lesson that probably applies across the board, I think, whether you’re a state or a federal regulator.
Mark Christie: No, I agree. And I spent 17 years as a state regulator, and I never went into a case thinking, “Gee, if I vote a certain way, I’ll never get reelected.”
Todd Snitchler: Right.
Mark Christie: But we followed the law. So my view is always, follow the law. Take the heat, do the right thing, and then you know, then you can sleep good at night, and, you know, if you don’t get re-elected, okay, you don’t get re-elected. But I did, twice.
Todd Snitchler: In your view, what’s the biggest challenge that you see, facing the American power grid today?
Mark Christie: Reliability at rates that—and I have to use “affordability” here, I guess. But reliability at a cost that I would say typical consumers can afford. Let’s say typical consumers. And it’s not just a threat facing the U.S. It’s facing Europe. I mean Europe’s having a horrendous situation in their skyrocketing, skyrocketing energy prices. Europe, and I have to include the U.K. now—after Brexit you have to say U.K. separately, but Europe and the U.K. are having a terrible situation. But you know, they’re where we’re going. Okay, they’re just getting there first. Now, people say, “Oh, that’s just because Putin invaded Ukraine and if it wasn’t for that, you know—”
The invasion of Ukraine simply brought to a head or accelerated issues that were going to be issues in Europe anyway, because Europe has followed a policy for the last ten years of refusing to develop its own gas supply. And they’ve been depending on Putin, you know through Nord stream.
Todd Snitchler: Mm-hmm.
Mark Christie: And all of a sudden, he cut them off. But the fundamental problem in Europe is they have been refusing to build the baseload generation just like we are, that could keep their lights on. And they’ve been introducing, you know, tremendous amounts of wind and solar, which are obviously intermittent. And they’ve been shutting down baseload. You know, Germany after Fukushima, the German government under Angela Merkel, you know, essentially panicked, and agreed to shut down all their nukes. And now they wish they had those nukes. I mean, they’re begging. I think there’s three remaining nukes in Germany that they’re trying to keep open because of the crisis, and I think they’re not even going to be able to do that necessarily, at least more than a few months, because they’re already so advanced in decommissioning.
And you know I see Governor Newsom in California is desperately trying to keep Diablo Canyon open, you know, and he crusaded against that for years before he became governor. So, you know, we’re having a, we’re coming face to face with reality here.
We need baseload generation, whether it’s nuclear, whether it’s coal, whether it’s gas, we have to have baseload generation. We have to have dispatchable generation. You cannot run a system strictly on intermittent. There’s a role for intermittent. This is not anti-wind, anti-solar at all. Any resource that is emission-free or and has, you know literally no fuel cost is a good resource to have. So, this is not anti-wind, anti-solar. It’s just a position that we have to deal with reality, and you have to have a mix in your system of dispatchable resources. As well as intermittent like wind and solar. You have to have that mix. You cannot go all the way to just purely intermittent. And you can’t plug the hole with DR, or some of the other—and you can’t plug it with storage. Storage is a great potential resource for the future, but it is not even close to being near commercial scale, or industrial scale, to keep the lights on in San Francisco or L.A. overnight. It’s not there yet.
Todd Snitchler: So, it feels like we’re at a bit of an inflection point, and so I’ll ask you my last question, which is, is there anything in our space in the energy and utility world that makes you optimistic?
Mark Christie: Well, ultimately, the solution, of course, is going to be technology. There are some very promising technologies. I mean, battery storage is promising. You know, it’s promising. It’s not there yet, as a major ability to switch the system to wind and solar and have battery capacity that’s going to keep the lights on when they’re not, you know, when the sun’s not shining, wind’s not blowing. But it’s going to take years to get that potential realized at a price that’s affordable.
I think one of the most promising technologies is small modular reactors. SMRs. I mean, look at the advantage of small modular reactors. First of all, nuclear is emission-free.
So right off the bat you have no carbon emissions from SMRs. They’re baseload. They run with a capacity factor north of 90 percent. That alone tells you this is a tremendously valuable resource if we can—If, if, the big if— if we can develop this technology to the point where it can generate electricity at something in the neighborhood of, you know, $60-70/mWh, you know something that that puts it in the market as far as what other resources can do. But it again, it ain’t there yet. It’s promising, but it’s not there yet, for full commercial scale rollout. I hope it gets there.
My optimism is purely because, you know, technological advancements that that we don’t even think are possible in fact, are. I mean, look at the Covid vaccine. You know, when Covid hit, we were being told by all the experts that you know, it would be five or seven or eight years before we could get a Covid vaccine. You know, maybe even ten years, you know, that’s how long it takes, and we got a Covid vaccine in about ten months.
It’s hard to decide, you know the hard thing about government-sponsored research is, are you putting money into the right technologies? Or are you putting it in some pipe dream? No pun intended.
But I am optimistic that you know that the potential to develop technology that’s going to give us emissions-free baseload generation is possible. Now, whether, how quickly it comes that’s the thing. We can’t suffer through but through skyrocketing prices and reliability crises, you know, in the years it’s going to take to develop these technologies. We have—and this is the whole point about this so-called energy transition.
A transition means, you know, a continuum in time. It doesn’t mean tomorrow.
It means a period of time during which you transition, and during that, we have got to have a power system that is reliable, and that again, the waitress at Cracker Barrel can afford.
Todd Snitchler: We certainly share your optimism around innovation. We think that that is where the future will lie as well. So, on that note of agreement, I will thank you very much for your time today, and certainly appreciate you taking the opportunity to share your thoughts with our listeners and with folks from EPSA about reliability, and how we’re going to make sure that we keep the consumer front and center as we address, you know, the changing energy mix as well as the reliability of the system today. So, thank you Commissioner Christie, for joining us.
Mark Christie: All right. Todd, enjoyed it very much.
Todd Snitchler: Thank you.
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Todd Snitchler: As we head into winter – and as policymakers continue to push for more zero-emission resources and a further electrified economy – the challenges facing our power system are only likely to continue. Stay tuned for more conversations on how we can address these issues – and the role competitive power suppliers and electricity markets will play in bringing solutions to the table. You can learn more about the FERC proceedings impacting the competitive power sector and how EPSA has weighed in at www.epsa.org. And for all things FERC, head to www.ferc.gov.
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