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TRANSCRIPT
[Energy Solutions Intro music.]
Todd Snitchler, President and CEO, Electric Power Supply Association (EPSA)
With the annual NARUC Winter Policy Summit just around the corner, this month’s guest is especially fitting. North Dakota Public Service Commissioner, longtime friend and colleague, and NARUC President Julie Fedorchak joins me today and shares exactly what it is that NARUC does, and its big plans for gas-electric coordination with the implementation of GEAR. She’ll also share, from her seat, what the state of reliability looks like today, and what approaches are needed to keep the grid running through an expanded energy mix.
You’re listening to Energy Solutions, a podcast from the Electric Power Supply Association, where we talk with experts about the changing electric system. I’m your host, Todd Snitchler.
[Energy Solutions theme music.]
Well, our guest this month is Julie Fedorchak and Julie, if you don’t know her, you will know her a lot better by the time we’re done. But Julie and I go back, oh, quite a ways now, having both served as Commissioners, I left, of course, the Commission years ago, and Julie is still serving and is very busy these days with a number of projects that she is working on, and we will of course cover those. But Julie, we’d like to welcome you to the Energy Solutions podcast. We’re grateful that you could take some time to join us.
Julie Fedorchak, President, National Association of Regulatory Utility Commissioners (NARUC), North Dakota Public Service Commissioner
Happy to be here, Todd.
Todd Snitchler
We have got a lot of ground to cover, so you and I talked ahead of time—we’ll both try to be a little less chatty and a little more Q & A. So, we will see how it goes.
Commissioner, can you do us all a favor for those that maybe don’t know you as well as I do? Tell us a little bit about your background and the many hats that you are wearing this year in particular, because I think maybe folks don’t know all the things that you’re responsible for, both in North Dakota, but also the other work that you’re doing with NARUC.
Julie Fedorchak
Sure. So, I am a journalism degree holder. I didn’t intend to get into the regulatory world or even politics. But early on in my career, I was tapped to work for the governor of our state, Governor Ed Schaefer, back in the ‘90s. I took that opportunity, and then I’ve kind of, my life has taken a different track since then, and I’ve largely been in public service since those days. And with a 10-year gap where I had my own business in communications. As I’ve been a Public Service Commissioner for North Dakota for 11 years, and in that role in North Dakota, we regulate five investor-owned utilities. We’re a fully vertically integrated system here in our state. We also are at the front seat of the Bakken oil development and oil boom, that’s been going on in North Dakota for a decade or more, and in that area, we regulate the pipeline permitting process. We also permit all the wind generation facilities, gas powered generation facilities, gas processing plants, that sort of thing. So, we have a real engagement in that industry. And then we also are in charge of coal mining and reclamation in our state.
We are an energy producing state, all of the above. We live that mantra; we have lots of wind, coal, and gas producing energy in North Dakota. And so those are kind of my main responsibilities there. I could talk about NARUC a little bit if you’d like.
Todd Snitchler
Sure, why don’t you? Since that’s the other—your second day job, I think, is your responsibilities at NARUC these days.
Julie Fedorchak
And that’s a role that I sought a few years back as I started to see some of these reliability concerns and started. I’m really involved in the MISO RTO in our region. I’ve been a liaison for the state on the organization of MISO States Board of Regulators for eight years. And so, I’ve seen this transition and some of the bumps that we’re having along the way. And really wanted to use the opportunity as a leader of regulators throughout the country to elevate the importance of reliable and affordable power. And regulators have a lot of different roles. But at our core, we need to ensure with the companies we regulate that we’re providing reliable service at an affordable price. And we can be assigned new tasks along the way. But those new tasks can’t trump those core functions that we must play. And so, I’m really using my time as president to shine the light on those core principles and really encourage and really allow, I think in some ways, the regulators throughout the country; remind them that they have the right and the responsibility to focus on that. I think it’s hard sometimes as regulators to do that in certain states, but I’m here saying it’s OK to do that. In fact, it’s your job. [Laughs]
Todd Snitchler
And I think that’s a really important and timely conversation for the reasons that you noted.
So, I know that you and I come from different parts of the country with different regulatory models, different, you know, utility models and all those things. But there are a few issues that we agree on completely. And I think the first of those is reliability. Can you talk a little bit about why you’re concerned about reliability and kind of your focus on that? Because that’s going to really set up a lot of our conversation.
Julie Fedorchak
For sure. Well, the reliability issues have really come to light in the last couple of years as we see more and more renewables being integrated into the grid and more of the dispatchable sort of traditional resources being retired. It turns out, at high levels, that has some interesting effects on the grid. And we’re seeing the reliability organizations raising some red flags both at the RTO level, all the grid operators are saying, you know, “There’s concerns, we might not have enough power to meet the demand in certain conditions.” And then NERC, the, you know, third party neutral body that’s charged with looking at reliability and ensuring that we are making proper decisions and protecting it. They have really serious concerns both in the near future and even more in the long-term future. So, I think there’s enough warning signs out there that force us to address this and really consider it carefully.
Todd Snitchler
Yep. So, as you think about your term for those that maybe aren’t as familiar as we are, the NARUC presidency is only one year. And so you are on the clock, so to speak. So, knowing that, how did you think about your agenda when you came into this? Because of course you work your way through the roles up to be President. But how did you think about setting your agenda for the year that you are in charge of the organization? It seems like a lot of time to get things done, but boy, once that clock starts running, you realize how short a year really is. So how did you think about that and what do you hope to achieve? And then of course, we’ll get into kind of your signature project next.
Julie Fedorchak
So—so—yes, the NARUC time period of one year in leadership is a small amount of time. I started to gear up about six months before I became president—
Todd Snitchler
No pun intended.
Julie Fedorchak
— and worked with Michael Caron, the last president to say like, “Hey, could we start talking about these things, and that thing?”
And so, we really kind of incorporated some of these themes in the November meeting, which technically wasn’t mine. But you know, we had a really great panel with some RTO executives talking about reliability issues. Started to develop GEAR, which we’ll talk about in a minute, which is the gas-electric coordination issue which is, you know, real central to the reliability concerns. And then I really just tried to be realistic about how much can you get done, and what tools do you have. And one of the greatest tools is in meetings, so we are really zeroing in on these issues through the meetings in a powerful way. And then between the meetings we’ve launched a book club to get our commissioners, Commissioner Emeritus, just like yourself and others around the country and staff to really think about some of these issues in a more global arena in a bigger outside of rate cases and those sorts of things. So just putting a bigger perspective on some of these decarbonization issues and our role in that vein. And so yeah, it’s, you know limited. But I’m trying to maximize the platform to accomplish those things.
And then finally, one of the roles is I get to go around and speak on behalf of NARUC to a variety of different industry groups and in that role, I’m also emphasizing the importance of reliability and affordability. And you know, recognizing that every state comes at this differently. North Dakota’s approach is very different from California’s, but central to the role of regulators is the need to provide reliable and affordable services. So regardless of what that means in each state or how we do it, we all agree on those things. So, I’ve found that to be a pretty powerful reminder to others and other groups are—this message is resonating with them. And I think the more we talk about it, the more power we give others to also express these concerns and really find solutions.
Todd Snitchler
Yeah. And it’s interesting because of course, we’ve done some polling around this issue and in a surprise to no one, the top two issues that poll north of 95% are reliability and affordability. And so, I think you’re squarely in the center of where the public is thinking about things. And you bring up gas-electric coordination and how we kind of got on to the next item we’ll talk about.
But we’ve been talking about this for more than 15 years in our space. It’s involved the NARUC commissioners. It’s involved FERC commissioners, the broader industry. We’ve had a couple of unfortunate events over the last couple of years that have really shined a light on it. So, it’s clear you like challenging issues. And so, were those the signals or were those the things that made you say, “This is the time for us to focus on this,” or was there something else that triggered your desire to take on what’s really a difficult issue? I mean it if it was easy to solve, we’d have done it by now. But you’ve leaned in hard to try to get people to think about it.
And then actually work on solutions, not just admire the problem.
Julie Fedorchak
Well, and I think that’s, you know, a few things. I like problem solving. And I think it’s easy to admire things, but what’s the point of it? So, I’ve really, since I’ve been on the Commission, noted these different reports that have come out, you know, dating way back to some of the earlier storms and warning signs. And these reports were developed, and early on, I thought “Oh, good. Now that this has been figured out.” And then you know, a few years later, the same things happened, and nothing had been changed. And so, you know, after Uri and after those reports came out and then we had the NAESB effort last year, that brought a bunch of people together and spent a long time talking about and they initiated another report. And then I’m coming into presidency right at that same time. And it just became clear like they recommended that somebody that, that NARUC get involved, your group, the Reliability Alliance, also put together great recommendations.
And then it just seemed like the next thought logical step was bringing together people who can actually take these ideas, work through them, and come up with solutions that actually could be implemented or passed along to the people who need to implement them. And so that’s really what the focus of GEAR is—it’s pretty simple, I think, at its core. Get the smartest people you can find in each of these sectors together. Put them in a room. Shut the door. Don’t allow the media in there. And let them work through the issues that are well defined and identified, and even solutions that have been proposed; talk about them and figure out “How could this be implemented? What are its shortcomings? What would need to happen and what are the limits and what are the possibilities of getting these things done?” And really kind of coming through that process with, you know, a short but decent amount of time, a year, with some—hopefully some solutions that can be implemented and agreed upon.
Todd Snitchler
Right. So, GEAR—which I, I love the acronym and you used it, I think by accident a moment ago, which just kind of made me smile a little bit—kind of talk to people that aren’t familiar with what it is, how you envision it working. I mean, obviously we all heard what you said, and we all agree that we want to get to solutions, but what’s the outcome? I mean, the dreaded report that nobody reads I know is not what you want, but kind of talk about what are some of the tangible takeaways that in a best-case scenario you can say, you know, “Job well done to the GEAR folks,” and “We’ve made a difference here.”
Julie Fedorchak
Absolutely. So, GEAR stands for Gas-Electric Alignment for Reliability. And it’s a, like I said, a group of these industry leaders from—there’s pipeline company representatives, two of them for in-state Texas pipelines and interstate pipelines. There’s producers, gas producers. There are an investor-owned electric utility, an investor-owned gas local LDC. And there’s a competitive generator supplier, a power supplier, and an RTO systems operator. Those folks are the members, and they’re tasked with looking through the various reports. The FERC reports, the NAESB report and the Reliability Alliance report. And identifying which of, you know, talking about the solutions that are proposed and the pros and cons, the barriers for each of those solutions. Ultimately, you know, I think there’s some—a lot of people have said, like, what do you think should happen? And I said, “Well, if I knew that, then I wouldn’t have created GEAR, right?” I mean, that’s the whole point. Like, this is the point. Bring these people together and let them—they’re the experts—let them decide. My sense is it’s a few things. You know, there’s a few obvious problems. The weatherization continues to be a problem. That strikes me as low-hanging fruit. I hope that these folks talk about “Do we need a standard for this stuff? Does it need to be forced or can we allow people to continue to do this as a best practice?” That’s a big question.
I think there’s market tools. So, you know the markets clearly play a vital role in the reliability. And they’re, you know, still operating under the system of the past. And they’ve been very slow to respond for a lot of reasons. First of all, the grid is not a laboratory. And we’ve kind of been using it like a laboratory, a little bit. And so, their main focus as operators is like, “Let’s just keep the lights on.”
And so, but they have to and are now, I think, devoting resources to thinking about “What are the new ways of operating, what are the new tools we need?” And clearly there are some new market tools needed to provide the right signals to the gas system as a whole to make sure that it’s there to back up the electric system. It never served that role before, right? It does now. And so, and the gas and electric days: not coordinated. That’s another thing I hope GEAR can talk about that and talk about, like, “How is it? How would that work, what’s needed, what? What are the pitfalls, how much of a solution is that?” You know, there’s so many different elements. And I think that that they’ll just work through each of these and really come forward with a series of recommendations for various entities: it might be FERC, it might be state regulators, it might be RTOs, to implement and address these recommendations. My hope is that the broader industries behind these people, because each rep just is one rep from one company. They’ve been asked to represent their industry as a whole, but my hope is that the industries will get behind the solutions because if they don’t, then we’ll probably be back where we were at the end of the NAESB report. So.
Todd Snitchler
Which is not advancing the ball. And I know that’s your goal and this GEAR is kind of a unique structure and my memory, I can’t recall a NARUC project that’s been formulated quite this way without, you know, kind of the FERC-NARUC partnerships and some of the things people might be more familiar with. Why did you choose this approach, and you know the other half, there’s the industry folks that you mentioned, but of course they’re state regulators that are sitting on the GEAR taskforce as well. How did you think about setting it up this way to be different than how it’s been done in the past? Was it just something you’ve used in North Dakota, or was it after some thought you said, you know, “We need to take a different approach and we’re gonna give this one a try.” And you thought that was the best way forward.
Julie Fedorchak
Well, I don’t think I really had a model in mind. I mean we, I think it’s helpful to have state regulators at the table because this is kind of what we do. We think through these problems and try to make systems work and are not afraid of just rolling up our sleeves and, you know, working with a variety of stakeholders to come forward with solutions.
Todd Snitchler
Right.
Julie Fedorchak
And getting people from all over the country from a variety of political backgrounds and states with different policies, that having all those thoughts and minds and voices in the room will be helpful. And then, you know, having the industry folks there with the operational experience is vital. I just, I guess I just thought that this would be the best way to get some results, and move beyond just celebrating the problems to real solutions. And quite honestly, we can’t afford any more big disasters. We’re lucky this has been a mild winter, and it really has. Because, you know there’s warning signs galore out there that under certain conditions, we don’t have enough power to meet demand. And that doesn’t work in the winter in a good chunk of this country.
Todd Snitchler
Yep, that’s right. So, I want to talk a little bit about the pace of some of the changes that we’ve seen in your focus on reliability and for the, you know, maybe somebody who’s a little bit on the outside looking in. Your tenure as a commissioner is much longer than average. The average commissioner is three to four years, they come on the bench and then they leave, you having been there almost three times that long, you’ve had a long lens through which to see some of these things occur and how they’ve happened. Have you been surprised at the pace of challenges to reliability? Has it kind of, you know, as was it Churchill, who said, you know, he didn’t go bankrupt fast, but at the very end, it was, the bankruptcy happened quickly? Or has this been something that’s been a steady drum beat that you have seen over years and now we’re just finally due to lack of attention or being distracted by other issues, has it finally risen to the level where we are in—it’s become critical that we address it? How have you viewed that? Because of course we’ve seen reports from NERC, and as you noted, the RTOs have been publishing papers over the last year or two, but did it sneak up on us or has it just been coming, and we haven’t been paying attention?
Julie Fedorchak
I think it’s been sneaking up on us, but there were certainly, I think there was warning signs, you know, way back in 2014 and 2016. And I started in my role with the RTOs, started to talk to them about sending signals to these dispatchable resources. At one of my very first meetings in 2016, I remember standing up as like a brand-new commissioner there and saying, “What are you doing to send signals to these resources so that they know that they’re valuable and can stay economic?” And they were like “Oh, we have tons of them on. We’re not worried about it.” Well, here we are. PJM, MISO. You know, the capacity is retiring faster than it can be replaced. And that’s, you know, just it’s not something that we can continue. It’s a recipe for disaster. And so, I think that we, I think some of it was early on, incorporating these renewables was kind of easy and it was cool and novel, and it was displacing higher price power. So, it seemed like a win-win for everybody.
It just became like clear later on that this isn’t a plug and play system. These new resources don’t function the same way. Turns out there’s a lot of extra juice that these traditional resources provide to the grid that the new ones don’t have. And so, there’s a gap, and we need to fix that gap, and it sort of happened like before the grid operators realized how big that gap was. There was all these retirements happening and occurring. And so now we’re sort of behind the ball, and getting this corrected is not as easy as it might seem.
Todd Snitchler
And I don’t think we can talk about reliability without getting into the headlines. And of course, you know, we’ve talked around Uri and Elliott, but just was it a week and a half ago, the storm of Martin Luther King Jr. week was eerily reminiscent of Winter Storm Elliott, a little different, but substantially similar. But performance seemed to be better across the entire energy value chain. Do you take that as that the industry segments from exploration production all the way to the burner tip got message received, circumstances were different, or did we just get lucky in this last go around? And I mean obviously there’s still work to do, but kind of how do you view it? Is this incremental progress, or TBD?
Julie Fedorchak
Well, I think it was a little bit of all three of those things.
Todd Snitchler
OK.
Julie Fedorchak
Yeah, I mean, I definitely think there was some luck involved and the circumstances were a little bit different. But I also think that the industry certainly has learned lessons. The operators I know have and have incorporated changes into their systems. I think they’re communicating better. I know they’re trying to send signals sooner to resources that are needed, but there’s still some structural problems that exist that need to be addressed and fixed. I don’t think it’s like, “Oh, we’re taking care of it,” and, you know, move on, all is well. And I worry that when you get through stuff, because we have such short attention spans, and that we can, you know, we’ll start hearing from folks, “Oh no. We didn’t have a problem. All is well. We don’t need to worry about this.” And that’s not the case. We know we still have the issue with the gas markets on long weekends. We know we have the issues on contracting and fuel security, those are, we know there’s still issues with weatherization, there aren’t great market tools out there incentivizing resources to secure their fuel and paying them for it over the over the long haul so that they’re ready. So, there’s just, yeah, those structural issues need to be addressed.
Todd Snitchler
Yeah. So, I share your assessment. I think it was, “We’re all pleased to see it, but we know there’s still a lot of work to do.” And you’ve mentioned a couple of times now, MISO and of course, you know we’re focused at EPSA on the restructured markets. But I’m curious if you agree that it’s not just a restructured market problem. I hear some folks try to categorize it as “Well, you know, the markets aren’t doing what they’re supposed to.” But the restructured markets have kept the lights on, and sent power to other regions that are vertically integrated, and helped them ensure their system’s reliability. And I take that as a signal that this is a systemic issue, and it’s not limited to one type of business model or another. And I’m curious if you see it that way or if you take a different perspective.
Julie Fedorchak
I most definitely think it’s a systemic issue and we’re seeing it, you know, weather circumstances that we didn’t used to notice in terms of the electricity impact are creating significant alarm and problems throughout the country. You know, I get concerned because a lot of people call it, you know, extreme weather. Maybe it is extreme weather, but we’ve always had 24 below temperatures in North Dakota, you know, and a lot of parts of the country have seen. You can look at weather patterns. A lot of places have seen this type of thing in the past. What’s different is we have resources on the grid that function differently, and we need to adapt to that, and we haven’t yet. And so those issues need to be fixed and need to be addressed, and we need regulators and grid operators working on those issues, identifying them and being honest about what the solutions are and working towards implementing those.
Todd Snitchler
Yeah. At its most basic level, I mean, it sounds like we’re talking about resource adequacy, right? I mean, at some point, you’ve got to have sufficient resources to keep the lights on, and you’ve already noted the retirement of dispatchable resources and the slow pace, or the inability to get things cited, constructed. I mean, whatever the reason is, it’s not being replaced with sufficient capacity to do the same thing. I call that the misalignment between aspirational policy goals and operational realities of the system.
So, you’ve been very clear in challenging your colleagues at the state regulatory level, like how should they be thinking about tackling those issues? Because some states treat resource adequacy differently. You know, you and I were in a meeting where I learned that, you know, it doesn’t even matter if you’re a vertically integrated state. You can tell someone that they’re authorized to build a plant, but they can’t get it done for any number of other reasons, which, you know, I think the general observer would say, well, if it’s vertically integrated and the regulator says it’s prudently or it’s justified, you know, you should be able to just go and do it, get in line and construct it, but it’s not that simple. So how are you helping to push your colleagues to think about this, but to also make meaningful changes to actually help keep the lights on? Because you’re very clear about “Somebody is responsible for resource adequacy and it’s us.”
Julie Fedorchak
Exactly.
Todd Snitchler
So how are you delivering that message and how is it landing with your colleagues?
Julie Fedorchak
I do believe that, and one of the themes that I’ve chosen, or my overarching theme is state regulators leading the way because I really—we need to recognize our leadership role and our expertise that we have that’s missing in the conversations.
We are kind of the neutral third party responsible for ensuring that the right questions are being asked and the right processes are in place to maintain reliability. So, I regularly say to my colleagues in other states, “You don’t have an IRP process, well go get one. You’re an expert. You know the legislators. You know the governors; go advocate for what you need to do your job in this changing world.” The way we’ve done it in the past cannot be the same way we do it in the future, because the whole system is different. So, I think, one of my missions is to really encourage the regulators. I joke about it, and I use the, the movie clip from Anchorman—
[Anchorman:
Male voice: I don’t know how to put this…but I’m kind of a big deal.
Female voice: Really?
Male voice: People know me.
Female voice: Well, I’m very happy for you.]
Julie Fedorchak:
Anchorman. We’re kind of, I’m kind of a big deal. [Laughs] Well, I say to my colleagues, “We are kind of a big deal, own it, get out there and use your expertise and take responsibility for this and get the tools you need to do the job right.” And so that’s, I guess, one of my big messages to my colleagues.
Todd Snitchler
Yeah. And I think, generally speaking, they’re in the right spot. And then I think your council about “Then step out and lead” is the right one. You mentioned at the top of our conversation about prices and affordability being a top-of-mind issue for consumers. And I think that’s especially true as people are dealing with inflation, and by that I mean the industry, but also the consumers that pay the bill, and market volatility that has, you know arisen over the last several years as we see this “energy expansion” as I call it. I don’t like the term “energy transition,” but this energy expansion is taking place. And I wonder if people are fully aware of what the costs to the system are, or has that been explained to them in a way that’s understandable? And I’m curious how you think about that, because as you know, the state regulators are generally the ones who are having the greatest impact on how those costs are allocated, what they’re allowed to be, how we’re implementing state policy choices, all while you’re charged with keeping the system affordable for consumers. And that’s a lot of balls to juggle. And I’m curious how you think about it and how you think we’re doing collectively at both educating the public and achieving those policy objectives.
Julie Fedorchak
I think we’re doing terribly in that area. I mean, I –
Todd Snitchler
[laughs] OK, that’s a clear answer. I’ll take it.
Julie Fedorchak
I went to—I was asked to testify to the U.S. Senate last year, and one of my messages was “There are a lot of reasons to do this, but it’s not going to cost anybody less money. It’s not going to save anyone money doing this.” It isn’t. And the fact that consumers have been told that we can do all these things, we can decarbonize, we can be green, we can be all-renewable and save money is just not true. And we have to stop saying that. I mean, I have people come to me, my ratepayers like “This is saving me money. Why do my bills keep going up?” Right? I mean, so people aren’t stupid. They see the reality, and we lose our credibility in a huge way when we have disconnecting results like that. So, I think regulators, and we need to push our utilities to also be clear about what the costs are. Part of the problem is we see these things in silos. And so like you might be you might be approving a project over here that is a new wind generator that you’re giving an advanced termination of prudence for. Because it’s going to displace higher price power and save this much money. But what they don’t include in that evaluation is how much does the transmission lines cost to get to that project? What kind of ancillary services are needed to provide the same attributes to the grid to keep the reliability, and what’s the cost of the backup power? All of those things are part of the cost equation and we look at one of them and talk about one of them. So, getting our brains around, even getting that data from a utility is not easy. Even for commissioners to get that kind of an analysis. So again, that gets back to the tools, and the modeling, and the things that we need to do this well and to do this right that are still very much being developed.
Todd Snitchler
At the risk of shameless self-promotion, I will say that we did just do some work with FTI where they did an analysis for the levelized cost of entry that included all of those things that you mentioned. It was only for the PJM region, but the tool was it did exactly what you asked. It showed what is the price of firming power, what do the ancillary services costs look like? And what does the all-in cost look like? Because as I think I don’t want to put words in your mouth, but as you know. We’re told that it’s—everything’s cheap. Well, then you figure out the full cost where you contemplate all the things that would be required. And it doesn’t look quite as cheap as it does on the other end. And as you know, there may be policy reasons for making the choices that we’re making, but let’s just do it eyes wide open rather than on the false assumption that, as you said, we’ll be able to do all this. It’ll be cheap. You know, we’ve already been through that with nuclear and “too cheap to meter” back in the ‘50s, so we don’t need to make that mistake again.
Julie Fedorchak
I do get frustrated with our utilities sometimes because they, you know, they’ll say, “Well, part of the reason we’re doing this is this is what customers want. But then the customers aren’t given the whole story.”
Yeah. So, you know that’s it’s not customers deserve the full story and then they can weigh in on what they want. And that can be part of the equation for the reason to do it. If it’s the main driver then let’s make sure they have the right information at their fingertips to make the decision.
Todd Snitchler
Yeah, I think that makes a lot of sense.
At the risk of asking you a dangerous question, I’ll ask you if you think that there’s a realistic timeline for decarbonizing the grid. That’s where a lot of our federal and state policies are driving towards. That’s where a lot of investment decisions are being driven into that space. Do you think there’s a timeline that it’s realistic? I mean, I know where I land on this, but I’m kind of curious where someone that’s from a Midwestern state who’s an energy producer, how are you thinking about it? And does that affect your decisions or is that just something that is part of the policy and you seek to implement it and you, you do your job as a regulator on the implementation side?
Julie Fedorchak
So, I think the timelines are as soon as the technology allows it to happen. So, I feel like the technology development should drive the timeline and we’ve kind of got it backwards. And I guess I appreciate aspirational goals, but I don’t think it’s helpful for some of the advocates out there to throw out these very specific dates and times where this must be accomplished or, you know, we’re going to have global, you know, chaos. You know, I’ve heard some very reasoned scientists talk about even the 2050 goal and the climate goals that have been established were knowingly set as being aspirational, so we know that you know at those dates and time, a life as we know it isn’t going to change. So, let’s keep moving this direction, but the reality is there’s no other country in the world that’s going to be more of a leader than the U.S. in developing these technologies and in in a way that they can be incorporated, incorporated worldwide. That’s what we need for this to work and to solve this problem. It’s not a U.S. problem, it’s a global problem. So, let’s make sure we don’t tie one of our arms behind our back and prevent ourselves from being a leader by threatening and jeopardizing the very reliability and affordability of our own resources that are going to help us develop, improve these technologies for the rest of the world. That’s how I see it.
Todd Snitchler
I think that makes a lot of sense, so I’m trying to be mindful of your time. And so I only have a couple more questions and then we’ll wrap up. So, because I know you’re laser focused on this, what are three, or five, or pick your number, things that are needed for grid reliability? If you had your wish list, you were queen for a day and could say “All right, we’re doing this.” What are the three, four, five things that you would say, “These are the things that I think we need to do and that will help ensure reliability and then we can work on the other issues.”
Julie Fedorchak
Sure. I love this question. I mean, it’s sort of one of the fundamentals, but I think we need to stay focused throughout this evolution that we’re under. We need markets that compensate resources appropriately for the reliability that they provide. Because ultimately, that’s what the grid is. It’s reliable electricity, so the market must compensate resources for their reliability. And currently, you know, they weren’t developed that way because all the resources were reliable. So that’s a big change that we need to get through. We need strong infrastructure. The head of NERC has said that, you know, the U.S. hasn’t proven itself to be capable and able to develop this kind of infrastructure and in order to continue down this path, that has to change. So, we have to be able to permit, construct, and operate the infrastructure needed to provide these resources, and until the date that we have new ones in place, we need to maintain the ones that we already have, and use them to their maximum. So that’s the second thing is the infrastructure. I think we need to address the cybersecurity issue. I don’t know how. But that’s a really significant component. And then we need generation resources on demand to meet the demand. So those are kind of the buckets that I think need to be developed. They’re intertwined.
Todd Snitchler
They are, and as noted at the very beginning, you are not afraid to take on the tough issues, but I think those are all really important things. So, knowing all that and knowing your experience in the space that you’re in, are you optimistic? Are there, are there things that you’re feeling like “I see a light ahead and it’s not the train at the end of the tunnel, but it’s success and we’re going in the right direction”?
Julie Fedorchak
I am optimistic, Todd. I’m by nature an optimist, but when you look at the amount of research and development that is occurring throughout the country, I do sense a growing recognition among all of the stakeholders about the reliability concerns and the importance of addressing them that a recognition that reliability truly does trump everything else, and if we fail in that regard, we’re going to end up way further behind. So, we’ve got to—so, I’m optimistic about that and I think that, you know, some of the market signals and the solutions, the various smart people that need to come up with these ideas, yourself included, are at the table working very actively on these issues, and I think getting some traction. So, I am really optimistic. I think that you know I’ve I told the Senate when I was talking to them, all of this can be solved with one thing: patience. And so you know, we just need a little bit more patience. Patience to develop and allow some of these things to evolve. And then also patience in some of the processes that need to take place. And people are going to have to give and take. You know, there’s a lot of folks out there who see things very black and white and that that isn’t going to work in this. It’s going to take some things that everyone doesn’t like to make this all work.
Todd Snitchler
Yeah, I appreciate the optimism because sometimes we get caught, I think, in the doom loop and there are a lot of things that we should feel optimistic about.
So, Commissioner, President, and my friend Julie, you have given us more time than I expected, so I don’t know which title I’ll use the next time we talk, but I really appreciate you taking time to visit with us. I think your insights are particularly helpful and I truly do compliment you on taking on tough issues.
Sometimes leaders abandon the front of the line to wear the title. And that is absolutely not where you are. You are taking on some of the toughest issues and I think you’re doing it in a way that will hopefully deliver the real results that the system needs. So, I thank you for your leadership on that and appreciate the opportunity to talk.
Julie Fedorchak
Thank you, Todd. I really appreciate your engagement in this space and your willingness to always speak frankly and smartly. So, thank you very much and I hope that these things do produce some results.
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Todd Snitchler:
I hope to see many of you at the NARUC Winter Policy Summit coming up at the Westin in Washington, D.C. As it happens, EPSA will be holding our third annual Competitive Power Summit there as well on March 26. Visit our website for more information.
As always, subscribe to this podcast for more in-depth interviews with the leading voices in energy today. Thanks for listening to Energy Solutions. If you liked this episode, please share it on social media with your coworkers, friends, and family. You can also connect with us on X, @EPSAnews, on LinkedIn, and on Threads @electricpowersupply. And subscribe, follow, leave a rating, or comment, on Spotify, Apple Podcasts, Pandora, Google, or wherever you listen to podcasts.
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