Last month, the House Subcommittee on Energy, Climate, and Grid Security hosted a hearing to examine the state of U.S. grid reliability. In the face of frequent extreme weather events causing widespread blackouts and electrification driving increases in demand, it is more important now than ever that lawmakers and industry come together to discuss reliability.
Witnesses called included grid operators from across the country including: Gordon van Welie, President and Chief Executive Officer, ISO New England; Paul Suskie, Executive Vice President, Regulatory Policy and General Counsel, Southwest Power Pool; Richard Dewey, President and Chief Executive Officer, New York ISO; Todd Ramey, Senior Vice President, Markets and Digital Strategy, Midcontinent ISO; Woody Rickerson, Senior Vice President and Chief Operating Officer, ERCOT; Neil Millar, Vice President for Infrastructure and Operations Planning, California ISO; and Frederick S. Bresler III, Senior Vice President – Market Services, PJM Interconnection, LLC.
Grid operators from around the country testifed at a Congressional hearing to discuss the state of U.S. grid reliability. Credit: House Energy and Commerce Committee
Rep. Jeff Duncan (R-SC), Chair of the Subcommittee, set the tone for the hearing: “The nation is facing an electric reliability crisis and the nation’s grid operators are not equipped to address it alone.”
Republicans and Democrats on the Subcommittee agreed that grid reliability was indeed in danger. Chair of the full committee Cathy McMorris Rodgers (R-WA) placed blame for the nation’s reliability issues on unnecessary early retirements of dispatchable resources, saying “We’ve seen increasing rolling blackouts and brownouts, as states move towards intermittent, weather dependent energy sources like wind and solar. They’re phasing out more reliable, baseload sources. While there is certainly a place for wind and solar in an overall energy mix, we cannot rely upon them to power the whole country.”
Chair Rodgers touched on what would emerge as the main point repeatedly expressed by both the Republican representatives and the witnesses: the retirement of dispatchable sources of electricity is happening at a rate that threatens reliability and our ability to successfully navigate the energy transition.
The Environmental Protection Agency’s proposed rule to reduce power plant emissions came under particular criticism. The rule would require a large portion of the nation’s gas power plant fleet to either implement carbon capture and storage or hydrogen blending technologies within the next few years or face shutdown. Neither technology is currently commercially available.
Bresler explained that, from a grid operator’s perspective, the rule, “could exacerbate the potential for reliability problems in the future to the extent that again, we don’t get sufficient replacement resources to maintain overall resource adequacy and get the types of generator attributes that we need, reliability attributes that we need in order to replace what could retire.”
Natural gas was continuously praised for its high reliability as an energy source, but many witnesses expressed concern about the state of natural gas infrastructure and the challenges new construction faces. All witnesses testified to the need for natural gas to power the nation into the future. Van Welie and Bresler, as the leaders of grid operators ISO New England and PJM, each explained that natural gas is critical to maintaining grid services in their regions. Van Welie explained that, “the quickest way to solve the pricing problem in New England is to build some pipelines to New England.”
While all of the hearing was dedicated to exploring reliability, competitive power markets were praised for their effectiveness, reliability, and innovation. Ranking Member for the full committee Rep. Frank Pallone (D-NJ) explained, “The developments of the last 25 years have made clear that power markets have promoted competition that has lowered wholesale energy prices and made the grid cleaner, all while ensuring reliability.”
Bresler added, “As a direct result of competition… competitive markets’ ability to attract investment into the PJM region, we currently enjoy our reserve margin of approximately 20 percent above our peak demand forecast.” He later expanded on this adding, “The benefit of competitive markets… is leveraging the power of competition in order to drive investability in… the infrastructure the grid needs in order to maintain reliability.” He also added that competitive market mechanisms protect consumers.
Rep. Pallone later asked how the wholesale power market helped PJM continue service during Winter Storm Elliot and how PJM was able to support Tennessee Valley Authority and Duke when they suffered blackouts. Bresler responded that, “The wholesale market operates to ensure that the physical asset owners and operators in our region are partners… with the grid operator in maintaining reliability. And it does that by providing the right financial incentives for performance of resources to make sure that resources have that financial incentive to act in a way that reinforces grid reliability. And then to the extent that we are able to, and we have the energy available to us to do so, we are able to export energy to other areas.”
Overall, the hearing provided insight into the reliability challenges our grid will face if the necessary changes to energy policy are not made. Members and witnesses reiterated throughout that an energy transition is crucial, but as Rickerson wrote in his testimony, “The energy transition currently underway must keep reliability and cost in constant focus and will require careful planning, time, and meaningful advancements in technologies.” As discussed in the hearing, this means the continued use of fossil fuels as part of an all-the-above energy mix that puts reliability at the forefront. As Ramey described, states and utilities need to continue, “maintaining and investing in natural gas generation.”
Alongside broader discussions of reliability, the hearing touched on the need for interregional collaboration and an integrated energy mix; two things competitive power markets are poised to deliver. In addition, members discussed incentives and subsidies and how they impact functioning markets. Specifically Rep. Debbie Lesko (R-AZ) stated “An area I think this committee must fix is the broken market system the ISOs and RTOs have developed which does not prioritize or incentivize grid reliability. Renewable subsidies have so distorted the market that we are building renewable projects that would not be built without subsidies.”
EPSA has put forward a series of proposed changes to improve market design to promote reliability and other evolving energy requirements.
Reliability must remain top of mind for policy makers both statewide and nationally. Now is not the time to exacerbate pending reliability woes, but to address them. At EPSA, we and our members are dedicated to advocating for common sense energy policies that push for innovation while also guaranteeing a reliable grid. We will continue to fight for both a competitive market free from distortion and cost-effective and reliable energy.
