With temperatures beginning to fall across the country, ensuring that Americans have the energy they need this winter has become a key point of attention across the entire energy value chain. As national leaders look to secure sufficient energy supplies and reliable energy access, they should continue to support competitive market-based solutions and properly address the questions facing competitive power markets nationwide. This is particularly essential as policymakers consider new federal energy regulators.
A unanimous vote by the Senate Energy and Natural Resources committee to advance Willie Phillips’ nomination to the Federal Energy Regulatory Commission (FERC) shows a continuing focus on energy reliability from Congress and federal regulators.
During his confirmation hearing, Phillips told the Senate Energy and Natural Resources Committee that reliability was one of his primary concerns as a regulator—shaping how he considered a wide range of power grid needs.
“The cornerstone of utility service is reliability. Consumers, businesses, and whole industries have to rely on the lights coming on when they flip the switch,” Phillips said in his testimony.
“I have a keen awareness of the cybersecurity and physical security threats that we face as a nation. And, as the effects of climate change and extreme weather increasingly challenge the reliability of our grid, it is imperative that we work to ensure that our nation’s energy infrastructure is resilient. Reliability depends on our vigilance against these threats,” he added.
As a regulator in the District of Columbia, Phillips made energy affordability a priority. Moving into his new role, he should continue FERC’s support of competitive electricity markets to provide affordable, reliable power.
Promoting reliability means answering threats to the physical structure of the grid, such as extreme weather, and ensuring that there are enough electric generation resources to meet consumer needs. Competitive wholesale power markets and the electric providers that offer capacity within them have proved themselves effective at filling this role. Competitive power suppliers are dedicated to combatting cyber threats, while also taking proactive safety and extreme weather measures.
In mid-October, PJM issued a new rule allowing coal plants greater flexibility in how they stockpile fuel this winter. The rule change allows generators to move to emergency status when they have less than 10 days of fuel on hand, rather than 32 hours of fuel. This change gives operators additional flexibility as they work to ensure reliable power. PJM may expand this emergency status to cover oil generation as well.
These changes will help competitive power suppliers in PJM ensure access to reliable energy.
In competitive power markets, companies are incentivized to invest in technologies to keep energy reliable and affordable in order to meet the needs of their customers.
In a report released during a technical power conference in September, the North American Energy Reliability Corporation described how the North American wholesale power system had met the challenges of 2020, including the pandemic and severe weather events across the country, finding that the system had responded well to these challenges.
“Despite these challenges, the system continued to perform well, showing no cascading instability or uncontrolled separation, continued reduction in the mis–operations rate, improving transmission outage restoration after extreme weather, and a reduction in transmission outages caused or initiated by human error,” the report found.
EPSA agrees with Commissioner Phillips that reliability is foundational to our energy grid and should be a focus for regulators. But it is also important to ensure that reliability complements affordability and efficiency.
As federal regulators consider how to shape the grid of the future—and how to better integrate renewable assets—EPSA encourages them to value and encourage the role competitive market-based solutions can play. Recent decisions and statements from current commissioners threaten to undermine the health of U.S. competitive power markets and their ability to deliver reliable electricity to the nation. All customers and communities deserve affordable power along with a cleaner grid – a just energy transition will not be achieved by picking winners and losers rather than allowing all resources and technologies to compete to reduce emissions at the least cost. Competitive wholesale electricity markets are the essential launchpad for America’s energy transition and must be structured to ensure consumers still receive highly reliable and affordable electricity.
Read More:
Biden Nominee to FERC Should Continue Support for Competition, Focus on Electric Grid Reliability | EPSA | September 9, 2021
Senate Hearing Highlights Need for FERC Focus on Market-Based Solutions for Reliable, Affordable Energy | EPSA | October 5, 2021
It’s Time to Rethink Policy Choices Driving Higher Winter Energy Bills | Todd Snitchler for Real Clear Energy | October 25, 2021
