FERC to review grid preparedness after terminating resilience inquiry

"The effects of climate change are already apparent and we must do everything we can within our statutory authority to ensure that the electric grid is capable of keeping the lights on in the face of extreme weather," FERC Chairman Richard Glick said.

The new proceeding, which FERC announced yesterday, will examine how grid operators prepare for and respond to extreme weather events, including, but not limited to, droughts, extreme cold, wildfires, hurricanes, and prolonged heat waves. It will include a technical conference with an opportunity for parties to submit comments in advance of that conference, the regulator said.

FERC in January 2018 launched a proceeding, Docket AD18-7-000, to "holistically" examine the resilience of the system after it terminated proceedings on a proposed rulemaking by then-energy secretary Rick Perry on grid resilience and reliability. Perry's rulemaking would have recognised the attributes of generation sources - such as nuclear - that are able to store fuel on-site.

FERC terminated Docket AD18-7-000 in an order issued on 18 February, in which it said: "Based on our review of the record compiled over the last three years, we do not believe that any generic action is appropriate. That is not to suggest that resilience concerns are no longer an issue or that RTOs [regional transmission organisations] and ISOs [independent systems operators] have addressed all threats to the resilience of the bulk power system. To the contrary, the resilience and reliability of the bulk power system must - and will - remain one of the Commission's paramount responsibilities and concerns.

"Instead, we believe that concerns about the resilience of the bulk power system are best addressed on a case-by-case and region-by-region basis. Be it wildfires in the West, hurricanes in the Southeast, or even the extreme cold weather experienced this week in Texas and the Great Plains, these threats present stark, but different challenges to the reliability of the electric grid."

Severe cold weather in parts of the USA last week contributed to power outages affecting millions of electricity customers across Texas, Louisiana and Oklahoma. Generation resources were strained due to cold weather tripping units, natural gas supply curtailments, and wind power generation outages. Independent systems operators the Electric Reliability Council of Texas (ERCOT), Southwest Power Pool and the Midcontinent Independent System Operator, all implemented controlled power outages across parts of their systems to manage load.

As the Arctic air mass moved south through the USA, Texas experienced its heaviest snowfall in 72 years.

Three of the state's four nuclear reactors continued to operate at 100% power throughout the extreme weather: unit 1 at the two-unit South Texas Project plant, 90 miles south-west of Houston, automatically tripped on 15 February following a cold weather-induced failure of a feedwater pressure sensing line in the non-nuclear part of the plant. The unit was subsequently restarted and was reconnected to the grid on 17 February.

US nuclear reactors have previously demonstrated their reliability during extreme weather, such as the polar vortex events of 2014 and 2019. This week, Exelon Generation said all six of its Illinois nuclear plants had continued to maintain nearly 100% output during the latest cold snap. "Winter resiliency and reliability requires year-long planning and maintenance. Exelon Generation workers spend months ensuring that backup generators and supplemental equipment are ready for inclement weather," it said.

Market activity review

FERC, together with the North American Electric Reliability Corporation, last week announced a joint inquiry into the operations of the bulk-power system during the extreme winter weather conditions. Yesterday, the regulator said its Office of Enforcement is examining wholesale natural gas and electricity market activity during the weather event to determine whether any market participants engaged in market manipulation or other violations.

"If the Office of Enforcement finds any potential wrongdoing that can be addressed under FERC's statutory authority, it will pursue those matters as non-public investigations," the regulator said.

The examination will take place as part of ongoing surveillance of market participant behaviour in the wholesale natural gas and electricity markets, carried out by FERCs Division of Analytics and Surveillance. Market participant-level trading data and data from the financial markets is used to screen daily and monthly trading at US physical and financial natural gas trading hubs and wholesale electricity markets. The division works to identify and scrutinise any potentially anticompetitive or manipulative behaviour to determine if an investigation is appropriate.