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Grid Operators Report to FERC on Grid Resilience

by added on 9 March 2018, Comments Off on Grid Operators Report to FERC on Grid Resilience , posted in Grid Edge, Regulation & Policy, Utilities, News,

Energy Secretary Rick Perry's bid to shore up coal power plant revenues by claiming they’re critical to the country energy security was rejected by the Federal Energy Regulatory Commission in January. 

But that FERC order came with a demand for the grid operators that serve about two-thirds of the country to examine the “resilience” of their transmission networks against superstorms, cyberattacks, or other potentially destabilizing threats (Docket No. AD18-7-000).

Friday was the deadline for independent system operators (ISOs) and regional transmission organizations (RTOs) to respond to FERC’s initial 18 questions about resilience. Some are fundamental, such as “explain how you identify and plan for risks associated with high-impact, low-frequency events (e.g., physical and cyber attacks, accidents, extended fuel supply disruptions, or extreme weather events).” 

Others are more complex, such as the questions about how grid operators share responsibility with power plant operators, distribution utilities and other key partners for keeping the grid stable. 

In anticipation of Friday’s deadline, some ISOs and RTOs have already provided guidance on how they’re interpreting FERC’s questions about resilience. Mid-Atlantic grid operator PJM, the country’s biggest ISO, filed an extensive response to FERC’s order on February 23 (PDF), laying out its approach to defining resilience -- and staking out certain differences of opinion with how the agency has defined it. 

For example, PJM asks FERC to adopt a slightly different core definition of resilience. January’s order came with this definition: “The ability to withstand and reduce the magnitude and/or duration of disruptive events, which includes the capability to anticipate, absorb, adapt to, and/or rapidly recover from such an event.”

Here’s PJM’s replacement: “The ability to withstand or reduce the magnitude and/or duration of disruptive events, which includes the capability to identify and mitigate vulnerabilities and threats, and plan for, prepare for, absorb, adapt to, and/or recover from such an event.” Note that the word “rapidly” has been omitted, while the phrase “identify and mitigate vulnerabilities and threats” has been added. 

PJM also states that resilience -- a term that’s still in flux -- is an extension of reliability. That’s important, because reliability is a well-defined set of ISO/RTO functions overseen by FERC, from capacity markets to secure resources years in advance, to split-second frequency regulation and “black-start” capacity to respond to emergencies. 

ISOs and RTOs should have an “affirmative role” in planning for resilience, and can address those issues through its existing systems for maintaining reliability, PJM noted. But “RTO authority during extended periods of degraded operations and/or unanticipated restoration scenarios should be clarified,” it wrote, and “federal leadership to improve communication and coordination with interdependent infrastructure systems is needed.”

That’s because a broad definition of resilience includes parts of the country’s electricity supply that lie outside ISOs' and RTOs' traditional boundaries, PJM wrote. “RTOs need better information from interdependent systems -- principally interstate gas pipelines, local distribution companies, and telecom providers, as well as water utilities.” PJM is also “exploring the role of new technologies in resilience,” such as energy storage for transmission or black-start capabilities, as well as the “role of distributed energy resources.” 

Untangling resilience from price formation and other key issues before FERC

In the rush to define resilience, FERC’s new docket has been drawn into broader policy battles at the agency, such as ISO and RTO proposals to change market price formation that have pitted power plant owners against clean energy and consumer advocates. 

Last week, a group including U.S. public power and rural electric co-ops, state utility advocates, wind and solar energy groups, the Natural Resources Defense Council and the American Council on Renewable Energy filed a “joint statement on power market principles” (PDF), asking FERC to apply technology-neutral and market-based solutions to the resilience docket. 

But its main focus was on another, more closely watched docket that could determine how state and local clean-energy and carbon-reduction policies are accounted for in ISO and RTO capacity markets.

Michael Panfil, director of federal energy policy for the Environmental Defense Fund, noted that PJM is also due to file its price formation proposal, which could allow “inflexible” units such as coal and nuclear plants to set market prices under some circumstances, as early as Friday. That separate proposal has been “much criticized as many stakeholders see enormous risk to the proposal, which would alter core market mechanics,” he said. 

But Panfil drew a bright line between the price formation issue and the resilience issue. “FERC has likewise stated previously that price formation efforts do ‘not include even an attempted nexus to bulk power system resilience,’” he noted -- a complicated way of saying that the two dockets are completely separate issues. 

John Moore, senior attorney for the Natural Resources Defense Council, highlighted another key concern -- that “there is no evidence of a resilience crisis, let alone one requiring a new FERC mandate. That’s in part because grid operators already incorporate resilience into many of their reliability-focused responsibilities.” 

Panfil agreed that “available evidence suggests that FERC should take a careful, considered approach to determining whether -- and if so, how -- resilience should be addressed."

"As the bulk of outages occur along transmission and distribution, we look forward to reviewing filings that identify processes in place that support resources like distributed energy resources, energy storage and demand response," he said.

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