A Desperately Needed Step Forward for Grid Reliability

A new, bipartisan energy and mine permitting bill from Senators Joe Manchin and John Barrasso is a critical step forward to addressing a host of delays and obstacles derailing urgently needed projects. It’s also a very important step forward in bringing much-needed daylight to a singularly alarming threat to the nation’s grid reliability: the U.S. Environmental Protection Agency (EPA).

Astoundingly, as the EPA constructed its suite of regulations to force the closure of the nation’s coal fleet, it never formally consulted the nation’s grid reliability experts on the impact of its proposed rules.

At the very moment the nation’s utilities, grid operators, and both the Federal Energy Regulatory Commission (FERC) and the North American Electric Reliability Corporation (NERC) were issuing report after report and plea after plea warning of a grid reliability crisis, EPA was charging ahead with a plan to make an alarming situation untenable. Despite having no grid reliability expertise of its own – or certainly nothing compared to that of the agencies charged with regulating our power system – the EPA took the reins of the nation’s energy policy and didn’t even bother consulting the experts at FERC and NERC.

It’s like having interior decorators decide to knock down every load-bearing wall in a house without consulting an engineer about their plan. When the house collapses, no one should be surprised. Having the people who pick paint colors take over structural engineering is a recipe for disaster. And yet, outrageously, here we are.

The Manchin-Barrasso permitting bill seeks a fix. The bill will amend the Federal Power Act to allow FERC to have the reliability experts at NERC analyze any proposed rule or regulation from a federal agency that might result in a violation of a mandatory reliability standard or threaten resource adequacy. In other words, instead of NERC just conducting periodic reliability assessments, it will now also be tasked with analyzing the reliability impacts of proposed or pending rules, finding potentially adverse effects and with the help of grid operators consider ways to mitigate them. The structural engineers will finally have a seat at the table.

This fix is critical progress in better understanding and addressing the potential threats posed by federal rules and regulations. It’s such an obvious role for FERC and NERC it’s frankly absurd they don’t already have it.

And should we need any reminder of just how dangerous regulatory mandates can be to grid reliability, consider this warning to Congress from Jim Robb, president and CEO of NERC. He said, “we must manage the pace of the transformation [of our power supply] in an orderly way, which is currently not happening.”

When asked if the generating capacity EPA’s regulatory agenda is forcing off the grid can be sufficiently replaced without incurring reliability impacts, he testified, “Not in the timeframe we’re looking at. No.” He added, “Interagency coordination is absolutely needed for policies that impact generation, especially coal resources, to keep reliability at the forefront of the policy table.”

With the Manchin-Barrasso bill we may finally get the transparency and interagency coordination the nation’s grid reliability so desperately needs.