Washington, D.C. — On Wednesday, House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-WA) and Energy, Climate, & Grid Security Subcommittee Chair Jeff Duncan (R-SC) sent a letter to Acting Federal Energy Regulatory Commission (FERC) Chairman Willie Phillips and the other Commissioners demanding they return the agency to its core mission to help deliver abundant, reliable, and affordable energy for Americans.
Excerpts and highlights from the letter:
INCREASING BLACKOUT RISKS: “Blackouts, brownouts, and energy rationing have become far too common in the past few years. The primary cause of the electricity shortages Americans have experienced in recent history is a lack of generation capacity. In other words, some regions do not have enough reliable, dispatchable generation to produce the electricity needed to support the bulk power system. These shortages often happen in the cold of winter or the heat of summer. This is due, in no small part, to the premature retirement of dispatchable generation resources, like coal, nuclear, and natural gas, and the rapid expansion of intermittent resources, like wind and solar, onto the bulk power system.”
RAPID ELECTRIC GENERATION RETIREMENTS ELEVATE RISKS: “For the past several summers, the California Independent System Operator (CAISO) implements rolling outages to balance its lack of dispatchable generation with increasing demand for electricity. According to an Electric Power Research Institute (EPRI) study conducted in 2020, ‘[t]he CAISO supply deficiency was largely due to a resource adequacy issue.’ In a recent study conducted by the Midcontinent ISO, the grid operator highlighted the pervasive risk of capacity shortfalls across its system by noting it had a ‘1.2 gigawatt (GW) capacity shortage in the planning resource auction […].’ Additionally, the Southwest Power Pool (SPP) could potentially face energy shortfalls. According to the North American Electric Reliability Corporation (NERC), in SPP, ‘outages and reduced output from thermal and hydro generation could lead to energy shortfalls at peak demand.’
“The PJM Interconnection, the nation’s largest grid operator, recently issued a dire warning about the rapid pace of electric generation retirements within its service territory. In a report issued February 24, 2023, PJM notes, ‘[r]etirements are at risk of outpacing the construction of new resources.…’ In the report, PJM projected 40 GW (40,000 MW) of retirements due to economic and policy factors, including regulations issued by the U.S. Environmental Protection Agency, state climate laws or regulations, as well as private sector Environmental, Social, and Governance commitments.”
Committee Republicans asked FERC to respond to the following questions by May 10, 2023.
- In your view, are the current Regional Transmission Organizations (RTO) or Independent System Operators (ISO) the best mechanism to provide reliable electricity? Please explain.
- Do current market rules allow dispatchable, on-demand generation resources the opportunity to recover sufficient revenues to continue to operate in the RTOs/ISOs? If so, which rules? If not, would you recommend FERC direct RTOs/ISOs to implement such rules?
- How do RTOs/ISOs compare to traditionally regulated regions in terms of electric reliability? Please provide specific data.
- What policies, whether federal, state, or market rules, prevent sufficient resource adequacy in RTOs/ISOs necessary to power the grid 24/7/365 regardless of the weather?
- Gas power generators are not required to procure firm gas transportation in RTO/ISO markets. How will the Commission ensure that market design adequately compensates natural gas generators for the reliability benefits of firm natural gas transportation?
CLICK HERE to read the full letter.