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Murkowski calls for greater attention to reliability challenges


From the February 12, 2014 issue of Public Power Daily

Originally published February 12, 2014

By Robert Varela
Editorial Director
Reliability could suffer unless federal policymakers pay greater attention to the impacts of a range of new factors and forces, including changes in the nation’s electricity mix and environmental regulations, Sen. Lisa Murkowski told state regulators yesterday. In addition to her speech to the National Association of Regulatory Utility Commissioners, the Alaska Republican issued a white paper, entitled Powering the Future: Ensuring that Federal Policy Fully Supports Electric Reliability.

Murkowski discussed factors that she believes increasingly threaten the reliability of the electric grid: the closure of baseload generating units, greater use of intermittent resources, weather events such as the recent polar vortex, the influence of federal government preferences and subsidies, and the potential consequences of new federal environmental regulations. 

Noting recent stories about last April’s physical attack on PG&E’s Metcalf substation, Murkowski said industry and regulators appear to be "appropriately applying new lessons to improve the physical security of electric infrastructure." While more may need to be done, it "would be a shame if newly realized fears about physical security drowned out a sober conversation about the broader risks that we now face," she said.

Murkowski said she is greatly concerned that federal policies could result in a grid that is less stable than even two years ago. If baseload coal and the ancillary services it provides account for almost 40 percent of our power, and the Environmental Protection Agency sets greenhouse gas emission limits without sufficiently considering whether technology is commercially available to meet the required standards, "the impact on grid reliability could be severe," she said. She is troubled that EPA has not asked the Federal Energy Regulatory Commission or the North American Electric Reliability Corp. for an analysis of the cumulative impact its rules may have on grid reliability.

At a minimum, federal agencies with a stake in the matter, notably FERC and EPA, "must communicate honestly, effectively, and in a timely and transparent manner through a formal and documented interagency process," she said in her white paper. Working with NERC, FERC should issue a formal report of the cumulative effect of government regulations on baseload capacity and the reliability of the grid, she said.

"What we learned from the polar vortex is that for one key system, 89 percent of the coal capacity that is slated for retirement next year because of an EPA rule was called upon to meet rising demand," said Murkowski, the ranking Republican on the Senate Energy and Natural Resources Committee. "Our reliance on installed, dispatchable power generation during extreme weather serves as a shining example of why diversity of baseload capacity is necessary to secure grid reliability."

The central challenge of electric reliability in the coming decade will be "finding a way to replace retiring base load capacity, while managing an increasingly variable energy mix," Murkowski said, adding that "our goal must be a grid that is more reliable and more affordable."

She challenged state regulators and all sectors of the electric industry to speak out more consistently and more candidly about the challenges facing the industry. "It may also be time to consider regulatory and even legislative reforms that will ensure a more robust role for electric reliability professionals in evaluating environmental rules," she said in the white paper.

APPA applauded Murkowski’s call for greater emphasis on protecting reliability, especially "her concern that federal government policy such as recent new environmental regulations not interfere with the stability of the grid by limiting fuel choices." APPA also voiced appreciation for her looking at grid reliability in its totality, from supply to infrastructure to physical and cybersecurity, and for inspiring public dialogue about the energy future.
 

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Senior Vice President, Publishing 
Jeanne Wickline LaBella
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JLaBella@publicpower.org

Editorial Director
Robert Varela
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Editor, Public Power Daily
Jeannine Anderson
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