The North American Electric Reliability Corp.'s Summer 2022 Reliability Assessment, issued in May, painted a sobering portrait of the ability of electric utilities in major portions of the United States to meet power needs this season. NERC identified several factors behind reliability concerns, including persistent drought, reduced generating capacity in some areas, supply chain concerns, and heightened cybersecurity threats. In addition, last summer, several solar photovoltaic resources tripped offline during grid disturbances in California and Texas, which NERC warned could happen again this year. The NERC assessment appears at a time when reliability and affordability of electricity are also challenged by rising natural gas prices and demands for new pipeline infrastructure. The Energy Information Administration recently projected that natural gas prices will remain relatively high in 2022 due to lower-than-average natural gas inventories resulting from constrained supply and increased demand. The staff of the Federal Energy Regulatory Commission (FERC) projects that these high natural gas prices will contribute to higher wholesale electric prices in Summer 2022, with FERC staff reporting that, in May, “futures prices for some major U.S. electric price points are up over last year’s settled prices by between 77% to 233%.” NERC has also asserted that additional gas pipeline infrastructure is needed to serve load reliably.
NERC’s summer reliability assessment attracted national media attention. For example, a commentator from The Wall Street Journal compared the U.S. grids today to those of developing countries, where power outages are a regular occurrence. That’s not the case in reality, but, certainly, dramatic outages in recent years combined with NERC’s assessment, are warning signals of potential further degradation to our comparatively highly reliable grids.
The Washington Post also reported on the NERC assessment in a front-page article, published June 3. The industry’s move away from fossil fuels to renewable resources may be happening too quickly, industry analysts told the newspaper. Coal plants are being retired at a faster-than-expected rate because operators have concluded it would not be cost-effective to invest in upgrades, NERC CEO Jim Robb told the Post.
These challenges all point to the need to continue to invest in 24/7/365 electric system infrastructure, while continuing to integrate intermittent and new types of generation sources that can be properly balanced and backed up when they are unavailable. The need for reliable power becomes even more important as we prepare for the rapidly growing fleet of electric vehicles that automobile manufacturers are already producing. The EV market in the United States is projected to grow from $28 billion in 2021 to more than $137 billion by 2028.
The good news is that public power utilities can “walk and chew gum at the same time.” They understand that reliability and affordability are inextricably linked to sustainability, including addressing climate change goals. They are also preparing to apply for and integrate the federal dollars that have been allocated through the Infrastructure Investment and Jobs Act (IIJA), which could help public power utilities with their ongoing work to bring essential utility services to local homes and businesses, while also offering innovative solutions to meet their customers’ needs and ensure sustainable communities.
The IIJA allocates more than $192 billion for infrastructure projects related to electric grid, cybersecurity, electric vehicle infrastructure, and broadband expansion. Public power utilities seeking to tap into this funding should work with their state and local agencies to determine how monies will be distributed and what priorities have been set by these government authorities. We’ve set up a landing page at PublicPower.org/Infrastructure Funding that goes over the latest on IIJA and highlights places where utilities can apply for funding directly. A key part of the immediate task: identify your most important infrastructure needs and make these known to your local and state partners.
In setting priorities, it is important that public power utilities identify their cybersecurity needs and seek to strengthen cybersecurity. The article on page 10 in this issue discusses work underway at APPA, and among our members, to help meet the cybersecurity needs of public power utilities. APPA has a cooperative agreement with the U.S. Department of Energy’s Office of Cybersecurity, Energy Security and Emergency Response (CESER). With the funding provided through the cooperative agreement, we are working to increase deployment of operational technology cybersecurity sensors on utility distribution systems and to grow information-sharing among utilities—all with the aim of protecting our members from cyber-attacks.
Many of the infrastructure challenges facing utilities today seem new. Thirty years ago, we did not worry about sophisticated electronics on distribution equipment or give much thought to infiltration of local utility computer systems. These modern needs are important, but it is remarkable that juxtaposed with our quest to meet these modern-day needs is a project that reminds us of the earliest objectives of public power. I want to thank the volunteers from public power utilities from across the nation who traveled to the Navajo Nation to help the Navajo Tribal Utility Authority meet the most basic of needs: bringing electricity to rural homes. The Light Up Navajo project, an industry effort to bring electricity to 14,000 Navajo Nation homes, is now in its third phase. Crews from utilities in Arizona, Arkansas, California, Delaware, Ohio, and Texas have worked on the 2022 phase of the project, or Light Up Navajo III. The photo essay that begins on page 20 tells a piece of that story.
The public power movement began in the 1880s. Local leaders brought electricity to Wabash, Indiana, in March 1880—28 months before Thomas Edison’s Pearl Street Station began operating in New York City in September 1882. The need for public power utilities to provide reliable and affordable power “keeping their feet on the ground” was juxtaposed with providing sustainable communities, or “reaching for the stars,” even then. Even with the added challenges we face now, 142 years later, public power has not lost sight of its primary mission.