Electricity Markets

No need for FERC action on resilience at this time: Association

Filings made by regional transmission organizations and independent system operators at the Federal Energy Regulatory Commission don’t show the need for any specific FERC actions on resilience at this time, on either a generic or region-specific basis, the American Public Power Association recently said.

The Association’s May 9 reply comments were submitted in a proceeding launched by the Commission earlier this year (Docket No. AD18-7-000). FERC in January said that it was initiating a new proceeding to evaluate the resilience of the bulk power system in the regions operated by RTOs and ISOs.  In its January order, FERC also proposed a definition of resilience for industry comment.

FERC directed RTOs and ISOs to submit information to the Commission on certain resilience issues and concerns “identified herein to enable us to examine holistically the resilience of the bulk power system,” FERC said at the time. The grid operators submitted the filings to the Commission on March 9.

In its reply comments, the Association said it agrees that establishing a common understanding of resilience is a useful first step in considering any action by the Commission intended to promote grid resilience. It also generally agrees, moreover, with FERC’s proposed definition of resilience, which the Association said is consistent with accepted industry definitions of the term. 

At the same time, the Association said that while it is “relatively straightforward to describe resilience conceptually, it is more challenging to determine what actions, if any, might be appropriate for the Commission to take to promote resilience.”

It said that the definition, by itself, does not describe the particular “disruptive events” that should be addressed, “nor does it identify the actions that might be taken to help ensure grid resilience. Crucially, the definition does not indicate how much resilience is enough, and it does not incorporate any notion of balancing resilience benefits against the costs of achieving those benefits,” the Association pointed out.

No need for specific FERC action

While agreeing that FERC must be vigilant regarding resilience challenges, the responses from the RTOs and ISOs don’t indicate the need for any specific action by the Commission in the proceeding to address resilience risks, the Association said.

Why? Because the threats to resilience identified by the RTOs and ISOs generally have been, and continue to be, addressed and/or evaluated by the Commission, the RTOs and ISOs, the North American Electric Reliability Corporation, states, and other industry stakeholders.

The Association said that while it does not minimize the various resilience-related risks outlined by the RTOs and ISOs in their filings, “it is essential to recognize – as the Commission did in the January 8 Order – that the Commission and the industry have been managing many of these risks for decades, even if those efforts have not been specifically framed as promoting ‘resilience.’”

The RTO and ISO responses in the proceeding “catalog at length the efforts that they, NERC, the Commission, and the industry with state cooperation generally have undertaken to identify and address threats to the resilience of the grid.”

By way of example, the Association pointed out that risks associated with severe weather and natural disasters have long been considered in planning and operating the grid.  Among other efforts, the industry has developed a robust storm restoration mutual assistance network in the event of severe weather or natural disaster.  “While there are legitimate concerns that extreme weather events are becoming more frequent and/or severe, it is not clear why this consideration cannot be factored into traditional system planning processes.”

Moreover, even though legitimate concerns may be raised about the risks presented by the prevalence of certain types of generation in different regions, reserve margins remain robust in all the Commission-approved RTOs and ISOs, the Association said.

It also noted that existing NERC reliability standards address issues that are aspects of resilience as defined by the Commission.

The Association acknowledged that certain of the risks identified by the RTOs and ISOs “have become more acute, or at least better understood, in recent years.” At the same time, even in the absence of a specific mandate to promote grid resilience, FERC and industry stakeholders have moved to address emerging risks.

The public power group said that to the extent that RTOs, ISOs or NERC, in consultation with their stakeholders, ultimately identify particular risks to grid resilience that they believe require action, they may file those proposals with the Commission so they can be evaluated on an individual basis with the benefit of a full record.

The Association said that if and when FERC is presented with a claim that a particular requirement, policy, action, or expense is justified by the need to promote grid resilience, the Commission “should require clear evidence explaining the threat and demonstrating the reasonableness of any proposed solution. Alleged threats to resilience should be clearly defined and supported by objective and empirical evidence regarding threat likelihood and potential adverse grid impacts, such as through probabilistic threat assessments. The Commission should not act based on vague or generalized claims of threats to resilience.” 

Similarly, proposed actions aimed at responding to identified resilience risks should be supported by evidence that they will meaningfully address the threat and do so in a cost-effective manner, the Association said.

The Association also made the following points in its reply comments:

  • Given that resilience risks differ by region, FERC should avoid “one size fits all” actions to promote resilience;
  • FERC actions to promote resilience must respect jurisdictional boundaries; and
  • Market mechanisms may be ill-suited to addressing particular resilience concerns.

With respect to avoiding “one size fits all” actions, the Association said that while the general vulnerabilities of the grid are broadly similar across regions, significant regional differences exist as to resilience risks, particularly as to the risks associated with resource diversity and fuel security. 

“While most of the RTO and ISO responses identify issues associated with resource diversity and fuel security as among the considerations in promoting resilience, resource mixes vary among the regions, as does the level of any concern.  Accordingly, any actions to promote resilience in the RTOs and ISOs should be undertaken on a regional basis, with input from regional stakeholders.”

As for jurisdictional questions, the public power group said that FERC should recognize and respect jurisdictional boundaries in considering any proposed actions to address resilience risks, either in the instant proceeding or in future dockets. “An increased focus on the resilience of the grid should not be a basis for the Commission to exercise its authority beyond what is statutorily allowed.”