Dive Brief:

• Ten witnesses from federal and state regulatory agencies, a public power entity, environmental groups, and power companies reported to a Senate Committee on Energy and Natural Resources hearing on threats to the bulk power system’s reliability.
• Federal Energy Regulatory Commission (FERC) is grappling with emerging issues, including cybersecurity, geomagnetic disturbances, and physical threats to the grid, Acting FERC Chair Cheryl LaFleur said. Its approval of the Version 5 Critical Infrastructure Protection (CIP) standards require all bulk power system cyber assets to be protected in proportion to their grid impact.
• Other changes, out of FERC’s jurisdiction, include the natural gas, renewables, and demand-side management booms, she added, and FERC is working with the EPA, other federal agencies and grid operators on plans to assure the system can meet future needs. FERC Commissioner Philip Moeller cautioned the EPA to respect the laws of physics in its push to cut emissions from the grid’s power mix.
• American Public Power Association President/CEO Sue Kelly said the grid needs risk mitigation through resiliency, redundancy, and the ability to recover. NERC President/CEO Gerry Cauley described concerns about a changing risk landscape that also includes threats from extreme weather and equipment failures.

Dive Insight:

Power producers and grid operators are less resolved to the direction the power system must go to contend with new and ongoing changes.

PJM VP Michael Kormos said meeting EPA regulations would be challenging for grid operators and predicted more volatile wholesale power prices in a natural gas-dominated future. American Electric Power (AEP) President/CEO Nicholas Akins said 89% of AEP’s generation designated for retirement was used during January’s polar vortex because capacity markets were not sufficient. He called for a reliability adder or price floor. And President/CEO Thad Hill of independent power producer Calpine, which gets 95% of its power from natural gas, called for more competition and less “non-market interventions” like the wind production tax credit.

NARUC President/Arkansas PUC Chair Colette Honorable said the system is resilient but utilities should help make it more so to protect their ratepayers.