Dive Brief:

• Energy companies and regional grid operators filed comments in the Federal Energy Regulatory Commission’s grid resilience docket on Wednesday, dividing over the role of the federal agency in securing the nation’s power infrastructure.
• Five of the six regional grid operators and companies outside the coal and nuclear sector argued FERC should not issue a "universal resilience standard" or direct changes to plant compensation, instead allowing grid operators to identify and address resilience challenges independently with FERC guidance.
• The PJM Interconnection, as well as coal and nuclear companies, argued FERC should take more direct action to define aspects of resilience and direct changes to plant compensation in regional markets. Their calls come as Secretary of Energy Rick Perry contemplates unilateral action to save many PJM coal and nuclear plants from retirement.

Dive Insight:

Comments in FERC's resilience docket on Wednesday laid bare energy industry divides based on region and resource.

In their reply comments, five of the six regional U.S. grid operators challenged the central premise of PJM's initial resilience comments, filed in March, which argued FERC should order the operators to make changes to their market tariffs to reflect resilience attributes.

"The record in the proceeding does not support any resilience standard or tariff changes requirements" in regional markets, they wrote.

Instead, FERC should "reject PJM's requests and allow individual RTOs/ISOs to pursue the resilience-related issues and initiatives they have identified in their region through collaborative efforts with their stakeholders and pursuant to the timeframes they have established."

That sentiment was echoed by most companies outside the coal and nuclear sector.

"The Commission should facilitate the identification of resilience issues on a regional basis rather than prescribing one approach to the RTOs/ISOs," wrote the Edison Electric Institute, the trade group for investor-owned utilities.

"[W]ith FERC's guidance, each ISO/RTO should continue to examine these issues and work with stakeholders to ensure that resilience risks are identified and addressed," wrote the Electric Power Supply Association (EPSA), a generator trade group.

PJM, however, stuck to its guns. The operator of the nation's largest electricity market is a major player in the proceeding due to efforts there from industry and the federal government to keep coal and nuclear plants from retiring. FERC opened the resilience docket after rejecting one of those efforts — the Department of Energy's grid resilience proposal — in January.

In its comments, PJM said that despite opposition from other operators, it still believes a "generic Commission action" is appropriate for FERC's "overall approach to resilience." The grid operator asked FERC for guidance on whether it envisions a "holistic approach" to resilience issues or a "more reactive approach deferring solely to a patchwork of potentially differing initiatives in each region to address the larger topic of resilience."

Major coal interests endorsed PJM's approach, but pressed FERC to move faster to identify and correct resilience issues.

FirstEnergy, an Ohio-based utility that was a key supporter of the DOE proposal, urged FERC to direct the North American Electric Reliability Corp. (NERC) to take "prompt and decisive action to ensure the continued resilience of the grid."

"This issue is far too critical to the security of the nation’s electric system to delegate it to organizations that have an institutional interest and are subject to the push and pull of their stakeholders," FirstEnergy wrote, referring to regional grid operators.

The American Coalition for Clean Coal Electricity, a sector trade group, reinforced the call for swift action, filing a study it commissionedy that claims the PJM market will "lose its resilience to gas outages if coal retirements continue." The nuclear trade group Nuclear Matters filed a similar report from IHS Markit focused on its plants in PJM, though the grid operator itself has repeatedly said reliability and fuel security are not at risk today.

Nuclear companies reiterated the call for federal action, but with less urgency than some coal generators. Exelon, the nation’s largest nuclear generator, urged FERC to direct grid operators to do fuel security studies, work with federal agencies to develop a "design basis threat" on fuel resilience, and "explicitly clarify" that operators should consider resilience in grid planning.

"Transmission owners should retain their traditional authority to consider resilience in transmission planning for local projects as well as planning on the distribution grid, while the RTOs must explicitly add resilience considerations to their regional transmission planning and market design," Exelon wrote. "The Commission should then review RTO filings under Sections 205 and/or 206 [of the Federal Power Act] to ensure the adoption and implementation of any needed reforms to address the vulnerabilities identified by the [design basis threat] tool."

A number of comments on both sides of the resilience argument urged FERC to better identify and define aspects of resilience. One filing that addressed the issue directly is a recent study prepared for environmental groups by Alison Silverstein, a key author of DOE’s grid reliability report last year, Rob Gramlich, a former advisor to ex-FERC Chair Pat Wood III, and Michael Goggin, former head of a wind trade group.

In their report, the authors write that the most cost-effective resilience investments will be those that are "effective against multiple threats and offer multiple benefits" beyond reliability and resilience. Those include distribution-level efforts like tree trimming and automation, outage recovery efforts, and investments to improve customer resilience, they wrote, while the onsite fuel supplies championed by the coal and nuclear sector are seen as less beneficial.

"There is a great risk that if regulators and stakeholders do not conduct the type of analyses suggested here, we will end up committing significant amounts of money and effort to improve resilience, yet have little constructive impact on the probabilities or actual levels of future customer outages," the authors wrote.