The Federal Energy Regulatory Commission’s high profile proceeding to enhance grid resilience could feature transmission investments as a solution, Chairman Neil Chatterjee said on Thursday, for the first time in public.
Instead of designing the grid to withstand “every single type of extreme event,” Chatterjee told an industry conference it may be “more reasonable” to invest in transmission lines “to help reduce the size of a disruption.”
The emphasis on transmission is new for Chatterjee, who has focused on the ability of plants to store fuel onsite for grid resilience. The chairman confirmed FERC will evaluate transmission as part of the proceeding, but gave no indication of a timeline for a decision.
Chatterjee’s comments may signal a shift in his thinking on the grid resilience proceeding, set up last year after FERC unanimously rejected a coal and nuclear bailout proposal from the Department of Energy.
During the debate on that proposal, Chatterjee often emphasized onsite fuel supplies — a key attribute of coal and nuclear plans — as a critical element of grid resilience. In November 2017, he proposed a short-term cost recovery package to keep fuel secure plants online while FERC studied resilience.
The Chairman struck a different tone at the CERAWeek conference in Houston, mentioning transmission investments as a potential resilience docket solution.
“It may not be possible or cost effective to design the grid to withstand every single type of extreme event that might occur,” Chatterjee said. “Striking the right balance for consumers is undoubtedly a complex undertaking, but I believe it is more reasonable for us to consider additional transmission investments as an insurance policy to help reduce the size of disruption and enhance the grid’s ability to bounce back.”
Speaking to reporters after his keynote, Chatterjee confirmed he will weigh transmission as part of the resilience proceeding.
“There were numerous comments submitted with regard to the role transmission plays in grid resilience and that’s something we’re considering,” he said.
Chatterjee’s comments were similar to remarks from large regional grid operators PJM and MISO at the conference earlier that day, which emphasized regional cooperation to handle disruptions in the power system.
“Resilience is more than fuel at one unit,” said Clare Moeller, president and Chief Operating Officer at MISO. “It’s about how the systems work together.”
Energy analysts have noted that most power outages involve disruptions to the transmission and distribution system, rather than fuel supplies. During the debate over the DOE resilience proposal in 2017, The Rhodium Group calculated that 0.00007% of customer outage hours since 2012 had stemmed from fuel supply issues at plants.
Chatterjee’s remarks on transmission and the cost of resilience investments are similar to recent arguments from large energy consumers, who have pressured FERC to consider customer costs more in resilience conversations. Last week, officials from the Electricity Consumers Resource Council (ELCON), and the Advanced Energy Buyers Group wrote in Utility Dive that recent discussions on resilience have ignored cost.
On Thursday, Devin Hartman, the president and CEO of ELCON, welcomed Chatterjee’s new tack on resilience.
“DOE’s latest murmurings that the power plant bailout agenda may resurface have put America’s manufacturers on alert. Industrials need competitive power options to keep a global fuel cost advantage. This means we need to let resources retire that the market has signaled to exit,” he wrote in an email. “In contrast, we are encouraged that FERC continues to stand tall. Industrials appreciate Chairman Chatterjee’s recent emphasis on accounting for the consumer perspective when it comes to grid resilience.”