Acting FERC Chairman Cheryl LaFleur on March 21 laid out a few challenges for the power industry to address regarding grid reliability and touched on the challenges at FERC in operating without a quorum.
Speaking at the 2017 Reliability Leadership Summit held by the North American Electric Reliability Corp. (NERC), LaFleur said “we are in a rather weird situation right now” with only herself and Commissioner Colette Honorable at FERC while President Donald Trump considers who to nominate to fill the vacant commissioner positions.
“We’re waiting very eagerly for nominations” from the White House to regain a quorum, and working to have issues queued up for new commissioners to act on once they are in place, LaFleur said during her remarks.
Addressing reporters after her speech, LaFleur said she has not heard from the White House on when any announcements will be made regarding new commissioners. She also said FERC staff is trying to prioritize issues for what any new commissioners should address first once they are approved by the Senate and sworn in at FERC.
FERC staff is acting on some cases as allowed under an order that delegated authority to them, while taking care to stay within the legal confines of what is allowed under the Commission’s 2/3/17 staff delegation order, LaFleur said.
She told reporters that FERC’s Office of Energy Projects staff has provided input on the Commerce Department’s March 16 request for comments regarding the White House Executive Memorandum about the use of U.S. steel for new pipeline construction. “That conversation is happening,” between FERC staff and the Commerce Department, she said.
The Commerce Department is taking comments through April 7 regarding a plan that will delivered to Trump by 7/23/17, seeking input on federal permitting requirements, demand for pipe to be used in pipeline construction, current pipeline construction requirements and other issues.
In her speech at the NERC event, LaFleur highlighted three changes driving the energy industry and FERC’s regulatory work. Those changes are the increased supplies of natural gas, new environmental regulations and the growth in renewable resources and demand-side technologies. Those changes are exciting, but they also present challenges for the industry and regulators, LaFleur said.
She laid out four challenges for NERC and the industry to tackle, essentially apologizing for not coming to the meeting with solutions. The first challenge stems from the increased use of distributed energy resources, with more solar generation being added and creating two-way power flows that differ from the traditional central power plant flows of the past. This dynamic has been discussed since at least the early 1990s, but in the last two years it has reached a tipping point, with large gas-fired power plants in California seeing their output cut back in the middle of the day due to peak solar power output, LaFleur said.
That example illustrates how some fundamental changes are taking place in grid control rooms, and as the power grid changes, “we have to be able to identify the resources and technologies that hold the grid together and make it work,” she said. FERC’s notice of proposed rulemaking on energy storage and distributed resources could help in this regard, she added.
Infrastructure. The second challenge involves infrastructure, which is a buzz word in Washington these days. Policymakers are planning plenty of infrastructure investments to fix facilities, but there is a tendency to spend a lot of money after something breaks rather than to maintain it over the long term, said LaFleur, who has focused on grid reliability issues since becoming a commissioner in 2010.
It is never easy to build new energy infrastructure, but it also is difficult to spend money maintaining facilities because such moves do not have ribbon-cutting ceremonies for governors or politicians, but they are critical for power grid reliability, LaFleur said.
Listing the Oroville Dam in California as an example, she noted that the spillway – which was damaged and threatened nearby communities, resulting in evacuations – will be rebuilt with wonderful structural and safety considerations. But what did the damage and experience of the past month teach FERC, dam operators and others about dam inspection procedures and safety protocols to avoid a similar incident at other facilities, LaFleur asked.
Regulatory Structure. The third challenge involves the regulatory structure and who is responsible for resource adequacy as markets change, with state regulators, independent system operators and federal authorities all having a hand in the various decisions. FERC is holding a two-day technical conference (AD17-11) in early May on these issues, and LaFleur said she will strive to make sure that reliability concerns will not fall through the cracks.
Regulatory changes also are being rolled out by the White House, with executive orders on eliminating unnecessary regulations and having agencies form task forces on regulatory reform. While the challenge for grid reliability issues was based on the changes at the state level and market issues, “we have to make sure we’re following the executive orders,” LaFleur told reporters after her comments.
Cybersecurity. The fourth challenge involves cybersecurity, improving grid resilience and ensuring that a security culture permeates the power industry so that reliability doesn’t become a “check the box” exercise, she told the gathering. Building resilience into any activity rather than addressing it as an afterthought will be important given the physical and cyber threats that are being seen, she said.
LaFleur commended NERC for progress made on reliability standards and other work that focuses resources where there is the greatest risk.
Other speakers at the NERC event addressed some of those risks, including utility workforce retirements and the growth of distributed resources that are not visible to bulk power system operators. Enhanced use of synchrophasors to provide real-time information on power grid conditions can aid visibility on what is happening at the distribution level, said Kyle Thomas, supervisor of electric transmission operations engineering at Dominion Virginia Power.
The utility workforce of the future will be made up of new college graduates, and the industry would be wise to partner and collaborate with universities on internship opportunities and other steps to make the power sector appealing to those with engineering and information technology skills, Thomas and others said. At Dominion, one-third of its workforce will be replaced by 2024, he said.
That is about average for the power industry as a whole, with 30% of the current workforce eligible for retirement in the next five years, added Bruce Mork, professor of electrical and computer engineering at Michigan Technological University.
By Tom Tiernan TTiernan@fosterreport.com
This article appears as published in The Foster Report No. 3141, issued March 24, 2017
Copyright © 2017 by Concentric Energy Publications, Inc. All rights reserved.