NERC Warns of Elevated Electric System Risk if Summer Temperatures are Extreme

Published: May 26, 2023

By: Concentric Staff Writer

There is an elevated risk of reliability problems across two-thirds of North America if summer temperatures reach extreme levels, according to a new report from the North American Electric Reliability Corporation (NERC).

NERC’s 2023 Summer Reliability Assessment, which covers June through September, evaluates generation resources and transmission adequacy, including evaluation of data in peak demand hours, peak risk hours, and from recently updated probabilistic analysis. NERC evaluated system adequacy in regions across North America, including the Midcontinent Independent System Operator; New England; Ontario, Canada; the Southeast; Southwest Power Pool; Texas; and the U.S. Western Interconnection.

All areas are judged as having sufficient reliability resources for normal summer peak load and conditions, but a majority of areas face the risk of energy shortfalls if summer weather is more extreme, NERC said.

Other factors include natural gas storage supplies, which are at high levels (but industry is monitoring potential delivery risks), and new federal environmental rules that restrict power plant emissions in 23 states, including Nevada, Utah, and several states on the Gulf Coast, in the Mid-Atlantic, and the Midwest. The new U.S. Environmental Protection Agency rules were finalized on March 15 and are meant to enforce “good neighbor” EPA requirements for air quality. Coal and natural gas-fired generation units in these areas will generally meet these requirements by reducing operations in the first year of implementation instead of adding new emissions equipment, NERC said.

Inventories of replacement generation resources could also affect power system restoration after hurricanes and severe storms, as could supply chain issues, the organization said.

“The electric industry continues to face a shortage of distribution transformers as a result of production not keeping pace with demand. A survey by the American Public Power Association revealed that many utilities have low levels of emergency stocks that are used for responding to natural disasters and catastrophic events,” the report says.

Winter precipitation has bolstered hydro generation in portions of the West, but low water levels in some areas remain a concern. Significant rainfall and snow will help replenish reservoirs and rivers, but the largest hydro reservoirs in the country, including the Grand Coulee Dam in Washington and the Hoover Dam on the Arizona–Nevada border, remain at historically low levels.

Another factor is the unexpected tripping of inverter-based resources, such as what happened in Texas in 2021 and 2022 and in California in 2021, and curtailment of electricity transfers that can alleviate over-supply in some areas but can also lead to shortfalls in other areas. Elevated temperatures are also expected in many parts of North America beyond the June–September time period when bulk-power system operators typically schedule planned outages.

The report recommends that reliability coordinators, balancing areas, and transmission owners in elevated risk areas review seasonal operating plans and protocols for communicating and resolving potential supply shortfalls ahead of potential extreme demand levels. They should also employ conservative generation and transmission outage coordination procedures commensurate with long-range weather forecasts and engage with state or provincial regulators and policymakers to prepare for efficient implementation of demand-side management mechanisms, NERC said.

All views expressed by the author are solely the author’s current views and do not reflect the views of Concentric Energy Advisors, Inc., its affiliates, subsidiaries, or related companies. The author’s views are based upon information the author considers reliable at the time of publication. However, neither Concentric Energy Advisors, Inc., nor its affiliates, subsidiaries, and related companies warrant the information’s completeness or accuracy, and it should not be relied upon as such.

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