FERC approves power plant rules to fight extreme weather
This story was updated at 11:20 a.m. EST.
The Federal Energy Regulatory Commission approved new rules Thursday to help protect the electricity system during severe winter weather, but grid experts said more action is needed to prevent deadly power outages like those that occurred during Winter Storm Uri.
Proposed by the North American Electric Reliability Corp. (NERC), the new reliability standards come two years after the February 2021 storm caused millions of people in Texas to lose power in below-freezing temperatures. More than 200 people died, some from freezing in their homes.
Under the new rules, which FERC approved in a unanimous decision, U.S. generation owners will need to protect power plants from freezing and develop enhanced cold weather preparedness plans, among other measures.
“This is an incremental step and an important step toward addressing some of the cold weather issues we’ve seen on our bulk power system,” said Willie Phillips, acting chair of the commission.
The new standards were approved during FERC’s monthly meeting, where the commission also dismissed a complaint from renewable energy advocates claiming that the New England power market unfairly favors natural gas. In addition, Phillips, a Democrat, announced a new senior staff position to guide a “reliability agenda” for the agency, and FERC advanced a major natural gas pipeline proposal crossing the U.S.-Mexico border.
The NERC changes confront some of the key factors that resulted in widespread, prolonged outages in Texas, including freezing of equipment at power plants that rendered them inoperable. Still, the new rules exclude about half of the recommendations that FERC and NERC have said are needed to improve the power system in Texas and other regions.
“There are a number of good measures in what we accepted today, for sure. But the critical generator weatherization requirements as they are proposed, to be frank, are not up to the task,” said Commissioner Allison Clements, a Democrat.
To comply with the new standards, owners of power plants will need to implement freeze protection measures based on the temperatures in the areas in which they are located. The rules do not include hard deadlines for when those measures would need to be finalized, although NERC is drafting another standard in response to Winter Storm Uri that will be proposed later this year, agency officials said.
Generators that have experienced outages or other problems due to frozen equipment will have 150 days, or by the next July 1, whichever is sooner, to develop corrective action plans, according to the new rules. Other power plants will have up to five years to develop a corrective action plan, officials said.
While the changes are much needed, some of the details do not reflect “the urgency we feel,” Clements said.
“The proposal before us requires existing generators to be able to perform for one hour at extreme cold temperatures beginning in April 2027. Yeah, one hour,” she said. “Needless to say, that doesn’t bring us total comfort that we’ll be sure to get through the next multiday event like Winter Storm Uri.”
‘Only part of the problem’
The power plant rules don’t address one of the root causes of system failures during Uri, said Joshua Rhodes, a research scientist at the University of Texas, Austin, who studies the electricity system.
During the deep freeze, many natural gas power plants in Texas were unable to obtain fuel as gas production declined at wellheads across the Permian Basin, Rhodes said. That had an outsize impact on the power system given the energy resource mix in Texas. In 2021, natural gas supplied 42 percent of the electricity for the Electric Reliability Council of Texas (ERCOT), which manages the power grid in the vast majority of the state.
“While we definitely need [generators] to be winterized and able to run at low temperatures, winterizing them is only part of the problem,” he said. “If they can’t get fuel, then they still won’t make electricity.”
NERC and FERC have also acknowledged that problem. Last year, Phillips said that natural gas pipelines should be subject to reliability requirements, as electric generators already are (Energywire, May 16, 2022). And last year, both NERC and FERC urged an industry organization known as the North American Energy Standards Board to convene a series of forums to address reliability challenges across the gas and electric industries. The forums are ongoing.
One challenge inhibiting greater coordination between the natural gas and electricity sectors is that FERC does not have jurisdiction over the reliability of the gas system. Still, Phillips told reporters Thursday that FERC is committed to holding up its “end of the bargain.”
“What’s clear is that we’re seeing increasingly we have winter storms that don’t fit our historical guardrails. We’re having one-in-10-year, once-in-a-generation storms that seem to be happening every other year,” he said.
Since Winter Storm Uri, Texas has established some new winterization requirements for its power generators, said Alison Silverstein, an Austin-based consultant who previously worked at FERC and at the Public Utility Commission of Texas. State leaders have also taken steps to ensure “aggressive investigations and penalties” for generators that don’t comply, she said.
“But since that didn’t prevent a number of ERCOT thermal units from freezing up during [Winter Storm] Elliott, clearly having solid requirements and enforcing them isn’t enough — ERCOT, NERC and FERC need to look at the gaps and how to fix them before these new standards age,” Silverstein said in an email.
Notably, when NERC first proposed the rules to FERC last year, all nine North American regional grid operators had raised various concerns with it. Among other complaints, the ISO/RTO Council had said that generators should be subject to more stringent rules to ensure that equipment was protected against freezing (Energywire, Jan. 3).
In a statement, the group said it appreciated the commission’s consideration of its concerns.
“We look forward to NERC’s work to address the issues we raised and establish an adequate winterization standard as directed by FERC in this order,” the council said.
In the meantime, FERC is working to promote a more reliable grid through personnel changes. On Thursday, Phillips announced that Kal Ayoub has been named critical infrastructure and resilience adviser, a new position at the agency.
Ayoub has led the cybersecurity division in FERC’s Office of Electric Reliability since 2015 and is highly regarded in the industry, Phillips said.
“His position is going to be critical as we lay out what will amount to a reliability agenda for FERC,” he said.
A blow for renewables?
In a separate unanimous decision, FERC dismissed a complaint from the American Clean Power Association and Renew Northeast alleging that the New England power market was overcompensating natural gas plants and putting renewable energy projects at a disadvantage.
While the commission found that there was not enough evidence supporting those claims, Phillips said he remained concerned about the reliability of the New England power grid and energy system overall.
“The challenges in New England are cross-product and cross-jurisdiction. These issues aren’t just electric, but also gas,” he said.
According to the complaint, natural gas generators in New England currently receive payments through the power market even when they aren’t generating electricity. By contrast, renewable resources — including solar, wind and hydropower — are assumed to have a lower capacity because they are not available around the clock (Energywire, March 18, 2022).
Matt Kakley, a spokesperson for ISO New England, said the regional grid operator is already working on some of the issues highlighted in the complaint, including “capacity accreditation.” That concept refers to how different resources are valued and compensated in the market.
ISO-NE plans to file a proposal on capacity accreditation later this year, he said.
“With this complaint formally dismissed, ISO New England and others can now engage with FERC commissioners and staff, benefiting from their views and expertise as the region navigates this important process,” Kakley said in a statement.
Francis Pullaro, executive director of Renew Northeast, said he hoped to see meaningful changes from the grid operator on the issues raised in the complaint.
“We need to get capacity accreditation correct, and it’s going to be pretty challenging,” he said. “If our complaint helped to advance the process, we’ll be grateful for that.”
Last year, FERC held a forum with energy companies, states and environmental advocates in New England to tackle some of the reliability challenges seen in the region. Among other issues, New England is highly dependent on natural gas for electricity, but the existing pipeline system is not adequate to ensure that gas is always available when needed.
On Thursday, Phillips announced that the commission would hold a similar New England reliability event later this year in Portland, Maine.
“The stakes are high, and we need to continue to work collaboratively with the states, the ISO as well as the electric and gas stakeholders on developing holistic solutions,” he said.
In addition to grappling with issues in New England, FERC responded to a request from Saguaro Connector Pipeline LLC to build a natural gas pipeline across the Mexican border in Texas.
The commission voted to grant the project a presidential permit, which would allow it to cross the border, pending concurrence from the departments of State and Defense.
The pipeline’s border facilities would be built and installed under the Rio Grande, affecting about 35 acres of land in Hudspeth County, Texas, according to Saguaro’s application. Ultimately, the project would deliver gas from Texas through Mexico and then export the fuel at a facility on the west coast of Mexico.
The Sierra Club has asserted that the entire project should be considered a natural gas export facility and called on FERC to complete a full environmental impact statement. The commission did not respond to that question in its decision Thursday.