We Can Have Both a Reliable Grid and a Cleaner Environment

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Opponents of power plant pollution control standards waved the red herring of grid reliability at a congressional hearing last week where they seized on a comment by a Federal Energy Regulatory Commission member, who warned of the possibility of “rolling blackouts” from potential power shortfalls in the coal-heavy Midwest. In truth, with thoughtful grid planning choices, reliability and pollution control standards don’t have to be pitted against each other.

The Midwest has a high concentration of coal-fired power plants. These mostly older plants are having a hard time making a profit in today’s energy markets, mainly because of more competition from lower-priced natural gas and renewable energy power, steadily improving energy efficiencies, and compliance with environmental protection standards.

EPA’s Mercury and Air Toxics Standards were a focus of last Thursday’s subcommittee hearing where the commissioners of FERC, the independent agency charged with regulating the high power grid, faced questioning from the House Energy and Commerce Committee’s Energy and Power Subcommittee. After years of delay, these standards will take effect by 2016 and mainly affect coal and oil-fired power plants, which emit high levels of these dangerous pollutants.

The Midwest and Coal Plants

MISO (Midcontinent Independent System Operator), the organization in charge of running the high power grid in much of the Midwest, is studying the impact of EPA’s toxics standards on power plants in its region. MISO’s focus of concern is the “reserve margin,” the amount of extra electric generation capacity necessary to keep on hand above and beyond the expected demand for power – think of it as electricity insurance.

Reserve margins are most important in the summer months during “peak hours” in the middle of the day when everyone is running their air conditioners on full blast. Power demand can be pushed beyond MISO’s predictions into reserve margin territory. MISO’s current desired reserve margin is 14.8%. (Caveat – the natural gas-dependent Northeast also faces tighter margins in the winter, when demand for gas heating strains fuel supplies.)

According to MISO, by summer 2016, its reserve margin could dip to 7% (half of what’s required) because unprofitable coal plants will retire and MISO isn’t sure that enough new power plants will be built, and other measures taken, to cover the shortfall. This lower margin is largely what moved Commissioner Philip Moeller to state at Thursday’s hearing that a particularly hot summer in the Midwest, coupled with lack of power, could cause localized “rolling” blackouts.

Commonsense, Reliability-Based Solutions

Maintaining and enhancing grid reliability as the nation’s energy resource mix moves to a cleaner, lower-carbon future is a top priority for everyone. No one wants blackouts or power rationing. The House subcommittee hearing missed a great opportunity to explore what MISO and other grid operators should do – and to some extent already are doing – to maintain healthy reserve margins and reliably serve customers. Here are a few steps we and many of our Midwest colleagues think MISO and others should take:

  • MISO isn’t an island. High-power transmission lines and electrical substations connect it to other power regions, for example the Southwest Power Pool, with whom MISO has 13 separate connections. SPP forecasts a very healthy power reserve margin of nearly 30% in 2016 and over 27% in 2017; in other words, it has power to spare. To assure that power is available where needed, MISO and other power regions need to improve joint planning and coordination, as FERC's landmark Order 1000 requires.

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                                  (Sustainable FERC Project image)

  • States should coordinate closely with MISO to match state requirements with MISO’s reliability needs. Earlier this year environmental organizations in MISO recommended a number of specific ways for states and MISO to harmonize their planning processes.
  • Power plant owners are required to give MISO only 6 months’ notice before they close or temporarily suspend operations, which doesn’t give MISO enough time to solve any potential reliability issues; MISO should increase the retirement notice deadline.
  • States should increase opportunities for consumers to reduce energy consumption during those hot summer days, a/k/a demand response. Most MISO states have comparatively little demand response. These programs can be ready well before 2016.
  • Although energy efficiency programs in the Midwest are reducing power consumption, MISO’s energy forecasts may not fully reflect the benefits of these programs. MISO should be certain that it is accounting for every megawatt of energy savings.

With smart planning and commitments, MISO and other regions can enhance grid reliability as we move to a cleaner energy future. Developing better planning practices now also will help grid operators facilitate compliance with the forthcoming carbon standards for existing power plants that are so necessary to cut the pollution harming our health and the planet.