FERC Tells Senators We’re Quickly Heading for an Electricity Crisis

Jim Willis, Marcellus Drilling New: “Here’s something truly noteworthy–something you need to sit up and pay attention to.”

FERC Tells Senators We’re Quickly

Heading for an Electricity Crisis

May 8, 2023 Electrical Generation, Industrywide Issues, Regulation+

Here’s something truly noteworthy–something you need to sit up and pay attention to. Last Thursday, all four Federal Energy Regulatory Commission (FERC) commissioners–two Democrats and two Republicans–sat before the Senate Energy and Natural Resources Committee in a hearing and said the same thing. All four FERC commissioners warned the Senators that too many coal- and gas-fired power plants are retiring without enough new sources coming online to replace them. They said the situation is “catastrophic” and “the red lights are flashing.”

The left’s insistence on shutting down fossil energy is about to result in tragedy. Pay attention! Even Democrats are saying this!

The U.S. grid faces major reliability challenges, according to members of the Federal Energy Regulatory Commission who used the word 34 times in their prepared testimony Thursday at a Senate Energy and Natural Resources Committee hearing.

There is a “looming reliability crisis in our electricity markets,” FERC Commissioner James Danly said.

“The United States is heading for a very catastrophic situation in terms of reliability,” FERC Commissioner Mark Christie said.

FERC Acting Chairman Willie Phillips said, “We face unprecedented challenges to the reliability of our nation’s electric system.”

Growing reliability and resilience challenges from extreme weather and cyber and physical security threats require changes to the U.S. grid, according to FERC Commissioner Allison Clements.

Power plants, markets and subsidies

Christie said the main problem is that power plants are being retired at a faster pace than they’re being replaced, pointing to estimates from the PJM Interconnection.

About 40 GW, or 21% of PJM’s installed capacity, is at risk of retiring by 2030, the largest U.S. grid operator said in a Feb. 24 report. PJM expects only 15.1 GW to 30.6 GW of accredited capacity to come online by 2030.

“The arithmetic doesn’t work,” Christie said. “This problem is coming. It’s coming quickly. The red lights are flashing.”

Phillips said he is “extremely” concerned about the pace of power plant retirements. “This is something that we have to keep a careful eye on,” he said, noting that FERC needs to work on the issue with states, which have authority over resource adequacy.

Reliability problems are driven by two main issues: faulty capacity markets and a dearth of gas pipelines, according to Christie. During Winter Storm Elliott in December, PJM was on the brink of rolling blackouts when a large number of gas-fired power plants failed to run, partly because they couldn’t get fuel, he said.

Danly said the culprit is subsidized renewable energy, which he contends undermines the economics of coal-fired and natural gas-fired power plants in organized markets.

“FERC has allowed the markets to fall prey to the price distorting and warping effects of subsidies and public policies that have driven the advancement of large quantities of intermittent renewable resources onto the electric system,” he said.

FERC has taken steps this year to bolster reliability, such as issuing cybersecurity standards, and requiring power plants to prepare for winter weather, Phillips said.*

*Utility Dive (May 5, 2023) – FERC commissioners tell senators of major grid reliability challenges, with some blaming markets