FERC ends consideration of Perry’s power grid resiliency proposal

The US Federal Energy Regulatory Commission has terminated a proceeding on Jan. 8 that considered US Energy Sec. Rick Perry’s Sept. 29 proposal on electric power grid pricing and resilience. It directed regional operators to provide information on whether they and FERC need to take additional action to make power grids more resilient instead.

Jan 9th, 2018

The US Federal Energy Regulatory Commission has terminated a proceeding on Jan. 8 that considered US Energy Sec. Rick Perry’s Sept. 29 proposal on electric power grid pricing and resilience. It directed regional operators to provide information on whether they and FERC need to take additional action to make power grids more resilient instead.

The proposal had drawn immediate criticism from natural gas producers and transportation system operators, who saw it as a veiled attempt to preserve power generation markets for the coal and nuclear power industries that otherwise could not compete economically with gas. Several gas and other energy associations promptly welcomed FERC’s latest action.

“The goals of this proceeding are to develop a common understanding among the commission, industry, and others of what resilience of the bulk power system means and requires; to understand how each regional transmission organization and independent system operator assesses resilience in its geographic footprint; and to use this information to evaluate whether additional commission action regarding resilience is appropriate,” FERC said in its Jan. 8 announcement.

Natural Gas Supply Association Pres. Dena E. Wiggins said the organization and its members were pleased that FERC rejected DOE’s initial grid resiliency approach, which NGSA felt would have undermined competitive power markets and hurt consumers without bolstering reliability.

“We firmly believe that natural gas is a reliability asset in the power sector, as proven repeatedly by its excellent performance during Hurricanes Harvey and Irma and during last week’s extreme cold weather event that set records for gas demand in the markets,” she said.

Susan Ginsberg, the Independent Petroleum Association of America’s vice-president of oil and gas regulatory affairs, said the national organization of upstream independents found FERC’s reasoning and resulting order to be sound, and in keeping with the documentation submitted‎ by a diverse group of interested parties.

“Even the organized markets stated there is no grid reliability emergency,” Ginsberg said. “FERC took the reasonable, conservative approach to initiate a new proceeding to further evaluate the resilience of certain bulk power systems.”

Contact Nick Snow at nicks@pennwell.com.

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