Oct
17
2017

October 2017: “Reliability Month”

Although October hasn’t been officially named “Reliability Month,” it might as well have been, owing to all the recent news bearing on how our country will generate power in the future.

In Texas, a merchant power company announced the closure of two large coal-fired plants, totaling over 2300 MW of capacity across 4 units, along with a mine that supports one of the plants. The company said that the plants fell victim to “an oversupplied renewable generation market, and low natural gas prices.”

Beltway coverage focused on Texas’ lost capacity and laudatory comments from the environmental community. However, there was insufficient attention to the 600+ good jobs that will evaporate, and to potential reliability impacts in Texas, where citizens clearly remember winter-time brownouts and rolling curtailments in the recent past.

On Friday, FERC Chairman Neil Chatterjee spoke to reporters about DOE Sec. Rick Perry’s request that FERC write new rules compensating for reliability attributes. PACE agrees with the Chairman that “compensating for baseload generation does not equate to destruction of the markets,” and that discussing the value of reliability attributes is a positive “step toward accurately pricing the contribution of all market participants.”

Sec. Perry did an admirable job Thursday, in over 2 hours of testimony to the House Energy Subcommittee, socializing that it’s acceptable and necessary to have an ongoing, robust conversation about reliability and that blind trust in the electricity “marketplace” can’t be the sole guidance.

This fall’s DOE-FERC interplay largely bears on coal and nuclear plants. But natural gas costs and supply impacts on reliability have also come up this month. EIA’s October Short-term Energy Outlook predicts that natural gas prices will edge farther above $3 per MM/Btu in the coming months. On Friday, FERC approved two pipelines needed to deliver natural gas from the Marcellus Shale to the mid-Atlantic and beyond. Even so, the Atlantic Coast and Mountain Valley pipeline projects still face more levels of federal and state review.

PACE will address the nexus between natural gas and reliability next week as we host a Facebook live panel on Thursday afternoon, October 26 examining utilities’ reliance on natural gas and the common-sense business tactics used to manage commodity costs. We’ll share details soon on how to join the live session. Please join us to hear directly from both experts featured in a video PACE released earlier this month.

Nuclear should be recognized in “Reliability Month” as well, with news of progress for construction of two new units at Georgia’s Plant Vogtle. University of Georgia Prof. David Gattie, co-author of PACE’s recent net metering report, published a thoughtful op-ed reminding policymakers why our nuclear fleet supports reliability and national security.

On a lighter note, if you’re curious about what our wonderfully diverse nation has chosen to mark this month, check out this awareness days calendar, which has a little something for everyone. In 2018, just before mid-term Congressional elections, a real Reliability Month might be just the ticket for focusing policymakers on consumers, energy costs and keeping lights on for all.