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FERC Expert Warns Electricity Growing Unreliable

Virginian Mark Christie is using his position on the Federal Energy Regulatory Commission as a national pulpit to preach a message of energy reliability doom, and he is being heard.

It helps that he is not alone in spreading the alarm. It also helps that he is basing his warning on actual instances of energy shortages, from Texas’s deadly experience two years ago to the problems in the Eastern United States just before Christmas 2022, which merely came close to catastrophe.

“The United States is heading for a very catastrophic situation in terms of reliability,” Christie told a United States Senate hearing May 4. “The arithmetic doesn’t work…This problem is coming. It’s coming quickly. The red lights are flashing.”

Christie joined the FERC panel in January 2021, after 17 years as a member (and often chairman) of Virginia’s energy regulator, the State Corporation Commission. Prior to that he had a career as a lawyer, lobbyist and then legal advisor to Virginia’s Republican state legislators.

This is not just a national debate, but also a Virginia debate. Virginia’s Governor Glenn Youngkin (R) 2022 Energy Plan and now Dominion Energy Virginia with its new integrated resource plan are sending the same message. They also warn that eliminating most or all fossil-fueled baseload generation rapidly and replacing it with wind and solar only is a recipe for failure.

And Christie isn’t alone. The other three FERC commissioners, two of them appointed by Democratic administrations, joined him in the message to the Senate. The uniformity of their views is the point that cannot be ignored, and you can watch the full hearing here. The Utility Dive coverage quoted the other commissioners extensively as well, but then ran to various advocates for intermittent renewable energy who proceeded to dispute that there is a problem or sought to blame it on fossil fuels.

Behind the argument is a February report from the regional PJM Interconnection transmission network, the largest such regional electricity sharing organization in the country. Quoting from the media release of the same date:

Energy policies and market forces already have, and could further expedite, the retirement of existing generation resources faster than new resources are able to come online. PJM’s analysis…indicates that there is up to 40 GW (gigawatts) at risk of retirement from economic and policy drivers by 2030. The report also highlights significant uncertainty around the pace of resource additions, which at current completion rates would be inadequate to maintain resource adequacy. The potential also exists for significant load growth in the future, driven by data center additions and electrification of transportation, heating and industry.

The coal, gas and nuclear plants disappearing are reliable baseload generators. They account for more than 20% of PJM’s entire power assets.  Dominion’s entire generation portfolio is 21 gigawatts. While they are retiring, demand is expected to grow about 13 gigawatts. The replacements coming online, and coming online more slowly than the retirements, are weather dependent.

Solar panels produce nothing 75% of the time and wind turbines produce nothing 60-65% of the time. That is Christie’s point about the numbers not adding up.  Some of the plants PJM warned were going to close, however, were Dominion’s and its new IRP calls for maintaining them instead.

In a Tweet, Christie (who has become prolific on Twitter), noted that another energy market observer, Independent Market Monitor, published an estimate the retired generation within PJM could reach or exceed 50 gigawatts.

Christie then bolstered his argument with a law journal article challenging some of the basic economics and incentives of our current energy market, including PJM’s capacity market and the standard practice of paying all power generators within a single clearing price. That is usually higher than their actual costs. The article is technical, but you don’t need to be an economist or engineer to understand it.  Read the summary at least.

Utility Dive went to the Natural Resources Defense Council and a Washington lobbying group for the renewable industry to dispute FERC’s warning. In Virginia, the angry pushback has come from Virginia Mercury, with a column by the Sierra Club’s Ivy Main complaining that Dominion is simply pandering to Youngkin. Main ignores the possibility that Dominion, in earlier IRP filings moving away from gas, might also have been pandering to a Governor she agreed with, Ralph Northam.

Main makes no mention of the PJM reliability report from February, or of the energy crunch right before Christmas. Virginia Mercury appears to have ignored both, along with the unanimous and bipartisan testimony in front of the Senate two weeks ago. Those who have disputed PJM’s report claim the problem in December was caused by a failure of the natural gas plants, but that is misleading.

In Texas two years ago, gas plants and pipelines that were not properly winterized failed from the cold. PJM facilities were better prepared for the cold (some still failed) but a different problem cropped up. Much of the shortfall happened because gas plants could not get supply.

When PJM was stretched near the breaking point, on December 23 and then again on December 24, generation units which had participated in the capacity market and been paid for their promised electricity didn’t step up. Some are facing fines, and the excuse that they could not get fuel is not being accepted. Christie’s complaints that the capacity markets are not working is becoming a common one.

The argument for more gas supply is also a Virginia debate, as the Mountain Valley Pipeline across Southwest Virginia and TC Energy’s pipeline upgrade into Hampton Roads are being opposed bitterly by the wind and solar industry advocates.  Both are vital. Both could still fail.

The competing visions for Virginia’s energy future, a diverse supply adding new natural gas and nuclear, or retiring gas to rely on two sources – wind and solar with some battery backup – should be put honestly before the voters picking a new General Assembly in November.

Steve Haner is Senior Fellow with the Thomas Jefferson Institute for Public Policy. He may be reached at steve@thomasjeffersoninst.org

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