On June 16, 2022, FERC issued two Notice of Proposed Rulemakings (“NOPRs”) aimed at improving the reliability of the bulk power system against threats of extreme weather. The NOPRs build on the June 2021 Technical Conference on Climate Change, Extreme Weather, and Electric System Reliability, which revealed an industry-wide need to assess current vulnerabilities of the transmission system to weather-related risks.
The first is a NOPR that proposes to direct transmission providers to submit one-time informational reports describing their policies and processes for conducting extreme weather vulnerability assessments and identifying mitigation strategies (“Reporting NOPR”). The Reporting NOPR seeks only to gather additional information – it does not purport to require transmission providers to conduct vulnerability assessments or otherwise alter current extreme weather response processes. FERC explained that the information collected will improve its understanding of how transmission providers identify and mitigate risks to transmission assets and operations caused by extreme weather events. In addition, FERC intends the Reporting NOPR to spur the sharing of best practices among transmission providers to ensure reliable service and prevent crises caused by a lack of electricity in high-risk areas. To that end, the one-time informational reports must: (1) describe the scope of the transmission provider’s vulnerability assessments; (2) develop inputs; (3) identify vulnerabilities and determine exposure to extreme weather hazards; (4) estimate the cost of impacts; and (5) develop mitigation measures to address extreme weather risks.
The second NOPR proposes to require the North American Electric Reliability Corporation (“NERC”) to modify Reliability Standard TPL-001-5.1 to address long-term planning for extreme weather events (“NERC NOPR”). Specifically, FERC directed NERC to modify TPL-001-5.1 to require: (a) development of benchmark planning cases; (b) use of steady state and transient stability analyses to study the impact of extreme weather conditions on expected resource availability; and (c) development of corrective action plans when performance requirements are not met due to extreme weather events. The weather events for which modifications are sought include extreme heat, cold, and drought. FERC directed NERC to submit modified reliability standards within one year of the effective date of a final rule resulting from the NERC NOPR.
In regard to the NERC NOPR, Commissioners Danly, Clements, and Phillips concurred with separate statements. Commissioner Danly remarked that although the development of NERC reliability standards may take over two years to develop, such action is an important step to establish enforceable compliance obligations that promote proactive planning for weather-related events. Commissioner Danly also opined that reliability challenges do not arise primarily from weather events, but rather from federal and state policies that spur the development of weather dependent generation resources at the expense of the dispatchable resources needed for system reliability and resource adequacy.
Commissioner Clements emphasized the need to reform system planning to address the impact of extreme weather events on the electricity grid and for NERC to develop robust reliability standards thereto. In addition, she opined on ensuring cost-effective implementation of the NERC NOPR, and the need for further actions to ensure system reliability, including increased interregional transfer capability, and improvements to scheduling and coordination in non-RTO regions, and properly accounting for resource availability during extreme weather.
Commissioner Phillips concurred to emphasize that additional efforts are needed to ensure the short- and long-term preparedness of the bulk power system. He also noted that, in his view, FERC should next consider further interregional reliability planning reforms, including the addition of a minimum transfer capability requirement. He also encouraged stakeholders to comment on whether FERC should require revisions to RTO/ISO outage scheduling practices and for FERC/NERC to consult with state regulators to develop extreme weather response policies.
Comments on the Reporting NOPR are due August 30, 2022. A copy of the Reporting NOPR can be found here.
Comments on the NERC NOPR are due August 26, 2022. A copy of the NERC NOPR can be found here.