Grid watchdog faces rising pressure to fix nation’s energy woes
The utility industry is clamoring more loudly in an election year for energy reforms that Congress and the administration have failed to deliver on, and one independent agency is being eyed to fix it all.
The Federal Energy Regulatory Commission, the nation’s energy market watchdog, is that agency.
The commission, formed from equal numbers of Republicans and Democrats, is seen as the fair, impartial arbiter of where the rubber meets the road on energy policy.
The commission has been paying close attention to how environmental regulations, both state and federal, are impacting the electric grid, including the centerpiece of the president’s climate agenda, the Clean Power Plan.
But the 2016 election season seems to be driving new outcry for the agency to step in and act where states, the administration and Congress don’t seem to have the inclination or will to do so.
John Shelk, president and CEO of the utility group Electric Power Supply Association, told the Washington Examiner that the commission’s oversight of the large wholesale markets that supply much of the nation’s energy are going to be thrust more into the spotlight, given the big challenges the grid faces amid major changes in how consumers get their electricity.
“It’s going to be interesting to see” where the conversation goes as the commission begins addressing some of these problems, Shelk said. FERC has been holding technical conferences and issuing rulemakings to address some of the challenges, but recent remarks by energy CEOs suggest it’s not going fast enough.
One of the big areas for FERC is how it addresses the “broader question” of the changing energy mix in the country, especially in light of what’s happening in the California and European energy markets, Shelk said.
The change he is referring to is driven in part by the rapid shift from coal, as the top source of the nation’s electricity supply, to natural gas that has taken the reigns as the number one fuel for electricity production.
On top of the coal-to-gas switch, is the rapid increase in wind and solar power, which are primarily intermittent sources of electricity that need to be backed up by natural gas plants in order to keep the grid afloat.
California is facing a crisis that highlights some of the hurdles the rest of the nation will face from the resource switch. The Golden State has plenty of solar panels being installed due to its aggressive renewable energy and climate laws, but an unforeseen problem with its natural gas supply could result in Los Angeles going dark if it isn’t careful.
FERC and California state regulators have been watching the problem closely to address an energy shortfall that could result in rolling brown outs and black outs, according to commission officials.
In Europe, the clean energy policies have caused big swings in power production from renewables, which is changing the power market’s structure in unforeseen ways, making it harder for gas and coal plants to continue running. Similar issues have begun to arise in the U.S. as well.
The administration’s climate plan would drive the transition to renewables even faster while forcing more fossil fuel and other conventional power plants to retire sooner, which critics of the plan say would drive up costs and make the grid less stable.