Accelerated Phase-out of Coal, Nuclear Could Overwhelm Virginia Electric Grid

Red markers indicate location of electric grid overload in extreme-case Summer 2022 coal and nuclear retirement scenario. Source: North American Reliability Council

If Virginia and other states in the PJM wholesale electricity market want to shut down their coal and nuclear plants, they had better start upgrading their electric transmission grids or face the risk of extensive overload and failure in extreme weather events. That’s one of the conclusions that can be drawn from a North American Electric Reliability Corporation (NERC) study published yesterday that explores the impact of coal and nuclear power plant retirements on electric grid reliability.

States the study, “Generation Retirement Scenario: Special Reliability Assessment:

Generator retirements are occurring, disproportionately affecting large baseload, solid-fuel generation (coal and nuclear). If these retirements happen faster than the system can respond with replacement generation, including any necessary transmission facilities or replacement fuel infrastructure, significant reliability problems could occur.

Therefore, resource planners at the state and provincial level, as well as wholesale electricity market operators, should use their full suite of tools to manage the pace of retirements and ensure replacement infrastructure can be developed and placed in service. Again, ensuring reliability throughout a significant retirement transition will likely include construction of new transmission and fuel infrastructure.

The scenario examined by the NERC report is not a predictive forecast for 2022. It is designed as a “stress-test to identify risk” during extreme weather events. As the map above shows, there are significant risks for Virginia, which, despite the closure of several coal-fired power plants in recent years, is still heavily dependent upon coal- and nuclear-fueled electric power both originating within the state and imported from outside. When generators are retired from one location and are replaced by resources from another location, power flows shift. The electric grid, designed for one system, may require extensive upgrades in order to accommodate that shift.

The issue is more than academic in Virginia, where electric utilities are under heavy political pressure to close remaining coal plants in the short run and nuclear plants in the longer run, and to restrict the addition of new gas-fired generators or gas pipelines. At the same time, efforts in Virginia to build new transmission lines or upgrade old ones have encountered heavy opposition and experienced significant regulatory delays, meaning that it could take many years to re-tool the electric grid.

The NERC report also raised the issue of fuel source diversity. As coal and nuclear are phased out, the electric grid becomes increasingly dependent upon natural gas, solar and wind. Solar and wind are intermittent energy sources and cannot be dialed up and down as needed during periods of extreme heat and cold. Natural gas is constrained by pipeline capacity, which can be compounded by accidents and other interruptions. Since 1998, almost 800 serious pipeline incidents have been recorded.

“Having up to 90% of the generation fleet relying on a fuel shared between industrial and residential customers as well as the bulk electric generation,” said NERC, “would expose the power system to a reliability risk. Nuclear and coal ensure fuel diversity, which is necessary to protect the reliable and affordable flow of energy.”

The study gave particular attention to the 13-state PJM transmission system, of which Virginia is a part. The stress-test scenario simulated the deactivation of all coal and nuclear, and replace the capacity with natural gas.  The key finding:

Transmission planning studies performed for this stress-test scenario found that BPS (Bulk Power System) transmission system reinforcements, generation dispatch requirements, and new operating procedures would needed to support generator retirements and replacements to maintain reliability criteria. Large amounts of generator retirements within a short time could result in extensive transmission network upgrade requirements that may not currently be included in transmission expansion plans.

Environmentalists have argued that a decentralized electric grid built around clean solar and wind can be resilient. However, any such system would require massive battery storage capacity, and there is no indication that utility-scale battery storage for purposes of load shifting (as opposed to fine-tuning grid voltage and frequencies) will be an economic proposition in the near- to mid-term future.

In what should serve as a warning to Virginia, the NERC study said: “As electric transmission is very time consuming to design, site, and permit, transmission planners and operators must be prepared to use various mechanisms, either in- or out-of-market, and could include steps to delay generator retirements until these transmission upgrades are completed.”

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28 responses to “Accelerated Phase-out of Coal, Nuclear Could Overwhelm Virginia Electric Grid”

  1. Steve Haner Avatar
    Steve Haner

    Again, I think I’m looking at an exhibit. This one will be used with legislators if the utility decides to run up Capitol Hill and cry and whine that the SCC is being unfair, and the GA should take over the resource planning process. I hope legislators (and BR readers) respond as follows: this is interesting and important. Lets put that data before the SCC and subject it to the process for the integrated resource plan, and we have confidence the SCC will insist on maintaining reliability. It is better positioned to understand and judge all this than we are.

    In fact, those exact issues have already been discussed in the IRP case, because Dominion is proposing to retire several viable fossil fuel plants, far earlier than they would otherwise go off line. We need to reconsider that?

    1. I totally agree, the SCC is far more qualified than the General Assembly to work through these issues. How could anyone disagree?

    2. Reed Fawell 3rd Avatar
      Reed Fawell 3rd

      It sure feels good to have the North American Electric Reliability Corporation (NERC) study published yesterday that explores the impact of coal and nuclear power plant retirements on electric grid reliability CONFIRM what several of us here have been saying for years now on this blog.

    3. Reed Fawell 3rd Avatar
      Reed Fawell 3rd

      Even to an amateur like me, that map looks scary – particularly the cluster weaknesses up in Northern Virginia from Dulles area down through Quantico Marine Base, and then down to Dahlgren, Va. before hitting Norfolk and Hampton Roads, after traveling down the north bank of the James River.

      But whole NE corridor from the Virginia Capes up to Philly then west looks threatened by 2022. This is not a game for sissies, or ravaging green capitalists, and their enviromental allies, to be calling the shots and making the decisions.

    4. SH, this NERC report is indeed a future exhibit — the question is, in what forum? A couple of days late I responded to Larry below about how NERC and PJM and FERC and the SCC and Dominion relate to one another; but let’s simply say here that at some level the GA would run up against federal standards and federal regional mandates that the State cannot overrule even if the GA made the SCC keep quiet about it. And that is why it makes absolutely no sense whatsoever to shut the SCC up and limit its powers; they are the State’s best early warning system, its best expert advisers, for how to manage the State’s utilities economically within the larger framework of immutable federal grid reliability and wholesale market requirements.

  2. LarrytheG Avatar

    I’m curious about the role of NERC especially with regard to it’s relationship to PJM. How do the two of them work together?

    PJM seems to have it’s own forecast and reliability perspectives and it’s PJM that communicates with Dominion about the reliability of the grid and what actions need to be taken. For instance, PJM supports putting powerlines over the James River to bolster the grid in the Hampton Roads region. So where is NERC on this?

    PJM is quasi-govt. NERC seems to be more of an industry-supported entity.

    In terms of baseload – which is coal and nukes – it would be DUMB to take them down if you need that baseload 24/7 – which is what baseload is. Baseload does not ramp up and down according to varying demand.

    So talking about wind/solar as if they are alternatives to baseload is even dumber!! the two of them do not work together.

    wind/solar is energy that can be harvested – WHEN IT IS AVAILABLE. It can be used to supplant other other generation (gas) that is not baseload generation but to think of it as an alternative to baseload is just wrong-headed.

    baseload is what you must have 24/7. Other sources, primarily gas – are what you add to baseload when demand exceeds baseload. wind/solar are what you use instead of gas – only when wind/solar is available – and you fall back to gas when wind/solar are not available. wind/solar is not run as a complement to coal/nukes.

  3. It is useful to look at worst case scenarios. But the NERC scenario that was described does not have a lot of application to Virginia’s situation.

    The coal plants that are being considered for retirement over the next several years in Virginia provide about 1% of the total energy generated by Dominion. The retirements are intended to save Dominion money, although the savings will only benefit the shareholders until rate reviews are reinstated. The Mt. Storm plant is considered to be Virginia generation since it is regulated by the VSCC. It is likely to continue operation for some time, as it is meeting current air quality regulations and is mostly paid for.

    The nuclear plants in Virginia would remain operating as they are until 2032, when the first Surry unit reaches the end of its 60-year operating license. Retirements for the other units would occur over an eight year time span and end in 2040. This is a far cry from the 2022 date that NERC is using.

    As I have suggested before, it is possible to replace the aging nuclear units in Virginia at zero costs to ratepayers with a 20-year program of energy efficiency. This would not only avoid the exorbitant costs of refurbishing the nuclear units but actually improve the transmission congestion situation that NERC is warning about. This also maintains fuel diversity by exchanging energy savings for nuclear generation. This provides even greater reliability and avoids increasing reliance on natural gas which is likely to see ongoing fuel price increases and concerns about GHG emissions.

    We would need to get going on such a program by 2020 in order to keep the program within the ranges that are equal to the average annual energy savings from utilities in the U.S. now.

    We are likely to experience advances in various energy technologies during this time. But it provides confidence to know that a program to replace what will become overly expensive nuclear generation will not require such breakthroughs.

    We don’t need scare tactics or crisis programs to achieve lower energy costs and greater reliability, just a well conceived, prudent energy plan that serves both the energy companies and their customers. This program would also create thousands of long-term jobs, and make Virginia a more attractive place to live and do business.

    1. Tom, if Virginia pursues the energy policy you outline and maintain reliability standards, do you see the need to rebuild parts of the transmission grid?

  4. I don’t have the analysis available that they did. But if we reduced load by 3200 MW, much of the transmission congestion that they are predicting would not occur. They are probably also assuming the 1.4% per year load growth that Dominion has been assuming for the past 10 years, but is so far unsupported.

    If the addition of solar occurred at the distribution level rather than what Dominion is proposing, both distribution and transmission congestion would also be reduced. This would save ratepayers money in extra transmission charges and reduces the need for new substations, which also lowers costs.

    A program like this should not be done in isolation because it would also lower utility revenues and profits. We would need to revise the way we pay utilities so they would continue to prosper. This is just a general proposal at this time. But it is an example how a simple program could significantly lower our energy costs and improve reliability. And it would provide a significant number of new jobs and boost our economic competitiveness.

    1. Reed Fawell 3rd Avatar
      Reed Fawell 3rd

      Another words, ignore the entire thrust, tenor, and conclusions of the North American Electric Reliability Corporation (NERC) study, including its above map, the rationales behind it, and the specific actions and solutions laid out and recommended in the report.

    2. Reed Fawell 3rd Avatar
      Reed Fawell 3rd

      For one example among many, consider these statements found on pagse 5 and 6 of the NERC Report

      Should we ignore this advice from the NERC Report?

      “Resource Mix and Fuel Assurance

      Generator resource mix—the collection of generator fuels and power sources producing electricity—is evolving as traditional coal-fired, oil, and nuclear generators are replaced by smaller natural-gas-fired units as well as wind and solar resources. In some ways, the changing resource mix can benefit reliability and security of the BPS. For example, replacing a large baseload generator with a mix of smaller natural-gas-fired generators and variable generation from renewables can provide operating and planning flexibility. However, the changing resource mix also presents known challenges to reliability that owners and operators must address, such as the need to ensure the new mix of fuel can be supplied at all times to meet the load and operating reserves.

      Natural-Gas-Fired Generation Increases in the Scenario

      In the preceding reserve margin analysis, the replacement generation resource mix includes natural-gas-fired units, as well as variable generation from wind and solar. Natural-gas -fired generation continues to grow in interconnection planning queues and has the potential to provide several attributes for selection as a replacement resource for
      retiring generation.

      Like the traditional baseload generators being replaced, natural-gas-fired generators can provide certain ERSs necessary to balance and maintain the electric grid under a variety of system conditions.

      Additionally, in many areas, natural-gas-fired generation can be sited and brought online relatively quickly—often in less than three years. Even in states or provinces with energy policy goals designed to boost the share of renewable generation in the resource mix, analysts predict that the levels of baseload retirements will require increased reliance on natural gas for electricity generation.

      3: Natural-Gas-Fired Generator Contribution to Resource Mix
      The addition of natural-gas-fired generation resources can be challenging in areas where natural gas supply and transportation infrastructure is operating near capacity and where growth in natural gas sector infrastucture is constrained.

      For example, natural-gas-fired generators in the Northeast can experience natural gas supply shortfalls as a result of upstream pipeline constraints. Approvals or new pipeline projects in the Northeast face challenges. Other parts of North America can be susceptible to disruptions in natural gas supply, such as portions of southwestern United States, which are dependent on a limited number of long-haul natural gas transmission pipelines.

      In order for natural-gas-fired resources to provide reliability benefits of traditional baseload generation that they replace, the new resources need fuel assurance. When natural gas fuel supplies to generators are uncertain (i.e., not obtained through firm contracting or supported by sufficiently redundant natural gas delivery infrastructure),

      Reference Margin

      Levels may need to be increased in order to provide the same level of BPS reliability that is being provided by retiring generation. Accelerated retirements of coal-fired and nuclear generation could place additional demand on the regional natural gas infrastructure network for assured delivery as natural-gas-fired generation increases.

      Maintaining Adequate Reserves under Extreme Conditions

      Generation retirements that result in declining Planning Reserve Margins and reduced fuel assurance can challenge the reliable operation of the BPS in extreme conditions. Reliability may be at risk from extreme events and conditions that result in elevated electrical and natural gas load, stressful environmental conditions for grid equipment, or reduced generator fuel availability. Often the extreme conditions that NERC and industry consider in evaluating resource adequacy and BPS reliability are regional in nature, reflecting unique challenges associated with geography, weather variations, or constrained energy infrastructure. Examples of such extreme conditions include the following:

      • The 2014 Polar Vortex and 2017–18
      • Northeast cold snap Prolonged heat or drought conditions in the Southwest
      • Natural gas supply risks in areas with limited pipeline redundancy or natural gas storage capacity …” End Quote —-

  5. If PJM needs more baseload power, then our PJM exporter states (eg; Pa., WVa.) will probably build new nat gas power plants. I am not personally opposed to Virginia getting a piece of the action, but other Virginian’s – Democrats in Gov seat- are vehemently opposed to that. So Virginia will continue to take a back seat and import our power.

  6. Reed and TBill,

    I feel that you missed the point of what I was proposing. The NERC report is premised on doing more of what we have been doing for many decades that doesn’t work so well anymore.

    The basis of their analysis was if demand is growing and we retire some of our existing generation, then we will have to import more power from outside the area (probably from new gas-fired generators) which will cause transmission congestion and possibly increased fuel supply risks. Exactly. I don’t disagree with their conclusions, except their panic date is at least ten years too soon for Virginia. And our demand is not growing.

    What I disagree with is their reliance on old solutions. They lead to exactly the problems that they identify.

    I was suggesting another way to approach the problem. One that lowered transmission congestion instead of raising it. One that reduced costs instead of increasing them. One that avoided increased fuel supply risks because it does not require more gas-fired power plants. The proposal I made solves the problems raised by the NERC report. I just chose to use different options than the same old responses that will cause the problems that the NERC reports warns us about.

    You are bright guys. I would appreciate you telling me the shortcomings of what I was proposing. We have 14 years before we are faced with the potential retirement of our first nuclear unit. We should use the time wisely rather than wander into the morass that the NERC report says could happen without proper planning.

    There is a surplus of currently low-cost generation in PJM (until gas prices get higher). If we need some additional supply for a few years, it would be much better to use this supply than to build something new. We would have to pay for a new facility for 35-40 years when it might be useful for only a few years.

    If you only needed a car for two years (and could not sell it after you bought it) would you lease one or buy one? This is not taking a back seat, but prudent investing.

    The carbon emissions in Virginia are over 41% of all nine RGGI states combined. That is why many policymakers are not too keen on adding more gas-fired plants in Virginia. And carbon is only half of the greenhouse gas effects related to gas-fired generation.

    But we don’t need more supply, we have all that we need plus a surplus in Virginia (with Greensville online). The new energy bill and the pipeline are asking Virginians to pay for utility projects for decades that will provide them with little value. We now have more options than those that have been traditionally selected.

    We should put our collective heads together and select a better future than staying in the rut that the NERC report assumes we will remain in.

    1. LED lighting can potentially greatly reduce electric demand by 2030, up to 40% electric reduction in the USA according to one article. That should help, but Virginia has a lot of elec heat pumps for home heating and the computer cloud is elec intensive.

      Yes if Virginia wanted to go full-out on elecric use avoidance, we could promote LED’s and encourage a switch away from heat pumps. The swtich to LED lighting will probably happen naturally without too much need for forcing. Ultimately we do rely on Dominion/SCC to tell us what the future demand looks like, and what we have to do about it (if anything).

      1. Actually TBill, if we used large ground-sourced heat pumps for the space heating and cooling in our large buildings, we would save a great deal of energy.

        Residential heat pumps are much more efficient than using electric baseboard heat and window air-conditioners for example, in mild climates such as ours.

  7. Reed Fawell 3rd Avatar
    Reed Fawell 3rd

    Yes, Tom, I understood you exactly. You want to ignore the North American Electric Reliability Corporation (NERC) study because you disagree with it. Your opinion is driven by your aversion to gas. So your want to limit demand and supply, and turn the market over the renewable power which will threaten the grid, according to NERC. This has been your basic argument all along. Is that not right?

    1. Reed,

      I’m disappointed that we seem to be talking past one another.

      I did not say that I disagreed with the NERC report, except to say the timetable in Virginia is in the early 2030s rather than the 2022 timeline described in their report. Given the scenario they selected and the responses they identified, their conclusions are likely to be accurate. NERC is a respected resource.

      Your recap of what I recommended is entirely inaccurate. I never advocated the outcomes that you attribute to me in this or any other BR post. For this article, I was merely proposing to substitute a new source of generation that could cost ratepayers nothing and be provided at a cost of about 3 cents per kilowatt-hour: energy efficiency. This would be far cheaper than spending at least $4 billion to refurbish Virginia’s nuclear units for another 20 years of operation. This would result in the cost of energy generated by these units to be possibly in the 15-25 cents per kilowatt-hour range. And require a stream of payments from ratepayers that could be $12 billion or more (non-discounted).

      Reducing demand throughout the grid in Virginia would actually reduce transmission congestion in Virginia. This would save money and reduce future costs rather than increase the costs based on importing more supply as assumed in the NERC report. Lowering demand would also increase reliability by providing more capacity in our existing transmission system to import energy during unexpected emergencies.

      Different solutions result in different outcomes. I have always said that I expect that nuclear, gas and, to a lesser extent coal, will be with us for some time. I have focused my recommendations on what to do next.

      The options that I have put forth are designed to improve the reliability and resiliency of our energy system, lower costs, be cleaner, increase employment and economic activity, provide more flexibility and increase customer choices. Continuing to rely solely on the technologies that have served us for the past 60-100 years will not achieve those same ends.

      I have not proposed to “limit” our choices or to “turn the market over” to any particular technology, but to open it up. We now have many choices that do not all require a large utility in order to implement them. I thought you might be one who would support a greater use of market signals to guide our energy choices.

      1. Reed Fawell 3rd Avatar
        Reed Fawell 3rd

        No, Tom, I understand you completely. Do away with nuclear and coal as quickly was possible, shut down all new pipelines and gas plants, and go mad dash for renewable power, while restricting c0msumer demand, and the supply that is necessary to serve it, and our national security. Whether you are disappointed in my refusal to accept your spin on the truth is irrelevant to what is going on in the world and your problem alone.

  8. LarrytheG Avatar

    I think what I hear from TOM makes sense.

    If we LOWER demand and at the same time we ADD distributed SOLAR – we actually reduce the congestion on the grid and in turn that actually improves reliability.

    NERC is doing the same thing that Dominion is doing – they both are forecasting increased demand and then that justifies more plants and more expansion and upgrading of the grid.

    The TRUTH of this is confirmed if you look at Dominions and NERCs past forecasts and compare them to what actually happened.

    They’re both committed to producing and selling MORE electricity – not more efficient production and use. More electricity produces more dollars for them and increases GDP but GDP basically does not measure real “productivity” when that productivity is gained through efficiency…

    that’s why GDP is going up and wages not… we’re producing more and more with less and less… the more robots we build the less human-staffed workers are needed.

    ” Evidence of a Decline in Electricity Use by U.S. Households
    It has been slowing down for decades, but is electricity use by American households now going down?

    Americans tend to use more and more of everything. As incomes have risen, we buy more food, live in larger homes, travel more, spend more on health care, and, yes, use more energy. Between 1950 and 2010, U.S. residential electricity consumption per capita increased 10-fold, an annual increase of 4% per year.

    But that electricity trend has changed recently. American households use less electricity than they did five years ago. The figure below plots U.S. residential electricity consumption per capita 1990-2015. Consumption dipped significantly in 2012 and has remained flat, even as the economy has improved considerably.”

  9. Jane Twitmyer Avatar
    Jane Twitmyer

    A few insights from some consultants on a grid that is structured very differently, driven by the technology of localized wind and solar.….

    Accenture Consulting, in a paper called Power Surge Ahead says …
    “With most efforts currently focused on addressing local issues on a case-by-case basis, few utilities are taking the network-wide approach required to address (and benefit from) the increase in distributed generation.”

    Accenture go on to caution against a strategy that restricts the build out of distributed generation, as Dominion is doing. “Relying on regulatory constraints to limit the deployment of distributed generation into the network may help in the short term to avoid some increases in network costs,” but they question the sustainability of a regulation-based strategy that seeks to prevent new forms of more renewable generation from connecting to the network. This seems to be Dominion’s strategy.

    Instead according to Energy Efficiency Markets …
    Virtual Power Plants (VPPs), “offer a very different future, providing financial and environmental benefits for DER owners while also maintaining a reliable supply and demand balance on the electric grid. The costs are much lower — about $80/kW” lower … than meeting demand with a central coal or even gas fired plant.

    “Navigant Research defines a VPP as ‘a system that relies upon software and a smart grid to remotely and automatically dispatch and optimize DERs via an aggregation and optimization platform linking retail to wholesale markets.’” Virtual power plants can be cloud-based, central or distributed platforms that aggregate, optimize and control varied and heterogeneous DERs to behave as conventional dispatchable power plants. They deliver power without the physical plant.

    Often, utilities fire up large and less efficient power plants to grapple with small gaps in demand. They may deploy a 600-MW gas plant when only 5 MW is needed. With a virtual power plant, when the operator asks for 5 MW, the virtual plant will do two things. It will look for places to reduce load, so the system may not need all of the 5 MW. It will also look for places where it can self-generate electricity by discharging batteries, or dispatching hydropower, wind or solar facilities.

    So this networked connection of microgrids made up of distributed energy generation at a local level is where the new clean technology is taking us. It is a different structure that will eventually replace the old ‘baseload’ and ‘peak’ system of central generation. We should be moving that way and so far Virginia is not.

  10. LarrytheG Avatar

    I think it is safe to say that Dominion and other utilities are focused on their bottom lines and if they can’t rely on increased consumption of electricity for more/better revenues -they’re going to try to sell other stuff – and it won’t be demand-side technology that reduces consumption even more.

    That’s why you see Dominion wanting to charge ratepayers for burying electric lines, and other “grid” improvements without any ROI being calculated.

    This is what companies do. In the non-monopoly world – competitors keep each others feet to the fire so they can’t make higher profits off of low-value products and services. In the monopoly world there is not such market force and that role falls to the regulators. But if the regulators are co-opted and/or neutered by the GA then the utilities will run amok and engage in every additional “profitable” service they can… there is no magic it’s pretty bald-faced.

    Dominion has zero interest in a more efficient distributed grid that erodes their revenues.

    To be fair and honest – if distributed systems were that good – we’d see that become the de-facto standard on the 10,000 inhabited islands in the world that currently get their electricity from burning diesel oil.

    Those islands are the truth model in my view.

  11. Jane Twitmyer Avatar
    Jane Twitmyer

    Hawaii will be 100% renewable by 2045 they say … So it is all going to take time but the islands are on the way. Check out RMI and their merger with the Carbon War room. Their islands-energy-project is making headway. It includes things like “LED Street Lighting Projects in Bahamas, Belize, Montserrat, San Andres (Colombia), St. Lucia, and St. Vincent”, Microgrids like “10 MW Bahamas Family Islands Solar and Storage Project and 8 MW Grenadines Solar and Storage Project.
    AND … 12 MW San Andres (Colombia) Utility Wind
    3 MW San Andres (Colombia) Utility Solar
    Geothermal Projects in Montserrat, St. Vincent, and St. Lucia
    4 MW Seychelles Floating Marine Solar
    5 MW Aruba Solar for Schools
    1 MW Anguilla Utility Solar
    26.4 MW Aruba Utility Wind
    A lot of their work is process ‘stuff’ like …”Developed a set of guidelines for governments, utilities and insurance providers to design and construct solar PV ground mount systems to be Category 5 hurricane resistant.” Their grids will have to change as our must to accommodate the different structure required by renewables and distributed generation, but they are moving toward ‘no more diesel electricity’. 17 projects totaling over 70 MW are spread across 8 island nations that are either under construction, under procurement, or plan to be tendered.

  12. Larry, you ask good questions, but let me go back to this earlier one: “I’m curious about the role of NERC especially with regard to it’s relationship to PJM. How do the two of them work together? PJM seems to have its own forecast and reliability perspectives and it’s PJM that communicates with Dominion about the reliability of the grid and what actions need to be taken. For instance, PJM supports putting powerlines over the James River to bolster the grid in the Hampton Roads region. So where is NERC on this? PJM is quasi-govt. NERC seems to be more of an industry-supported entity.”

    A basic bit of background: NERC is the reliability-standards-setting agency for the grid. Yes, it’s run by the industry, but its standards (which are mandatory for all electric utilities [including coops and munis] when adopted) must be approved by the Federal Energy Reg. Comm’n (FERC). What NERC standards say is something like, “Service to all retail electric customers must be at 60 Hertz A.C. with a variance of X/Y cycles per hour, and must be dependable not to exceed X outages per Z timeframe.” There are subordinate standards for transmission lines, for generators and so forth, but the driving force is the reliability of service to the retail customer. When it comes to electric service, NERC is the utility industry’s version of ANSI (the American National Standards Institute).

    The utilities plan their facilities to provide electric service that meets these NERC standards. If they don’t, they get written up by NERC and reported to FERC and their State Commissions. That’s why you can go just about anywhere in the US and sign up for electric service and it will be about the same characteristics and just as reliable as anywhere else in the US.

    PJM is the independent system operator of the PJM Region. PJM doesn’t set reliability standards but implements them at the grid level. PJM has dozens of utilities operating within its portion of the grid and it has to come up with an overall plan for maintaining the reliability of service at the grid level within that region. The individual utilities plan their own pieces of the grid, but PJM pulls all those individual plans together into a “coordinated” PJM-wide plan; and if one utility’s plan doesn’t make sense given what its neighbors are planning, PJM calls them together and knocks heads to work it out; or if push comes to shove, PJM can go to the FERC and ask for an order directing changes. PJM has its own planning staff and prepares its own master plan for the transmission grid that will meet NERC standards, given what the utilities are forecasting in the way of loads and generating resources, and if PJM thinks the utilities are not planning enough transmission where it is needed to meet NERC standards, PJM will say so — to the State Commissions and to the FERC. Often there is more than one way to meet those standards, so PJM and the utility may end up arguing for different solutions before the relevant Commissions, but usually there is a consensus plan worked out between them before the utility seeks regulatory approvals to build it (a good example is that James River crossing you mentioned). Also, PJM and the utility may disagree on their forecasts; those disagreements also end up before the relevant Commissions — as you and TomH have pointed out on occasion.

  13. (cont’d) Both NERC and PJM, as well as individual utilities, can and usually do raise the alarm when they see dangerous trends that threaten reliability on the horizon. PJM’s focus is on grid reliability and economics within its multi-state area. NERC only gets involved at a very high level when it sees long-range trends that threaten grid reliability (and to a lesser extent, economics) on a large scale — like changing modes of electric generation and the onset of time-shifting resources through batteries and the increased use of electricity for transportation, and threats like cybersecurity and terrorism and natural disasters — if changes aren’t made to the transmission grid to deal with them. NERC’s concern is national electric policy, not its local implementation, and its chief forum is the FERC, and Congress.

    1. Reed Fawell 3rd Avatar
      Reed Fawell 3rd

      Glad to see you back, Acbar.

    2. Reed Fawell 3rd Avatar
      Reed Fawell 3rd

      Acbar, is this your arid lecture on bureaucratic process, or do you instead have any principled stand on the substance of what is going on in the real world we live in? Where is your beef in all these fancy words of yours?

      1. Amidst the arid lecture, hopefully, is a little clarification with a big implication. Clarification of what the roles of NERC and PJM are, and aren’t — as LG asked — because that comes up in any discussion of what the VSCC can and can’t do. It all relates to which utility activities are under federal versus State jurisdiction. Yes it’s all complicated and not a little boring, until the discussion turns to another favorite topic here on BR: what can be done about the GA’s meddling. Which brings me to: Implication — specifically, the fact that NERC and PJM report to FERC, a federal agency, not to to the SCC, which implies that the GA (which can and has restricted or overridden the SCC repeatedly) can’t do a damned thing to stop either NERC or PJM from expressing their views about the reliability of Dominion’s system or the credibility of its in-house forecasts of load growth or the need for new transmission or what should be done to make Dominion a more efficient, lower cost retail electricity provider. But that federal/State jurisdictional split also implies, the FERC and PJM can’t do a damned thing to stop Dominion from rate-basing all its new generation, even though it makes no sense for ratepayers to absorb not only the entire installed cost of that generation including profit, but also the entire risk of wholesale non-competitiveness and premature obsolescence. And while PJM runs a 13-state-wide wholesale electric market, neither PJM nor FERC can make Dominion buy its retail power there even if it would be cheaper than running its own generators. And while FERC can declare that new transmission is needed, the State has exclusive jurisdiction over where to build it, or in some cases whether to build it at all. Retail rates, including the rate-basing of new generation, and transmission siting, is entirely the purview of the SCC, and THAT is what the GA most tries to manipulate for Dominion’s benefit. And that is what the SCC’s investigation of the IRP is all about!

        So we come to, “Where is your beef in all these fancy words of yours?” My beef is, NERC points out the problem but not a single solution. As JB put it, “If Virginia and other states in the PJM wholesale electricity market want to shut down their coal and nuclear plants, they had better start upgrading their electric transmission grids or face the risk of extensive overload and failure in extreme weather events. That’s one of the conclusions that can be drawn from a North American Electric Reliability Corporation (NERC) study published yesterday that explores the impact of coal and nuclear power plant retirements on electric grid reliability.” Right! The coal plants being retired are not in the same locations as all that new renewable resource power and all those new natural gas units and someday all those batteries. But whaddaya gonna do about it? Who has jurisdiction over the new transmission? Who has jurisdiction over the new generation? Who has jurisdiction over each of the various costs reflected in the retail electric rates that result? Who has jurisdiction to eliminate the excess profits that result from laws that restrict rate reviews? Who is looking over Dominion’s shoulder as it plans how to respond to all the changes that are happening on the Grid?

        The SCC, acting for the State of Virginia, is the first line of defense for retail consumers, here. The SCC has created the IRP process in order to perform the very review that protecting consumers requires. The GA in its wisdom has restricted the SCC’s ability to perform future IRPs, but it hasn’t forbidden the current one. It’s extremely important that the SCC expose Dominion’s assumptions and planning to the thorough scrutiny that the “public interest” demands. The SCC is doing so — despite the high political stakes and the potential for backlash from the GA. Among its options are to tell Dominion to stop ignoring the PJM wholesale markets and stop building unneeded or higher-cost generation at ratepayer expense and increase funding for energy savings programs and demand-side-management programs and self-generation by its customers. NERC is also saying to the SCC, as well as to PJM, don’t forget about upgrading Dominion’s transmission to keep the grid reliable.

        If my ramblings here have any ultimate purpose it’s to make clear that sorting through all this stuff requires expert decision-makers, backed by large staffs, with all parties offered full opportunity for hearings and due process — the very purpose for which the SCC was created. As Steve also reminds us, there is no way even the best-intended GA initiative can sort through all this stuff and reach the right conclusions except by accident. Meanwhile, however, we can at least discuss these things intelligently on this blog, and for that purpose TomH and I who both used to work in the utility business have been known to provide other readers here with the occasional tutorial on the regulatory framework for this discussion.

      2. To correct an important omission above: “there is no way even the best-intended GA initiative can sort through all this stuff from scratch in just a couple of days of committee hearings and reach the right conclusions except by accident.”

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