Is Grid Reliability At Risk?
The Environmental Protection Agency’s (EPA) recent decision regarding electric generating plants is concerning at best. We could debate whether 3-letter agencies actually have the authority to make rules, that bear the same weight as laws, but that’s a whole different issue. This 1 in particular will have widespread effects on households, businesses, schools, hospitals, and other electric consumers.
As demand for electricity increases and policies continue to force the premature retirement of always available generation, a dilemma is playing out at utilities across the country. Simply put, reliability really is at risk. Our country is on track to fall short of the electricity we need to meet future demand. According to Jim Matheson, CEO of the National Rural Electric Cooperative Association (NRECA), “The consequences of this rule are severe. It will result in far less electricity at far greater costs just when demand is rocketing in our digital community”.
The North American Electric Reliability Corp. (NERC) – the not-for-profit regulatory authority charged with protecting the reliability and security of the grid – is also making the case. In its 2023 Reliability Risk Priorities Report, NERC listed “energy policy” as the number 1 threat to reliability. According to them, reliability is no longer assured and environmental policy choices are creating significant challenges. NERC’s vice president of compliance assurance and registration, Howard Gugel says, “The current administration’s disorderly, accelerated push to retire reliable baseload generation in favor of renewables, requires extraordinary action by the stewards of the grid.” We are coming to a crossroads when electric demand cannot be met. (78503000)
As demand for electricity increases and policies continue to force the premature retirement of always available generation, a dilemma is playing out at utilities across the country.
The EPA gives coal and gas plants 2 options – beyond shutting down completely – for reducing CO2 emission: co-firing with hydrogen (30% blend by 2032; 96% by 2038) or Carbon Capture and Storage. Even though the rule has been made, neither technology has been proven effective under large commercial real-world conditions and both have enormous costs and logistical challenges. The availability of equipment for compliance is only speculative at this point and the actual cost can’t be calculated due to the large number of unknowns. It is an unproven technology.
Electric co-ops have been actively involved with innovation regarding the energy transition with large projects in North Dakota, Wyoming, Texas, and Illinois. However, this innovation is no match for the top-down regulatory approach by the EPA. Forcing this type of regulation on everyone actually forces a different approach. This completely removes the autonomy and local decision-making of electric cooperatives. The only choice left at this point is to fight. If policymakers don’t recognize their role in threatening the reliability of the grid and take steps to help prevent rolling blackouts before it’s too late, electric cooperatives, through NRECA, their local Generation and Transmission Cooperative, and their local statewide associations will have to challenge the legality of this regulation.
Brandon J. Wittman
Chief Executive Officer