By Michael Brooks

WASHINGTON — Speakers and attendees at Infocast’s 21st Transmission Summit East last week noted that “resiliency” was the buzzword of the event.

A consensus seems to have emerged on an industry meaning of the word that distinguishes it from “reliability”: the ability to reduce the magnitude and duration of a disturbance in grid operations.

But there was little to no consensus on how regulators and utilities should measure or value it. Nor was there any agreement on whether there is even a resilience problem to solve.

Michael Spoor, vice president of transmission for Florida Power & Light, opened the conference with a presentation detailing how the utility’s hardening of its system lessened the impact of last year’s Hurricane Irma compared to Hurricane Wilma in 2005. Since 2006, FPL has spent more than $3 billion to replace its wooden transmission and distribution poles with concrete and steel structures able to withstand 145-mph winds, as well as undergrounding some of its lines.

Despite Irma making landfall in Florida as a Category 4 storm (compared to Wilma’s Category 3) and affecting 1.2 million more customers than Wilma, it took eight fewer days for FPL to restore service to its customers.

But that was a case of a utility in a non-RTO state taking the initiative itself, without market-based incentives or federal directives.

“This isn’t a new problem. We’re using a new word, maybe, to define something that we’ve doing for a really, really long time,” Katherine Prewitt, vice president of transmission for Southern Co., said in a Wednesday panel on valuing resiliency.

“I think that the bottom line with regard to the word ‘resiliency’ has a lot more to do with policy and politics than it does with operations and what we’re doing on the ground,” said Barbara Clemenhagen, vice president of market intelligence for Customized Energy Solutions. Utilities have been complying with NERC reliability standards on a nonvoluntary basis, “but certainly I don’t think there’s any utility in the room who would say they wouldn’t volunteer to address all of these standards.”

Paul Kelly, director of federal policy for Northern Indiana Public Service Co., noted that a NERC report published last year found that resilience against weather-related events has been improving. “So there wasn’t so much of an alarm bell being sounded from the reliability organization, but nationally it’s become a very politically focused issue.

“We really want to make sure we make the right decisions, and that we have a really good understanding of ‘is there truly a problem?’”

‘Beyond N-1’

The concept of N-1 — planning for the loss of a grid asset, such as a generator or a transformer — has “served us well for over 100 years,” Mohammed Alfayyoumi, director of Dominion Energy’s transmission system operations center, said in a panel on considering resiliency in grid planning. “But in today’s environment with a focus on resilience, I think we need to go beyond N-1, where we can look at N-2, N-5, depending on the situation.” Technology has progressed so that computers can calculate N-2 across the system, he said.

Paul McGlynn, PJM senior director of system planning, said natural gas pipelines are also important for resilience. “We need to expand [N-1 contingencies] to events on the pipeline system: loss of a pipeline, loss of compressor station or whatever may also impact part of your generation fleet.”

But Clemenhagen said there was a need for discussion on “the difference between a rational economic system that makes sense for … the consumers who are paying for it and, not just a gold-plated system, but a platinum-plated system that you hear some policymakers assume that we can have; not just N-1 but N-∞ contingencies.”

A former member of the British Columbia Utilities Commission, Clemenhagen said, “We need to be very careful to define [resiliency] … based on rational economics for consumer interests, because in the end, they have to pay for it. The end users are the ones who pay; I don’t care how you calculate it, whether it’s market-based costs or reliability-based costs, consumers will pay for these costs in the end.”

“We could platinum-plate the system, but I don’t think that’s what anyone wants,” Prewitt said.

“‘The ability to rapidly recover’ … looks a lot different in Louisiana that’s recovering from a hurricane event, than it does in my state of Indiana if we have an ice storm in the dead of winter,” Kelly said. “I think our standards in America are phenomenal because we emphasize reliability. And if I could take a dollar and invest it somewhere, I’d much rather invest it in reliability. I’d rather keep the lights on for my customers versus taking that dollar and shipping it over to resilience.”

Why Now?

Several moderators asked their panelists why resiliency was such a big focus of discussion lately — and each gave a somewhat different answer.

McGlynn talked about the threat of bad actors and cyberattacks. Aubrey Johnson, MISO executive director of system planning and competitive transmission, cited the reliance on electricity for almost every aspect of modern life, and that people are more aware of outages across the country. Alfayyoumi said that the grid is becoming more complex because of the rise of renewable resources. Clemenhagen, along with many other panelists and attendees, cited recent severe weather events across the country.

Barely mentioned, however, was Energy Secretary Rick Perry’s proposed Grid Resiliency Pricing Rule, which called for RTOs to pay the full operating costs for generators with 90-day onsite fuel supplies. In testimony before Congress, Perry cited the polar vortex of 2014 as evidence for the rule’s need. (See Perry Defends Call for Coal, Nuclear Supports.)

However, the proposal was apparently based on an “action plan” from coal producer Murray Energy that called for “immediate action … to require organized power markets to value fuel security, fuel diversity and ancillary services that only baseload generating assets, especially coal plants, can provide.” (See Photos Show Murray’s Role in Perry Coal NOPR.)

FERC eventually rejected the proposal, instead opening a new docket to document how each RTO and ISO assesses resilience and use the information “to evaluate whether additional commission action regarding resilience is appropriate.” The summit came on the eve of the due date for the grid operators’ responses. (See related story, RTO Resilience Filings Seek Time, More Gas Coordination.)

“Resiliency means different things to different people,” John Lawhorn, senior director of policy and economic studies for MISO, said in a Thursday panel on the status of wholesale market reforms. “From my personal perspective, I think the risk associated with overbuilds is much less than the risk associated with underbuilds. But we need to be able to quantify that information for presentation to our stakeholders and our regulators to have them weigh in to evaluate how much risk they want to take.”

“There are different ways to address [resiliency], but the definition of what it is and how you solve that and measure it, from my perspective, is very important,” said Keith Collins, executive director of SPP’s Market Monitoring Unit.

“I don’t know what FERC’s going to do with this,” PJM General Counsel Vince Duane said, sounding almost weary. “They’re going to have a tremendous amount of information, and it’s going to be leading in a lot of different directions, so I don’t envy their task. And it’s hard to offer tangible and concrete suggestions, but at PJM we’ve tried to do that in our comments tomorrow as best we can.”