SEATTLE — “Buckle your seatbelts; it’s going to be an interesting ride,” NAES CEO Bob Fishman said as he kicked off last week’s third biennial NAES NERC conference, where nearly 140 power plant operators, engineers and back-office professionals spent three days being schooled in the finer points of complying with NERC standards.

Fishman wasn’t so much referring to the nature of the conference — billed “Sustaining Reliability: Balancing Operations and Compliance” — as the changes forcing the electricity sector to re-examine its approach to reliability.

“To look at the market, we’re entering an era of unprecedented change,” said Fishman, whose company helps generators, transmission owners and others comply with NERC reliability standards. “In my career, I’ve seen the rise of the gas turbine and the combined cycle plant. During my stint at Calpine, we were building 8,000 MW a year for a while, and that was a big shift. But this shift is different and very fundamental.”

Demonstrating his point, Fishman listed several concurrent developments: the decline in electricity demand relative to economic growth; growing reliance on renewables and efficiency; plant retirements; and persistently low power prices driving an increasing number of bankruptcies by generators.

What do those changes mean for compliance, grid operations and the future of the industry? Fishman posed rhetorically.

“The good news is that people can’t live without electricity, so the grid’s not going away soon,” he said. “But we are going to see a very different grid infrastructure and operation than we’ve seen before. The integration of renewables into the grid has and is causing a dramatic shift in where power is generated, how it’s generated and how the grid copes with the intermittency of renewables.”

The three-day conference, which featured NERC CEO Jim Robb and FERC Commissioner Neil Chatterjee, touched on EPA’s replacement for the Clean Power Plan, the politically charged debate over grid resilience, cybersecurity, and the impact of electric vehicles and solar generation. (See related story, NERC Seeks to Balance Oversight, Collaboration.)

Here’s more of what we heard.

FERC Discusses Resilience

Mark Hegerle, director of the Division of Compliance in FERC’s Office of Electric Reliability, pondered the meaning of resilience: “Is it encompassed by reliability? Is it part of reliability? Is it something separate from reliability? Does it mean fuel security? Does it mean hardened transmission? Cybersecurity? Recovery from thunderstorms or distribution outages?”

Hegerle noted that FERC in January rejected the Department of Energy’s Notice of Proposed Rulemaking to provide price supports for coal and nuclear plants. Instead, FERC opened its own resilience proceeding setting out three goals: to develop a common understanding of resilience, understand how each region assesses resilience, and use that information to evaluate potential commission actions (RM18-1). (See DOE NOPR Rejected, ‘Resilience’ Debate Turns to RTOs, States.)

“We wanted to actually think before acting. I know that’s a rarity in Washington,” he said.

“FERC has a lot of responsibilities, but protecting the reliability of the bulk power system is among the most important,” Chatterjee said. “It’s a point that I made during my Senate confirmation hearing, and one year into my time at FERC, I remain committed to this mission.”

Chatterjee said he has “gotten under the hood of the system” as commissioner, helping him understand even more what it takes to maintain the high level of reliability enjoyed by the U.S. He also cautioned that historically low natural gas prices and technological innovation are driving “unprecedented changes” in the country’s resource mix.

“These trends promise tremendous benefits to consumers through lower prices and great choice, but they also highlight a need for vigilance to ensure that reliability is not adversely impacted,” Chatterjee said. “Ten years from now, I do not want to regret not having asked the hard questions about the effects of these changes in resource mix.”

On Cybersecurity

“It’s no secret that America’s critical infrastructure is under threat from foreign actors,” Chatterjee said, referring to the potential for cyberattacks on the grid. “Could the grid hold up against a cyberattack that take out a [gas] pipeline? What about a cyberattack that takes down a substation?”

Joseph Baugh, senior compliance auditor for the Western Electricity Coordinating Council (WECC), addressed the need for “low-impact” facilities — such as smaller power plants — to be hardened against cyberattacks, a new requirement under a NERC’s CIP-003 standard.

“Smaller sites can become a vector for attacks on more critical facilities,” Baugh said.

“If you just own a single generation location, that’s a low-impact [bulk electric system] asset — but you still communicate,” Baugh said. “You probably communicate with either a [generation operator] or a [balancing authority] somewhere. And if you have someone providing transmission services for you, you [are] probably communicating with a [transmission operator]. Know where those communications paths lie, know what they look like, know what they use, and develop the protections necessary and applicable to those communication paths.”

“Cyber is a rapidly evolving threat. It’s a threat that morphs day in, day out,” Robb said. “Your ability to protect yourself from a security perspective is much, much more complex than operating a system reliably and securely.”

On the Demise of Peak Reliability

Robb said the single most important reliability issue facing the U.S. over the next two years is Peak Reliability’s announcement that it will end operations as the Western Interconnection’s reliability coordinator as soon as the end of 2019. Peak will be replaced by “at least three, maybe four [RCs], depending on how you do the math,” Robb said. “The Western Interconnection is structured very, very differently than the East. It really operates as one integrated machine and has had the benefit of Peak Reliability being the reliability coordinator for the entire interconnection.”

The CEO noted that CAISO, SPP and Canada’s BC Hydro could all be functioning as Western RCs within the next two years and would require NERC certification.

“Most importantly for the West are [that] seams agreements are going to need to be put in place to make sure those RCs operate seamlessly and effectively as one,” Robb said.

Chatterjee said FERC is “closely monitoring” the transition from Peak.

“While I appreciate the desire for greater participation in markets and reduced costs that prompted this change, moving away from a single reliability coordinator in the West reintroduces many of the difficult seams issues that prompted the formation of Peak in the first place,” he said.

Maury Galbraith, executive director of the Western Interstate Energy Board (WIEB), expanded on the potential seams issues in a post-Peak West, listing concerns over outage coordination, system operating limits, awareness of remedial action schemes, data sharing and overall communication.

Galbraith acknowledged that CAISO was likely to become the RC for most of the interconnection and said WIEB was concerned about governance under the ISO — or any other RC that is stood up in the region.

“We think the decision-making of the RC needs to be transparent. It needs to be independent. There ought to be a role for the states and provinces to provide input into that decision-making process,” Galbraith said.

Solar, Storage and Flexible Generation

Chatterjee said his staff gets annoyed when he refers to energy storage as a “gamechanger.”

“They say it’s too cliche of a comment, but there’s truth in that cliche,” Chatterjee insisted. “Storage will be the transformative technology. But for us to be able to realize storage’s full value, we must ensure communication between the customer, the distribution utility, the transmission utility and the RTO in a way that’s never been done before.”

Galbraith pointed to the “explosion” of distributed solar in the West, which is expected to double in the next 10 years. That development is coupled with the significant retirement of coal resources, with about 15,000 MW being shuttered between 2010 and 2025.

A major implication of those two developments: “We are seeing, with all of the renewable generation, a premium placed on flexible operation of other generators,” Galbraith said.

Galbraith noted that Western Interconnection coal units that in 2001 on average operated at near capacity for 52% of their operating days are now functioning as baseload just 22% of the time. In 2016, coal units were offline for 22% of operating days, compared with 9% 15 years ago.

“So one big question for [WIEB’s Western Interconnection Regional Advisory Board] and its members are, ‘Where are we going to get ancillary services, not next winter or summer, but five, 10, 15 years down the road when those coal units are retired or offline?’” Galbraith said.

— Robert Mullin