Rapid electric load growth, the loss of baseload generating assets and more extreme weather make a diverse power portfolio more crucial than ever, a generation and transmission cooperative leader told federal energy regulators.
“An ‘all of the above’ policy on resources has never been more critical to maintain reliability, predicated in large part on unprecedented challenges,” Hoosier Energy President and CEO Donna Walker said in remarks submitted to the Federal Energy Regulatory Commission as part of FERC’s annual reliability technical conference in Washington, D.C., on Oct. 16.
Walker represented NRECA on a conference panel about resource adequacy and expected load growth. She discussed the confluence of variables that utilities must navigate in the current environment, including potentially rapid load growth, plant retirements, and a shift toward variable and energy-limited resources.
The commission “would benefit from considering the cumulative impact of all of these factors when evaluating the reliability risks of today and how it can avoid exacerbating those risks,” Walker’s written testimony stated.
She said the U.S. electric grid is already struggling to keep up with existing demand while preparing for increased demand from manufacturing, data centers and vehicle electrification. At the same time, new regulations, including the Environmental Protection Agency’s power plant rule, could accelerate the retirement of always-available fossil-fuel-based generation and add more pressure on the grid.
“NRECA has been clear about the need for smart energy policy to prioritize electric reliability,” Walker said. “Resource adequacy is a critical component of maintaining reliability, and policymaking is impacting our members’ ability to reliably and affordably provide power to the 42 million Americans they serve.”
She explained that Bloomington, Indiana-based Hoosier Energy is transitioning from a mainly coal-fired baseload utility to a balanced portfolio that includes more renewable resources. The co-op is also partnering with Wolverine Power Cooperative in Cadillac, Michigan, on power purchase agreements with Holtec International that will support the restart of the Palisades nuclear plant in Michigan, a project that will deliver reliable, affordable, carbon-free power to members, Walker said.
Those resource additions will meet normal expected load growth over the next 10-20 years, but “these efforts become much more complicated when considering the vast number of moving parts within our industry,” Walker’s remarks noted.
Growth in consumer demand, she said, has typically been linear and incremental, but that dynamic has changed as large new commercial loads come online.
“Changes in customer load, especially large customer loads, have the potential to turn resource adequacy on its head,” she said. “Hoosier Energy is by no means alone among the co-ops in receiving interest from data centers, artificial intelligence and cryptocurrency companies.”
Walker outlined several steps that FERC could take to help co-ops and other generation and transmission providers address these challenges.
Those include a revamp of the way FERC measures and forecasts resource adequacy and giving priority to load-serving entities seeking to interconnect new generation to the grid.
Walker also encouraged FERC and states to work together on easing transmission constraints and allow states, self-regulating entities such as co-ops, and other relevant authorities to prioritize regional flexibility, transparency and fair cost-allocation methodologies for new projects.
“FERC should focus transmission planning and expansion on meeting the needs of [load-serving entities] and the consumers they serve,” she said.
Throughout her testimony, Walker repeatedly stressed that any solution to meet the growing demand for energy and transmission must consider the costs to consumers.
“The consumers of electric co-ops, who serve more than 90% of the persistent poverty counties in the United States, have to be able to afford that electricity,” she said during the Oct. 16 panel. “Cooperatives share an obligation to serve their members by providing safe, reliable and affordable electric service. The objective must be to strike a balance between cost and reliability.”
Molly Christian is a staff writer for NRECA.