Source: | Jeremy Dillon | January 23, 2018

The recent cold snap and “bomb cyclone” weather event that chilled much of the Mid-Atlantic and Northeast this month appears to have showed the reliability and resilience of the electric grid as currently operated, energy officials said Tuesday at congressional oversight hearing.

But it also showed some of the vulnerabilities to the grid, especially as they relate to energy infrastructure, including natural gas pipelines, as wholesale market consumers saw high prices in response to record demand.

“That is all good news,” Senate Energy and Natural Resources Chairwoman Lisa Murkowski, R-Alaska, said about the grid reliability during the event. “The bad news is that we have not addressed the more difficult and fundamental challenges for electric and gas infrastructure.”

“We must ensure that our nation’s natural gas supply — a boon to our economy and to our national security — can be reliably delivered to a changing marketplace,” she added.

According to analysis prepared by the Energy Information Administration, the bomb cyclone from earlier this month resulted in record levels of demand for natural gas and elevated power prices for much of the country.

On Jan. 5, the coldest day of the weather event, EIA reported that prices reached $247 per megawatthour (MWh) in New England and New York and $262 in the Mid-Atlantic, compared with average prices of $30 to $50 in the preceding six weeks.

Much of that price spike could be attributed to a bottleneck of infrastructure to move natural gas to a region of the country that has increasingly adopted natural gas as the fuel of choice for its electric generation needs.

“We have a natural resource in my home state and region that would love to be selling our natural gas in this country and to the Northeast,” said Sen. Shelley Moore Capito, R-W.Va., highlighting the difficulties of permitting pipelines in New England.

But Sen. Angus King, I- Maine, raised the point that the question is not so much about natural gas price problem as it is about a delivery problem, which is he said is attributable to other factors in addition to pipeline permitting. The region’s reliance on natural gas usually causes problems for about two weeks during extreme weather events, making pipeline builders skeptical about capital investment.

“One of my favorite comments is from a friend of mine in Maine who said there is rarely a silver bullet; there is often a silver buckshot,” King said. “And that is what we are talking about here, a multiplicity of resources.”

That could include energy efficiency, storage options, increased renewable deployment, demand response, infrastructure and rate structures, King said.

But while prices may have been high during the weather event, grid operators said grid diversity and better fuel source interaction ensured that the grid was able to meet the increased demand, resulting in better performance and no blackouts in the region compared to a similar cold weather event in 2014.

“Although we are still receiving and reviewing data, it appears that, notwithstanding stress in several regions, overall the bulk power system performed relatively well,” FERC Chairman Kevin McIntyre testified in his first appearance before the committee since taking over leadership of the commission responsible for overseeing grid operations.

But as to resilience and reliability — a question that has dominated energy thinking after Energy Secretary Rick Perry in September proposed financial rewards for baseload power sources like coal and nuclear that can guarantee onsite fuel supplies — a department official told lawmakers that the recent cold snap bolstered DOE’s stance that preventing the premature shutdown of coal and nuclear plants is needed to ensure resiliency.

“The grid’s integrity is maintained by an abundant and diverse supply of fuel sources today, especially with onsite fuel capability,” said Bruce Walker, an assistant secretary who heads the department’s Office of Electricity Delivery and Energy Reliability. “The real question is whether or not this diversity will be here tomorrow.”