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S&P Global: Texas Blackouts May Bring Winterization Mandates from FERC, Shape Federal Spending Priorities

Posted by Jasmin Melvin on Mar 24, 2021

S&P Global covered a recent AEE webinar on February Texas blackouts quoting Jeff Dennis and Suzanne Bertin on potential responses from FERC and Congress. Read excerpts below and the full story here.

Policy activity on grid resilience has seen an uptick in the month since an Arctic blast left millions of Texans without power for days, and the federal policy response could bring new requirements for generator winterization and inform stimulus and infrastructure spending priorities, a Washington insider said March 24.

The federal response starts with the Federal Energy Regulatory Commission, Jeff Dennis, managing director and general counsel for Advanced Energy Economy, said during an AEE-hosted webinar on the policy fallout from the Texas blackouts…

A more-than-200-page report issued by the commission following 2011 power outages in Texas brought on by extreme cold weather recommended winterization of electric and gas system equipment, as it identified a lack of any mandatory standards at the federal, state or system operator level regarding generator winterization.

NERC followed up on that recommendation in 2012, initiating a standards development process within its stakeholder process, but ultimately issued guidance instead of adopting a mandatory reliability standard.

"The FERC chair and commissioners have pointed to that and hinted that they are looking at whether it is time to order NERC to develop some more mandatory standards around this," Dennis said…

Suzanne Bertin, managing director of the Texas Advanced Energy Business Alliance, chimed in that state-level legislation that the Texas lieutenant governor and speakers of both chambers of the Texas legislature have set as priorities include requirements on winterization…

"We saw significant price increases in the gas market, with prices spiking not just in Texas, but across the Southwest and the West as well in response to this event, and so there are questions about market behavior," Dennis said.

FERC has announced that its Office of Enforcement will examine what occurred in the gas and electricity markets during the extreme winter weather, he added.

"If it finds market manipulation, it has authority to impose civil penalties of up to $1 million a day per violation," Dennis said…

"We think the major policy impact is that it is likely that [the hearings] will inform priorities that Congress as well as the [Biden] administration has in upcoming stimulus and infrastructure packages that we expect will start to move through Congress now that Congress has passed the COVID-19 relief bill and signed that into law in the last month or so," Dennis said.

Read the full story here.

Topics: AEE In The News