Published: May 18, 2023 |

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EPA’s new Good Neighbor Plan could hurt reliability of the bulk power system as operators limit generation from coal and natural gas plants in order to comply with the rule’s tighter requirements, the North American Electric Reliability Corporation (NERC) said in its 2023 Summer Reliability Assessment.

The analysis from NERC complements its multiple warnings over the last year about the reliability challenges associated with a changing grid, especially the negative consequences associated with lower availability of traditional generation sources that are retiring due to age, to avoid costly compliance measures, and to meet utilities’ decarbonization targets.

Limited generation tied to Good Neighbor is one among a handful of reliability issues regional grids are expected to face this summer, according to NERC’s newest analysis, which concluded that a larger share of the country this year than last is at elevated risk of having insufficient reserves in above-normal demand conditions.

NERC said PJM, New York, and most of the Southeast have sufficient resources to manage normal summer peak demand and are at low risk of seeing shortfalls related to extreme demand or generation outages.

Otherwise, some two-thirds of the rest of the country, including New England, Texas, and the entire West and Midwest face risks of electricity supply shortfalls when extreme weather drives demand above normal levels.

The fuel supply outlook has improved in the last year but some regions could still face challenges acquiring coal and natural gas, NERC said.

Additions of renewable wind and solar will help meet demand but those regions could be challenged if high demand coincides with low winds.

The new factor this year is EPA’s Good Neighbor Plan, which it finalized in March.

The rule cracks down on pollutants that contribute to smog in downwind states and affects power plants operating in more than two dozen states.

Coal and gas plants in states subject to the Good Neighbor plan “will likely meet tighter emissions restrictions primarily by limiting hours of operation” this year “rather than through adding emissions control equipment,” which could diminish reliability, NERC said, citing indications from generators in Texas that they will run out of emissions allowances for compliance by July.

Even if generators sought to add emissions control equipment to comply with the rule, reliability corporations in summer-peaking areas “typically are not able to authorize extended outages to upgrade systems during this summer season in order to ensure sufficient resources for high demand,” NERC said.

The report excludes effects of other EPA rules to electric reliability, including the new greenhouse gas proposal.

The Midcontinent Independent System Operator’s (MISO) outlook has improved compared to last year, when NERC concluded it was at a high risk of facing insufficient operating reserves even in normal demand conditions. MISO was the only regional entity deemed to be at high-risk.

MISO remains at an elevated risk level but the risk of being unable to meet reserve requirements at peak demand this summer in MISO is “lower than in 2022 due to additional firm import commitments and lower peak demand forecast,” NERC said.

Source: Washington Examiner

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