More calls made to learn about past winter's energy price spike
A congressional committee has joined New England senators in demanding some answers as to why natural gas and electricity prices soared during the winter that’s finally winding down.
Ranking representatives on the House Energy and Commerce Committee wrote to the regional manager of the New England wholesale electricity market on March 27 with a long list of questions related to affordability and reliability.
“This year’s brutally cold winter stressed the electric grid, causing electricity prices to spike across the Midwest, Mid-Atlantic and Northeast, and highlighted our nation’s reliability vulnerabilities,” they wrote. “Members are concerned these problems will only worsen as more coal plants are scheduled to shut down due to environmental regulations.”
Included in the letter is a link to a staff report from the Federal Energy Regulatory Commission that reveals just how stressed the electricity grids were throughout much of the country, not just in New England.
New England avoided any brownouts brought by extreme cold and high energy costs, but other regions were not so lucky. “According to FERC, January’s cold weather events stressed the bulk power system with high loads, and other challenging operating conditions, including more than 50 gigawatts of forced outages,” the letter states.
A report prepared by FERC staff notes that forced outages were significant in some regions during the week of Jan. 4.
“In the Southeast, Duke Energy Progress and South Carolina Electric and Gas implemented voltage reductions on Tuesday morning, Jan. 6. Several generating units also tripped in the SCE&G area, forcing the company to implement rotating outages and shed approximately 300 megawatts of firm load during the morning peak. The load was restored later in the morning,” the report states.
The fact that much of the country was facing the prospect of roving brownouts during what was admittedly a severe winter worries people.
The letter from the House committee to ISO-NE and three other grid operators that together cover most of the U.S. east of the Mississippi, came just a week after a group of U.S. senators from the six New England states called on federal regulators to ensure that markets functioned properly and that prices were not increased by speculation or manipulation.
The senators, five Democrats and one Independent, focused on the possibility of foul play, while the House committee, controlled by a Republican majority, focused on the impact of EPA regulations that could force more coal-fired plants offline in the years ahead.
“We are concerned that outages and price increases could be exacerbated in the future as coal-fired power plants that utilities have relied on to meet the surge in demand are shuttered for environmental reasons,” the letter from the Energy and Commerce Committee states.
The letter cites a February report from the Energy Information Administration suggesting that the number of coal-fired power plant retirements will be higher than originally anticipated, and that an estimated 60 gigawatts of coal-fired capacity will retire by 2020.
“We are specifically concerned that the loss of these critical generation facilities in such a short timeframe will make it increasingly difficult to meet electricity demands in the future, thereby putting reliability at risk and driving up electricity prices for consumers,” the representatives write.
In New Hampshire, PSNH is under pressure from regulators to sell off its coal-fired plants in Bow and Portsmouth. Those plants were called upon to produce electricity throughout much of the winter, when their cost of operation was actually lower than the cost of electricity produced by natural gas.
The president of ISO-NE, Gordon van Welie, warned that things are likely to get worse before they get better, when he addressed an energy industry conference in Washington, D.C., in mid-March. The region will be in a “precarious operating position” for the next three to four years, he email@example.com