Federal regulators have acted against the most up to date outages due to weather and other issues related to severe winter weather conditions. On the 16th or February in 2021, both the North Electric Reliability Corporation (NERC) and Energy Regulatory Commission under the federal government (FERC) announced their inquiry into how bulk-power systems operate in the Midwest and Southcentral states during the recent severe weather. In these states, there were utility outages and other events in recent weeks. On February 22, 2021, the FERC announced that it would investigate if market manipulation went on in the natural gas wholesale and electric markets during the recent cold weather. Also, to study the climate change threat and how severe weather affects electric reliability.
The NERC and the FERC released a joint inquiry into how the bulk-power system operates during the cold weather event (take a look at the NERC’s announcement). Both NERC and a FERC investigation will work with states, other federal agencies, regional entities, and utilities. They will do this to locate the issues with the bulk-power system performance and come up with solutions as needed. The effort by FERC and NERC will look at all the power operations in and on the outside of transmission operations that are regional as well as system operators, which include such as Mid-continent Independent System Operator (MISO) and Southwest Power Pool (SPP). Keep in mind that the FERC doesn’t have jurisdiction over the Electric Reliability Council of Texas (ERCOT.). However, the market participants of ERCOT who control bulk-power systems are under NERC jurisdiction.
There were two press releases issued on February 22, 2021, by the FERC. They addressed issues regarding the energy industry that came about during the severe cold weather conditions in most of the country recently. Number one, the FERC informed the public that its Office of Enforcement (OE) is looking at wholesale market activity. At the same time, there is cold weather in natural gas markets and electric markets to determine if market participants get involved in market manipulation or commit other offenses against FERC’s policies and rules. As far as trading and additional data, Analytics and Surveillance, a division of OE, will look at it to see if further investigation is needed. If the OE takes studies into individual market participants’ behavior, such analyses will not be public.
Second, should the FERC make plans to start a new proceeding to look at climate change effects and severe weather events on electric reliability? The new proceeding will include public comments and a technical conference, but it has not been docketed yet. The examination is on regional grid operators. Their goal is to see that grid resiliency in the face of extreme weather, such as extreme cold, hurricanes, droughts, wildfires, prolonged heatwaves, and hurricanes. This is not a dramatic action. The recent impact of severe weather events and the FERC Chairman Rich Glick’s unwavering focus on climate change during his tenure at the Commission.