FERC commissioner discusses duty to supply electricity to public

Utilities employees who operate an electrical grid and the regulators who oversee the grid have a duty to the public to make sure that the electricity comes onif the light switch is flipped, Tony Clark, Commissioner of the Federal Energy Regulatory Commission, said at a lecture onSaturday.

“Job number one, almost invariably, is reliability,” he said of the FERC’s priorities.

Energy reliability has evolved a lot in the last decade, Clark noted. Up until 2005, all reliability standards in the country were voluntary standards. They were the industry’s best practices and were neither mandatory nor enforceable by the federal government.

Flaws in the transmission system were exposed through the Northeast blackout of 2003, which changed how the public perceived utility regulation and opened up legal questions about energy, Clark said.

Coming out of that event, the Energy Policy Act of 2005 emerged and granted the FERC new authority over market manipulation and improved reliability standards. The standards are now mandatory and include penalties that regulatory agencies like the FERC can enforce through its relationship with the North American Electric Reliability Corporation.

After this policy change, the FERC worked on improving the grid visibility from the operator standpoint, training the people running the grid, trimming trees around the grid and creating protocols to prevent any widespread outages in the future.

Through making such core changes, the FERC discovered other threats to the grid.

The issue of cybersecurity has become more prominent in recent years and the FERC has been “working aggressively” on these issues, Clark said. The FERC, through its relationship with the North American Electric Reliability Corporation, updated rules regarding the critical infrastructure of the grid. These standards represent the “ecosystem of security” that is needed to prevent hacking into the grid, Clark added.

This processis still ongoing, Clark noted.

In light of the April 2013 Metcalf incident, in which power lines were cut in San Jose, Calif., the FERC realized there were still many physical weaknesses in the grid that needed to be addressed, according to Clark. The FERC has imposed mandatory physical security standards so that the bulk electric system maintains its reliability.

The FERC’s latest effort concerns geomagnetic disturbances and electromagnetic pulses. Utilities from different regions require different treatment since the stability of each grid depends on factors such as latitude and soil type, Clark noted. Therefore, the FERC plans to study the vulnerabilities of these grids, create operating protocols and produce mitigation strategies to prevent grid-wide electric disturbances.

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Nevertheless, the overall grid is now much more secure than before, but still a work in progress, Clark added.

He said the Commission is very focused on grid infrastructure, as the grid begins to generate more electricity from natural gas and renewable energy. Unlike nuclear resources or coal, which can be kept in a stockpile and flexibly managed, natural gas has to flow at the exact time one needs it, and renewable sources like wind and solar energy are unpredictable, so the system must be more responsive.

“The problem of constraints or lack of infrastructure is reflected through prices,” Clark said, giving examples of varying prices of natural gas along a pipeline network.

Clark noted that futures contracts on natural gas for winter last year differed from region to region. Much natural gas can be found in southwest Virginia and West Virginia, so the cost was between $2 and $3. If you went a little north, to New Jersey or Southeastern Pennsylvania, the price became “relatively expensive” at $9. Entering New England, the price was $21 to $22. This significant difference works its way into consumer bills and into electricity prices, because energy cannot move around efficiently, Clark explained.

The FERC is therefore under pressure to work on strengthening infrastructure, Clark added.

“Energy is the lifeblood of modern economy — [the economy] does not work without access to reliable, affordable energy,” he said.

Clark noted that these energy problems affect not only the United States, but also other countries.

“Energy poverty is a huge issue,” Clark said, since without energy reliability, people cannot have access to clean drinking water or basic communication infrastructure that is needed in the modern world.

He closed by saying that the energy field needs bright, articulate, creative workers, whose impact can extend across the globe.

Clark gave his talk, titled “America Energy Today: The View from FERC,” in McCormick 101 on Saturday at 2 p.m. as the keynote speaker for the Princeton University Energy Association’s Spring Energy Conference.