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Sep 04, 2023

United States at risk of tight electric supplies this summer

May 11 (Reuters) - Several parts of North America are at elevated risk of energy

May 11 (Reuters) - Several parts of North America are at elevated risk of energy shortfalls this summer during periods of extreme air conditioning demand, according to the organization responsible for the reliability of the North American power grids.

The North American Electric Reliability Corp (NERC) said in a notice on Wednesday ahead of the release of its 2023 Summer Reliability Assessment that power resources "are adequate for normal summer peak demand."

But "if summer temperatures spike and become more widespread, the U.S. West, Midwest, Texas and Southeast, New England and Ontario (in Canada) may experience resource shortfalls," NERC said.

NERC has become more aggressive in warning about reliability concerns in recent years after power grid operators were forced to impose rotating outages in California in August 2020 and in Texas in February 2021.

NERC plans to release its 2023 Summer Reliability Assessment on May 17.

Last winter, NERC warned that several parts of the United States, including Texas, the Midwest and New England, could suffer reliability problems due to generator retirements, generator vulnerability to extreme weather and fuel supply and natural gas infrastructure limitations.

Extreme cold during Winter Storm Elliott in December 2022 caused some energy companies, including the Tennessee Valley Authority and Duke Energy Corp (DUK.N), to impose rotating outages.

In addition, several power plants in the PJM power grid failed to operate during Elliott when called upon by the grid operator. The PJM grid covers all or parts of 13 states from Illinois to New Jersey.

That failure to operate resulted in penalties of around $1.8 billion for the PJM power plants that are currently under review by the U.S. Federal Energy Regulatory Commission (FERC).

PJM members voted to approve a proposal on Thursday to "reduce the penalties for (power plants) failing to meet commitments by up to 90% for next winter," according to the Natural Resources Defense Council, an environmental group.

Officials at PJM were not immediately available for comment.

PJM, however, did say in a release that it expects to have enough resources to meet expected peak demand of 156,000 megawatts (MW) this summer. The grid expects to have over 186,000 MW of power capacity available.

PJM said it is ready, as always, to take steps needed to maintain reliability if demand is higher or resources are lower than expected.

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