Cooperative utility leaders urge Congress, federal agencies to bolster grid reliability

"Demand is going up and supply is going down, and that's not a good trend if you want to maintain system reliability," said Jim Matheson, CEO, National Rural Electric Cooperative Association.

Electric cooperative utility leaders are visiting Washington, D.C., this week with a message for members of Congress and federal officials: Grid reliability is at growing risk and steps should be taken to protect it.

"We only have to look back to [Winter Storm Elliott] last December when we had rolling blackouts in nine states during an extreme weather event to point out that we've got some stressed grids," Jim Matheson, National Rural Electric Cooperative Association CEO, said April 13 in a press briefing.

In addition, the North American Electric Reliability Corp. has been warning that parts of North America face growing reliability risks, he said.

Matheson identified five main factors behind the reliability concerns: rising demand driven by electrification; a failure to fully replace retiring power plants; challenges in permitting new infrastructure; supply chain bottlenecks; and a lack of gas when power plants need it in grid emergencies.

"Demand is going up and supply is going down, and that's not a good trend if you want to maintain system reliability," he said. "It's so difficult to put in any new electric utility assets because of permitting challenges."

There are serious supply chain problems for "nuts and bolts" electric components such as electric meters, distribution transformers, cross bars and wire, according to Matheson.

On the gas issue, on Christmas Eve, Old Dominion Electric Cooperative, an NRECA member, had no access to gas despite having a firm contract for the fuel for its power plants, Matheson said.

"Those are the things we want to talk about with Congress," Matheson said. "We want to make sure they understand that if we're going to address this issue, we need time. We need technology to develop and we need a lot more infrastructure … if we're going to have policies that really support a reasonable level of reliability through whatever form the electricity market transition takes."

The NRECA supports permitting reform measures found in energy legislation that passed the House late last month.

The trade group would like to see legislation passed that shortens permitting timelines, according to Matheson.

"We're interested in seeing if there are ways to put some boundaries around how long litigation can string out the permitting process," he said.

The group also thinks Congress can help fix a shortage of distribution transformers plaguing utilities. The group wanted the Department of Energy last year to dedicate $250 million to the issue, but DOE opted to use that funding to support heat pumps. NRECA is seeking funding for distribution transformers, Matheson said, noting there is only one U.S. company that makes a type of steel needed for transformers.

Advancing a pending DOE proposal to increase energy efficiency standards for distribution transformers is "wrongheaded" amid a transformer shortage, he said.

NRECA opposes the Biden administration's goal of emissions-free electricity by 2035, according to Matheson.

"We don't think it's realistic at all," he said. "We think that compromises reliability in a real serious way."

NRECA expects pending Environmental Protection Agency regulations will encourage the rapid retirement of coal-fired power plants.

"We need to think about, what do we do when those plants shut down? How are we going to keep the lights on because we're not putting in the replacement capacity?" Matheson said.

No federal agency "owns" the reliability issue, according to Matheson.

"No one's thinking this through. No one's adding up all the pieces to see how we make this happen in a way that is not overly disruptive to our economy and to people's day-to-day lives if they have a lack of reliable electric service," he said.