Good morning, Chairman Phillips and Commissioners,
Items E-1 and E-2 are draft final rules related to the assessment of and planning for extreme weather impacts to the transmission system. While weather events have impacted the transmission grid throughout its history, the frequency and severity of extreme weather events are increasing. A robust and growing body of scientific evidence attributes this trend to climate change and indicates that this trend will persist. As demonstrated by recent extreme weather events, this trend threatens livelihoods, electric system reliability, and the Commission’s ability to ensure just and reasonable jurisdictional rates. For example, in February 2021, Winter Storm Uri resulted in the largest controlled firm load shed event in U.S. history, with more than 4.5 million people losing power in Texas alone, and in some cases the outages – tragically – contributed to loss of over 200 lives.
In a May 2021 report, the US Government Accountability Office (GAO) identified potential impacts to the grid in every region of the United States that, absent measures to increase resilience, may increase outages and impose billions of dollars in additional costs to utility customers. GAO recommended that the Commission take steps to identify or assess climate change risks to the grid to ensure the Commission is well-positioned to determine the actions needed to enhance resilience. And now, I will turn it over to my colleague Mahmood Mirheydar, to present a summary of E-1.
Item E-1 is a draft final rule that addresses the impacts of extreme weather on the reliability of the nation’s Bulk-Power System, through Reliability Standards for transmission system planning. The draft final rule directs the North American Electric Reliability Corporation (NERC), the Commission-certified Electric Reliability Organization, to develop a new Reliability Standard or modifications to the current transmission planning Reliability Standard, TPL-001-5.1, no later than 18 months from the date of publication of this draft final rule in the Federal Register to address reliability concerns pertaining to transmission system planning for extreme heat and cold weather events that impact the Reliable Operation of the Bulk-Power System. Specifically, the draft final rule directs NERC to develop a new or modified Reliability Standard that address three major concerns. First, the draft final rule requires the proposed Standard to define benchmark events based on prior extreme heat and cold weather events and/or future meteorological projections. Second, the proposed Standard must require planning entities to develop planning cases for extreme heat and cold weather events using steady state and transient stability analyses that cover a range of extreme weather scenarios, including the expected resource mix’s availability during extreme weather conditions and the wide-area impacts of extreme weather. Third, to the extent these planning studies discover specified instances when performance requirements during extreme heat and cold weather events are not met, the proposed Standard must require planners to develop corrective action plans to allow the performance requirements to be met. And now, I will turn it over to my colleague Alyssa Meyer, to present a summary of E-2.
Item E-2 is a draft final rule on one-time reports on extreme weather vulnerability assessments, that gather information on how transmission providers assess the impacts of extreme weather on their transmission assets and operations. An extreme weather vulnerability assessment – as defined in the draft final rule – is any analysis that identifies where and under what conditions jurisdictional transmission assets and operations are at risk from the impacts of extreme weather events, how those risks will manifest themselves, and what the consequences will be for system operations. The draft final rule directs transmission providers to file one-time informational reports describing how they conduct extreme weather vulnerability assessments, if at all. Specifically, transmission providers would report how they: 1) establish a scope; 2) develop inputs; 3) identify vulnerabilities and exposure to extreme weather hazards; 4) estimate the costs of impacts; and 5) use the results of vulnerability assessments to develop risk mitigation measures. The reports would provide the Commission with a fuller record as to whether and how transmission providers assess and mitigate vulnerabilities to extreme weather and will enable coordination among transmission providers as well as information sharing on best practices. The draft final rule would make certain changes from the NOPR, which include: requiring reporting on how transmission providers define extreme weather and requiring reporting on how Regional Transmission Organizations and Independent System Operators – RTOs and ISOs – account for differences between transmission owner members’ assumptions and results.
Reports would be filed within 120 days after the publication of the final rule in the Federal Register rather than 90 days as proposed in the NOPR. Any public comment on the reports would be filed 60 days after the reports are due rather than 30 days as proposed in the NOPR.
This concludes our presentation. We are happy to take any questions you may have.