Mandatory Power Plant Winterization Proposed Following Texas Grid Failure
Could mandatory power plant winterization requirements be on the horizon? According to a joint report authored by the Federal Energy Regulatory Commission (FERC) and the North American Electric Reliability Corporation (NERC), the answer is a resounding yes.
Background on the Mandatory Power Plant Winterization Proposal
While on the surface it may seem as though the recommendation was driven by the Feb. 2021 winter storm event in Texas that sideswiped ERCOT and left millions without power, it actually has its roots stretching back a decade.
A “winterization” recommendation was put forth by a joint FERC-NERC report after a similar event in 2011. However, the agencies decided not to act on the recommendation at that time. Since then, similar events occurred in 2014, 2018 and of course 2021.
Although about 60% of the Texas outages in Feb. 2021 were rooted in gas-fired units, the new report’s recommendations apply to all types. Specifically, the report makes 9 recommendations. The ones related to power plant winterization are:
- Identify equipment and components that are critical to keep running during periods of extreme cold, and take additional steps to protect these items.
- Upgrade or update units in ways that allow them to continue to operate efficiently during periods of extreme temperatures.
- Consider the impact and effects of wind and precipitation in winterization plans.
While the 2011 report failed to mandate winterization, that won’t be the case now. In fact, million-dollar-a-day penalties would not be out of the question. The good news is that utilities will be able to recoup the winterization costs.
As for next steps, NERC could decide to grab the bull by the horns and start coordinating the development of new rules around the recommendations. Or, FERC could issue an order directing NERC to do so. Either way, mandatory power plant winterization is coming to Texas and elsewhere, and will likely be enforced beginning in 2023.
