US energy body to examine climate change threat to power grid

The decision follows power outages in Texas due to an extreme cold snap that left millions of people without electricity.

'The effects of climate change are already apparent,' says the chairman of the Federal Energy Regulatory Commission [File: LM Otero/AP Photo]

Federal energy regulators in the United States say they will examine threats that climate change and extreme weather events pose to the country’s electric reliability in the wake of last week’s deadly Texas freeze that left millions of people without power.

“The effects of climate change are already apparent,” Federal Energy Regulatory Commission (FERC) Chairman Richard Glick said in a statement on Monday.

“We must do everything we can within our statutory authority to ensure that the electric grid is capable of keeping the lights (on) in the face of extreme weather.”

FERC, which regulates the interstate transmission of electricity, oil and natural gas and approves fossil fuel projects such as pipelines, could play a big role in US President Joe Biden’s promise to make the power grid emissions-free by 2035.

Workers have been repairing broken power lines in Texas [File: Thomas Ryan Allison/Bloomberg]

It was not immediately clear how FERC, a panel of five commissioners which has a 3-2 Republican majority until about June, can help to ensure that power delivery remains reliable in an age of extreme weather events.

In California last August a crushing heatwave led to rolling blackouts for two days.

Ten years ago, after a milder Texas cold snap led to power outages, FERC looked into ways to protect the grid and wrote recommendations for how to make natural gas and other installations more resilient to extreme cold.

“We followed up on those for a couple of years, but actual implementation was in the hands primarily of the Texas authorities who run the grid, and as memories faded most of those steps were not taken,” former FERC chair Cheryl LaFleur told the Reuters news agency in a video interview.

She said the severity of last week’s freeze, which killed at least 24 people, should prompt a stronger response.

Earlier this month, Glick, a Democrat, said FERC will create the panel’s first position to oversee environmental justice. The person will ensure that FERC decisions do not unfairly hurt historically marginalised communities with pollution, he said.

Market manipulation

The commission also said its enforcement office is examining wholesale natural gas and electricity market activity to see whether an investigation is necessary following a surge in power prices during the Texas cold snap.

Texas electricity price spike chart [Bloomberg]
Texas electricity price spike chart [Bloomberg]

Wholesale power prices in the state soared more than 300-fold, stirring memories of price spikes that accompanied California’s energy crisis of 2000-2001, when now-bankrupt energy trading giant Enron and others artificially boosted prices.

On Saturday, US Senator Tina Smith wrote to regulators, including FERC, calling for an investigation of any price gouging by natural gas producers and suppliers. Spot prices in some cases rose to nearly 100 times the usual levels.

FERC’s surveillance office identifies any potentially anti-competitive or manipulative behaviour to determine whether investigations are appropriate. FERC also screens daily and monthly trading at most US physical and financial natural gas trading hubs and the organised and bilateral wholesale electricity markets. It may work with other federal agencies on the review, it said.

Source: Reuters