| Posted in: News Releases
This week Missouri River Energy Services (MRES) and its members in the Southwest Power Pool saw an unprecedented perfect storm of events that affected the reliability of the power grid throughout the central U.S. The event highlighted the critical need industry-wide for a diverse, flexible and robust generation mix to ensure that there is always sufficient generation available. The power plants operated by MRES, along with the municipal generation of members, serve as assets to hedge high market prices and provide reliability support for the region.
What caused the energy emergency and power outages?
On Sunday, Feb. 14, historic cold weather and a series of winter storms affected the center of the United States from north to south. The extreme cold weather caused electrical demand to increase significantly. At the same time electrical generation in the Southwest Power Pool (SPP) region was constrained due to inadequate supplies of natural gas and wind generation. Additionally, in the southern area of SPP and in Texas, freezing temperatures caused equipment to seize up in natural gas wells, wind turbines, and even in some power plants themselves. As a result, electric generation in the region was not sufficient to meet the extreme and widespread demand for electricity. SPP directed its balancing authorities, such as Western Area Power Administration (WAPA), to begin reducing load. WAPA then began working with its municipal and cooperative customers to temporarily shut down power, otherwise known as rolling blackouts, to reduce demand on the system. This is the first time SPP, in its 85-year history, has had to take action in this manner to curtail power in the winter.
What is the Southwest Power Pool (SPP)?
SPP is a Regional Transmission Organization (RTO) that oversees the reliability of the electric grid and operates a wholesale power market in the central United States on behalf of a diverse group of utilities and transmission companies in 14 states. SPP is one of seven RTOs in the U.S. that is a nonprofit corporation regulated by the Federal Energy Regulatory Commission (FERC) to operate bulk electric power systems. SPP has 104 members and covers more than 552,000 square miles. The company is based in Little Rock, Arkansas.
SPP’s job is like an air traffic controller of the grid. SPP ensures the reliable supply of power, adequate transmission infrastructure, and competitive wholesale electricity prices for their region. It operates an energy market to facilitate the sale and purchase of electricity to ensure cost-effective electric reliability throughout the region it serves.
Who supplies power to your community?
Your utility has two power providers. WAPA supplies a specified amount of hydroelectric power from the dams on the Missouri River to your community. Your supplemental supplier is Missouri River Energy Services (MRES), which supplies the remainder of the power used in your community. MRES has a diverse mix of resources in terms of both fuel sources and geographic location, including hydroelectric, coal, natural gas, wind, solar, diesel and nuclear. Both WAPA and MRES own transmission facilities in SPP and both use the SPP transmission system to deliver electricity to the communities they serve.
If WAPA and MRES supply the power to our community, how can SPP call for the power to be shut off?
SPP serves, among other things, as a reliability coordinator for the region. SPP determines which power plants in the region are called upon to operate based on the need or “demand” for energy from customers. During this extreme weather event, wind availability was low and natural gas deliveries were curtailed to many generating plants. SPP called upon all other types of generation to run, but at times it was not enough to meet demand, so as a last resort, SPP implemented controlled interruptions of service to prevent cascading blackouts.
When the electric generation in the region is not sufficient to meet the demand for electricity, SPP declares an Energy Emergency Alert (EEA). When the EEA reaches a Level 3, SPP must begin controlled interruptions of service, otherwise known as rolling blackouts, which reduces demand on the system. When SPP calls for rolling blackouts, the affected power suppliers must comply with the order. This includes WAPA.
Why is there a need for rolling blackouts?
The entire electric grid has very strict parameters under which it operates. When demand exceeds generation, the SPP reliability coordinator must follow a plan to reduce load to protect the greater grid. The temporary rolling outages help protect the grid from longer, more sustained outages. If the entire power grid within SPP had failed, it would have taken much longer to restore power and there could have been actual damage to equipment, making it impossible to quickly restore power.
Who was affected by the outages?
On Feb. 15 and 16, WAPA was ordered by SPP to reduce a specified amount of load from its customers. With only a short time to comply, WAPA curtailed service to many of its customers, including MRES members Denison, Iowa and Valley City, North Dakota without notice. Moorhead, Minnesota and Winner, South Dakota were given a notice and then curtailed a short time later. Five additional members were contacted and given notice to prepare for possible outages on Feb. 17 after a 15-minute notice. On Feb. 17, those outages were no longer necessary.
How did renewable energy impact the situation?
Intermittent renewable resources, such as wind and solar, are valuable when they are online. But when they are not available due to lack of wind or sun, there must be other reliable and flexible resources such as coal and natural gas, to pick up the load. During the recent extreme weather conditions, all available fossil-fuel power plants were running to keep the lights on and to compensate for the low wind production.
In addition, limited gas supplies across the region played a part in this situation. MRES and its members continued to provide a diverse generation mix to ensure system reliability. The Exira Station typically operates on natural gas, but when the gas supply was curtailed, MRES was able to switch the plant to run on diesel fuel. All MRES generators operated to the fullest extent during this extreme weather event and performed well. Six member-owned generators also ran to help support the grid throughout the event and they also performed very well in the extreme weather conditions.
How will this crisis impact my utility bill?
Until the market settles according to current tariff rules, MRES is unsure of the impact to MRES and its members. We don’t anticipate an impact to rates, but there may be market adjustments that are unknown at this time which will impact the financial settlements. Although energy market prices were very high, MRES did not have to make significant purchases in the market to supplement our generation. As noted, all MRES generators were operating during the crisis and MRES will be paid the market price for the energy generated. These market payments are expected to cover all costs of generation. The same will be true for members that ran their local generating units.
How can we prevent this from happening in the future?
Due to the interconnected nature of the transmission system, no one company can solve this problem. Providing reliable power is an industry-wide problem and needs to be addressed by the industry as a whole. Many resources failed to perform during this extreme weather event. Wind units failed to perform due to lack of sufficient wind or icing conditions. Solar failed to perform due to heavy cloud cover. Coal and gas resources failed to perform due to freezing of gas wells or freezing at the plants themselves. There are solutions to these problems. The industry needs to use science and engineering to make the electric system more robust. This will take time and money to solve. But it can and should be done.