PUF Covers LPPC Grid Reliability Event with Sen. Kevin Cramer
The Large Public Power Council, LPPC, hosted an event in early December on grid reliability, “Power Shift: Meeting America’s Power Needs.” It examined the latest energy policy developments from Washington, D.C., and discussed how our nation can achieve a decarbonized future, while also ensuring families and businesses continue to benefit from reliable and affordable power.
Welcoming remarks were given by LPPC CEO John Di Stasio. U.S. Senator Kevin Cramer(R-ND), a former North Dakota PSC Commissioner, spoke on grid reliability and more.
This was followed by a panel featuring LPPC Chair and LIPA CEO Tom Falcone, Omaha Public Power DistrictCEO Javier Fernandez, U.S. Rep. Sean Casten (D-IL) Energy Advisor Nikki Roy, and former Deputy Secretary of Energy and United States Energy Association CEO Mark Menezes. Enjoy these excerpted remarks.
U.S. Senator Kevin Cramer (R-ND)
Kevin Cramer: Baker Electric, the co-op, is where my dad started his career as a sophomore, I think in high school, climbing poles and learning how electricity is distributed and how the lights stay on. As a mean-spirited, right-wing capitalist – big ogre – he used to regulate investor-owned utilities.
When I was this regulator trying to figure out locational marginal pricing, I went to my colleague, Tony Clark, one day. About two weeks into it, I said, Tony, I don’t even know what I’m doing. I’m drowning in this. Because it was like RTO week when I got there, and we were trying to set up MISO and I wondered, “I don’t even understand the engineering, much less the economics of this. Please help me.”
He laughed and said, “Do you believe in baptism by immersion?” I said, “I actually do as a Lutheran, it’s not intuitive, but I do.” He said, “Well, that’s what this is.” Tony’s dad was an Episcopal priest. So how he used this illustration, how he had the wisdom to use it, I don’t know. But I said, “I don’t know if I have time, even with immersion, I can’t keep up.” He said, “It will come, it will click and come to you.”
But not taking that chance, I called one of our smaller utilities and said, “Can you send me an engineer and an economist, and a white sheet of paper?” So, we spent an hour in my office and the engineer drew the lines, and the economists put the prices, and then it clicked.
But whether you’re an investor-owned utility or public power company, a municipality, or a co-op, whatever the case might be, you have to answer to someone eventually, as I used to say to the investor-owned utilities, who always complained to me because the co-ops had such a tremendous advantage because they didn’t have to come to the regulator for permission.
I said, “Try my mother-in-law. I’d much rather come to a utility regulator with evidence in hand than to my mother-in-law, who has a tremendous stake in the game.” So, I set the table with that discussion.
John, by the way, your introduction was so great because you made the relevant points about balance and resource adequacy and the transition that we’re in and how to again, balance all of those things and more importantly said, have a discussion.
I like discussions more than I like lectures, and you least of all need to be lectured by me. But I’ll maybe just say a little bit along the lines of this transition, how I see it going, and the role I try to play with both my technical background and some common sense from my mother-in-law, and then just my daddy who climbed the dang pole and kept the lights on.
Coming from a cold weather place that generates a lot of electricity, we produce a lot of coal, we produce a lot of wind. We export more than we consume. So other people’s cultures and getting back to the RTO of the regions, the interstate component of all this, all of that’s very important to me.
The preservation of federalism, as well as good policy, good stewardship of our environment and our resources. It won’t surprise you that I get concerned when we’re navigating the monkey bars and we’re tempted to let go of the one we’re hanging onto before we grab the next one.
I feel like that’s where we are. So, the role I try to play is slow down, don’t get the cart before the horse. Don’t get the transmission line before the generation or lower demand. I feel like right now we’re in this moment where all the incentives are centered around one part, but they don’t connect to the other part.
They need your wisdom. They need your planning skills. We need to be in this together at a pace that sets us up for success, rather than feeling good about ourselves. So that’s very general.
I’m not going to, but I could list all of the crazy regulations. Not only am I on the EPW committee, I’m on the banking committee. Now, before you study me too closely, Sonny Bono was on judiciary. He really was.
But all these regulations relate to a utopia that somebody has created in their mind. I’m also on the Armed Services Committee, and I see some of the policies, and I talked to enough international leaders. Just last night I spoke to the International Development Union Center, leaders from around the world that get together to talk policies.
I spent a lot of time talking to generals about how we protect certain things and how we use certain resources, certain ways. I talk to a lot of European energy ministers, prime ministers, foreign ministers who want what we have. They want what we have.
They want our natural gas to generate cleaner electricity and to heat their homes and run their factories, for example.
But I think more than anything, what they need is our leadership, and they need our counsel. They need our innovation. This is why, as much as I loved former President Trump and would love to serve with him again, he and I argued, and I lost, of course.
I never know anybody that won an argument with him, but at least not internally, that we needed to remain in the Paris Accord. Why? Because the world needs us.
And because when we sit at a table, we’re at the head of the table and we can help navigate this for the world, this transition in responsible ways. Okay, I lost that argument. But now I look at our federal government and I look up and down the federal agencies and see almost a shell game going on. We’re transporting or exporting. Climate guilt is more important than actually dealing with the climate itself.
So, the discussion you’re going to have, the discussion many of us are having has to be realistic and be balanced and balance adequacy with environmental stewardship and with the resources that we’ve been given and blessed with. Then together we can do that...
It’s too late to turn back all of the retiring older-generation facilities that we had, but we should stop. One of the senses of urgency that we should reject is this urgency that somehow seems to demand a lot of incentives to build out a whole bunch of generation that won’t keep the lights on twenty-four hours a day, seven days a week.
We have to be honest with people about intermittent sources of electricity, and that’s what I mean by, the balance. For some reason, we’ve incentivized the closing of plants. We’ve let go before we grab the next bar. There is a sense of urgency about it. I loved your illustration, and I lived it. I live in Bismarck, North Dakota with a power plant that they just blew up about a few months ago.
I shot video of the whole thing right across the Missouri River from me, and we had blackouts because of what was going on in Texas, because that side of North Dakota’s SPP. The rest of it’s MISO.
That is very hard for people from a major energy-producing state to understand. We’ve got to be a lot more careful that direction, but what I worry about in your illustration is that our attention span as a culture is so short that it’s going to take more than a rolling blackout before somebody goes, “Maybe, we shouldn’t have retired that plant so soon,” but we all know better.
I would just appeal to your courage as managers, as board members, as investors, to do what I feel like I have to do sometimes. Around here, I talked about the art of the possible, Bismarck’s political definition. The same is true out there.
We have capital. We have literal capital and political capital, and how we accumulate it, and how we spend it, matters. How we talk about issues matters. I think we’ve got to resist the knee-jerk reaction to do this thing over here, not thinking about the consequences over there.
What I’m talking about is retiring big sources of baseload power while we wait for the development of permanent wind or whatever the case may be. I’ve sited lots of wind farms in my life.
I’ve sited lots of transmission lines, and I’ve sited lots of pipelines. They’re all really important, and we need to do a better job of that balance and discussion, but I hear your call. We need permitting reform really fast so we can build things really fast.
United States Energy Association CEO Mark Menezes
Mark Menezes: You have obligations to provide affordable, reliable, clean, and resilient power. Those are your obligations. You don’t have a choice. In our world, you’re forced to make – and you heard this from Senator Cramer – binary choices.
One hundred percent renewables are not fossil, non-fossil. You won’t get very far in policy discussions when you’re forced into those binary discussions.
I find it very helpful to begin conversations with policymakers to say, “We can’t choose one or the other because we have an obligation for all four of those.”
Omaha Public Power District CEO Javier Fernandez
Javier Fernandez: We experienced a sixteen percent increase in our peak winter load. This past August, we broke our summer peak load by ten percent in one year, and it’s going to continue to happen year after year, after year. This is when people need our services the most. When it’s minus thirty degrees in the winter, people are using more and more electricity to heat their homes. And it’s happening in the heat of the summer.
We’re talking about permitting reform. Permitting reform, not only for long-distance, high-voltage transmission lines, but permitting reform at the state and the local levels.
We, too, are doubling the size of our generation portfolio. We have to. We are well on our way. We’re going to deliver at least seven hundred megawatts of new generation next year.
We would have been there with an additional thousand megawatts, had it not been for local permitting issues. This is where locating new solar farms and new wind farms is becoming a gigantic issue. Rural counties don’t want that type of infrastructure in their territory, and trying to come to the table, and present these scary new technologies in a way that it’s really not that much. I’ll give you one example.
Nebraska is known for raising corn. Forty percent of the corn grown in Nebraska is already used to harvest energy, in the form of ethanol. Four and a half million acres of corn production in Nebraska is used to harvest energy already. Now, we’re looking at ten thousand acres, a fraction. One quarter of one percent of that land that would be used for solar production. But it’s different. It’s solar panels. It’s not corn plants.
When you look at the efficiency, acre per acre. One acre of corn used for ethanol production, versus one acre of solar panels used for electricity. You pack thirty-four times more energy with solar production than with planting corn. So, you have a crop that yields thirty-four times more energy, that uses zero water, zero fertilizer, zero pesticides, it doesn’t compete for water for other users. But it’s really hard to get that message across.
Those are the conversations we’re having with our neighboring rural communities, to make sure that we have a good conversation, and we all come to the table and solve this issue too.
Long Island Power Authority CEO Tom Falcone
Tom Falcone: This is a wind farm in federal waters, and it’ll be operational by January. But that has been an eight-year saga. On the positive side, you can make your way through, and get this stuff built.
On the concerning side, with the speed at which we want to do these things, eight years, when the construction period is about eighteen months. All the rest is in getting coalesced around, this is a project we want to do.
On the hopeful side, to your point on engagement, we built the first one in East Hampton. There is no path by which you could land an offshore wind project and bring it to a substation that does not pass by at least one billionaire’s house. You’ve looked at all of them.
The opposition was quite large. But if you can build it in East Hampton, you can build it anywhere. It took a coalition of the local community to say that this was important, and to get it done.
That said, there are also other offshore wind projects that have been proposed on Long Island. Some have run into opposition they have not been able to surmount, at least yet. I think part of that was community engagement upfront was not that good...
I have a couple of quick thoughts. First, we share the same strategy, which is we’re going to get to a zero or near zero carbon grid, but the electric grid only is thirteen percent of New York State’s carbon emissions. Sixty percent is heating and transportation.
If you really care about carbon, if you want to get to a low-carbon grid, you have to take that clean electric grid and use it to power transportation and heating. We are pursuing electrification. We’re pursuing heat pumps, which are very economic on Long Island.
So, people are going to get more and more of their needs from electricity but for people to feel comfortable with that, two things have to happen. One, the price has to be reasonable. So, we have to maintain affordability of electricity but number two, it has to be reliable.
People have to feel like, I can trust the electric grid, including in big storms. Long Island is a long island for anybody not familiar with it, and occasionally a hurricane or storm or something comes up the East Coast, and once or twice a decade we get whacked and fifty to ninety percent of our customers could lose power.
Now when you get hit by a hurricane, people are going to lose power. That’s going to happen. The question is how you make the grid as resilient as possible so that you can restore it as quickly as possible. So, our board has put in a couple of standards. One of them is around everyday reliability, but another one is on resiliency.
Our last big storm was in 2020. We came out the other side of it and said, “Well, what’s our strategy, so that if the same exact storm were to hit five years from now, we would reduce the speed of restoration by about twenty percent. We’d pick up the pace by about twenty percent,” and that’s a realistic target. We put out a strategy.
It’s a lot of money. It’s billions of dollars of investment. However, it’s things that need to be done to assure reliability, which is especially a big priority for Long Island.
One other thing, which perhaps is off topic of this forum, but is good advice for any electric utility, is it’s not just the infrastructure that needs to be reliable. The biggest thing that also comes in those moments is your ability to communicate with your customers and give them information and that’s the resiliency of your IT systems.
I’m not aware of too many utilities who haven’t had trouble because they’re very complex and they need to be very robust and be tested very well and it is not easy to do. But in those key moments when the power does go out, what people really want to know is when’s it coming back, and they want you to be able to provide information that’s accurate and timely.