U.S. electricity markets are projected to have adequate amounts of generating capacity to maintain reliable operations this winter, though grid operators in certain regions may face challenges during periods of extreme weather, according to the FERC staff Winter Energy Market and Reliability Assessment.
This year’s report, presented to the Commission at its October meeting, notes the National Oceanic and Atmospheric Administration forecasts above average temperatures this winter for most of the U.S., except for the Pacific Northwest and West-North Central region of the country.
Rising demand for natural gas, mostly for gas exports, and lower than average natural gas storage inventories are driving expectations that natural gas prices for the coming winter will be higher than last year. Prices are expected to be particularly high in New England, which is dependent, in part, on LNG imports.
“The impacts of rising natural gas prices on consumers are top of mind. Although FERC does not regulate natural gas prices, we do have authority to address market manipulation and we intend to remain particularly watchful during this period of inflation and high price sensitivity,” FERC Chairman Rich Glick said.
Today’s report comes as FERC continues to address concerns about winter energy challenges around the country.
“This assessment highlights that all regions have adequate resources for a normal winter,” Glick said. “But it’s important that we recognize regions could still face challenges in extreme weather conditions, and often these challenges vary from region to region. In New England, generation capacity is adequate, but fuel constraints will continue to challenge the region in the winter. In contrast, Texas has robust capacity but does not have sufficient ability to import power from its neighbors. It is imperative that we recognize each region’s unique challenges and work with them to plan and solve on a customized regional basis.”
Last month, the Commission convened a day-long New England Winter Gas-Electric Forum to consider the region’s electric and natural gas system challenges during the winter.
Tomorrow, the North American Energy Standards Board (NAESB) convenes the second of four meetings to identify solutions to the reliability challenges facing the nation’s natural gas and bulk electric systems. FERC Chairman Glick and North American Electric Reliability Corporation President and CEO Jim Robb urged NAESB to hold these meetings as one of the key recommendations from the joint FERC-NERC-Regional Entity report on the 2021 Winter Storm Uri freeze.