Item E-3 is a draft Notice of Proposed Rulemaking [NOPR], to be issued pursuant to section 304 of the Federal Power Act, that proposes to direct transmission providers to submit one-time informational reports describing their current or planned policies and processes for conducting extreme weather vulnerability assessments and mitigating identified extreme weather risks. Today’s draft NOPR builds on the record of the June 2021 Technical Conference on Climate Change, Extreme Weather, and Electric System Reliability, during which there was widespread agreement that utilities and other industry participants should assess the vulnerabilities of their systems to these risks. However, the record to date notably does not indicate whether and to what extent transmission providers are conducting extreme weather vulnerability assessments, the methods used to conduct those assessments, and what is done with the information from those assessments. The proposed one-time reports would ensure the Commission can fulfill its statutory obligations with respect to system reliability and just and reasonable rates.
According to a robust and growing body of scientific evidence, extreme weather events are occurring more frequently; those events pose increased threats to system reliability and impact Commission-jurisdictional rates. Extreme weather events also come with significant human consequences. More than four and half million people in Texas alone lost power during Winter Storm Uri, and in some cases the outages contributed to a tragic loss of life. Winter Storm Uri also had a significant impact on energy prices, which rose to historic levels in the wholesale markets serving Texas and the South-Central region.
Additionally, in a May 2021 report, the US Government Accountability Office (GAO) stated that extreme weather driven by climate change is expected to become increasingly frequent and severe and to have far-reaching effects on the electric grid. GAO identified potential impacts to the grid in every region of the United States that, absent measures to increase resilience, may increase outages and impose billions of dollars in additional costs to utility customers. GAO recommended that the Commission take steps to identify or assess climate change risks to the grid in order to ensure it is well-positioned to determine the actions needed to enhance resilience. Similarly, the draft NOPR notes that the failure to assess and mitigate the risks of extreme weather could increase the frequency of loss of load events and also affect consumers. Consumers ultimately bear the financial burden to regularly rebuild damaged infrastructure or pay for solutions that may be more costly than solutions that could have been identified through a more proactive, forward-looking process. They also bear the burden when extreme weather events lead to extreme prices for wholesale electricity.
To be clear, the goal of this proceeding is to gather information, not to establish new requirements. Therefore, the draft NOPR does not require transmission providers to conduct extreme weather vulnerability assessments where they do not do so already, or to require transmission providers to change how they conduct or plan to do such assessments.
Today’s draft NOPR proposes to define an extreme weather vulnerability assessment as any analysis that identifies where and under what conditions jurisdictional transmission assets and operations are at risk from the impacts of extreme weather events, how those risks will manifest themselves, and what the consequences will be for transmission system operations. The draft NOPR further proposes to require transmission providers to submit one-time informational reports on how they (1) establish a scope for their extreme weather vulnerability assessments, (2) develop inputs, (3) identify vulnerabilities and determine exposure to extreme weather hazards, (4) estimate the costs of impacts, and (5) develop mitigation measures to address extreme weather risks.
Comments on the NOPR are due 60 days after publication in the Federal Register.
Thank you, this concludes our presentation. We are happy to address any questions.