Power Crisis Prompts Rethink, With Gas Impacts
Risk management incentives for suppliers to align with reliability goals could also help, argued Devin Hartman, a former president of the Electricity Consumers Resource Council now at the conservative R Street Institute. In Texas, suppliers are more motivated to chase price signals than with SPP and MISO.
Yet with SPP and MISO, one “big issue” is that steps such as winterizing equipment and ensuring backup fuel fall to state regulators. Federal reliability standards aren’t aligned, an issue that “really surfaced” during the bomb cyclone event that hit the Midwest in 2019. “We have seen that disconnect” for years, but extreme cold weather events have underscored it more, Hartman told Energy Intelligence.
He also suggested that power plants should not have the option of buying gas on an “interruptible” basis from pipelines. This option, while cheaper, allows the pipeline to reduce or curtail supply if the gas is needed for “firm” customers such as homes, businesses or hospitals. Interruptible purchase arrangements appeared partly to blame for the power shortages in Texas.