The Cooperative Difference: Balance of Power 2.0


A year ago, in the aftermath of Winter Storm Uri, I penned an article titled, “Balance of Power.” I stated that the Electric Cooperatives of Arkansas were embarking on a Balance of Power campaign to help raise our collective energy IQ. Even now, our goal remains the same, and that is to better inform you of the challenges faced when trying to achieve the Balance of Power for our cooperative.

The year 2022 was full of obstacles. Strained supply chains resulted in a national shortage of transformers and other critical equipment needed to ensure the reliability of the electric grid. We also saw continued strain on the electric grid with power shortages in California during Labor Day weekend, with the state living under the fear of rolling blackouts for nearly a week. Rolling blackouts were averted in California but only due to extreme conservation. Californians were asked to turn off their air conditioning and to avoid charging their electric vehicles in the evening after the sun sets and solar power is no longer available.

We saw the Regional Transmission Organizations (RTOs) that balance the grid in Arkansas — Southwest Power Pool (SPP) and Midcontinent Independent System Operator (MISO) — sounding alarms by raising the amount of reserve power that utilities must have available to keep the grid reliable. To put that in simpler terms, the concern is that there wouldn’t be enough power available to meet everyone’s needs in the winter. This is particularly challenging in that nationally, we continue to see coal and nuclear plants shutdown to be replaced with intermittent resources like wind and solar. This is a challenge because coal and nuclear plants are almost always available, whereas intermittent resources are subject to weather conditions. Winter is the most significant pressure point because peak load in the winter occurs in the evening and early morning, when the sun is not shining, and the wind doesn’t always cooperate with the demand for electricity.

Arkansas Electric Cooperative Corporation (AECC) set an all-time record peak for electricity — 3,147 megawatts (MW) — in December 2022.

This all came to a head in December 2022, when a significant cold front moved across the country and, once again, shined a light on the cracks in the foundation of grid reliability. At Arkansas Electric Cooperative Corporation (AECC), we set an all-time record peak for electricity demand at 3,147 megawatts (MW), which is about 500 MW more than we see in peak summer conditions. I am happy to report that we were able to avoid rolling blackouts, but not without a fair amount of stress.

On the evening of Dec. 23, we received notification from MISO that we needed to curtail power to members who agreed to reduce load during peak periods, and to prepare for rolling blackouts for all others due to a forecasted shortage of power. These peak demands occurred when it was dark, so solar resources across the state were not able to contribute to supplying electric load. In extreme cold, there are always challenges with operating power plants, which is why there are requirements to have more power available than forecasted peak loads. But as peak loads continue to increase, and only intermittent resources are added to the grid, the margin for error continues to shrink.

Power plant reliability was not perfect but better during 2022 Winter Storm Elliott than during 2021 Winter Storm Uri. One of the constraints that created the challenge was a shortage of natural gas to power plants. As we shift away from coal and nuclear fuels to an ever-increasing reliance on natural gas, the diversity of our fuel supply for electric power generation dwindles. This is not an issue in the summer because power plants are not competing with home heating demands for natural gas like they are in the winter. Natural gas infrastructure gets constrained during these cold weather events and results in reductions in supply or even lack of supply to power plants. This results in extreme price spikes for natural gas, which in turn results in extreme prices for electricity.

Other areas around the country were not as lucky as Arkansas. PJM — an RTO like MISO that serves all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and Washington, D.C. — also had to curtail power to those who agreed to do so and had to issue rolling blackout alerts.

The Tennessee Valley Authority (TVA) experienced rolling blackouts to stabilize the regional power grid for the first time in its 89-year history amid subzero temperatures. The NFL Tennessee Titans had to delay kickoff of the game with the Houston Texans due to power outages and rolling blackouts. The issue was that TVA needed about 30,000 MW of power but only had 23,000 MW of supply.

Duke Energy also had to issue rolling blackouts in the Carolinas for the first time in company history.

We take our mission of providing you with a Reliable, Affordable and Responsible electric power supply seriously. Cooperatives are not-for-profit. Your cooperative operates on a cost basis and returns any excess to you if more money is collected than needed to supply your electricity. Cooperatives embrace all forms of electric generation, including wind and solar; however, prioritizing and subsidizing these sources of generation and regulating other forms of generation out of existence is the concern.

Diversity is a strength in every area of life. However, in energy production, we are moving in the opposite direction. Closing coal and nuclear plants reduces fuel diversity and makes us more reliant on a single fuel source, natural gas, to keep the electric grid reliable. Demand for natural gas during these winter events causes extremely high prices, which are ultimately passed on to you. It also results in supply shortages that reduce the amount that can be used for electric generation, thus impacting grid reliability. I often hear that this is the exact reason why we need more intermittent resources that don’t require fuel, such as wind and solar. But this logic fails the test when viewed through the lens of electric reliability due to these resources’ natural limitations.

I share this information not to scare you, but rather to highlight the challenges AECC and other utilities face in supplying ever-increasing electric loads. The challenges will continue to increase with the continued push to electrify transportation (electric vehicles) while simultaneously closing coal and nuclear plants and replacing them with intermittent resources. The real goal should be to maximize power supply diversity by balancing traditional sources like coal, nuclear and natural gas with wind and solar, all while continuing to innovate and integrate new forms of generation, resulting in a Reliable, Affordable and Responsible electric grid that is critical to every aspect of our lives.

Vernon “Buddy” Hasten is President and CEO of Arkansas Electric Cooperatives, Inc., and Arkansas Electric Cooperative Corporation.