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As gas use jumps, Georgia Power to add resilience section to resource plan

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Essential Energy Insights - September 17, 2020

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As gas use jumps, Georgia Power to add resilience section to resource plan

Gas pipeline and transmission outages are among the potential risks Georgia Power Co. will explore in a new resilience section being added to its next integrated resource plan, parent company Southern Co.'s Chairman and CEO Tom Fanning said Jan. 17.

Fanning said traditional utility integrated resource plans, or IRPs, already explore threats to grid reliability but that more attention should be paid to "abnormal conditions," be it a wildfire, hurricane or cyberattack.

"We will introduce new concepts of resilience and we will start to introduce ideas that will go to, 'What if we lost a gas pipeline system?'" Fanning said at an event hosted by the Bipartisan Policy Center in Washington, D.C.

Exploring pipeline vulnerabilities has become more important to Southern as the utility boosts its reliance on gas-fired generation. When Fanning became Southern's chairman in 2010, about 70% of the company's energy was produced by burning coal, natural gas' share was in the "single digits" and renewable resources produced none of that energy. In 2018, that generation portfolio shifted to about 50% gas, 26% coal and 11% renewable energy, he said. The transition towards lower-emitting fuels is part of Southern's goal to cut nearly all of its greenhouse gas emissions by 2050.

"As we move from single-digits gas generation now to 50%, how should we think about the sanctity of pipelines?" he pondered with reporters on the sidelines of the Jan. 17 event. "And what do we do if a major pipeline gets interrupted for some period of time? Does that show up as more storage?"

Another idea he said Georgia Power is exploring is the preservation of "inactive reserves," such as coal-fired plants that have been taken out of service but kept "alive" for a resilience emergencies. In addition to pipeline outages, the resilience review will look at the impact of lost transmission capacity and potential interruptions to generating facilities.

But Fanning said Georgia Power "probably won't act on [those resilience concepts] in a significant way this time" and is "setting up the argument later" for possible action. Georgia Power will probably file its IRP in late January. Southern has subsidiaries in other states, which Fanning said have different schedules for submitting resource plans.

Fanning noted that Southern is not the only utility incorporating resilience into its resource planning. He cited a Virginia regulators' decision earlier that same day to approve a Dominion Energy Virginia request to invest $154.5 million in cyber and physical security measures. The investments are part of a 10-year plan that the utility, which is known legally as Virginia Electric and Power Co., formed to enhance grid reliability, resilience and security.

The increased focus on resilience comes after the Trump administration proposed a plan in September 2017 aimed at subsidizing financially struggling coal-fired and nuclear plants in the name of grid resilience. The Federal Energy Regulatory Commission rejected the plan in January 2018 but launched a broad grid resilience review that could result in new policies to further shore up the U.S. bulk power system.