MISO, Utilities Report Issues on Winter Readiness

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MISO, Utilities Report Issues on Winter Readiness

December 15, 2021

Are utilities better able to withstand widespread winter storms today than they were last February, when 216 people died as a result of the largest grid outage in U.S. history?

The answer seems to be ‘Yes” in some respects and less certain in others.

That is one take-away from the Midcontinent Independent System Operator (MISO) Quarterly Update meeting held at the Minnesota Public Utilities Commission (MPUC) Dec. 3. Along with updates from MISO staff, the meeting included presentations from the state’s largest electric suppliers, including the investor-owned utilities and Great River Energy.

Two factors affecting reliability now that didn’t exist in February 2021 are high natural gas prices and coal supply challenges. Those two issues were raised repeatedly over the course of the meeting.

MISO opened the meeting with its Winter Readiness report. In a typical winter situation, it expects to have ample electric generation capacity to meet electric load. However, with last February expressly in mind, MISO said an overall average does not preclude extreme events for a short period of time, which could present significant operational challenges.

This includes the risk of energy shortfalls during extreme weather.

In a scenario similar to what we experienced in February, MISO estimated it could face 107.3 gigawatts (GW) of demand and generation availability of only 87.9 GW. This could lead to 7 Gigawatts of maximum load shed, MISO said, in a “perfect storm” scenario.

Such a scenario precludes MISO from carrying its own load, said its representatives and it would have to “rely on our neighbors to help us support the load we have.” This would likely take the form of power imports from PJM, a regional transmission organization to the east of MISO that coordinates the movement of wholesale electricity in all or parts of 13 states and the District of Columbia.

The coal industry is under pressure, said MISO, with a supply chain that is very different from the past. Finding coal on the spot market, it reported, is a challenge.

With high natural gas prices there is an economic incentive to burn coal, but MISO cautioned about burning through coal stockpiles too quickly heading into winter. To slow an early reduction in coal stockpiles, said MISO, a discussion is underway about adjusting market offer prices.

MISO said financing coal was an issue. Recognizing an increased risk of coal and even gas supplies, MISO said it was conducting weekly coal/fuel oil surveys and estimated generating unit run times.

Dual fueled generators, which can run on either natural gas or fuel oil, are “very important assets at a time like this,” said MISO.

In summary, MISO estimated 90 percent of the generating fleet was winterized and capable of working in extreme weather. MISO North is more capable of withstanding extreme cold temperatures, it said, than is MISO South.

Utility outlooks

Xcel noted challenges this fall with its coal inventory but said it is taking steps to remedy those concerns. Its coal stockpile is increasing and it doesn’t expect any problems.

Winter prices appear significantly higher with loads increasing from depressed pandemic levels. Natural gas prices are causing concerns with the coal inventory issues. “A lot of (coal) mines shut down,” Xcel said, and “rail sets taken off-line.” Diversity of fuel supply and generating resources “is definitely key,” Xcel said. It expects to have “plenty of surplus” generating capacity, “assuming wind is in place.”

Thermal (fossil-fueled units) will be available, said Xcel. Wind generation “starts to see cutouts” at 22 below zero Fahrenheit.

GRE said its 1,400 megawatts (MW) of gas/dual fuel peaking units were an “incredibly valuable” resource during February’s extreme cold. GRE said historically it has seen wind generation drop offline at 22 below, which is “something to keep in mind.”

GRE said it expects much higher prices. It is “as prepared as ever” for cold weather events but did mention a national shortage of fuel truck drivers. It was taking steps to ensure deliveries. Coal Creek Station, its largest resource, is valuable, GRE said, and can generate to 60 degrees below zero.

Minnesota Power noted it could call on demand response (removing the load from its system demand) from 15 percent of its load. The coal weather packages on its wind turbines allow them to operate to -22. It expects adequate coal reserves over the winter and market prices 50 to 75 percent higher.

Otter Tail Power said it had 50 days of coal at its Big Stone plant. The lignite-fired Coyote is a mine mouth facility and has no fuel supply issues. Otter Tail said it expects market pricing three times higher than two years ago and 50-70 percent higher than last year. There are no cold weather limits with its coal plants. Its wind generation drops offline from -20 to -30.

Manitoba Hydro said drought has been a concern in recent months but it would meet its contractual obligations, November precipitation was more normal.

ITC and Xcel both noted that the Huntley-Wilmarth 345-kV line, from the Huntley substation near Winnebago to the Wilmarth substation in the city of Mankato, was recently energized and improves reliability.