At a recent FERC meeting, NERC warned of a growing “five-alarm fire” in the nation’s energy grid, primarily due to the rise of data centers and slowing infrastructure buildouts.
Last week the North American Electric Reliability Corp. (NERC) sounded the alarm about the mounting stress on the nation’s electric grid. At a recent Federal Energy Regulatory Commission (FERC) forum, NERC’s President & CEO emphasized that mounting challenges — including shrinking reserve margins, extreme weather, complex permitting processes, and rising cybersecurity threats, among others- are a concern.
According to Utility Dive:
“The reliability of the power grid remains extremely high, but, paradoxically, the risks to reliability continue to mount,” Robb said. “We’re seeing … an increasing number of small scale events and near misses that continue to reinforce what we can’t call anything but a five-alarm fire when it comes to reliability.”
In addition to the issues above, the discussion also spotlighted the rapid growth of large loads such as data centres, projected to consume between 6.7 % and 12 % of U.S. power by 2028 (up from 4.4 % in 2023). FERC members and system operators stressed that accommodating this scale of new demand will require faster permitting, more transmission build-out, and improved planning tools. The implications for county and local governments are significant: as infrastructure and siting pressures grow, counties will likely be required to coordinate more closely with state and regional grid planners, and state leaders will likely feel more pressed to preempt county processes perceived as contributing to delays.
What is FERC?
The Federal Energy Regulatory Commission, or FERC, is an independent agency that regulates the interstate transmission of electricity, natural gas, and oil. FERC also reviews proposals to build liquefied natural gas (LNG) terminals and interstate natural gas pipelines as well as licensing hydropower projects. The Energy Policy Act of 2005 gave FERC additional responsibilities as outlined and updated Strategic Plan. As part of that responsibility, FERC:
- Regulates the transmission and wholesale sale of electricity in interstate commerce
- Reviews certain mergers and acquisitions and corporate transactions by electricity companies
- Regulates the transmission and sale of natural gas for resale in interstate commerce
- Regulates the transportation of oil by pipelines in interstate commerce
- Approves the siting and abandonment of interstate natural gas pipelines and storage facilities
- Reviews the siting application for electric transmission projects under limited circumstances
- Assesses the safe operation and reliability of proposed and operating LNG terminals
- Licenses and inspects private, municipal, and state hydroelectric projects
- Protects the reliability of the high voltage interstate transmission system through mandatory reliability standards
- Monitors and investigates energy markets
- Enforces FERC regulatory requirements through imposition of civil penalties and other means
- Oversees environmental matters related to natural gas and hydroelectricity projects and other matters
- Administers accounting and financial reporting regulations and conduct of regulated companies
