Electric Grid Managers Pursuing Fuel Availability Improvements After February Storms

Aug 18, 2021

Credit Photo from Public Service Company Oklahoma

A Southwest Power Pool executive told Oklahoma state regulators the corporation is working hard on ensuring an adequate supply of fuel for electricity generators across the 14-state grid it oversees.

An SPP report on February’s winter storm response focused on natural gas shortages and resulting price spikes as major factors behind utilities implementing rolling outages amid subzero temperatures. Chief Operating Officer Lanny Nickell told Oklahoma corporation commissioners on Tuesday SPP is doing things like advocating for gas price caps that don’t currently exist and re-evaluating seasonal fuel availability assumptions.

"Bottom line is if we can ensure that gas supply is readily available and it's affordable, that's going to certainly help our rate payers and customers across the footprint," Nickell said.

Nickell said SPP has also formed a task force to ensure fuel availability improves. Corporation Commissioner Dana Murphy said while Oklahoma’s major electric utilities are included, she wants to see a regulatory or government presence from the state as well.

"Because I feel as the fourth-largest gas producer and that we were responsible for ... about 28% of the load shed, I think it was really important to make sure that Oklahoma was included," Murphy said.

Murphy also said the Corporation Commission will take its own look at the natural gas issue in a hearing next month. She believes it’s more complex than how SPP sees it.

"It could be that the weather conditions prevented trucks from coming in to haul off oil, and, therefore, the well had to be shut in because it produced both gas and oil," Murphy said. "There could be an issue because there was electricity needed to dispose of produced water, and if electricity was not available to use the disposal well, then the well could also not perform. It's a multipronged issue."

The corporation commission is still determining how much consumers will pay for utility costs that skyrocketed. State lawmakers created a securitization program to help utility companies spread out their debts over several years. Those total $4 billion.

At one point during the February storms, SPP’s market price for electricity hit almost $4,300 per megawatt-hour, more than 240 times its average price for all of 2020.