POWER August 2018 - 22

What Is 'Resilience,'
and Do We Need It?
Kenneth W. Irvin
Christopher Polito
U
.S. Secretary of Energy Rick Perry last year petitioned the
Federal Energy Regulatory Commission (FERC) to craft policies
to provide for " resilience " in the nation's generation
resource mix. He wrote that ensuring a reliable and resilient electric
supply and corresponding supply chain are vital to national
security.
Framing the issue as " national security " is what's happening
now, with the White House National Security Council arguing for
the administration to use the Defense Production Act and authority
under Federal Power Act section 202(c) to " temporarily
delay retirements of fuel-secure electric generation resources. "
FERC has rejected arguments that government intervention into
wholesale energy markets is needed. It also has asked the question:
What exactly is resilience, and do we need it?
Defining Resilience
FERC has said it places a priority on resilience, and recently issued
an order initiating a new proceeding (Docket No. AD18-7-000)
to holistically examine the resilience of the bulk power system.
FERC's action directed the regional transmission organizations
(RTOs) and independent system operators (ISOs) to provide information
as to whether FERC and the markets need to take additional
steps to affirm the resilience of the bulk power system.
FERC said its goals are to " develop a common understanding
among the Commission, industry and others of what resilience
of the bulk power system means and requires; to understand how
each regional transmission organization and independent system
operator assesses resilience in its geographic footprint; and to
use this information to evaluate whether additional Commission
action regarding resilience is appropriate. "
Yet resilience remains an elusive concept. The comments from
the RTOs and ISOs explain resilience as another, perhaps expanded,
value of reliability. Their comments in response to FERC
indicate all is well with each of their respective systems. But at
the same time, market events show that we do not have a clear
view of what resilience is, how to measure it, or how to ensure it.
Responding to FERC's directive, PJM Interconnection took a
bold approach, seeking to establish a set of principles that would
(intentionally) act as a lightning rod or spark action. PJM, for
example, asked FERC to adopt a slightly different core definition
of resilience and apply it (essentially) nationwide. FERC's order
in January came with this definition: " The ability to withstand
and reduce the magnitude and/or duration of disruptive events,
which includes the capability to anticipate, absorb, adapt to,
and/or rapidly recover from such an event. "
PJM recommended an alternative formulation: " The ability to
withstand or reduce the magnitude and/or duration of disruptive
events, which includes the capability to identify and mitigate
vulnerabilities and threats, and plan for, prepare for, absorb,
22
adapt to, and/or recover from such an event. " Note the omission
of the word " rapidly, " and the addition of the phrase " identify
and mitigate vulnerabilities and threats. "
Additionally, PJM's description of resilience-a term still in
flux-as an extension of reliability is notable. Reliability is a
well-defined set of ISO/RTO functions overseen by FERC, from
capacity markets to secure resources years in advance, to splitsecond
frequency regulation and black-start capacity to respond
to emergencies.
Ensuring Grid Resilience
Where we go from here is not clear, but it's clear action is needed.
The Commission must act quickly and substantively, because the
underlying concerns around resilience have surfaced in a multitude
of proceedings. For example, the Electric Power Supply Association
(EPSA) says resilience " must be a priority in all regions
of the country, not only those served by independent system
operators or regional transmission organizations. " According to
the EPSA: " It is important for [FERC] to extend its inquiry on the
holistic examination of resilience to all jurisdictional entities,
particularly transmission owners and systems outside of ISOs/
RTOs. "
Broad concerns about the loss of baseload generation persist.
Cynics will see a political, not a practical, motivation at play,
but leaked memos and reports tell us that the National Security
Council is studying the security risk from coal and nuclear power
plant shutdowns.
In the recent docket, FERC has amassed a robust record that
should lead to action. What type of action is not clear. FERC's
options include using this record to justify that everything is
fine. That choice seems unlikely given Chairman McIntyre's seriousness
of purpose and the record developed in the docket. It
seems more probable that FERC will affirm the various individual
RTO/ISO plans to advance resilience in their respective regions.
If FERC sets forth a universal definition of resilience, the RTOs/
ISOs can pursue meaningful steps to achieving said resilience in
their markets.
Between the bookends lies an array of choices for FERC. What
FERC will choose to do is hard to discern, but the general sentiment
of commenters is that FERC must act-and soon-to ensure
the resilience of the bulk power system. ■
-Kenneth W. Irvin is a partner in Sidley Austin LLP's Washington,
D.C., office. Christopher Polito is an associate with Sidley
Austin LLP in Washington, D.C. This article has been prepared for
informational purposes only and does not constitute legal advice.
This information is not intended to create, and the receipt of it
does not constitute, a lawyer-client relationship. Readers should
not act upon this without seeking advice from professional advisers.
The content therein does not reflect the views of the firm.
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POWER | August 2018
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POWER August 2018

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