Key Issues > Electricity Markets, Grid Security and Resilience
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Electricity Markets, Grid Security and Resilience

The nation’s electricity grid faces a number of challenges—including reliability and security concerns.

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The nation’s electric grid delivers electricity that is essential for modern life. However, the electric utility industry faces significant challenges, including aging infrastructure, changes in the sources of power generation, and increased physical and cybersecurity risks.

The Department of Energy (DOE) and the Federal Energy Regulatory Commission (FERC) have key responsibilities related to the electric utility industry. For example, DOE seeks to ensure that the nation’s energy delivery system is secure, resilient, and reliable. DOE is also responsible for things like collaborating with the owners and operators of critical infrastructure, identifying vulnerabilities, and helping to mitigate incidents. FERC regulates wholesale electricity markets and is responsible for reviewing and approving mandatory electric reliability standards.

These and other federal agencies play various roles in addressing challenges facing the electric utility industry.

For example:

  • Research and deployment of technologies. DOE conducts research and development and provides analytical support for efforts to modernize the electricity grid. Deployment of energy storage and solar and other technologies could make electricity grids operate more efficiently and provide other benefits—such as cleaner generation of electricity. However, these technologies also present challenges, such as uncertainty about how they perform over time and in various operating conditions.
  • Addressing cybersecurity risks. The federal government has a significant role in addressing cybersecurity risks facing the electricity grid, even though most of the grid is owned and operated by private industry. DOE has developed plans to implement a strategy for addressing grid cybersecurity risks, and FERC has approved mandatory grid cybersecurity standards. However, DOE and FERC could take additional actions to address some significant cybersecurity risks facing the electricity grid.
  • Disaster response and enhancing resilience. Federal agencies coordinate to support local electric utilities in restoring power following disasters. For example, agencies took unprecedented roles in restoring power in Puerto Rico following Hurricanes Irma and Maria. However, FEMA should take additional actions to address challenges facing longer-term grid recovery in Puerto Rico to ensure the grid is rebuilt in a manner that enhances resilience.

Hurricane Maria Damaged Power Lines in Puerto Rico in November 2017

  • Regulating electricity markets. To ensure there will be enough electricity from power plants to meet customers' future needs, some U.S. electricity grid operators use capacity markets (which aim to provide financial incentives to build and retain enough power plants to meet electricity needs). In 4 regions of the United States, FERC has approved such capacity markets. However, FERC should more fully assess the performance of these markets.  
  • Owner of infrastructure. The federal government owns significant electricity generating capacity and transmission assets, which are managed by four regional power marketing administrations (the Bonneville Power Administration, the Western Area Power Administration, the Southeastern Power Administration, and the Southwestern Power Administration) and the Tennessee Valley Authority (TVA). However, these federal entities face operational challenges. For example, TVA has faced challenges managing its unfunded pension liabilities and it should take steps to ensure that its pension plan is fully funded.  
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    • Frank Rusco
    • Director, Natural Resources and Environment
    • 202-512-3841