(Reuters) – Power companies in the U.S. are having trouble getting enough supplies, which could make it harder for them to keep the lights on as summer heats up and hurricane season peaks.
Storms, wildfires, and droughts are happening more and more often in the United States. This summer, people are expected to use more electricity than ever before. According to federal agencies, this could put a strain on electric grids at a time when the weather could make them less reliable.
Utilities are warning that they may not be able to get enough equipment, which could make it harder to fix power outages. They are also having a harder time restocking natural gas for next winter because power generators are burning record amounts of gas because dozens of coal plants have been shut down in the past few years and there is a severe drought in many Western states that is cutting hydropower supplies.
Richard Glick, the head of the U.S. Federal Energy Regulatory Commission (FERC), said earlier this month, “Increasingly frequent cold snaps, heat waves, drought, and major storms continue to challenge the ability of our nation’s electric infrastructure to provide reliable, affordable energy to consumers.”
Federal agencies like the Federal Energy Regulatory Commission (FERC) that are in charge of making sure the power grid is reliable have warned that grids in the western half of the country could have problems this summer if people turn on their air conditioners to cool off.
Some services have already had trouble because of the heat. The Electric Reliability Council of Texas (ERCOT), which runs the grid in Texas, had to tell people to use less energy after a heat wave in mid-May caused several plants to shut down without warning.
The Ohio-based American Electric Power (NASDAQ: AEP) Company shut off power to over 200,000 homes and businesses in the middle of June because of a heat wave and damage to transmission lines caused by a storm.
The Midwest of the United States is most at risk because demand is going up while coal and nuclear power supplies are going down.
The Midcontinent Independent System Operator (MISO), which runs the grid from Minnesota to Louisiana, said that there is a higher chance of short-term power outages in some parts of its coverage area. This is to protect the grid’s integrity.
Problems with the supply chain have already slowed down the building of renewable energy projects all over the country. Because of the delays in renewable energy and the lack of power in the Midwest, Wisconsin’s WEC Energy Group Inc (NYSE: WEC) and Indiana’s NiSource Inc (NYSE: NI) had to put off closing their coal plants.
GETTING READY FOR SUPPLY SHORTAGES
As they prepare for big storms, people who run utilities are keeping their parts and tools on hand. This means that operators have been coming up with new ideas over the last few months.
At the CERAWeek energy conference in March, “We’re doing a lot more splicing, putting cables together, instead of laying new cable, because we’re trying to keep our new cable in stock for when we need it.”
Transformers, which sit on top of electrical poles and change high-voltage energy into power that homes can use, are hard to find.
PSEG’s CEO, Ralph Izzo, told Reuters that the company has had to look at other ways to get low voltage transformers. PSEG is based in New Jersey and trades on the New York Stock Exchange (NYSE).
Izzo said, “You don’t want to run out of supplies because you don’t know when that storm will hit, but you know it will.”
In May, the National Rural Electric Cooperative Association and the American Public Power Association told U.S. Energy Secretary Jennifer Granholm that some utilities have to wait more than a year for transformer parts.
Data from Refinitiv shows that so far this year, the weather in the U.S. has been about 21% warmer than the average for the last 30 years. Summer hasn’t even started yet.
“If we have several days of 100-degree heat, those pole-top transformers will start popping like rice krispies, and we won’t have the supply stack to replace them,” Izzo said.
