On November 16, 2023, FERC staff issued the 2023-2024 Winter Energy Market and Electric Reliability Assessment report, projecting trends and identifying considerations for energy markets and electric reliability for the upcoming winter (December through February). The report focuses on weather outlook, the state of the natural gas and electricity markets, and initiatives implemented in the wake of Winter Storm Elliott.

The report projects higher temperatures in the northern half of the country this winter, which is expected to reduce demand on natural gas and electricity. Accordingly, production of natural gas is projected to slow and place downward pressure on electricity prices. These effects are projected to be most significant in the West, with the Southwest Power Pool as the only region expected to see price increases.

Notwithstanding reduced demand in the North, the report warns that extreme weather, such as prolonged cold, drought, and wildfires, will continue to pose reliability risks to the grid. The staff report incorporates data from the North American Electric Reliability Corporation’s (“NERC”) Winter Reliability Assessment and Long Term Reliability Assessment, which are forthcoming later this year. The report indicates that all six regions covered by NERC will have sufficient generation to meet expected demand and reserve requirements this winter under normal operating conditions, but some may need to rely on operating mitigation measures such as voluntary load reduction, importing power from neighboring regions, drawing on operating reserves, issuing Energy Emergency Alerts, or shedding load during extreme winter conditions.

The report also reviewed lessons learned from Winter Storm Uri and Winter Storm Elliott and steps that utilities and regional operators are undertaking to better prepare for extreme weather. These include performing site-specific generator winter preparedness plans, installing situational awareness tools, and reviewing fuel supply arrangements and communication protocols. Additionally, NERC recommends additional cold weather preparations, implementing fuel surveys and continued monitoring of fuel supplies, anticipating underestimation of load in extreme cold and taking early action to reduce shortfalls of reserves. Furthermore, NERC calls on state regulators and policy makers to grant environmental waivers when needed for reliability reasons and appeal to the public to reduce energy use during extreme conditions.

A copy of the report and staff’s presentation can be found here.