Southwest Power Pool faces electricity reliability crisis as coal plants retire rapidly

The House Committee on Energy, Utilities, and Telecommunications convened on January 23, 2025, to discuss critical developments in Kansas's energy landscape, focusing on the state's electricity generation capacity and the challenges posed by plant retirements and regulatory changes.

The meeting opened with a presentation highlighting that as of 2023, wind generation accounts for approximately 47% of Kansas's electric generation capacity, followed by coal at 28%, natural gas at 8%, and nuclear at 18%. This trend mirrors a broader shift across the United States and within the Southwest Power Pool, which encompasses 14 states from the Dakotas to Texas. Notably, coal's share in the regional generation mix has decreased significantly from 59% in 2012 to 27% today.

The committee examined the implications of these changes, particularly the reliability of the electric grid. Recent data from the Federal Energy Regulatory Commission (FERC) indicated that power plants are retiring at a faster rate than they are being replaced, raising concerns about the reliability of the national electric system. The North American Electric Reliability Corporation (NERC) reported that certain regions, including parts of Missouri and Kansas, face elevated risks of energy shortfalls during extreme weather events starting in 2025.

A significant point of discussion was the projected decline in reserve margins within the Southwest Power Pool. The reserve margin, which indicates the extra capacity available during peak demand, has decreased from 24% in 2019 to a projected 15% by 2026. This decline is attributed to the closure of 15 power plants over the past six years, including coal, natural gas, and one nuclear facility, which collectively represent a loss of 4,700 megawatts of capacity.

Looking ahead, the committee noted that an additional nine plants are scheduled for retirement in the next six years, potentially removing another 5,700 megawatts from the grid. The discussion underscored the urgency for new generation sources, with 87% of upcoming projects in the Southwest Power Pool expected to be wind, solar, or battery storage, leaving only 13% as baseload generation from traditional sources.

The meeting also addressed the impact of recent environmental regulations on energy generation. The committee expressed concerns over the rapid implementation of regulations targeting coal plants, which could further complicate the transition to a more sustainable energy mix. The potential for legal challenges to these regulations was highlighted, particularly regarding the carbon rule set to take effect in 2032.

In conclusion, the committee emphasized the need for strategic planning to ensure energy reliability in Kansas. With significant plant retirements on the horizon and a shift towards renewable energy sources, the discussions underscored the importance of addressing regulatory challenges and expediting the development of new generation capacity to meet future energy demands. The committee plans to continue monitoring these developments closely as they work towards a sustainable energy future for the state.