By Tom Kleckner
HOUSTON — At the Gulf Coast Power Association’s annual spring conference last week, ERCOT CEO Bill Magness once again moderated a panel of his counterparts from around the country, welcoming back MISO’s John Bear and SPP’s Nick Brown. Joining the discussion this year was PJM’s Andy Ott, with a vacant chair left to recognize 2017 participant Steve Berberich of CAISO.
Magness asked Brown and Ott to explain their participation in the Western markets. SPP has been working to integrate the Mountain West Transmission Group since January 2017, while PJM has partnered with Peak Reliability to offer market services in the Western Interconnection through its PJM Connext subsidiary.
Brown pointed out that SPP is not a greenhorn when it comes to being active in the region. “We’ve worked with participants in the West the last 10 years, helping them to understand our markets,” he said. “The efficiencies, the increasing of reliable operations across larger areas, the integration of renewables … those are all things people are wanting.”
“It’s really education, trying to fill a void,” Ott said. “We’re fostering a discussion of competitive markets. Even if we’re not successful, we’ve had a positive influence. When we first got out there, we saw cultural differences, but we very quickly talked about a market for the West, by the West. We let them realize, ‘Wait a minute, I’ve got control,’ because it’s their assets, their region.”
In describing the value of RTOs to their members, Brown shared a story about a conversation he had with a current SPP participant, who had previously formed another organization consisting of member utilities.
The member asked Brown, “‘What are you going to say to convince me to turn over management of my assets?’
“‘Well, how did you do it within your organization?’” Brown said he responded.
“‘I pried it out of their cold, dead fingers.’
“I said, ‘OK, we can’t do that. We’re not going to do that. We’ve got to show the value proposition [of an RTO]. Quite frankly, that’s why you don’t have value in doing this by yourself anymore.’ That’s what the folks in all our footprints saw: the benefits.”
Asked what he was watching in the other RTOs, Bear pointed first to their response to FERC’s resilience initiative, saying “there are ways we could be more resilient.”
“The FirstEnergy situation in PJM … we’re interested to see how that gets dealt with,” Bear said, referring to FirstEnergy Solutions’ recent bankruptcy filing and plea for governmental protection of its nuclear and coal plants. (See FES Seeks Bankruptcy, DOE Emergency Order.)
“We’re also watching Andy’s guys to see how they do scarcity pricing. For SPP, we’re watching how they deal with all that wind, and how they do so well with 50%, 60% [wind penetration] levels. We can only simulate that.”
“My neighbors matter a lot to me. John and I are intertwined, and we have great working relationships between the two of us,” Ott said, noting his organization also learns from SPP. “A developing story is in New England, where they worry about fuel security. They only have a couple of interstate pipelines, and we have 25. How they deal with that fuel-security problem will affect us.”
Like SPP, MISO is also working to accommodate a large influx of wind energy and other renewables. Bear said the ISO had 100 MW of renewable energy in the mid-2000s, but that has now grown to 18.5 MW.
“We had people telling us that with up to 5 GW [of renewables], we would crash the system,” he said. “We’ve done a lot of transmission build to disperse that [energy] and pass the benefits around. We’ve also had to design products to handle the wind. We had a lot of wind turbines that wouldn’t turn down, but now, we incentivize them to do the right things.”
Magness did not let the round table end without uttering a word he said is heard these days at every self-respecting conference: blockchain.
“There, I said it!” he said, peering at his audience.
Later, upon begin congratulated for mentioning “blockchain,” Magness brought up another futuristic word from a bygone era: “Plastics!”
