By Amanda Durish Cook

CARMEL, Ind. — MISO may have to contend with security concerns, communication constraints and even the eventual phaseout of the vertically integrated utility model as it strives to manage a grid with growing amounts of distributed energy resources.

Those possible scenarios were laid out March 26 at the latest in a series of educational workshops hosted by the RTO and the Organization of MISO States. The events are a precursor to MISO bringing discussion of DER market rules to its stakeholder process.

The first workshop on DERs in late January was cut short by a dangerous cold snap that knocked out power to MISO’s Carmel headquarters. (See Cold Snap Halts DER Talk as MISO Calls Max Gen Event.) The RTO has planned two additional workshops more technical in nature for April 9-10 and April 17-18.

Located far from the coasts, the Midwest and South are typically slow to take up new energy trends. MISO has a relatively low level of DERs on its system, with a 2018 OMS survey finding about 2.6 GW (compared with about 6 GW in the geographically smaller CAISO footprint). But Bob Shively, president of training firm Enerdynamics, said MISO’s volume is “significant” and predicted that DER will grow — albeit lopsidedly — based on state politics and regulation.

MISO DER Program Manager Kristin Swenson said it’s appropriate for discussions to happen now, even if adoption is currently relatively low.

“The rate of change seems very slow until it happens all at once. … Political, regulatory changes happen quickly, and it takes a long time to prepare,” Swenson said. “Now is the time to be looking at what’s going to be five years, 10 years away.”

Shively said DERs are fast becoming economic: “There’s this distinct possibility that DER penetration is happening very quickly out there, and it will have impacts on the bulk electric system.”

T&D Communication

Shively said MISO and its members must now figure out how to improve communication at the transmission and distribution interface to increase visibility and determine what wholesale market changes are needed to include aggregated DER.

“There’s going to be a coordination and discussion that never took place in the past,” Shively said, adding that metering DERs will one day become a “necessity.” He said the distribution grid will likely become a data monitor and automated system in addition to a power delivery system. Distribution operators may soon be scheduling generation, Shively said, or form distribution-level system operators to optimize the use of DERs. He also said MISO may need to devise a special interconnection agreement for DER aggregations.

“This is not going to happen overnight, but there are some models being talked about out there,” Shively told stakeholders.

Currently, MISO has neither visibility nor situational awareness about the location or output of DERs in its footprint, and management thinks it possible that FERC will issue rules on the treatment of DERs this year. The grid operator also predicts that DERs will require “new gird management protocols” as the transmission grid, distribution grid and end users begin flowing energy between one another, deviating from the traditional pattern of one-way flows.

But Shively said changes to incorporate DERs must be made thoughtfully, with special attention on system frequency, voltage and resource adequacy.

“When we’re planning the system, the No. 1 thing is we don’t want to break the system,” he said. “So if we’re bringing DERs on … we want to make sure that we’re not doing things to damage our equipment.”

He said to maintain frequency, utilities can control generation and might someday control even load courtesy of smart devices.

Shively also pointed out that there’s no dollar value placed on reactive power to control voltage and no incentive to provide it. “Unless you want to be a good corporate citizen,” he chuckled. He added that voltage instability will likely be localized and managed on the distribution circuit and said frequency issues are the bigger threat to the grid.

‘Points of Entry’

Stakeholders pointed out that DERs open the question of what generation falls under NERC Critical Infrastructure Protection standards. Shively said DERs open new “points of entry” to the grid. He said it’s possible that hackers could access controllable home systems.

But he also pointed out benefits, saying DERs could potentially provide black start services to restore the grid from blackout.

Stakeholders asked about the difference between a DER and a more energy efficient refrigerator, when both serve to reduce load.

“It starts to get really fuzzy: What is a DER and what isn’t a DER. … So the answer is, it’s a fuzzy line, not a fine line,” Shively said. “Is a Nest thermostat that changes your temperature a DER, or is it just customer behavior?”

Shively said MISO will have to keep in mind that its DER supply mix will directly result from state processes, but it’s up to the RTO to plan the system and model load. That will prove difficult for grid operators that lack visibility of DER behavior, he said. Shively said MISO should also consider that line maintenance can take multiple DERs out of service.

Minnesota Public Utilities Commission staff member Hwikwon Ham recommended MISO differentiate its future operational concerns from its planning reserve concerns regarding DER integration. The RTO has said it may have to rethink its planning reserve margin as resource availability shifts. (See MISO, Stakeholders Debate Merits of Seasonal Auction.)

Others’ Load

WPPI Energy economist Valy Goepfrich observed that the MISO system only seems to encounter complexities when a DER owner goes from serving its own load to serving others. She asked if MISO might only have to make changes when groups of DERs enter the wholesale market en masse.

But Shively said even when customers choose to serve their own load with DERs, load modeling becomes a problem. He said under that scenario, data exchanges will still be needed between distribution and transmission.

“I think you’re right; it’s probably a spectrum” of grid preparation based on DER use, Shively said.

Shively also said that once new guidelines for visibility and control are in place, MISO members can’t assume that existing communications systems will be adequate. He pointed to rural areas that lack high-speed internet.

But he said the DER discussion is reminiscent of the fears he heard when utility-scale wind and solar were being integrated into the system. However, he allowed that the question of generation on the distribution level muddies the regulatory waters.

Vertical Integration

Stakeholders asked how increasing use of DERs would interact with the largely vertically integrated utility model in the MISO footprint.

Shively paused. “That’s a great question.” But, after a beat, he said, “I think that there’s going to be more pressure for customers to have retail choice. … I would contend you can go down the road for a while without retail choice, but the more you crack open the door…”

He trailed off, later adding that companies like Google and Amazon might lead the way on pushing for supplier choice.

At the end of day, Shively said, the difficulties of absorbing DERs into the market should prove worth the effort.

“We can come up with lots of problems with implementing DERs, but we also have to remember there’s a lot of potential,” he said. “I think, long-term, DERs can provide low-cost reliable service to customers. That’s the goal of what all this should be.”