By Rich Heidorn Jr.

HOUSTON — NYISO CEO Brad Jones got to wear his cowboy boots again last Tuesday, returning to Texas for a discussion with the CEOs of SPP, MISO and his former employer, ERCOT.

Though three of the four grid executives claim Lone Star roots, Jones was the only one wearing boots onstage at the Gulf Coast Power Association session.

Footwear aside, the four of them had much in common, including concerns over cybersecurity and their management of shifting generation resources. They also expressed sharply differing views on some subjects, such as the value of FERC Order 1000.

Impact of Low Gas Prices, Renewables

ERCOT CEO Bill Magness, who moderated, began the discussion by asking his colleagues whether natural gas or renewables were causing bigger changes in their operations.

“Both,” responded MISO CEO John Bear, a Texas native. “Five years ago, we were about 85 to 90% provided by coal. It’s about half that right now. So we’ve really made a significant shift because of the wind generation and obviously the gas coming online.”

Bear said he didn’t share the fears of some that the Clean Power Plan and other environmental rules will “rob of us our fuel diversity.”

“In fact it’s giving us fuel diversity,” he said. “We’re losing our storage, because that coal pile is largely going away for us. But we are adding a lot more flexibility because of those gas plants.”

SPP CEO Nick Brown took note of his RTO’s growing wind generation — 12.5 GW installed and another 4 GW in the transmission queue. The RTO set a new record at 2 a.m. April 5, with wind representing 48.32% of generation. (See related story, Wind Energy’s Growth Causes Second Look at 2 Tx Projects.)

“If you had asked me five years ago if we would ever see 48% of the generation online at a given point in time being from … wind, I would have laughed at you,” Brown said. “And yet it is a reality. And I’m sure before the end of this year we’ll see 50%.”

In five years, Brown said, “we’ll be predominantly a renewable generation fleet with some thermal. We’re going to have to learn to operate differently.”

Magness said ERCOT is, like MISO, affected equally by renewables and low gas prices. It has been trading wind records with SPP and also expects to exceed 50% penetration this year. “We’re seeing hours of negative pricing across the system in a way that’s relatively new,” Magness said. “It used to be more isolated in the west zone.”

By contrast, New York gets only 4% of its power from variable renewables, said Jones, who joined the ISO in October. Controllable hydroelectric facilities provide another 20%. (See New NYISO Head: New York a ‘Fantastic Opportunity’.)

Unlike Texas, which is fighting the CPP in court, New York “wants to take leadership on low-carbon issues,” Jones said.

Thanks to its participation in the Regional Greenhouse Gas Initiative, the state doesn’t need to make any changes to comply with the CPP. But meeting Gov. Andrew Cuomo’s Clean Energy Standard, which calls for renewables providing half the state’s power by 2030, is another matter.

“To give you a sense of scale, [that would require] 25,000 MW of solar, if solar is the only technology we use. It’s 15,000 MW of wind if that’s the only technology, and we today have about 1,700” MW, he said.

Jones called out former ERCOT colleagues, joking, “I had to go to New York to get a capacity market.” With low energy market prices and a demand for increasing renewables, he said, “it is very valuable to have.”

Demand-Side Management

Because of the growth in intermittent resources, Brown said grid operators “need to pay more attention to the demand side of the equation.”

“Historically, as balancing authorities, we assume load is just this random event and then we chase it, most typically with these huge thermal machines,” Brown said. “The engineer in me has always hated that.”

He predicted policymakers will “allow wholesale market operators to send price signals to the end-use load and use that load as a controlling mechanism to help us balance.”

Bear agreed on the need. “At some point, loads are going to start growing again,” he said.

Is Order 1000 Worth the Trouble?

Bear and Brown also questioned the value of Order 1000 and its competition requirements.

Bear said MISO has already committed to building $6 billion in transmission to eliminate congestion in its footprint.
“Because we did that, when you combine that with … $2 gas, there’s not a lot of congestion on the footprint, so finding those economic opportunities [to justify new transmission projects] is really hard,” he said.

He noted that transmission projects typically take eight to 10 years to complete. “Add an extra year to the process to bid those things out, pick amongst [the responses], work through the litigation process — I’m wondering if that’s really necessary,” he said.

Brown said SPP’s board will soon make a decision on whether to authorize its first competitive transmission project. The RTO received 11 responses to its solicitation to build a 115-kV line between North Liberal and Walkemeyer in southwestern Kansas. (See SPP Issues RFP for 115-kV Transmission Project.)

“We now call into question the need for this line just because of changes in the load forecast,” he said. “So we may have gone through all that [competitive solicitation] for nothing.

“I’ve always characterized the [Order 1000] process as very cumbersome, very costly, very time consuming. And it’s going to be interesting to see if the benefit of the competitive process justifies the extremely complex process.”

In contrast, Jones said he has a “positive perspective” on Order 1000, although he agreed on the need to “streamline” the competitive process.

Jones said the FERC order has helped New York break a “logjam” to initiate its first major transmission projects in 30 years.

One project, the Western Energy Connection, will add 1,000 MW of transmission capacity for hydro, gas and renewable generation, including the dam at Niagara Falls. “We can’t get all of that hydro resource into the state. It’s bottled up. And we’re having to spill some of that water down the river,” he said. (See NYPSC Directs NYISO to Seek Tx Bids.)

Cybersecurity Fears

The executives also shared their concerns over cybersecurity.

Bear said the issue was a minor concern for MISO five years ago. “The amount of time we spend on it now is unbelievable,” he said. “It’s that big black unknown. We’re doing everything we can to make sure we’re as prepared as we can be, but if anyone looks at you and says, ‘Are you sure that we’re never going to have an event?’, you can’t say ‘I’m sure.’”

Brown called the issue “the most frustrating” part of his job and said SPP is no longer solely focusing on keeping hackers out of the system.

“What keeps me up at night is, are they already in and we don’t know it? And the challenge is, I don’t know how much to spend. What’s the right amount? What’s the right amount of risk mitigation for this type of event? I don’t know the answer to that.

“How much protection do we have from our insurance carrier for a cyber penetration event? I still can’t get straight answers,” he added. “Even the coverage we have has certain exclusions in there that the underwriters are just adamant have to be there and I’m adamant that they can’t be there. We just don’t see eye to eye.”