By Rich Heidorn Jr.

New England’s needs for energy infrastructure, which have been debated in the courts and state legislatures, moved to ISO-NE’s Planning Advisory Committee last week as stakeholders began discussing the potential for major transmission projects under FERC Order 1000.

Although EPA’s Clean Power Plan may be eliminated by the Trump administration, state clean energy goals could drive projects that deliver Canadian hydro and wind power from Maine and the Atlantic Ocean. Order 1000 requires public utility transmission providers to consider “transmission needs driven by public policy requirements [PPR] in both the local and regional transmission planning processes.”

ISO-NE last month invited stakeholders to identify public policies that could drive transmission needs, in compliance with the FERC rule. National Grid, NextEra Energy Transmission and TDI New England were among those that submitted ideas before the Feb. 25 deadline.

At the PAC meeting Thursday, the Conservation Law Foundation and Avangrid gave their views, prompting a debate with the New England States Committee on Electricity (NESCOE) over FERC’s and the RTO’s jurisdiction.

“This is a very important program and crucial to both the states’ and [ISO-NE’s] ability to meet their obligations in this area,” said David Ismay, senior attorney for CLF.

Public Policy Drivers

Ismay outlined potential transmission upgrades resulting from:

• State renewable portfolio standards, which will require about 20% of ISO-NE load to be served by renewables by 2030;
• The 2016 Massachusetts Energy Diversity Act, which mandates procurement of 9.45 TWh of hydro or hydro and RPS by 2022 and 1,600 MW of offshore wind by 2027; and
• The Massachusetts and Connecticut Global Warming Solutions Acts of 2008, which require 2050 statewide emissions limits at least 80% below 1990 (Massachusetts) and 2001 (Connecticut) levels.

Ismay said ISO-NE’s 2016 Economic Study — still in development — and the 2015 Economic Study: Evaluation of Offshore Wind Deployment indicate the scale and type of upgrades that could meet the RPS targets and import large amounts of Canadian hydro and offshore wind.

Those studies identified transmission to eliminate bottlenecks between load and wind resources in Maine; a project for moving Canadian hydro to Southeast Massachusetts (SEMA); and transmission to SEMA from the Rhode Island/Massachusetts Wind Energy Area designated by the Bureau of Ocean Energy Management.

“We think there is a need for a north-south connection from Canada, from Maine, from both of those perhaps, to the SEMA load zone and this is a need that has been much discussed,” Ismay said.

Ismay said the RTO should conduct a transmission study to identify “a range of cost-effective” upgrades able to satisfy the state initiatives, adding “I’m sure there’s other ways to do it” beyond those identified in studies to date.

‘Could This Go Anywhere?’

“All well and good,” one stakeholder responded when Ismay finished his presentation. “But if the states have no agreement as to cost sharing, could this go anywhere at all?”

“The way I read the language that’s already in the Tariff and the way I read the FERC orders, this is a process that already has cost allocation in the Tariff for it,” Ismay answered. “The cost allocation can potentially be modified if the states reach agreement, but it’s not dependent on the states reaching an agreement. As the Tariff and the last order from FERC currently stand, it’s clear that this is an ISO process — not one that the states may wholly control but one that they absolutely may contribute to and may drive.”

Dorothy Capra, director of regulatory services for NESCOE, disagreed with Ismay’s interpretation.

“I don’t want to get into a legal argument here, but let’s just say NESCOE disagrees with the way CLF is interpreting Attachment K,” she said, referring to the section of ISO-NE’s Tariff governing the regional system planning process. “We believe that the states do have the right to say whether or not their policies actually require transmission.”

Ismay acknowledged states can challenge public policy declarations. “Say a stakeholder other than the state identifies a valid PPR … and the states say, ‘You know that second one? We’re good. We’ll show you how this doesn’t impact regional transmission.’ I would expect [ISO-NE] to consider that and to weigh that in its assessment,” he said.

Jose Rotger of Emera Energy asked for the RTO’s legal interpretation. “Does the ISO believe that it can begin a public policy transmission study regardless of whether there was a request filed by NESCOE and the states?” he asked.

“I’m not going to do the hypothetical,” responded Theodore Paradise, assistant general counsel for operations and planning. When Rotger persisted, Paradise would not budge. “If this was court, I’d say, ‘Asked and answered.’”

Jurisdictional Challenge to FERC

NESCOE and state regulators from the region have challenged FERC’s May 2013 order accepting ISO-NE’s compliance filing amending its Tariff in accordance with Order 1000’s local and regional transmission planning and cost allocation requirements, as well as the commission’s March 2015 order on rehearing (ER13-193 and ER13-196).

Transmission developer LS Power Transmission and others have also challenged FERC’s rulings, saying the compliance filings by ISO-NE, NYISO and SPP still favor regulated incumbents over independent developers. (See Tx Developers Challenge NYISO, SPP, ISO-NE Order 1000 Filings.)

Order 1000 described PPRs as those “established by local, state or federal laws or regulations (i.e., enacted statutes passed by the legislature and signed by the executive and regulations promulgated by a relevant jurisdiction, whether within a state or at the federal level)” and include “local laws and regulations passed by a local governmental entity, such as a municipal or county government.”

NESCOE said the commission was arbitrary and capricious in “requiring the selection of public policy-driven projects in the regionwide transmission plan, rather than solely the establishment of procedures to consider (i.e., identify and evaluate) transmission projects driven by state and local public policy requirements.”

The committee also said FERC exceeded its authority under the Federal Power Act and violated state sovereignty in expanding the requirements of Order 1000 “from an obligation to consider public policies in transmission planning to an obligation to select policy-driven projects” (15-1139, 15-1141). Oral arguments in the case were held before the D.C. Circuit Court of Appeals on Jan. 13.

Details

Steve Garwood of New Hampshire Transmission asked ISO-NE officials about the level of detail they sought in filings due Feb. 25, noting that the RTO’s template “asks for very specific upgrades.”

Director of Transmission Planning Brent Oberlin said the level of detail provided by CLF is “a start.”

“We laid out the template … hoping for much more specificity,” he added.

In considering transmission projects for Canadian hydropower, for example, “I don’t know what the cost of the [energy] source is … so depending on where I land [the beginning of the transmission line], I may be picking the most expensive generator on the planet. And since the ISO doesn’t procure resources, it’s a little tough to work out.”

Avangrid: Leverage Existing Tx

Also presenting was Avangrid’s Paul Dumais, who highlighted the same public policies as CLF, while also mentioning the Clean Power Plan.

Dumais noted that the region has already made significant transmission investments through reliability projects, saying the RTO should insist that in ensuring sufficient transmission to accommodate public policies “we leverage the investments we’ve already made.”

He also expressed concern over the choice of planning assumptions, saying the RTO should balance reliability against cost.

“For example the assumptions made about generation dispatch in the minimum interconnection standard versus the capacity capability interconnection standard will drive different levels of upgrades,” he said.

“We would encourage NECSCOE … to talk about how … it’s not necessarily needed that the system be designed for the peak day with generation at nameplate rating and the interconnection at New Brunswick flowing at the 1,000-MW [limit]. … What’s more important is that over the 8,760 hours [per year], the generation is generally deliverable into the market. This requires us to look at it differently, such that we’re not building transmission to necessarily meet the worst-case situation — that there’s recognition that at some points in time there’s likely to be some congestion and people can live with that given the cost to overcome it.”

Untangling from CPP

In his environmental regulatory update, ISO-NE’s Patricio Silva gave the PAC a briefing on what he said were the steep challenges facing the Trump administration’s plan to scuttle EPA’s Clean Power Plan.

Silva noted that EPA acted following its 2009 finding that greenhouse gas emissions present a threat to public health and welfare and that the agency had a duty to act.

“It’s a final rule. Withdrawing the finding requires an additional rulemaking and they have to offer a justification to essentially counter the existing regulatory record,” he said. “This approach presents a variety of legal hurdles and some administrative rulemaking hurdles. It is not clear that this would succeed. There are ample example of litigation where such approaches came to naught.”

Successfully withdrawing the endangerment finding would eliminate EPA’s rationale for regulating emissions from existing generators under Clean Air Act Section 111(d) and new units under Section 111(b).

Silva said that could pose a new risk to generators, who have been protected from private litigation over GHG emissions by the Supreme Court’s 2011 American Electric Power vs. Connecticut decision, which said EPA’s regulatory authority over emissions precluded any “private right of action.”

“If EPA determines they do not have the authority under 111, the decision in AEP vs. Connecticut seems to imply … that generators could subsequently be subject to private litigation,” Silva said. “This is a very complicated area of law and regulation that is fraught with significant risk for existing and new generators. … Many of my counterparts at the other ISO/RTOs are watching this matter with a great deal of focus for the potential impacts.”