For the first time in more than a year, regulators from PJM and NYISO joined in person for the Mid-Atlantic Conference of Regulatory Utilities Commissioners’ (MACRUC) annual Education Conference at the Nemacolin Woodlands Resort in western Pennsylvania.

This year’s conference, “Policy, Process and People,” highlighted the challenges of planning for new infrastructure while simultaneously dealing with the worldwide impacts of the COVID-19 pandemic.

Willie Phillips, chairman of the D.C. Public Service Commission and outgoing MACRUC president, said the last 18 months were difficult. The pandemic “disrupted the lives of everyone we know,” but organizations like MACRUC have done the work necessary to take care of its consumers and also keep essential services running, he said.

Phillips said he also wanted to use the conference as an example of how important it is to come together and have face-to-face conversations.

“Even though the past year has been a tremendous loss for a lot of people, it’s also a story of resilience because we know what we can do when we’re tested and we all come together to help each other.”

MACRUC and FERC

The first panel of the conference, “MACRUC & FERC 2021: Policies in Perfect Harmony,” featured a conversation between Virginia State Corporation Commissioner Jehmal Hudson and FERC Chair Richard Glick on several topics, including implementation of Order 2222, resource adequacy and PJM’s minimum offer price rule (MOPR).

Conference participants chose the MOPR as the first topic. Stakeholders would later vote on the MOPR, shortly after the end of the conference on Wednesday, supporting PJM’s proposed replacement and sending the ultimate decision to the RTO’s Board of Managers. (See related story, Stakeholders Back PJM MOPR-Ex Replacement.)

Glick said it would be best for PJM to come up with a substitution for the MOPR on its own “organically through the stakeholder process.”

“It’s important that we do get something done before the next auction in December, and from that perspective the commission should be prepared to act if PJM fails to pursue modifications to the MOPR,” Glick said.

Stakeholders and officials who originally supported the idea of a MOPR tended to do so because of concerns about “price suppression” or that capacity prices weren’t high enough, Glick said, but he indicated that the reality has shown there doesn’t need to be a MOPR to address a market power problem. He said the MOPR was “aimed solely at raising prices,” and that is his greatest concern.

Glick said the MOPR has ended up inhibiting the ability of states to design what resources their generators should utilize. “We need to go back to a more rational approach.”

Hudson said some stakeholders believe that existing capacity markets are not well suited for meeting the adequacy and reliability needs of a decarbonized grid. He asked Glick what the role of capacity markets is in resource adequacy and if they’re still necessary.

Glick said FERC has had a tradition of deferring to the different regions about how they want to approach resource adequacy. He said the commission needs to continue to defer to regions “as much as possible” on the issue because there’s “not a one-size-fits-all approach.”

But Glick said the “jury is still out” if capacity markets are the correct approach for resource adequacy.

“I’ve got some concerns about capacity markets, and others do as well,” Glick said. “Others see capacity markets as a very necessary part of the whole resource adequacy regime. … We need to take a look at whether markets do what they’re supposed to be doing and whether they do it in a just and reasonable manner.”

COVID-19 Impacts

Phillips led a panel discussion on the impacts of COVID-19 on state commissions and utilities in the MACRUC region, focusing on how stakeholders dealt with emergency preparedness and the consequences of state-issued moratoriums on utility shutoffs.

Phil Moeller, executive vice president of regulatory affairs for the Edison Electric Institute, said it’s been “quite a 16 months” dealing with the pandemic. Moeller said many industry insiders had a “second full-time job” trying to coordinate for COVID-19.

Moeller said the full impact of COVID-19 emerged early for EEI, as its board meeting that occurred a week before the shutdowns featured Rebecca Katz, director of the Center for Global Health Science and Security at Georgetown University Medical Center, who talked about the serious nature of the pandemic. Moller called it a “sobering meeting” because the information was coming from one of the leading experts on infectious diseases.

EEI immediately started working with its member companies, Moeller said, setting up a single point of contact for COVID response. It eventually put out information in the form of a “playbook” that has morphed into a 100-page document in 11 different revisions that will be used for future disasters.

Besides the pandemic, Moeller said, the utility industry also had to deal with wildfires in the West, serious hurricanes in the Gulf of Mexico and the East, and the derecho in the Midwest last summer.

“It’s been a very challenging time, but the industry came together,” Moeller said.

Robert Powelson, CEO of the National Association of Water Companies and former FERC commissioner, said the development of protection protocols for customers who couldn’t pay utility bills during the pandemic was a serious challenge. Powelson said the industry recognized early in the pandemic that customers needed assistance and began supporting moratorium efforts around the country.

Powelson said programs like Low Income Home Energy Assistance Program have served as an important stopgap effort in paying utility bills, but he said similar initiatives are “layaway programs” that haven’t solved the problem of growing debt among customers. He said the industry doesn’t want to see the “socialization of those costs” through defaults by utility customers.

“The longer these moratoriums go on, we’re all going to face judgment day,” Powelson said.

State and Federal Relationships

The final panel of the conference included a discussion between Maryland Public Service Commission Chair Jason Stanek and FERC Commissioner Neil Chatterjee.

Chatterjee said logistical problems that came before the commission in the last year created a “perfect storm” that caused tension and concern between it and the states. Chatterjee said that after Powelson departed in June 2018, prior to the confirmation of Commissioner Mark Christie in November, there were no state regulators on the commission to give the granular perspective at the federal level.

“It’s important to have a state voice there,” Chatterjee said.

Chatterjee said he was “heartened” by the amount of collaboration between FERC staff and state officials during the pandemic and that officials came together quickly and “put the full weight of the regulatory community” behind the challenges. He said he is hopeful for more face-to-face interaction.

He pointed to the new task force that includes all five FERC commissioners and 10 state regulators appointed by the National Association of Regulatory Utility Commissioners aimed at increased transmission development. (See FERC Sets Federal-State Taskforce to Spur New Tx.)

Chatterjee said transmission is going to be “the central issue” before the commission in the coming years, and if the task force proves to be successful, it could be extended to other issues.

“In the absence of federal legislative action to address decarbonization, more and more of these decisions are falling to the states, and that is leading to these inherent tensions between states and federal agencies like FERC,” Chatterjee said. “And if Congress does not act in this regard in the coming years, there are still going to be obstacles and challenges that arise. And hopefully these increased levels of communication will help both FERC and our state colleagues and advocates.”

Chatterjee said he is regularly asked how to have serious and critical examinations of energy policies going forward with all the challenges and conflicts in the energy transition. He said his solution is to “make energy policy boring again.”

“When energy policy is boring and you allow the engineers and the economists to sort it out, you can get constructive outcomes,” Chatterjee said. “The more it’s boring and the less it’s politically salacious, then I think that durability can occur.”