The organizers of an effort to create a resource adequacy program in the West updated their progress and raised vital issues, including potential FERC oversight and the need to hire professionals to develop and manage the program, during a webinar Friday.
The Northwest Power Pool (NWPP), a voluntary organization of utilities based in Portland, Ore., is heading the effort. Its members cover eight Western states and two Canadian provinces, making it possible for the proposed RA program eventually to include most of the Western Interconnection. (See Western Resource Adequacy Program in the Works.)
NWPP President Frank Afranji said one pressing matter now is hiring a program developer to help bring the project to fruition now that it’s well along in the preliminary planning phase.
“Even though a lot of the work has been done [including the program’s basic design], the steering committee has decided that in order for us to move up to the next level, we really need to get an experienced program developer,” Afranji said.
A search is underway for an individual or organization with experience designing multistate RA programs to deal with governance details, cost estimates and regulatory and stakeholder outreach, he said.
“We have the initial, conceptual design … [but] the next stage is going to require a lot more sophisticated work,” Afranji said.
Later, NWPP members will hire an administrator to run the RA program – a distinct role from the program developer, he explained.
Planners expect the RA program to move to a more detailed design phase later this year and begin implementation work in 2021.
Afranji thanked the many participants who tuned into the webinar. “It’s a tribute to the very high interest in the resource adequacy issue,” he said.
A Two-Part Approach
Mark Holman, managing director for power at Powerex, the electricity marketing and trading subsidiary of BC Hydro, described the program’s design, which includes two time horizons.
One horizon will be “forward showing,” Holman said. Member entities will have to show seven months prior to the summer and winter seasons of peak demand that they have enough contracted or installed resources to meet their obligations to the program.
“We’re trying to ensure that each entity comes to the table with sufficient installed available committed capacity to meet their share of the reliability needs,” he said.
The effort will involve establishing common metrics to measure capacity across the vast Western region with its many separate entities and ways of working, Holman said.
The second “operational” time horizon of the program will focus on real-time and day-ahead time frames.
“That’s how we access pooled regional resources,” Holman said. “By having an operational module, it enables us to lower or right-size the amount of resources that are needed … This function is usually provided by an ISO or RTO. In our case, of course, we don’t have an ISO or RTO, so this is a module we’re looking to develop.”
With variable wind and power resources becoming a larger part of the energy mix in the West, the real-time component would allow resources to be adjusted and shared among the RA program’s members as needed, he said.
Planners have been considering whether the program should be binding on members and whether failures to meet resource obligations should be punished with fines, Holman said.
‘The Land of FERC’
Sarah Edmonds, director of transmission services at Portland General Electric, talked about whether the RA program will fall under FERC jurisdiction.
That’s a potentially touchy topic in the Pacific Northwest where many entities — including the Bonneville Power Administration, public utility districts and irrigation districts — aren’t overseen by FERC and don’t want to be.
“We know that’s an important element to some of our members,” she said.
Edmonds said a working group within the NWPP RA program effort has been researching the regulatory landscape and making preliminary assessments.
“Jurisdiction is going to depend on the scope of the program, what functions we want to have in the program and also the timing on when we want to implement these functions,” she said.
One conclusion so far is that parts of the RA program will almost certainly be FERC jurisdictional if the program is going to have any real benefits for participants.
“This is intended to be a regional program, so by its very nature it will be multi-state,” Edmonds said.
Common planning reserve metrics, and a decision to make the program binding on participants with fines for non-compliance, would subject the program to federal oversight, she said. “It’s those functions … that put us in the land of FERC.”
States traditionally have authority over generation facilities and resource planning and adequacy, while FERC oversees interstate transmission and sale of electricity under the Federal Power Act, Edmonds noted. The program will probably be subject in its different respects to state and federal authority.
“We’re dealing with something called cooperative federalism,” Edmonds said. “When it comes to resource adequacy across a regional program, we are likely living in a world where both FERC and the states play a role … Unfortunately, there is no bright line here. There’s no specific delineation of what would be FERC, necessarily. This is something we will have to work out as we work through the details of what we want in this program and when.”
Currently all RA programs operate within ISOs and RTOs and are “part and parcel of all the FERC jurisdictional services provided by the operators.”
“We’re in a really unique position as far as this program” because it would operate outside an RTO or ISO, she said.
The RA program could be constructed in a way — without binding commitments or financial penalties, for instance — to avoid FERC oversight, Edmonds said. Such a program would likely result in information sharing only.
“If we just made this an informational, nonbinding program, it would be more than we have today, but I don’t think it delivers what we want in terms of the end result for reliability for the region,” she said.