Page 1069 – RTO Insider

July 24, 2020

NERC Standards Committee Briefs: July 22, 2020

NERC’s Standards Committee expects to bring five standards development projects to a final ballot by the end of the year despite work schedule challenges created by the COVID-19 pandemic, according to Project Management and Oversight Subcommittee Chair Charles Yeung.

During the committee’s monthly conference call on Wednesday, Yeung said the following projects — including NERC’s oldest standard drafting project still in progress — are on track for FERC approval within the next six months:

Project 2015-09 — Establish and communicate system operating limits. A final ballot is planned by August, with the standard submitted to FERC for approval in September.
Project 2019-02 — Bulk electric system cyber system information access management. Final ballot and FERC filing both scheduled for September.
Project 2016-02 — Modifications to Critical Infrastructure Protection standards. Final ballot in December, FERC filing in January 2021.
Project 2017-01b — Modifications to BAL-003-1.1. Final ballot in October, FERC filing in December.
Project 2019-03 — Cybersecurity supply chain risks. A final ballot is tentatively planned for August. The FERC filing has not been scheduled yet.

While committee members had no questions about the projects, Linn Oelker, market compliance manager for LG&E and KU, raised a concern about the transparency of the development process. Oelker said he could find “very few, if any, meeting agendas and meeting notes” on NERC’s website, noting he had raised a similar concern at the committee’s March meeting. (See “Coronavirus Adaptations Spark Transparency Debate,” NERC Standards Committee Briefs: March 18, 2020.)

Soo Jin Kim, NERC’s manager of standards development, acknowledged the concern but asked committee members to have patience, as different standard development teams might approach recordkeeping in different ways, and that technical or other misunderstandings in an SDT meeting might need to be worked out before a team is comfortable posting their minutes. Oelker replied that he understood the challenges; however, he continued to urge SDT leaders to ensure they are handling issues consistently for the sake of industry.

Hostler Raises Cost-benefit Complaint

An additional question about NERC’s Project Tracking Spreadsheet was raised by Marty Hostler, reliability compliance manager for the Northern California Power Agency (NCPA). Hostler, who joined the committee prior to its March meeting, asked why no effort appeared to have been made to estimate financial costs and benefits of the 11 projects currently in progress, given that all would likely require utilities to expend money and other resources to ensure compliance.

“I’ve never worked in an industry where we have projects that don’t have any estimates. We have lots of people that have to pay the bills for all these proposals, and there’s no cost-benefit analysis for any of them?” Hostler said. “I personally would like to see some cost estimates; I don’t know if anyone else would, but I’m a customer myself, and I’d like to know what it’s going to cost.”

Standards Committee Chair Amy Casuscelli, of Xcel Energy, reminded Hostler that comment forms do typically ask respondents to share their estimated compliance costs, though she admitted being unsure whether that information is collected or analyzed by NERC. Hostler replied that the lack of any other cost-benefit actions seems to confirm that utilities’ burdens are a low priority for SDTs.

NERC Standards Committee — Soo Jin Kim, NERC | © *ERO Insider*

Kim added to Casuscelli’s remark about the cost question on comment forms, assuring Hostler that drafting teams do take the responses into consideration and actively weigh costs against benefits, even though these debates are not reflected in the project spreadsheet. She also reminded participants that NERC and the committee had a mandate from FERC to address specific issues, which do not include entities’ financial challenges.

“I understand from a utility perspective you do have a concern for cost to ratepayers, but because of our statutory authority, we’re obligated to address reliability concerns,” Kim said. “We do take cost into consideration for formal ballots. … However, we don’t, before we address a reliability concern, start [a] cost-benefit analysis before every” standard authorization request.

Cold Weather Team Grows by 3

The Standards Committee voted to add three new members to the SAR drafting team for Project 2019-06 (Cold weather), having approved the expansion of the team at last month’s meeting. (See “Debate over Cold Weather Team Expansion,” NERC Standards Committee Briefs: June 17, 2020.)

The addition of three team members came as a surprise to some participants. Sean Bodkin, NERC compliance policy manager for Dominion Energy — who, along with Oelker, cast the only votes against the proposal in June — reminded the committee that that motion referred only to adding one or two members to represent small entities.

NERC had received four nominations for the drafting team and recommended two candidates for approval by the committee. Steven Rueckert, director of standards at WECC, moved to add another candidate from the four on the grounds that the existing SAR drafting team had no representatives from the Western Interconnection.

But Bodkin said the motion seemed to overlook better ways of achieving this result. He warned that having three out of 13 members (post expansion) from small entities could actually lead to overrepresentation of the sector.

“I really can’t support adding three additional candidates from a very limited pool,” he said. “If we’re looking for Western Interconnection representation, then we should solicit that from all entities in the Western Interconnection, not just from small entities.”

Bodkin’s argument failed to sway other members, and his ended up being the only “no” vote. Abstaining were Michael Puscas, compliance manager for reliability and operations compliance at ISO-NE; Venona Greaff, senior energy analyst for Occidental Chemical; and independent member David Kiguel.

SDT Candidate Restored After Application Oversight

Another debate was sparked by a motion to appoint the chair, vice chair and members to the SAR drafting team for Project 2020-03 (Supply chain low impact revisions).

The motion presented to the committee requested that members approve nine of the original 10 candidates solicited by NERC for the team. A 10th member was left off the slate because he did not list any references on his application form. Several participants on the call questioned whether this omission really constituted sufficient grounds for rejecting a candidate that otherwise seemed highly qualified.

“If it’s just an oversight, there are compensating aspects [such as] the fact that he’s got such long experience compared to many other members,” said Robert Blohm, managing director of Keen Resources.

NCPA’s Hostler agreed and also asked whether NERC had made it clear to the candidate that the missing references would disqualify him from serving on the team. Kim and Casuscelli did not respond directly to this question but noted that reference checks form a crucial part of the nomination process and that completing the application form didn’t seem like “an unreasonable request.”

“I’ve heard this candidate several times on calls and seen their comments, and I’m surprised they weren’t nominated for the committee, because they’re very adept with the cybersecurity and critical infrastructure protection standards,” Hostler said. “I want to know if that’s the policy to exclude candidates [for lacking references]; if so, candidates need to know that.”

Blohm called for an amendment that would add the excluded candidate back to the slate, which was approved unanimously; the amended slate subsequently passed without objection. The committee also approved a solicitation for additional members to represent entities that only have low-impact cyber systems, as the current slate lacks any such entities.

July 24, 2020

PJM Consumer Advocates Seek New Venue for CIP Talks

PJM’s consumer advocates on Thursday proposed changing the venue for discussions on NERC’s reliability standard on critical transmission facilities, saying the current process is moving too slowly.

Greg Poulos, executive director of the Consumer Advocates of the PJM States (CAPS), told the Markets and Reliability Committee that his organization will seek a vote next month to eliminate the Planning Committee’s special sessions on Critical Infrastructure Stakeholder Oversight (CISO) and move discussions to the MRC under a revised issue charge.

PJM CIP — Greg Poulos, CAPS | © *RTO Insider*

NERC’s Critical Infrastructure Protection standard (CIP-014) requires transmission owners to protect assets whose loss or sabotage could result in widespread instability, uncontrolled separation or cascading outages.

Last August, the PJM Transmission Owners gave notice they were planning to make a Federal Power Act Section 205 filing to develop a solution for addressing existing CIP-014 facilities, almost two years after Poulos said PJM raised the issue at its 2017 Grid 20/20 conference. (See PJM Defends Resilience Focus as Pre-emptive, not Excessive.)

In December 2019, stakeholders approved the issue charge that created the CISO discussions at the PC, which was to focus on avoiding future CIP-014 facilities and mitigating any that arise.

About a month later, the TOs’ made a 205 filing outlining their plan for addressing fewer than 20 existing CIP-014 facilities, a plan approved by FERC in March (ER20-841). (See FERC Approves PJM TOs’ Critical Tx Process.)

Poulos said advocates were proposing the venue change in part because the CISO process was moving too slowly. CISO’s work plan called for completing its work in June and returning to the full PC with a proposal in July, but PJM now expects it to work into September.

“We don’t take this [action] lightly,” Poulos said. “Aspects of this discussion really haven’t moved at all in the last couple months in the Planning Committee.”

Poulos also said the advocates didn’t feel their proposals would get a fair hearing in the PC because committee Chair Dave Souder has expressed opposition to CAPS’ proposals.

“When the chair is saying we’re opposing your position, it’s really hard to feel like we’re going to have a good opportunity to be heard,” he said. “There is some frustration with how the Planning Committee works compared with other committees. There is no other chair that we can think of that has spoken against [a stakeholder] package.”

Souder said development of PJM’s proposals were slowed by the RTO’s consultation with ReliabilityFirst and SERC Reliability on how to provide stakeholders information on CIP-014 mitigation projects under the strict confidentiality rules in the CIP standards. “The outreach took time but was required to provide CISO the needed clarity,” he said.

PJM introduced “avoidance” proposals in June and July and expects to introduce a “mitigation approach” at the August CISO meeting, Souder said. “Revoking and reassigning the issue charge is not necessary and will only delay this process,” he said.

No other stakeholders have sponsored a package on mitigation, although CAPS introduced mitigation “components” in April, he said. According to Souder, CAPS refused to incorporate the RTO’s feedback in its proposal, which he said would violate the CIP standards.

CISO can complete its assignment in September with a PC vote in November and MRC vote before the end of the year, Souder said.

Poulos said CAPS is concerned that unless the issue is moved to the MRC, stakeholders might miss the opportunity for input if the TOs choose to make another 205 filing. The TOs must give stakeholders 30 days’ notice of plans for a filing, and FERC must rule on it within 60 days of filing.

“That 90-day period causes us concern,” he said.

Robert Taylor of Exelon said PJM sought input from SERC, RF and NERC at CAPS’ request. “To ask PJM to do that outreach and then assert that that outreach is slowing down progress is problematic,” he said.

David “Scarp” Scarpignato of Calpine defended PJM’s handling of the CISO proceedings, saying it was a “very informative, very well-run stakeholder process.”

Alex Stern, director of RTO strategy for PSEG Services, accused CAPS of seeking a “do-over.”

“It’s extremely dangerous to hear someone suggest that because they disagree with a PJM chair of a standing committee, the chair is somehow incapable of allowing voices to be properly heard,” he said. “I don’t think that’s happened in this proceeding.”

Jim Davis of Dominion Energy said the original issue charge had the correct balance between transparency and CIP confidentiality requirements. “If we were to provide all the details on mitigation projects, this proposal would result in transmission providers … giving the public a roadmap to the grid’s vulnerabilities,” he said.

Susan Bruce, representing the PJM Industrial Customer Coalition, said there is “frustration and concern from those who are paying the bills.”

“How can we fix this so customers and state regulators can have additional confidence?” she asked.

July 24, 2020

Ohio Gov. Calls for Repeal of Nuke Bailout

Reversing position, Ohio Gov. Mike DeWine (R) said Thursday the state should repeal House Bill 6 in light of the federal bribery charges against House Speaker Larry Householder (R), who pushed the bill through the legislature last year.

DeWine called for Householder’s resignation Tuesday after the speaker and four others were accused of taking $61 million in bribes from FirstEnergy to win passage of the legislation, which included subsidies for the Perry and Davis-Besse nuclear plants. (See related story, Feds: FE Paid $61M in Bribes to Win Nuke Subsidy.) But DeWine had said Wednesday that the law, which he signed last July, should remain intact to save the nuclear plants’ jobs and carbon-free power.

During his televised coronavirus briefing Thursday, however, he said the legislation should be reversed. “While the policy in my opinion is good, the process by which it was created stinks. It’s terrible; it’s not acceptable,” DeWine said, calling for the bill to be “repealed and replaced through an open process.”

Republican state Reps. Mark Romanchuk and Laura Lanese and Democratic Reps. Mike Skindell and Michael J. O’Brien have announced plans to introduce repeal bills. All four had opposed H.B. 6 last year. Environmental groups also called for its repeal.

Ohio FirstEnergy Nuke Bailout — Ohio Gov. Mike DeWine | *Ohio Governor’s Office*

But with DeWine continuing to support the bill, chances of a repeal had appeared slim. Republicans control both the House of Representatives and Senate by a supermajority. H.B. 6 passed the House 51-38, with 10 Democrats joining 41 Republicans.

The law will charge all Ohio electricity customers a monthly fee ranging from 85 cents for residential customers to $2,400 for large industrial plants from 2021 until 2027. Although Perry and Davis-Besse are the main beneficiaries, the law also subsidized coal plants in Ohio and Indiana.

In an 81-page affidavit, federal officials accused FirstEnergy of paying $61 million in bribes and “dark money” campaign contributions to elect Householder and allies who pushed the $1.5 billion in subsidies into law.

FirstEnergy’s merchant unit, FirstEnergy Solutions, the owner of the nuclear plants, emerged from bankruptcy in February as a new company, Energy Harbor. But the utility’s CEO, Charles Jones, and others could face legal jeopardy for their alleged roles in the scheme. The government said the CEO of “Company A” — as FirstEnergy was referred to in the document — was in regular contact with Householder during the time the company was making secret payments.

DeWine opened his press conference Thursday saying he had been “struggling to process” news of the scandal. “It takes a while to really get it,” he said. “The most important thing is that the public has confidence in the process.”

According to Cleveland.com, FirstEnergy’s political action committee donated more than $25,000 to DeWine’s 2018 campaign for governor and $20,000 to his transition fund after he was elected. FirstEnergy executives individually gave DeWine’s gubernatorial campaign at least $27,000, it said.

Although FirstEnergy no longer owns the nuclear plants, its stockholders have been punished in the three days since the scandal broke. FirstEnergy shares closed Thursday at $27.40, a 34% drop since opening trading Tuesday. Energy Harbor, which trades over the counter, closed at $22.50/share, a drop of 31% since Tuesday.

July 24, 2020

CAISO Adopts Co-located Resources Plan

The CAISO Board of Governors unanimously adopted the first of two proposals Wednesday intended to allow co-located and hybrid resources, such as solar panels coupled with battery storage, to connect to the grid more seamlessly.

The proposals, part of the ISO’s hybrid resources initiative, were fast-tracked to speed the addition of storage at existing interconnection points. CAISO needs the new capacity to help head off a projected shortfall next summer caused by the retirement of aging natural gas plants and the inability of solar to meet evening peak demand without storage. (See CAISO Briefs Western EIM on Hybrid Resources.)

In response to the anticipated shortfall, the California Public Utilities Commission required load-serving entities under its jurisdiction to procure 3,300 MW of capacity by 2023. Some LSEs proposed integrating co-located resources into the market as soon as this fall, and CAISO moved quickly to adopt its co-located connection plan by the end of July to allow FERC 90 days to approve Tariff changes before the resources go live.

“There is an urgency around getting [policy to support] these co-located resources … because we start to see these resources coming on and interconnecting late this year,” Mark Rothleder, CAISO’s vice president for market policy and performance, told the board. “We need to get started with some minimum features around the point of interconnection … [and] we will continue to work on additional features that have been requested in future phases.”

The starting point includes new Tariff language governing resources that share a single point of interconnection but have separate resource IDs, allowing CAISO to dispatch them individually.

CAISO Resources Plan — | *174 Power Global*

CAISO executives decided to implement the co-located plan first because it involves more familiar procedures. The hybrid resources plan — allowing solar and storage to be dispatched as a single unit — could prove trickier, they said.

“The co-located model allows for the underlying resources to be modeled in a manner similar to existing resources today but requires the ISO market to manage a constraint at the point of interconnection to ensure that the combination of resources does not receive market instructions beyond the interconnection limit,” Rothleder wrote in his memo to the board.

The board will take up the hybrid resources plan this fall. CAISO needs additional time to develop a proposal that will let it deal with situations in which intermittent resources such as wind and solar are offline because of weather conditions, while the storage component keeps operating, Rothleder said.

“Enabling hybrid resources requires several new features for the resource operator to communicate to the ISO when portions of the generating facility are unavailable because of deviations in the variable output component of the hybrid resource,” he wrote.

The co-located resources plan is slated to take effect this fall. The hybrid resources component is scheduled to be brought before the board in November and implemented one year later.

Some stakeholders have expressed concern that CAISO is moving too fast to bring new storage online, but others have said the speed is warranted by the impending shortfall and the number of projects lined up.

CAISO’s interconnection queue contains about 24 GW of mixed-generation projects, including 20 GW of storage projects. Much of the storage is proposed for sites where solar arrays and wind farms already operate.

“Developers are adding storage to existing sites because adding resources at these locations can be done more quickly and at a lower cost than establishing new interconnections,” Rothleder said. “Lower costs are achieved due to the existing infrastructure, such as step-up transformer equipment that is already a part of the existing facility.”

In addition, he said, “siting at existing facilities takes less time to go through the ISO’s interconnection process because the capacity addition can be considered through the material-modification process, rather than the process of siting a new facility, which includes additional analysis and approvals.”

The integration of hybrid resources is expected to be a major issue for CAISO and other organized markets, as battery storage paired with renewables plays an ever greater role.

FERC held a technical conference Thursday to discuss the issue. (See FERC, RTOs Need to Set Hyb rid Rules, Experts Say and FERC Sets Tech Conference on Hybrid R esources.)

July 24, 2020

Consultant Tells MISO Microcities are Wave of the Future

If one business consultant’s vision proves correct, MISO stakeholders learned Tuesday, future neighborhoods will be self-contained developments with their own power sources.

Speaking at MISO’s July Informational Forum, Josh Hodge, CFO of Peoria, Ill.-based Dukes Business Consulting, said zero-carbon-footprint microcities independent of the grid are a possibility. He said the future could lead to vertical gardens on city blocks and parking garages with solar canopies and car-charging stations.

Hodge said microcities offer a sustainable model that can tackle the affordable housing crisis and cities’ “food deserts”: urban areas that lack easy access to fresh and nutritious food.

He said the developments would include hybrid, solar-and-storage resources. The net-zero electricity use could mean residents won’t have electricity bills.

“Massachusetts and California already require solar installations to be coupled with storage, and we expect to see this trend to spread,” Hodge said.

MISO microcities — EverForce Energy’s Magnetic Transducer Generator | *EverForce Energy*

EverForce Energy’s new Magnetic Transducer Generator stands to be a gamechanger for microcities, he said. Hodge said the technology can produce continuous energy without a fuel source, with one 5-MW generator providing uninterrupted, clean energy for roughly 1,000 homes for more than 20 years.

“And this is all with minimal maintenance and minimal impact on the environment,” he said.

Hodge said microcities can “supply and manage their own energy needs, and only connect to the grid to sell excess energy.”

“During emergencies, they could disconnect from the grid to protect themselves or the larger grid,” he said.

Hodge acknowledged microgrids will also cut the need for new generation and transmission and could draw customers away from utilities. While that may be bad news for utilities, he said some could make lemonade from lemons and embrace the increased reactive power and frequency and voltage regulation.

He also said new monitoring technologies on distribution systems could allow utilities to use microgrids’ stored supply when necessary.

July 24, 2020

MISO Members Make 1st Rules on Sectors

MISO’s Advisory Committee members this week adopted the first set of standards for creating and joining stakeholder sectors.

During a virtual meeting Wednesday, committee members adopted new rules that make MISO or its Board of Directors the mediator and final arbiter when a new entity is refused entry to a sector.

“This will effectively eliminate a sector’s ability to ‘veto’ an organization’s request to join that sector,” the AC said.

The rules also mean that sectors must establish their criteria for joining and post them on the public MISO website.

“Sectors are encouraged to be as inclusive as possible, which ideally ensures a new entity can find a fit within the existing set of sectors except in the rarest of circumstances,” the AC wrote.

The committee this spring created a miscellaneous Affiliate sector to serve as a catch-all for new, hard-to-pin-down members. The move prompted the board to charge the committee with making rules on how new members join sectors and how new sectors are created. (See Board OKs 11th MISO Sector, Orders Redesign.)

In its new rules, the AC called new sector creation a “last resort” and said that a group of organizations wishing to form a new sector must make their case in writing and boast documented participation in MISO’s stakeholder committees. While the committee can recommend a new sector’s creation, the board will have the final say.

MISO sector rules — North Dakota PSC Commissioner Julie Fedorchak | © *RTO Insider*

The AC also said that if a band of stakeholders wants to create a new sector, it should be at least 10 organizations strong. If not, the organizations may have to join the Affiliate sector.

North Dakota Public Service Commissioner Julie Fedorchak said the 10-organization threshold seems a little high, considering that most stakeholders would probably find a home in MISO’s existing 11 sectors.

“It seems that having that minimum threshold there is a little restricting,” Fedorchak said. In response, the committee added language giving the board the ability to override the 10-organization requirement.

The AC isn’t finished on sector restructuring. The committee will next discuss divvying up voting rights and how to consolidate like-minded sectors.

Advisory Tx Planning Principles?

Meanwhile, some AC members want to have a say in MISO’s effort to better coordinate its transmission planning processes.

The RTO currently uses separate planning processes to study transmission buildout for its generator interconnection queue and the reliability and economic projects under its annual Transmission Expansion Plan. Several committees are coming up with ideas to better link the planning studies and identify more cost-effective network upgrades that can meet multiple transmission needs. (See MISO Unveils 1st Proposal to Consolidate Tx Planning.)

The AC is debating whether it should draft principles to guide the committees’ discussions. Members of the Municipals Cooperatives and Transmission-Dependent Utilities sector asked the committee to draft coordinated transmission planning principles.

“We’re looking for something more than meeting notes,” DTE Energy’s Nick Griffin said.

Several committee members, however, are opposed to the idea, saying transmission planning isn’t in the committee’s bailiwick.

Environmental and Other Stakeholder Groups sector representative Natalie McIntire, of Clean Grid Alliance, said a set of transmission planning principles would constrain the committees’ work and “confuse the stakeholder process.” She also said it isn’t the AC’s place to shape MISO planning policy.

ITC Holdings’ Cynthia Crane, chair of the Planning Advisory Committee, also said a set of AC principles might muzzle some committee discussions.

Fedorchak said it would be a “pretty heavy lift” for sectors to reach consensus on consolidated planning.

Xcel Energy’s Carolyn Wetterlin, who also chairs MISO’s cost allocation stakeholder group, questioned what purpose the principles would serve and agreed that consensus would be hard to come by.

The AC will again discuss the principles during its August teleconference.

July 24, 2020

FERC OKs Negotiated Rates for Merchant Tx Line

FERC on Thursday approved SOO Green HVDC Link’s request to charge negotiated rates on its proposed 350-mile, 2,100-MW transmission line, which the developers hope to use to deliver renewable energy from upper MISO to Illinois and the PJM grid (ER20-1665).

In June, PJM stakeholders agreed to consider integrating HVDC converters as a new type of capacity resource in the RTO at SOO Green’s request. (See HVDC Initiative Endorsed by PJM Stakeholders.)

The SOO Green line is planned to run underground, primarily along existing rail rights of way from Mason City, Iowa, to Plano, Ill. Construction is expected to begin in early 2022 and be completed by 2024.

SOO Green is owned 80% by Copenhagen Infrastructure III, 10% by Jingoli Power Transmission and 10% by Siemens Energy. None of the owners or their affiliates owns any other transmission facilities, except for generation interconnection facilities, the developers said. (A Jingoli affiliate owns less than 10% of a small cogeneration facility in Michigan, and Siemens holds a minority interest in a combined cycle generation facility near Cleveland.)

The developer has hired London Economics International to design an open solicitation process and serve as its independent evaluator.

SOO Green transmission rates — | *SOO Green*

SOO Green hopes to attract generators, marketers, load-serving entities and end-users to obtaining transmission capacity rights, either as “anchor shippers” or later through an auction. The “registered participants” can seek commercial arrangements on their own or ask to be matched with others by the independent evaluator.

FERC evaluates negotiated rate applications based on four factors: the justness and reasonableness of the rates; the potential for undue discrimination; the potential for undue preference, including affiliate preference; and regional reliability and operational efficiency requirements. The commission said its review takes into account its open-access requirements, the Federal Power Act and the “financing realities faced by merchant transmission developers.”

No one filed interventions or protests in response to SOO Green’s application.

The commission concluded that the developers will bear the full market risk of the project and have no ability to erect barriers to entry or incentive to withhold capacity because they will turn over operational control of the line to either MISO or PJM, which will operate it under its Tariff.

“SOO Green states that while it is currently in discussions with both MISO and PJM about the many operational issues involving the project, it is unclear at this juncture which RTO will ultimately have operational control of the project,” FERC said.

The commission conditioned its approval on SOO Green’s submission of a compliance filing after the open solicitation demonstrating that the allocation process was fair and transparent and consistent with the commission’s 2013 policy statement on allocation of capacity on new merchant transmission projects (AD12-9, AD11-11).

July 24, 2020

FERC Accepts SPP, NIPCO Settlement

FERC on Wednesday accepted an uncontested settlement agreement between SPP and Northwest Iowa Power Cooperative (NIPCO) over the latter’s annual transmission revenue requirement, formula rate template and formula rate implementation protocols as a transmission-owning member of the RTO (ER15-2115).

The commission last year rejected a settlement filed by SPP, saying that, because it was contested, it couldn’t be approved under its guidelines and precedent set by a 1999 case. FERC in February then denied NIPCO’s rehearing request. (See “Co-ops Rebuffed in Settlement Rehearing Requests,” FERC Denies Rehearing in Z2 Remand Order.)

SPP NIPCO Settlement — Northwest Iowa Power Cooperative has agreed to an annual transmission revenue requirement with SPP. | *NIPCO*

NIPCO had argued that when TOs join regional grids, even indirect modifications to grandfathered agreements can trigger a threshold analysis under the Mobile-Sierra doctrine, which holds that negotiated, fixed-rate contracts are to be presumed just and reasonable under the Federal Power Act and cannot be revised by FERC without a finding that the public interest requires modification.

The commission said the Mobile-Sierra “public interest” presumption applies to an agreement only if the agreement has certain characteristics that justify the presumption.

In its latest order, FERC clarified the framework that would apply if it was required to determine the standard of review in a later challenge to the settlement by a third party or by the commission acting on its own authority.

SPP was given 30 days to file a compliance filing.

July 24, 2020

Optimism About Renewables Abounds amid Pandemic

Despite a severe spike in unemployment and some project delays amid the COVID-19 pandemic, industry stakeholders remain upbeat about the long-term prospects of renewable energy, as indicated by a panel during the National Association of Regulatory Utility Commissioners’ Summer Policy Summit on Tuesday.

Gregory Wetstone, CEO of the American Council on Renewable Energy, opened the panel with some sobering unemployment figures: 514,200 people in the clean energy sector are out of work as of this month. But most of this is on the residential solar side.

renewables pandemic — ACORE CEO Gregory Wetstone | *NARUC*

“The bigger issues from the standpoint of utility-scale have been availability of tax equity and finance,” Wetstone said, though these have been mitigated somewhat by the U.S. Treasury Department’s deadline extensions in May for projects to qualify for federal tax credits.

There’s also been “a big uptick in a focus on sustainability investing,” which has been helpful, Wetstone said. He noted BloombergNEF data suggesting that though 2020 will not see as much renewable development as expected before the pandemic hit, it will still be mostly on par with that of 2019 and more than rebound next year. (See Renewable Investors See Light at End of COVID Tunnel.)

Wetstone cited “key drivers” for continued investor confidence, including decreasing costs; increased demand from residents, companies and utilities; increasing state and local renewable and emission goals; and climate change as an ever more resonant political priority for residents.

ACORE said that confidence in mid-term sector growth remains strong consistent with its 2018 and 2019 surveys. | *ACORE*

Xcel Energy CEO Ben Fowke, who serves as chairman of Edison Electric Institute, also expressed confidence. “I happen to be of the mindset that we can do more with clean energy to jumpstart the economy and overcome some of the economic impacts of COVID-19,” he said.

“We have seen some delays with some of our wind farms [because of] the supply chain disruption. Fortunately, we still qualify for the 100% production tax credits for our customers because of the safe harbor extension. … So things are going OK at Xcel, and we’re looking forward to being able to be part of the solution to get the economy rolling again.”

Fowke’s company, which has set a goal to be 100% carbon-free by 2050, expects 80% of its power to come from renewables. He is not so concerned about reaching that renewable milestone as in securing the last 20% of zero-carbon resources — the unknown on which he urged investors to focus.

“I think it’s really important we get started today in nurturing those resources so we can all meet those zero-carbon goals by midcentury,” Fowke said. “I don’t know what those resources will be.” He listed advanced nuclear, carbon capture, geothermal and hydrogen as candidates. “The important thing is we need to get started today. And we need to recognize the fact that we can’t do it with 100% renewables. It defies the laws of the grid.”

Federal Aid Unlikely

The discussion occurred amid a surge in coronavirus cases in the U.S., an increase in deaths from the virus and an uptick in unemployment claims, just as federal unemployment benefits and eviction moratorium are about to expire. Congress and the White House are in the middle of negotiations on what to do next to address the crisis.

Both Fowke and Wetstone expressed a desire for aid to the renewable sector in the form of tax credit extensions or refunds, or a measure to make it easier to site interregional transmission.

But in comments before the panel, Sen. Lisa Murkowski (R-Alaska), chair of the Senate Energy and Natural Resources Committee, said energy-specific measures are likely going to be left out of any forthcoming stimulus legislation. She listed some measures she said there has been discussion on: extension of the tax credits; a short-term waiver of Nuclear Regulatory Commission fees for “challenged” nuclear plants; and a program to provide personal protective equipment for nonprofit utilities.

“I am hoping we can find common ground in some of these areas,” she said. “Now I can’t tell you which of these items will make it into a final package; only that, in my view, they make good sense and I think that they would enhance it.”

Murkowski also used her time to plug her American Energy Innovation Act, which faltered on the floor of the Senate in March. “If anybody has an opportunity to raise these issues with the folks on the [Environment and Public Works] Committee to separate [hydrofluorocarbons] from our energy bill, I’d appreciate it,” she said. (See FERC Targeted in Energy Bill Amendments.)

July 23, 2020

FERC OKs El Paso Electric Mitigation

FERC on Wednesday approved a market power mitigation plan for an investment fund’s $4.3 billion purchase of El Paso Electric and rejected rehearing requests challenging the commission’s approval of the deal (EC19-120).

The commission’s March 30 order approving the transaction directed the companies to file a mitigation plan to address market power concerns that could arise from a premature termination of power purchase agreements for Mesquite Power, part owner of the 595-MW Mesquite Generating Station in Arizona. Mesquite Power is owned by EPE’s purchaser, the Infrastructure Investments Fund (IIF). (See FERC Conditionally OKs Purchase of EPE.)

The applicants offered two options to reduce their controlled capacity if the “surplus output contracts” for Mesquite are terminated before their scheduled expiration on May 1, 2021.

Under the first option, EPE would sell a 14-MW block of firm energy during peak periods. The energy would be supplied by an EPE generation facility that would be economic during the seasons and load periods with market power screen failures and backed by system power if the designated unit is unavailable.

EPE’s Rio Grande Plant in Sunland Park, N.M. | *El Paso Electric*

Under the second option, EPE would sell a 14-MW block of firm energy from its share of the Palo Verde nuclear plant during peak periods to a nonaffiliated third party at the Four Corners trading hub. EPE would pay liquidated damages if it is unable to deliver.

“Either option would be sufficient to mitigate the competitive harms identified by applicants’ sensitivity analysis,” FERC said in approving the proposal. It required the applicants to notify it if the contracts are terminated and which mitigation proposal will be enacted within 60 days of Mesquite receiving notice of early termination.

The commission rejected a request to rehear the March order by Public Citizen, which contends JPMorgan Chase should be considered an affiliate of IIF in FERC’s analysis of the merger. J.P. Morgan Investment Management has acknowledged it is an investment adviser of IIF, but FERC ruled that its market power analysis showed the transaction would have no adverse effect on rates even if J.P. Morgan were considered an affiliate.

“The commission did not, as Public Citizen argues, ignore the information it provided in its various pleadings. Indeed, it was partly in response to Public Citizen’s various pleadings, and applicants’ responses to them, that commission staff took the extra step of requesting additional information and explanation from applicants,” FERC said.

The commission also rejected a rehearing request on similar grounds from U.S. Sens. Jeff Merkley (D-Ore.), Ed Markey (D-Mass.) and Bernie Sanders (I-Vt.), saying they lacked standing because they did not file motions to intervene in the proceeding and were not otherwise made parties to it.