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March 24, 2024

IMM Tells MISO to Do More to Curb Fake DR Schemes

DALLAS — MISO’s Independent Market Monitor told the Board of Directors on March 19 the RTO must crack down on confirmations to prevent more phony demand response from infiltrating its markets.

Monitor David Patton said penalties for the string of demand response schemes have eclipsed $100 million. FERC in February put the squeeze on an obscure, Texas-based LLC formed to sell in-car ketchup holders to the tune of $27 million for offering faux load reductions. It was the third time recently a company was caught manipulating MISO’s demand response market and collecting unjustified payments. (See FERC Catches Ketchup Caddy Co. in Another Fake DR Scheme in MISO.)

“When you move demand to the supply side, there’s certain things you need to do … to validate the demand response is actually real,” Patton said during a Markets Committee of the MISO Board of Directors meeting.

Patton said he’s working with MISO to “remove vulnerabilities” from its ruleset regarding DR registrations and validations. He said the RTO must dedicate more resources to authenticating DR capabilities.

MISO directors discussed recent instances of apparent DR fraud in a nonpublic session following the MC meeting. No board members stated their opinions publicly on the scams during Board Week.

WEC Energy Group’s Chris Plante suggested MISO’s Advisory Committee schedule a discussion on the Ketchup Caddy situation and where responsibility for authenticating demand response market participants ultimately lands.

March 21, 2024

CAISO’s EDAM Scores Key Wins in Contested Northwest

HOUSTON — CAISO scored simultaneous victories in heavily contested territory on March 21 after Portland General Electric (PGE) and Idaho Power both signaled their intent to join the ISO’s Extended Day-Ahead Market (EDAM).

The moves significantly boost EDAM’s position in the Pacific Northwest, a region where SPP’s competing Markets+ day-ahead offering has won a strong following among the network of publicly owned utilities entitled to low-cost power from the Bonneville Power Administration — which has been a key participant in developing Markets+ and expects to issue a market “leaning” next month. (See NW Cold Snap Dispute Reflects Divisions over Western Markets.)

“This has been an important and consequential week for improving grid reliability and customer value in the West,” CAISO CEO Elliot Mainzer said in a statement. “We are honored that both Idaho Power and PGE are taking steps to join the EDAM. Their participation will allow for improved optimization and coordination of critical components of the Western electricity network, helping to bridge the Pacific Northwest with the Rocky Mountain and Desert Southwest regions.”

The decisions add to a string of good news for EDAM. In February, the Los Angeles Department of Water and Power (LADWP) received board approval to prepare to join the EDAM, while earlier this month, the Western Area Power Administration’s Desert Southwest Region pulled out of the second phase of developing Markets+.

The commitments by PGE and Idaho Power put five entities in the EDAM camp, including PacifiCorp, the Balancing Authority of Northern California and LADWP.

‘Rigorous Analysis’

PGE’s decision should come as little surprise to electricity sector stakeholders in the West, with multiple industry sources telling RTO Insider as early as last year that the utility firmly favored joining EDAM.

The utility has been participating in CAISO’s Western Energy Imbalance Market (WEIM) since 2017 and “worked extensively to help develop [EDAM] to lower power costs, increase resilience and access more clean energy sources across the West,” CEO Maria Pope said in a statement accompanying the utility’s announcement.

Additionally, Pam Sporborg, the utility’s director of transmission and market services, is co-chair of the Launch Committee for the West-Wide Governance Pathways Initiative, a multistate effort to develop a governance framework for an independent RTO that would expressly include California and build on the WEIM and EDAM.

“We looked at Markets+ very seriously,” Pope told RTO Insider on March 21 on the sidelines of the CERAWeek by S&P Global conference. “I was in Little Rock [at SPP headquarters] last summer, looking at our analysis and how we were thinking of the product that they were offering. We compared that with CAISO’s opportunities, and we did rigorous analysis and came to [our] conclusion as a result of the analysis.”

That analysis showed PGE should expect “anticipated gross cost savings between $6 million and $18 million annually, based on current modeling and depending on the final number of EDAM participants,” PGE spokesperson Andrea Platt told RTO Insider in an email.

Platt also noted that the move “takes advantage of technology and systems PGE has deployed and leverages PGE’s transmission system to connect regional resources across a common market — such as hydropower from the Pacific Northwest, and solar facilities in California and the Desert Southwest.”

PGE is Oregon’s largest utility by customer base, serving about 900,000 customers in a 4,000-square-mile service territory covering seven counties in the northwestern part of the state, with most concentrated in the Portland metro area. It operates about 1,255 circuit-miles of transmission and is co-owner of the California-Oregon Intertie, a key 500-kV link for transferring energy between the Northwest and CAISO.

Speaking on a panel at CERAWeek, Pope emphasized a point repeatedly made by advocates of a single electricity market in the West, including the backers of the Pathways Initiative, highlighting the need to “leverage” the full diversity of resources across the West to deliver “the lowest-cost renewable energy to our customers with significant savings, but also significantly enhance reliability.”

“I think when you see the additional load growth that is coming, you see the continual closure of some of our more carbon-emitting resources across the West, the expense and time it takes to build renewable energy as well as transmission, the work it takes to build out a virtual power plant and really using the distribution system, we need all solutions to be on the table to keep customer prices as low as possible,” Pope told RTO Insider.

While PGE is not required to obtain approval from the Oregon Public Utility Commission to join EDAM, it has provided regulators with an informational filing that outlines its analysis and decision, Platt said.

Letter to CAISO

If PGE’s participation in EDAM looks inevitable, Idaho Power’s decision for the CAISO market appears more tentative, if still likely.

The Boise-based utility conveyed its intentions in a March 21 letter to CAISO COO Mark Rothleder rather than in a formal announcement.

The letter signed by Kathy Anderson, the utility’s transmission and markets senior manager, explains that market studies it commissioned indicate it will benefit financially from extending its current real-time market participation into the day-ahead time frame and that EDAM “could provide the most value for Idaho Power’s customers.”

“Based on the study results and additional analysis performed, we are currently leaning towards EDAM as the preferred day-ahead market in our respective balancing authority area, subject to the necessary regulatory approvals and satisfactory resolution of certain outstanding issues,” Anderson wrote. “Before formally committing to join and implement EDAM, it is important to resolve a few issues.”

The letter cites two of those concerns, including the need for the EDAM to include a “transmission revenue recovery mechanism” that allows participants to be reimbursed for short-term open-access transmission tariff-related revenue losses incurred when transitioning into the market, the only aspect of the market that FERC rejected when approving the EDAM tariff in December. (See CAISO Wins (Nearly) Sweeping FERC Approval for EDAM.)

The other concern relates to ensuring that the EDAM’s default energy bids for gas-fired generators represents the “actual fuel risk and costs of each unit, addressing both the fuel zone and purchase cycle relative to the awards,” a concern for generators that don’t benefit from the same storage ability as that within CAISO’s BAA, the letter says.

The letter also encourages CAISO and stakeholders to address the ISO’s lack of independent governance but says Idaho Power will not require that issue to be resolved before committing to EDAM.

“We are encouraged by the results of the benefits studies and view EDAM as an important option to increase market benefits that our customers are already experiencing in WEIM,” Anderson wrote.

Idaho Power serves 630,000 customers across 24,000 square miles in southern Idaho. The utility operates about 1,988 MW of hydroelectric generation and 4,800 miles of high-voltage transmission, some of which interconnects with the BPA system.

In December, CAISO’s Board of Governors approved a plan for the ISO and Idaho Power to jointly fund the $1 billion Southwest Intertie Project-North (SWIP-N) project, a 285-mile, 500-kV line in Nevada designed to tap energy from Idaho’s wind resources for delivery to markets to the south. The project is now included in the ISO’s 2022/23 transmission portfolio. (See CAISO Board Approves Nevada Transmission Line to Access Idaho Wind.)

March 21, 2024March 26, 2024

FERC Proposes Restricting Reactive Power Compensation

FERC on March 21 proposed preventing transmission providers from including charges associated with supplying reactive power in their transmission rates in the hopes of preventing unjust and unreasonable rates for end-use customers (RM22-2).

At its monthly open meeting, the commission issued a Notice of Proposed Rulemaking seeking comments from “all interested persons” on its proposal to revise Schedule 2 of its pro forma open-access transmission tariff to prohibit the inclusion within transmission rates of charges associated with the supply of reactive power within the standard power factor range of a generating facility. Generators set the standard power factor range in their interconnection agreements.

In addition, the NOPR would revise section 9.6.3 of FERC’s pro forma large generator interconnection agreement and section 1.8.2 of its pro forma small generator interconnection agreement to remove the requirement that transmission providers “pay an interconnection customer for reactive power within the standard power factor range if the transmission provider pays its own or affiliated generators for the same service.” This change would make the LGIA and SGIA consistent with OATT revisions.

Reactive power is “a critical component of” an electrical grid, FERC said in its NOPR, because it keeps system voltage within appropriate ranges, allowing the transmission system to reliably supply “real power,” which provides energy to end users. Generating facilities, transmission lines and equipment, power electronic equipment and load can either produce or absorb reactive power.

FERC ruled in Order 888 that transmission providers must incorporate six ancillary services into their OATTs, including the reactive supply and voltage control supplied by generators. However, the commission indicated in 2021 that it was considering updating its approach to compensating reactive power capability, seeking industry input in a Notice of Inquiry. (See FERC Seeks Comments on Reactive Power Compensation.)

Order 888 assumed a resource mix that overwhelmingly comprised synchronous generators, but as FERC pointed out in its NOI, much of the new generation coming onto the grid consists of nonsynchronous inverter-based resources such as wind and solar facilities. The commission said it was “facing challenges in evaluating proposed reactive power rate schedules” because most of the filings for such schedules were made by owners of nonsynchronous resources.

The NOPR also mentioned Order 2003, which said generators are not owed compensation for providing a standard range of reactive power as that is a condition of interconnection (ER23-523). FERC cited Order 2003 last year in approving a request from MISO transmission owners to eliminate it and voltage control charges from their own and unaffiliated generation resources. (See FERC Ends MISO Compensation for Reactive Power Supply.)

Responding to comments that argued “that separate reactive power compensation is necessary to maintain reliability,” FERC observed that providing reactive power is “already required by a generating facility’s interconnection agreement” and suggested that requiring additional payment would not affect this.

The commission also noted that some commenters said the payments they received for reactive power helped them obtain financing to make needed improvements to generating facilities. In response, FERC argued that “resource developers continue to develop new generating facilities in regions without such payments.” Rather than recovering reactive power costs through transmission rates, the commission suggested that entities use “energy and capacity sales, since competition between generating facilities may incentivize efficiency.”

Comments on the NOPR are due 60 days after its publication in the Federal Register, with replies due 90 days after publication.

March 21, 2024

FERC: Markets Stable in 2023; Gas Continues to Dominate Mix

WASHINGTON — 2023 began with a mild winter, setting the pace for a relatively quiet year in which natural gas and wholesale electricity prices dropped and the U.S. added 26 GW in generation capacity, according to FERC’s annual State of the Markets report, released March 21.

And while the expected growth in demand from data centers and cryptocurrency miners continues to concern grid operators, total electric consumption dropped slightly in 2023.

The single biggest factor was natural gas, FERC staff told commissioners at their monthly open meeting. Record-high production exceeded consumption, which was lower than expected because of reduced heating demand from the residential and commercial sectors in January and February, the peak of heating season. This led to lower gas prices, which in turn led to lower electricity prices.

Still, “domestic consumption of natural gas grew for the second straight year,” according to the report. “Power burn — the largest component of U.S. natural gas demand — reached a new annual average high of 35.4 [billion cubic feet per day], representing a 7% year-over-year increase as lower natural gas prices and coal power plant retirements drove higher levels of electricity generation from natural gas resources.”

LNG exports to Canada, Mexico and Europe also increased, though the U.S. remains a net importer of gas from Canada.

Four members of the public interrupted the meeting and were escorted out of FERC headquarters in protest of fossil fuel infrastructure. They missed hearing that solar was the dominant resource type added to the grid in 2023, at 18 GW. This was more than double the amount of wind, natural gas or battery resources, which each ranged between 6 and 9 GW in added capacity.

Battery storage had a landmark year, as additions rose by about 50% to 6.1 GW. 2023 also saw the first addition of nuclear capacity in seven years, the Vogtle plant in Georgia, and the completion of the first utility-scale offshore wind project, South Fork Wind off New York. And coal resources continued to decline, with 6.8 GW in retirements, a nearly 19% drop.

“Nevertheless, in terms of installed capacity, natural gas remained the primary resource type at the end of the year at 45% of the capacity mix, followed by coal at 15%, wind at 12%, nuclear at 8%, hydro at 8%, solar at 7%, oil at 2%, other at 2% and batteries at 1%,” according to the report.

The 49-page report has a section on “Transforming Markets,” which recounts the many changes and new products by RTOs and ISOs being implemented. These include SPP’s Uncertainty Reserve ancillary service; PJM’s increase in synchronized reserve procurement; CAISO’s Day-Ahead Market Enhancements; ISO-NE’s new day-ahead ancillary services market; and MISO’s seasonal capacity market construct.

“All of these changes that are being reported in the State of the Markets report are encouraging,” Commissioner Allison Clements said. “I think it’s really important to have this context when we’re thinking about the pace of change and potential thermal retirements. These retirements will not be happening in a static environment, as market, grid and operations transitions are well underway. …

“And there is no shortage of replacement generation and storage lining up ready to serve, and their integration will be aided by FERC’s reforms and by the ongoing work in the regions.”

Clements’ upbeat assessment was countered by Commissioner Mark Christie, who quoted the PJM Independent Market Monitor’s State of the Market Report, which said up to 58 GW of thermal resources could retire by 2030. (See related story, PJM Monitor Finds Markets Overall Competitive.)

“Given current technology and the short time period, the retiring capacity can only be replaced by gas-fired or dual-fuel generation,” the Monitor wrote. “Renewables can replace a significant amount of the energy output but cannot replace the capacity. Capacity means that the resource is expected to be available when needed, regardless of the time of day or ambient conditions. … The current PJM interconnection queue does not include adequate thermal capacity to replace the potentially retiring thermal capacity.”

Nameplate capacity net additions and retirements from 2013 to 2023 by resource type | FERC

While Christie supports Order 2023 as “a good step forward” to unclogging RTOs’ generator interconnection queues, “it’s not a silver bullet” for maintaining resource adequacy, he said. Clearing “the queue is not going to fix it, because the queue is largely nondispatchable, intermittent resources that are simply not one-for-one replacements.” And the gas-fired resources in the queue won’t all necessarily get built because of the difficulty of siting pipelines, he said.

Asked to respond to Christie’s remarks, Chair Willie Phillips pointed to the commission’s pending final rule on transmission, which he said is coming soon.

“There is no one silver bullet that is going to fix interconnection, and there is no one silver bullet that is going to fix transmission. But … there is no greater action that the commission can take that can address reliability, affordability and sustainability than addressing transmission reform in general,” Phillips said. “Now we have more work to do, and we are laser-focused, as I’ve said many times, on our long-term and regional planning rule. And we are in the last leg of the final lap. … I’m like Michael Johnson at this point. We are running as fast as we can to get this done.”

March 21, 2024May 9, 2024

FERC Rejects PURPA Petition in Arizona Solar Case

FERC has declined to act on a petition that accused Arizona’s Salt River Project of setting rates that discriminate against customers with rooftop solar (EL24-54).

The petitioners had asked FERC to initiate an enforcement action against SRP under the Public Utilities Regulatory Policies Act. But in a notice of intent not to act issued March 21 at its monthly open meeting, FERC declined to do so.

The petition was filed Jan. 12 by two SRP rooftop solar customers, Karen Schedler and Jeremy Helms, and the nonprofit advocacy group Vote Solar. An amended petition filed Jan. 22 added Solar United Neighbors as a petitioner.

The petition alleged SRP’s rate plans discriminate against rooftop solar customers through a higher fixed monthly charge for solar customers and more advantageous peak periods for non-solar customers. (See Petition Seeks PURPA Protections for Rooftop Solar.)

Non-solar customers have a three-hour peak period. The time-of-use plan offered to solar customers has a longer peak period that varies by season: 2 to 8 p.m. in the summer, and 5 to 9 a.m. plus 5 to 9 p.m. during the winter, according to the petition.

But SRP said in a motion to dismiss that its retail rates for rooftop solar customers are just and reasonable “and fully consistent with PURPA’s costing principles.”

SRP, along with intervening parties including the National Association of Regulatory Utility Commissioners, also claimed that the issue of SRP’s retail rates is not within FERC’s jurisdiction.

“Petitioners challenge SRP’s rate design as applied to retail customers with rooftop solar PV panels located behind the meter,” NARUC wrote in a filing. “Such challenges to retail rates are subject to exclusive state jurisdiction.”

NARUC also said the petition offered no evidence the retail customers’ rooftop solar is a “qualifying facility” under PURPA.

PURPA was enacted in 1978 to encourage development of small power producers and co-generators and to reduce fossil fuel demand.

In concurring statements accompanying FERC’s order, Commissioners Allison Clements and Mark Christie expressed differing opinions on the issue of FERC’s jurisdiction.

Christie said he was persuaded by the arguments from SRP, NARUC and other intervenors that the issues in the petition should be addressed at the state rather than federal level.

But Clements said the mere fact that residential rooftop solar customers are making the claim does not make it a state issue.

“While states and relevant non-jurisdictional entities such as SRP have retail rate authority, PURPA provides for federal jurisdiction over a utility or retail authority’s implementation of PURPA’s obligation to purchase from and sell to qualifying facilities,” Clements wrote. “Further, it is clear that behind-the-meter rooftop solar arrays owned or leased by residential customers can be qualifying facilities.”

FERC’s decision means the petitioners may bring an enforcement action against SRP “in the appropriate court,” the commission said.

David Bender, an Earthjustice attorney representing Vote Solar, said he had expected the commission’s decision to not bring an enforcement action. Bender said he was aware of FERC bringing enforcement actions only a couple of times in the 46 years since PURPA was enacted.

“We filed our petition because it is a prerequisite to bringing our own enforcement action in federal court, which we will proceed to now do,” Bender said in an email to RTO Insider.

An SRP spokeswoman said the company was pleased with FERC’s decision, noting the utility’s position was supported by the American Public Power Association and the Large Public Power Coalition, in addition to NARUC.

“SRP offers multiple rooftop solar rate options to customers that are just, reasonable and fair and prevent cost shifts from the class of customers who have chosen to put rooftop solar on their homes to the class of customers without rooftop solar,” the spokesperson said.

March 21, 2024

Panel Connects Clean Energy Transition to Boston’s Big Dig

SOMERVILLE, Mass. — Selling the long-term narrative to the public on the significance of clean energy infrastructure is as important as any technical barriers to infrastructure development, a panel of energy experts emphasized at Greentown Labs on March 21.

Convened by Advanced Energy United, the event was aimed at drawing connections between the infrastructure needs of the clean energy transition and Boston’s Big Dig, a massive construction project that replaced an elevated highway cutting through the city’s downtown with an underground tunnel.

Ian Coss, producer of a 2023 podcast by WGBH investigating the history of the massive project, told attendees the Big Dig serves as both “a cautionary tale” and “a point of inspiration” for clean energy infrastructure projects.

Completed in 2007, the idea behind the Big Dig initially was conceived in the early 1970s; it took 20 years to “even get to the starting line of construction, and then it took another 16 years to build it,” Coss said. The project ultimately cost more than $20 billion, was beset by a series of controversies and has long carried the reputation of a boondoggle, he said.

But despite the construction challenges, the completed project now provides significant quality-of-life benefits to the city and the broader region, Coss said. Connecting the project to the daunting need for infrastructure that lies ahead, Coss said the history of the Big Dig shows “how important narrative is to public works.”

“A project can be transformative and at the same time viewed very negatively for a long period of time,” Coss said, adding that the project’s reputation led to a “chilling effect” on major infrastructure projects in the region.

Rebecca Tepper, secretary of Massachusetts’ Executive Office of Energy and Environmental Affairs, said the challenges the state faces today in developing infrastructure may be even greater than those of the Big Dig. While the Big Dig was limited to the city of Boston, the infrastructure needed for the clean energy transition will extend through the Northeast and require intense regional collaboration, she said.

At the same time, Tepper remains optimistic, and she highlighted community engagement and benefits as the key components to the successfully deploying infrastructure at scale.

“Can we still build big things? Yes, because we have to,” Tepper said.

With impending emission target deadlines, states also do not have the luxury of time for developing clean energy infrastructure, the panelists said.

“Time is no friend: It’s no friend in politics, in life and in infrastructure projects,” said Joe Curtatone, president of the Northeast Clean Energy Council.

Other challenges specific to energy include the fact that the existing infrastructure needs to continue functioning throughout the construction process, and there often is limited tangible or visible benefits to celebrate when the infrastructure is completed, said Maria Robinson, director of the U.S. Department of Energy’s Grid Deployment Office.

Accompanying energy infrastructure with projects that provide real benefits to local communities can help “make it more tangible,” Robinson said.

Despite the myriad challenges, one advantage of today is the alignment of federal, state and local governments on the need to quickly develop clean energy infrastructure, and the availability of federal dollars to do so, said Jeremy McDiarmid, managing director of Advanced Energy United. McDiarmid called this alignment “a moment to seize.”

Advanced Energy United recently co-founded the Transmission Possible coalition, which is working “to elevate the conversation” and make transmission issues more accessible to a general audience, McDiarmid said. (See Transmission Coalition to Fight for Expanded Grid.)

“It’s something that everybody needs to understand,” McDiarmid said. “We don’t have another choice; we don’t have the luxury of just ignoring this.”

Ultimately, the success of the clean energy transition will depend on more than the success or failure of any single project, McDiarmid said.

“We need to think bigger,” McDiarmid said, “telling a big-picture story so the unfortunate bumps along the road are just that.”

March 21, 2024March 26, 2024

3 FERC Nominees Quizzed by Senators in Hearing Short on Fireworks

The three FERC commissioner nominees faced questions from the Senate Energy and Natural Resources Committee on March 21 in a hearing light on fireworks.

“The job calls for people who can fairly assess the needs and concerns of all interests affected by our energy policies and apply the law,” said committee Chair Joe Manchin (D-W.Va.). “Today we’re here to assess the experience and qualifications of three nominees before us for this important job.”

The nominees include Judy Chang, who is up for the seat opening in July, FERC staffer David Rosner, who most recently was detailed to Manchin’s committee and Lindsay See, the West Virginia solicitor general. Rosner and See are nominated for the two open seats on the commission. The committee took just three weeks to hold a nomination hearing after the White House announced choices. (See Biden Names 3 Nominees to Give FERC 5 Members Again.)

Ranking Member John Barrasso (R-Wyo.) tied Chang — who worked for Massachusetts after being hired by Gov. Charlie Baker (R) — to what he called that state’s “failed policies.”

“To remind the committee, this is a state that consumes twice as much electricity as it produces,” Barrasso said “It’s a state that benefits from the resolve of other states and other countries to produce the energy that Massachusetts needs and uses. And it’s a state where residents pay among the highest electricity and natural gas prices in the nation.”

In her role in Massachusetts, Chang advocated against expanding natural gas infrastructure to the region, which Barrasso highlighted in old quotes.

“As part of the state government, however, I personally experienced what it’s like to go through winters in New England and from the governor all the way down, the nail-biting experiences to make sure that we have not only reliable service, but affordable service,” Chang said. “And that is particularly the time when New England is more like Germany than it was like Pennsylvania in its cost and availability of natural gas.”

If she had a “magic wand” she said she would like to see more natural gas infrastructure for the region but noted that the issue is very difficult in New England.

Sen. Mazie Hirono (D-Hawaii) asked Chang how her time as Massachusetts’ undersecretary for Energy & Climate Solutions would inform her time on FERC. Chang responded that reliability must be considered, or the energy transition won’t work.

“No one in this country will tolerate any outages,” Chang said. “So, I think I understand the complexity of the energy systems through my work in Massachusetts, and I will definitely carry that with me going forward.”

Hirono also got into a back-and-forth with See over West Virginia v. EPA, a case the nominee argued on behalf of the state before the U.S. Supreme Court. The court relied on the “major questions” doctrine to find EPA overstepped the Clean Power Rule by using the Clean Air Act in a way Congress never intended. More recently, the court has taken up a case that threatens to overturn the Chevron Doctrine, which has courts pay deference to regulatory agencies on technical questions under their jurisdiction. (See: Supreme Court Hears Oral Arguments on Overturning Chevron.)

Hirono asked how See views FERC’s authority given the recent legal developments and points she made while arguing the case for West Virginia.

“I certainly understand that [FERC] will be a different role of acting impartially,” See said. “And I think that that will be important when it comes to [the] role of the agency. As I have said, my philosophy would be to follow the law. And I would be looking at experience to see what exactly it is Congress delegated and tasked FERC with doing. I’d be looking for that best interpretation consistent with governing statutes.”

Getting rid of Chevron would be a “tall order” for Congress because it would have to be very precise in what it delegates to agencies, said Hirono, who asked See whether FERC could consider carbon pollution in its decisions.

“My understanding is that FERC, like any other agency only has the authority that Congress has delegated to it,” See answered.

March 21, 2024March 26, 2024

FERC, State Regulators Renew Collaboration

Nearing completion of its long-awaited transmission planning rulemaking, FERC announced March 21 it’s forming a new working group with state regulators to continue the dialogue it began in 2021.

In its order, the commission created the Federal and State Current Issues Collaborative, which will provide a venue for discussions on issues including electric reliability and resource adequacy; natural gas-electric coordination; wholesale and retail markets; new technologies and innovations; and infrastructure (AD21-15, AD24-7).

FERC said the new group will be like the Joint Federal-State Task Force on Electric Transmission, which has held eight meetings since late 2021, the most recent last month. (See Utility Regulators Repeat Concerns About Tx Siting Oversight.)

“Given the success of this collaboration and the array of additional cross-jurisdictional issues relevant to FERC and state utility commissions, we seek to continue a formal collaboration to explore electricity sector issues where there are relevant jurisdictional nexuses or regulatory gaps,” the order said.

The task force discussed issues including regional and interregional transmission planning; siting; cost allocation; generator interconnections; physical security; and grid-enhancing technologies — several of which are likely to be addressed in the commission’s transmission planning and cost allocation rulemaking (RM21-17). (See FERC Watchers Weigh in as Transmission Rule Approaches Finish Line.)

“Yes, we have more work to do on transmission, but we are landing the plane,” FERC Chair Willie Phillips said in a press conference after the commission’s monthly open meeting. “And soon, we’ll need to turn to other matters and issues that I think we can get helpful and valuable feedback on from our state colleagues.”

Like the task force — which was due to expire in November — the new group will run for three years unless extended and will include the FERC commissioners and 10 state regulators nominated by the National Association of Regulatory Utility Commissioners (NARUC).

The order requested that NARUC nominate two state representatives from each of NARUC’s five regions.

“All state commissions may suggest agenda topics for public meetings of the collaborative and may also submit comments before and after on the topics being discussed at such meetings,” FERC said. “In addition, the collaborative may consider convening regional meetings with opportunity for participation by all state commissions in the region.”

The first meeting of the collaborative is expected in fall 2024.

Phillips said the task force “addressed almost every issue that I can imagine under the transmission reform regime,” and that the commission included states’ feedback on Order 2023, which revised the pro forma generator interconnection rules to clear queue backlogs (RM22-14). (See FERC Updates Interconnection Queue Process with Order 2023.)

Now, he said, it’s time for the commission and states to “pivot” to reliability concerns.

“We heard today from Commissioner [Mark] Christie: there is a concern about reliability [and] resource adequacy. That’s also a priority, and I want to hear from our state colleagues on those issues as well. Because … no commission has taken more action on reliability than this one. Every month since I’ve taken over as chairman, we’ve taken a major action on reliability.”

NARUC President Julie Fedorchak, a North Dakota regulator, said the states are eager to continue discussions with FERC. “The role of state utility commissioners is increasingly more challenging and consequential to the quality of life, safety and economic health of this nation,” she said. “Ensuring the reliability of the grid as the energy sector evolves at a rapid pace is crucial.”

North Carolina Commissioner Kim Duffley, who represented the states as the co-chair of the transmission task force, said the group “allowed for meaningful dialogue and assisted in providing a clearer understanding of regional differences.”

“The states look forward to seeing the beneficial results of our conversations and working with our federal partners on other significant federal-state issues,” she added.

Michael Brooks contributed to this article.

March 21, 2024

Members Call for More Tx Expansion Following MISO’s $20B LRTP Blueprint

DALLAS — MISO’s conceptual, $20 billion, 765-kV transmission suggestion took top billing at Board Week, with some members asserting that MISO has even more transmission to plan if to meet the future confidently.

MISO earlier this month said it envisioned a $17 billion to $23 billion second long-range transmission plan (LRTP) portfolio with most lines rated at 765 kV. Many of the proposed line routes in the massive buildout track those approved under the first LRTP for MISO Midwest. (See MISO Says 2nd LRTP Portfolio Should Run About $20B, Rate Mostly 765 kV; MISO Outlines Benefits of New LRTP Investments.)

“This is the System Planning Committee of the MISO Board of Directors, and I’m going to tell you right off the bat, there’s nothing to see here,” MISO Director Mark Johnson joked when opening the March 19 meeting discussing the RTO’s grid-expansion activities.

“I can tell you today that we’re starting to glimpse the finish line,” MISO Vice President of System Planning Aubrey Johnson said of the second portfolio. He said MISO personnel have logged more than 25,000 hours to reach the blueprint.

Aubrey Johnson reminded attendees that MISO has said for years its members are contemplating adding up to $500 billion in new generation to achieve carbon reduction goals and that the RTO could recommend $100 billion in transmission projects to incorporate those resources into the grid over the next two decades.

“The generation expansion is driving the transmission we plan to marry to it,” he explained.

By 2042, MISO predicts it likely will manage 466 GW of installed capacity, have a 145-GW peak load that occurs in January rather than July and will have overseen 103 GW in generation retirements. Its fleet will emit 96% less carbon pollution than it did in 2005.

Senior Vice President of Planning and Operations Jennifer Curran said while MISO can’t pin down precisely what the future’s fleet resembles, the second portfolio is MISO’s “least-regrets” plan.

MISO Director Nancy Lange said MISO’s plan appears necessary to usher in the future resource mix.

“We’re trending toward the top range of the plan if I think about load growth, capacity accreditation,” she said.

Aubrey Johnson said MISO believes stringing 765-kV lines affords it more flexibility going forward and is preferrable to MISO recommending three 500-kV lines, three double-circuit 345-kV lines, or six single-circuit 345-kV lines for every single-circuit 765-kV.

On the other hand, MISO’s annual transmission planning cycle shows a preliminary $5.5 billion in more routine investments. (See Early MTEP 24 Designates $5.5B in Transmission Spending.)

However, Executive Director of Transmission Planning Laura Rauch said MISO’s information shows load growth is gaining momentum and she expects future annual transmission packages to include more spending on local transmission projects.

Members to MISO: More, Please

Some MISO members said the proposed 765-kV lines aren’t a match for future changes.

Clean Grid Alliance’s Beth Soholt said despite the billions of dollars in proposed projects, MISO needs “to keep going.” She said two of MISO’s three transmission planning futures are too conservative, especially considering recent load growth.

Soholt urged MISO to recommend and the board to approve the second portfolio expeditiously.

“There is a significant cost to not building transmission in a timely manner,” she said.

Xcel Energy’s Drew Siebenaler said while the first portfolio was “groundbreaking” and the second “has the potential to set us up for the energy future,” MISO should plan even more transmission.

The Grain Belt Express Question

Invenergy’s Arash Ghodsian asked MISO leadership to factor in planned merchant HVDC lines, like the Grain Belt Express, into LRTP efforts. MISO has said it will conduct a sensitivity that includes Grain Belt operations into its modeling but has not committed to rearranging the second portfolio to account for the merchant HVDC line.

Mark Johnson acknowledged publicly that Invenergy sent a letter to the MISO Board of Directors arguing the RTO is deficient in its LRTP planning because it has not contemplated the $7 billion, 5-GW Grain Belt Express in its latest LRTP portfolio.

“MISO does its very best to ensure that it has a very open and transparent process,” Johnson said, encouraging stakeholders to participate in MISO’s public planning meetings and voice concerns.

WPPI Energy’s Steve Leovy also said he’s worried about “MISO planning over projects” like the Grain Belt Express.

Invenergy’s letter said there is “no justification in the MISO tariff or otherwise for an inefficient planning process that disregards privately funded infrastructure development happening in MISO’s own footprint.”

“By ignoring the parallel efforts of merchant transmission developers in its LRTP, MISO has demonstrated an ongoing failure in planning,” Invenergy wrote. The company estimates MISO’s first LRTP portfolio alone contains more than a billion dollars in unnecessary costs because it ignored advanced-stage interregional merchant transmission.

Invenergy said MISO’s failure to include merchant HVDC lines is distorting its required cost-to-benefit analyses.

“It is time for the board to step in and prevent further waste, delay and policy outcomes inconsistent with those set out by” the Department of Energy, FERC, NERC and Congress, Invenergy told MISO directors.

Members Want Future Discussions on LRTP III’s Cost Allocation

At the March 20 Advisory Committee meeting, some MISO members asked that a future discussion be devoted to the cost allocation of the third LRTP portfolio, which will focus exclusively on MISO South transmission projects.

Regulators of states with Entergy companies have asked MISO to use an allocation that assigns 90% of costs based on adjusted production cost savings and avoided reliability projects, with the remaining 10% billed to new generation that interconnects in MISO South based on a flow-based methodology. (See Entergy States Debut Long-range Tx Cost Allocation Proposal, MISO Members Unconvinced.) MISO, on the other hand, has proposed using a blend of a 50% postage-stamp allocation to load and a 50% allocation to the local transmission zone for MISO South LRTP projects.

At any rate, the third LRTP portfolio is poised to use a different cost allocation than the first two Midwestern portfolios, which employ a 100% postage-stamp allocation to load. Any new cost allocation proposal will have to pass FERC muster.

March 21, 2024March 26, 2024

MISO Members Doubt Severity of Long-term RA Alarm Bells

DALLAS — MISO members appeared skeptical at their quarterly meetings that the RTO is destined to face capacity shortfalls before 2030.

MISO Advisory Committee members at a March 20 meeting cast doubt on predicted shortcomings from both NERC’s 2023 Long-Term Reliability Assessment and MISO’s latest version of its Reliability Imperative report.

MISO was elevated to a high-risk area by NERC late last year; the agency predicted the footprint would grapple with a 4.7-GW shortfall by 2028.

And last month, MISO warned that members are powering down dispatchable units too quickly and aren’t building equivalent generation able to pick up the slack on the grid. (See MISO Publishes Call to Action to Bypass Danger in Reliability Imperative Report.)

Minnesota Public Utilities Commissioner Joseph Sullivan said capacity shortages projected in NERC reports haven’t transpired, while some regions previously designated as low risk have experienced blackouts. He said state commissions and utilities have cooperated to delay retirements and ensure resource plans are sufficient.

The Michigan Public Service Commission on March 15 cited resource adequacy worries when it rejected Consumers Energy’s early termination requests on two power purchase agreements with biomass plants. The commission said that “relying on unpredictable markets for replacement supply outside of a comprehensive integrated resource planning process in this manner entailed an unacceptable level of risk.”

Sullivan also said the Organization of MISO States and MISO’s annual RA survey “affords more context and granularity” than NERC reports.

The Union of Concerned Scientists’ Sam Gomberg agreed that states historically have kept the lights on and that NERC’s projected shortfalls haven’t emerged.

“I think there’s a lot of reactionary effect when we see our region in red. But it’s NERC’s job to keep these fires lit. … This is not to obviate the sense of urgency,” Gomberg said. “I want to emphasize the role of the states.” He said he had faith that states will help MISO “get over the hump” of turbulent years of thermal retirements and replacement with clean power sources. He also said NERC’s report seemed flawed because it relies on a drop in resource additions by 2028.

Gomberg also said he noticed MISO is working on several initiatives NERC suggested.

“Perhaps the sky is not falling, but it does help emphasize to regulators that our plans in place are working,” WEC Energy Group’s Chris Plante said.

But Michelle Bloodworth, of coal trade organization America’s Power, said it’s well known that solar and wind generation cannot provide the six operating attributes MISO has singled out as critical to the system. She said the premature retirement of mostly coal resources is connected directly to the reliability crisis.

MISO has defined six system reliability attributes as vital to the system, including availability, rapid start times, the ability to deliver long-duration energy at a high output, and providing voltage stability, ramp-up capability and fuel supply certainty. (See MISO: Attributes Work Won’t Result in New Obligations on Retirements, Interconnection Queue.)

Bloodworth said it’s a wake-up call that NERC raised MISO from “elevated” to “high risk” in its latest assessment. She advised MISO to be “cautious about any thermal generation that is retiring, not just coal.”

Clean Grid Alliance’s Beth Soholt said both the NERC Long-Term Reliability Assessment and MISO’s Reliability Imperative struck an unnecessarily catastrophic tone.

“I think our sector would rather have a tone of ‘this is what needs to be done’ rather than ‘the sky is falling’ alarmist [rhetoric],” she said.

Soholt also said MISO and states could do more to make sure energy storage can serve as a source of dispatchable power in the fleet transition.

However, Bloodworth said she commended the “sober” tone because there is cause for concern, with 19 GW of MISO’s coal fleet set to retire in the next five years and even new natural gas investment threatened by EPA’s proposed carbon emissions rule.

“A megawatt is only as good as the people it’s delivered to,” Bloodworth said.

Gomberg said coal use is “devastating from the cradle to the grave” in terms of toxic environmental and deadly public health consequences.

“The quicker we can move on from coal, the better,” he said.

Yvonne Cappel-Vickery, the clean energy organizer for the Alliance for Affordable Energy, said it would be helpful if utilities were more open with customers about their resource plans.

Travis Stewart, representing the Coalition of Midwest Power Producers, said in addition to new resources, MISO needs new transmission, especially merchant HVDC lines.

“You can read that same headline for the past 10 years,” OMS Executive Director Marcus Hawkins said weeks earlier about MISO and NERC warning about a pending shortfall in the next three to four years.

But state regulators are working relentlessly to ensure that “MISO’s worst nightmare doesn’t come true,” Hawkins said at the Gulf Coast Power Association’s March MISO-SPP conference. However, Hawkins said new load growth and the hastening fleet transition means different factors are at play in estimating capacity adequacy.

“We’ve had quite an erosion in our resource adequacy,” MISO CEO John Bear told board members and stakeholders at MISO’s March 21 board meeting.

Bear said the grid operator is going to have to ensure it conducts sufficient analysis to be confident in its decisions’ safety before moving ahead on more RA initiatives. Nevertheless, he said, moving ahead is a must.

Bear predicted MISO won’t have glowing news to share in its next RA survey due in summer in partnership with OMS. He said RA concerns are compounded by significant load additions across the footprint and system stability concerns.

“I want to remind people, as we move forward, there are going to be very new risks,” Bear said.

Iowa Utilities Board member and OMS President Josh Byrnes agreed the RA risks are real, and the solutions are complex; however, he urged fellow commissioners and members to “stay positive.”