The Federal Emergency Management Agency dropped its claim Tuesday to a large chunk of the $13.5 billion trust that Pacific Gas and Electric plans to fund for wildfire victims as part of its Chapter 11 reorganization.
Lawyers for FEMA and PG&E told U.S. Bankruptcy Judge Dennis Montali in San Francisco that FEMA had settled for $1 billion of its original $3.9 billion claim for wildfire expenses and can only recoup its money from the trust once all the individual wildfire victims have been paid.
Judge Dennis Montali | Commercial Law League of America
Residents and business owners harmed by PG&E-sparked fires in 2015, 2017 and 2018 have filed more than 77,000 claims in the utility’s bankruptcy case. Montali pointed out the deal could mean FEMA winds up getting nothing from the trust, which is what wildfire victims have wanted.
“I’m sure the fire victims will be happy to see the outcome, and so am I. Congratulations,” Montali told attorneys Stephen Karotkin, who represents PG&E, and Matthew Troy, with the U.S. Department of Justice.
The dispute over whether FEMA could share in the victims’ trust was one of the biggest threats to PG&E exiting bankruptcy by June 30, which it must do to take part in a wildfire insurance fund established by the state last year.
FEMA, along with a number of California state agencies, argued it was entitled to get back billions of dollars it spent responding to disasters started by poorly maintained PG&E equipment, including the November 2018 Camp Fire that killed 86 people and destroyed the town of Paradise.
PG&E and the government agencies reached the agreement during a mediation session Monday intended to resolve disputes over PG&E’s disclosure statement, a simplified explanation of its reorganization plan for fire victims and others. The statement will soon be sent to more than 300,000 interested parties who can vote on PG&E’s bankruptcy plan, the judge said. (See PG&E Tries to Put Bankruptcy Plan in Layman’s Terms.)
Montali ordered the mediation before retired U.S. Bankruptcy Judge Randall J. Newsome last October to try to bring a timely end to one of the largest bankruptcies in U.S. history. PG&E and its adversaries, including lawyers for the fire victims’ Tort Claimants Committee (TCC), said they’d worked out several disputes involving the disclosure statement in Monday’s mediation session.
Stephen Karotkin | Weil, Gotshal & Manges
“We’re pleased to report that objections raised by the TCC, the United States government and state agencies … have all been resolved,” Karotkin told the judge. The agreements will be filed with the court in next few days.
“Thanks to the involvement of former bank bankruptcy Judge Newsome, who’s been working very hard over the last few days … we were able to reach these agreements,” Karotkin said.
Montali responded: “He’s my secret weapon. I’m going to turn him loose on the coronavirus next.”
A hearing on PG&E’s planned financing to exit bankruptcy is scheduled for March 16.
The bankruptcy, now estimated by PG&E to cost close to $60 billion, relies on new stock and debt offerings. Fire victims and Gov. Gavin Newsom have expressed concern that a highly leveraged PG&E may be unable to upgrade its aging infrastructure or to fully compensate those who lost homes and family members.
MISO on Monday introduced temporary measures to contain the COVID-19 outbreak, converting all in-person meetings to conference calls and barring visitors from its three offices until further notice.
The prohibition on visitors covers RTO offices in Carmel, Ind.; Eagan, Minn.; and Little Rock, Ark. Indiana and Minnesota both recently recorded their first cases of COVID-19, while Arkansas so far has no confirmed cases.
MISO has tightened access to its control room and put a hold on all control room tours. It has also suspended all non-essential business travel for its employees.
MISO Little Rock headquarters | Google Maps
The conference call policy applies to this week’s March 10 Interconnection Process Working Group meeting and March 11 Planning Advisory Committee meeting and Integrated Roadmap workshop. MISO doesn’t have any in-person meetings scheduled March 16-20. It said decisions about future meetings will be “communicated as they are made.”
“The plan is to continue the conference-call only policy for the foreseeable future,” MISO spokesperson Allison Bermudez told RTO Insider.
The RTO is conducting a reassessment of attendance at its Board Week in New Orleans March 24-26, asking all registered attendees to change their registration status by March 12 if they no longer plan on traveling to the meetings.
Bermudez said MISO leadership is still evaluating the board meetings in New Orleans and will communicate their decision with attendees.
MISO said its “top priorities are the health and well-being of our employees and stakeholders and the reliability of the bulk electric system.”
In a March 9 message to stakeholders, CEO John Bear said, “MISO’s Incident Management Team continues to track the situation closely and is consulting with experts on appropriate safety steps that help protect employees and ensure grid reliability.” The RTO has initiated more cleaning practices, and employees and contractors are similarly limiting large, in-person gatherings. He also said MISO is prepared to have employees work from remote locations.
“All areas within MISO have business continuity plans that enable work to continue from alternative locations if necessary. We will continue to monitor developments and implement additional protocols as necessary to minimize risk to the MISO community,” MISO said, adding that new developments will be posted on its Twitter page and misoenergy.org.
MISO’s contentious first storage as transmission assets (SATA) proposal will become the subject of a future technical conference to allow FERC to weigh the merits of the plan, the commission ruled Tuesday.
FERC formally accepted MISO’s bid to include storage options in its annual transmission planning while also suspending the new Tariff provisions until Aug. 11 after determining they might be “unjust, unreasonable, unduly discriminatory or preferential.” Details of the upcoming technical conference will be included in a later notice (ER20-588).
The commission said the conference will most likely tackle MISO’s plans for evaluating and selecting storage as a transmission-only asset (SATOA), the existing formula rate providing a cost recovery process for SATOA projects and the operating guides applying to the projects. FERC will also discuss SATOA’s “market activities and any potential wholesale market impacts of those activities” and how the projects could potentially impact the RTO’s generator interconnection queue.
MISO’s plan — which stipulates that storage as transmission be limited for now to transmission-only functions and thus operated solely by transmission owners — drew several protests from stakeholders criticizing the RTO’s filing as giving its transmission owners an unfair advantage. Multiple entities said MISO’s ruleset is primed to allow incumbent transmission owners to effectively have a monopoly on storage assets functioning as transmission, harming competition. Several urged FERC to reject the filing. (See MISO SATOA Proposal Faces Opposition.)
Invenergy’s Grand Ridge Battery Storage Facility in Illinois | BYD
The commission said it will collect comments after the technical conference and will consider them in further action on the filing.
MISO has said its ruleset would avoid introducing complexities around cost recovery, particularly related to how non-transmission owners would be compensated for providing transmission services.
RTO staff have also repeated assurances that they will soon begin designing new rules that will allow SATA to function as transmission while simultaneously participating in MISO’s energy markets.
MISO officials have also said storage developers and owners who are not classified as transmission owners could still propose projects under the RTO’s existing rules for selecting non-transmission alternatives (NTAs) in the place of transmission projects. MISO last year placed several mentions of electric storage resources into BPM 20, the business practice manual managing NTAs.
But MISO storage owners and developers said the treatment remains unequal since NTAs must first clear the RTO’s approximately three-year generation interconnection queue. The queue is not a requirement for transmission owners proposing SATOA, who instead submit their projects for study through the annual MTEP process.
MISO’s 2019 Transmission Expansion Plan (MTEP 19) includes American Transmission Co.’s Waupaca area energy storage project, which is meant to ease transmission reliability issues in central Wisconsin. The first-ever SATOA project in the RTO’s footprint was withheld from final MTEP 19 approval as MISO waited on the SATOA rules for its cost recovery method. The RTO had planned for its Board of Directors to hold a special March vote on approval of the project once it had FERC’s go-ahead on its rules and cost recovery method. (See MTEP 19 Could Yield First MISO SATAProject.)
By Tom Kleckner, Robert Mullin and Rich Heidorn Jr.
NYISO and MISO on Monday joined PJM, ERCOT and CAISO in suspending in-person stakeholder meetings in response to the spreading COVID-19 coronavirus.
The New York ISO said all stakeholder meetings would be conducted via teleconference until further notice. It also suspended nonessential business travel. MISO said late Monday that it has changed all in-person meetings for this week to webinar. The RTO is also weighing the possibility of canceling its quarterly Board Week, scheduled for March 24-26 in New Orleans.
The two grid operators’ announcements followed PJM’s on Thursday. The RTO said stakeholder meetings would be webcast only through March 20, when it will begin re-evaluating access to its Valley Forge campus weekly. During that period, it is suspending all visits to its offices except for “essential business personnel and vendors that need to deliver critical items or services.” All business travel for PJM employees and contractors is suspended, including speeches and trainings.
The RTO also is canceling the first three weeks of the PJM Operator Seminar set for Baltimore on March 10, saying “it was not prudent to have a concentration of grid operators in one place.” It is considering replacing portions of the in-person training with online training. It will also consider the need to cancel the remaining weeks of the seminar scheduled in April and May in Columbus, Ohio, and at PJM.
COVID-19 has infected more than 97,800 people worldwide, killing more than 3,300.
ERCOT was the first to scrap in-person meetings, announcing March 3 that it was replacing them through March 15 with webinars or conference calls. The Texas grid operator has instituted restrictions for visitors to all of its facilities and is canceling nonessential business travel by staff and contractors for the same period.
On Monday, the grid operator extended the restrictions through March 31. ERCOT said on Friday that it was canceling six sessions of its black start training, which was to begin March 17. The monthly Technical Advisory Committee meeting scheduled for March 25 has been postponed until at least April 1.
ERCOT is also monitoring staff and their family’s international travel, instructing staff with illness or symptoms to stay home, and deep-cleaning its facilities. It said it will review its restrictions on a weekly basis and alert stakeholders to any changes.
“ERCOT provides a critical service to Texans, and we are taking an abundance of caution to ensure the health and safety of our staff during this time,” spokesperson Leslie Sopko said in an email.
On March 1, the state’s largest energy conference was canceled because of COVID-19’s spread. (See CERAWeek Canceled as COVID-19 Virus Spreads.) And on Friday, Texas caused even bigger waves when Austin canceled the South by Southwest media festival. The annual event draws hundreds of thousands of people to Texas’ capital and contributes an estimated $450 million to the local economy.
CAISO
CAISO alerted stakeholders Wednesday that “to protect the health of the company’s staff and prevent possible disruption to critical business operations,” it has issued temporary restrictions on all in-person meetings through April 1 or until further notice. In-person meetings hosted by CAISO and its Western Energy Imbalance Market will be conducted as teleconferences or webinars when possible, the ISO said.
The policy applies to a series of key meetings scheduled for this month, including those for CAISO’s Board of Governors; the Western EIM Governing Body and Governance Review; the Market Surveillance Committee; the Market Performance and Planning Forum; and the 2021 Local Capacity Requirements process. The decision will also impact CAISO’s March 11 Resource Interconnection Fair.
The ISO has also restricted visitor access to its facilities and suspended nonessential business travel for employees.
“We understand that the new protocol may be an inconvenience, and we apologize for any changes in travel plans, but continued reliable operation of the electrical system is our company’s first priority,” CAISO CEO Steve Berberich said.
ISO-NE and SPP
ISO-NE and SPP had not canceled in-person meetings as of Thursday, although all said they were monitoring the outbreak and following guidance from federal, state and local health agencies to mitigate COVID-19’s spread.
ISO-NE suggested members’ employees not meet with its staff or visit its facilities if they feel ill or show symptoms. The RTO referenced CDC’s expectation that the number of coronavirus cases will continue to grow, and recommended stakeholders consider following its guidelines.
“It is important to stress that, at this time, the risk to [ISO-NE] business operations remains low,” the grid operator said in an email to members.
SPP told RTO Insider it is continuing to work with health officials to monitor COVID-19 and influenza threats and respond appropriately. The RTO said it would use its communication channels and social media to alert its stakeholders of any steps being taken.
On Thursday, SPP emailed its stakeholders to say it had stopped some international travel, but that it had not cancelled meetings or placed restrictions on domestic travel to and from its offices. The RTO encouraged those attending SPP business meetings who feel ill or who are restricted by their organizations from traveling to use its web and teleconference options.
“We have a robust emergency management and business continuity plan that exists to maintain uninterrupted provision of our critical services,” SPP’s Derek Wingfield said. “Our goal is to ensure both the health and safety of our employees and the continued reliability of the grid.”
A bipartisan energy bill being debated by the Senate is providing FERC critics an opportunity to seek changes to the commission’s quorum rules and authority.
Democratic senators have proposed at least seven FERC-related amendments to the American Energy Innovation Act (S. 2657) introduced by Sens. Lisa Murkowski (R-Alaska) and Joe Manchin (D-W.Va.), the top members of the Senate Energy and Natural Resources Committee. (See Murkowski, Manchin Offer Bipartisan Energy Bill.)
The amendments would end tolling orders that can indefinitely delay judicial review of commission rulings; create a consumer advocate’s office; seek to improve interregional transmission planning; and increase public input on natural gas pipeline siting.
Late Monday, however, the entire bill appeared in jeopardy when the Senate refused to end debate following a dispute over Democrats’ attempt to add language on energy efficiency and reducing the use of hydrofluorocarbons (HFCs) in refrigerators and air conditioners, The Hillreported.
Senate Minority Leader Chuck Schumer (D-N.Y.) also threatened to filibuster the bill over Republicans’ opposition to an amendment on climate change.
“I am incredulous the Senate did not vote to invoke cloture … after a year of regular process in the Energy and Natural Resources Committee,” Murkowski said in a statement Monday night. “It is beyond frustrating to have our bill, which contains priorities from more than 70 Senators, held up by an unrelated dispute that was never part of our discussions in the lead-up to this floor process. We will regroup and look for a path forward but finding one will require members to be more reasonable and accommodating than they have been in the last week, and certainly more so than they were today.”
Reversing PJM, NYISO Rulings
Two proposed amendments target FERC’s recent rulings in PJM and NYISO.
Amendment 1447 would expand Section 201b(1) of the Federal Power Act — which prevents FERC from regulating generation or local distribution — by also prohibiting the commission from regulating “state regulations, including financial incentives or fees, promoting the development of facilities for the generation of electric energy, unless the regulation directly targets a wholesale rate or charge subject to the jurisdiction of the commission.”
It was sponsored by Schumer, Sen. Kirsten Gillibrand (D-N.Y.), Maryland Democrats Chris Van Hollen and Ben Cardin and Pennsylvania Democrat Bob Casey.
In addition, Van Hollen, Casey, Sen. Cory Booker (D-N.J.) and Sen. Sheldon Whitehouse (D-R.I.), proposed amendment 1437 to revise FPA Section 205. It would bar FERC from approving a rate that “prevents a covered state public policy resource from being able to clear in a capacity auction or an energy market auction.”
Tolling Orders
Amendment 1448 by Schumer, Gillibrand, Cardin and Van Hollen would amend the FPA and Natural Gas Act to prevent FERC from indefinitely delaying judicial review of FERC decisions.
The FPA and NGA currently deem rehearing requests as denied if the commission fails to act within 30 days. FERC routinely issues tolling orders — granting rehearing “for the limited purpose of further consideration” — to give itself more time to rule on the merits. The D.C. Circuit Court of Appeals will hear oral arguments March 31 in a case challenging the practice. (See Consumer Advocates Appeal MOPR Order to DC Circuit.)
The amendment would require the commission to rule on the merits of rehearing requests within 30 days after issuing a tolling order to meet the current 30-day deadline. FERC’s failure to issue a ruling on the merits by the deadline would mean the rehearing request was denied and is ripe for review by the federal courts.
Quorum
Schumer also filed amendment 1449, which would prevent the majority political party on the commission from having more than a one-member voting advantage over the minority party. Current law limits the majority to three seats on the five-member commission.
FERC currently has two Republicans and one Democrat, but the margin could grow to 3-1 with the addition of Republican James Danly, currently the commission’s general counsel. On Tuesday, the Senate ENR Committee voted 12-8 to send Danly’s nomination to the commission for consideration by the full Senate.
Democrats are upset that President Trump has failed to name a nominee for the seat left open by the departure of Democrat Cheryl LaFleur in August. Schumer is backing Allison Clements, clean energy markets program director for the Energy Foundation, for the Democratic seat. (See related story, Danly Re-advances, but not Without Drama.)
Interregional Planning
Sen. Martin Heinrich (D-N.M.) proposed amendment 1330 to order FERC to complete a rulemaking within two years to increase the effectiveness of interregional transmission planning.
It would require FERC to assess the effectiveness of existing planning processes at identifying interregional transmission projects providing “economic, reliability, operational and public policy benefits.” The commission would have to consider changes to “ensure that efficient, cost-effective and broadly beneficial interregional transmission solutions are selected for construction” while considering the public interest; the integrity of markets; the protection of consumers; and cost allocation methodologies that “reflect the multiple benefits provided by interregional transmission solutions.”
Siting of Interstate Natural Gas Pipelines
Amendment 1386 by Sen. Jeanne Shaheen (D-N.H.) cites a 2013 Government Accountability Office report that quoted public interest groups and state officials who said members of the public need more opportunities to comment on proposed pipeline projects.
It calls on FERC to “prioritize meaningful public engagement and coordination with state and local governments to ensure its processes remain transparent and consistent; and to ensure the health, safety and security of the environment and affected communities.”
Office of Public Participation and Consumer Advocacy
Shaheen also proposed amendment 1387 to create an Office of Public Participation and Consumer Advocacy within FERC.
It would have authority to intervene in administrative, regulatory or judicial proceedings on behalf of energy customers regarding natural gas siting, infrastructure development and the rates, charges, prices, tariffs or service of public utilities and natural gas companies under FERC jurisdiction. It would also be able to submit amicus briefs to federal courts or regulatory agencies.
The office would take input from a Public and Consumer Advocacy Advisory Committee subject to the Federal Advisory Committee Act.
The Senate began debate on the Murkowski-Manchin bill Wednesday. On Thursday, Murkowski filed a modified substitute amendment to S. 2657 (originally a geothermal bill) that included her bill and 18 amendments — nine each from Republican and Democratic senators.
Among them were calls for a study on putting microgrids in wildfire risk areas; adding reduction of transportation-related carbon emissions to state energy conservation plans; a National Academies study of net metering; a program to prepare veterans for careers in the energy industry; and an R&D program to improve gas turbine efficiency.
None of the FERC-related measures was included.
“Our bill now addresses priorities from nearly 70 members of the Senate,” Murkowski said in a statement. “We have made it even better than it was, and now we need to move on to our final steps.”
The Edison Electric Institute (EEI) and Open Access Technology International (OATI) have asked FERC to clarify its order requiring public utilities to adopt the North American Energy Standards Board’s (NAESB) Standards for Business Practices and Communication Protocols for Public Utilities.
In its filing, EEI suggested that some language in FERC’s order might conflict with the commission’s “Dynegy redirect policy,” a concern echoed by OATI. This policy states that “transmission customers receiving firm transmission service and requesting redirect rights do not lose rights on the original path until the redirect request is accepted by the transmission provider, confirmed by the transmission customer and passes the conditional reservation deadline.”
In its Notice of Proposed Rulemaking, FERC had requested comment from stakeholders on whether the policy should be extended to “conditional and non-firm transmission redirects”; its February order noted that “virtually all the comments received on this subject” opposed the extension. As a result, the commission found that “limiting the Dynegy policy to redirects from unconditional firm service is reasonable.”
However, EEI and OATI warned that the order’s statement that the policy “will extend to neither short-term firm point-to-point transmission service nor non-firm transmission service” seems to create an internal inconsistency when applied to redirect requests from “unconditional short-term firm point-to-point … parent reservations.” Similarly, OATI said that the order “introduced ambiguity as to exactly which unconditional firm parent reservations were to be afforded the protections under the Dynegy policy.”
As a result, both commenters requested that FERC clarify how the policy will apply to short-term redirect requests. OATI also requested further review of FERC’s decision to exclude text in the preambles to WEQ-001-9 and WEQ-001-10 that restricts redirects to unconditional parent reservations and allows transmission providers to specify the reservation process for redirects, saying that the omission creates confusion by implying that the standards are meant to apply to “both unconditional and conditional firm parent reservations.”
Longer Implementation Timeline Requested
Along with concerns over redirect policies, EEI and OATI also sought more information on implementation of the NAESB standards. In its order, FERC mandated that public utilities make compliance filings by May 26 and complete their implementation of the standards by July 26.
But the respondents observed that these deadlines seem to contradict the standards themselves. Specifically, WEQ-002 already includes an implementation plan requiring full compliance “no later than 18 months after adoption [of the standards] as regulation.” Both OATI and EEI requested that FERC defer to the 18-month implementation timeline. OATI in particular asserted that the NAESB standards represent “a very complex business process” that public utilities will not be able to implement and test adequately within five months, while EEI suggested that the commission allow utilities to request a waiver of its deadlines if needed.
Dominion Energy asked FERC on Friday to reconsider its conclusion that self-supply resources suppress PJM capacity prices, contending the commission’s position is inconsistent with an exemption it granted similar resources in NYISO.
Dominion asked to supplement its Jan. 21 request for rehearing of the commission’s December order requiring PJM to apply the minimum offer price rule (MOPR) to all state-subsidized resources (EL16-49, EL18-178). (See PJM MOPR Rehearing Requests Pour into FERC.)
PJM had asked FERC to approve its previous exemption for self-supply resources owned by public power entities (cooperative or municipal utilities), vertically integrated utilities subject to traditional bundled rate regulation and load-serving entities that serve retail customers. In 2013, the commission ruled that “a self-supply LSE that owns or contracts for a large proportion of the capacity needed to meet its load has no reason to finance uneconomic entry given that such a strategy would not be profitable.” (See Is Self-supply Suppressing Prices?)
Dominion’s 1,661-MW Possum Point Power Station in Dumfries, Va., can burn natural gas and oil. | Dominion Energy
But FERC’s Dec. 19 order found that self-supply resources were subsidized because the energy and capacity they produce are purchased through state-directed procurements.
Dominion said in its rehearing request that the commission failed to justify making self-supply capacity subject to MOPR and ignored evidence that self-supply does not suppress prices.
In the Feb. 20 NYISO order, however, the commission accepted a self-supply exemption proposed by NYISO on terms similar to PJM’s proposal, Dominion said (EL16-92, ER17-996). (See FERC Narrows NYISO Mitigation Exemptions.)
“In the 2020 NYISO order, the commission accepted in part, subject to condition, the NYISO’s proposed self-supply exemption, the NYISO’s proposed net short and net long threshold criteria for the self-supply exemption, and generally all other aspects of the NYISO’s proposed self-supply exemption. … Yet, the commission made no effort to distinguish between its findings regarding the NYISO’s proposal and its nearly opposite findings in this proceeding made just two months prior,” Dominion said.
Dominion Energy owns 27,100 MW of generation. | Dominion Energy
“If the NYISO’s proposal is adequate and the commission continues to find that self-supply entities do not possess the incentive to artificially suppress pricing in the NYISO market, the commission should likewise find that, with well defined guardrails, self-supply entities in PJM also continue to lack the incentive to artificially suppress prices in PJM capacity markets. Moreover, the commission should permit the self-supply exemption in substantially the same form originally proposed by PJM in this case,” Dominion said. “The commission is obligated to provide its reasoning when departing from existing policy or precedent.”
A Dominion official told an energy conference last week that growing vertically integrated utilities such as Dominion may need to leave the capacity market if the ruling is not changed. (See related story, “A Maryland Capacity Auction? Dominion Going FRR?” Overheard at ACORE Policy Forum 2020.)
Dominion Energy Virginia, which owns 27,100 MW of generation, is planning to build 2.6 GW of wind generation off the coast of Virginia and is about halfway through a plan to add 3,000 MW of solar generation.
SACRAMENTO, Calif. — Gov. Gavin Newsom on Thursday reappointed Ashutosh Bhagwat and Angelina Galiteva to their fourth three-year terms on the CAISO Board of Governors.
Bhagwat is a law professor at the University of California, Davis, where he holds an endowed chair in freedom and equality. He has written about the California electricity crisis of 2000/2001 and lectures on constitutional law.
Galiteva is president of NEOptions, a renewable energy design and development firm. She was executive director of the Los Angeles Department of Water and Power and head of its green energy initiative from 1997 to 2003. Galiteva is an attorney with an advanced degree in energy law.
Both have served on the ISO’s board since 2011, when then-Gov. Jerry Brown first appointed them.
In the last nine years, CAISO integrated large amounts of renewable resources, established the Western Energy Imbalance Market and, starting last year, became the reliability coordinator for much of the West.
“The executive leadership team is looking forward to working with the newly reappointed board members, and the entire Board of Governors, as we continue to refine and showcase our vision of a clean, low-carbon power grid,” CAISO CEO Steve Berberich said in a statement. “We appreciate Gov. Newsom’s engagement in the board appointment process and his confidence in our team and our mission.”
The State Senate must confirm the appointments, but Bhagwat and Galiteva will continue to serve, effective immediately. Their terms expire Dec. 31, 2022.
The five-member CAISO board also includes Chair David Olsen, who was first appointed in 2012 and reappointed in January 2019. For the decade prior to his appointment, Olsen was managing director of Western Grid Group, an organization of former state energy officials advocating for grid modernization and clean energy. He was CEO of outdoor clothing manufacturer Patagonia in the late 1990s.
Last year, Newsom appointed University of California, Berkeley business professor Severin Borenstein and business promoter Mary Leslie to the board.
Borenstein is faculty director of the Energy Institute at Berkeley’s Haas School of Business. Leslie was president of the Los Angeles Business Council since 2001 and deputy mayor of Los Angeles under Mayor Richard Riordan in the 1990s. (See Newsom Names New CAISO Governors.)
FERC on Friday rejected Tariff revisions filed jointly by ISO-NE and the New England Power Pool to clarify that resources retained for fuel security reasons will not be retained for other reasons once the fuel security retention period ends (ER20-89).
“While we favor limiting the scope and length of out-of-market actions, we seek to balance that objective against the ability to address reliability concerns,” the commission said. “The proposal here would remove ISO-NE’s ability to retain a fuel security resource to address potential future transmission reliability issues that may arise simply because the resource in question had been retained previously for fuel security.”
The proposed Tariff revisions prompted a protest from Exelon, which owns Mystic 8 and 9, the planned retirement of which prompted the RTO and NEPOOL to seek to retain resources for regional fuel security in the first place.
Exelon argued that the proposal “unduly discriminates” against fuel security resources in general and the Mystic units in particular. The company contended that “the proposal results in different treatment for transmission security resources based on whether the resource has previously provided fuel security service, despite the fact that transmission security and fuel security resources are similarly situated for purposes of retirement,” FERC noted.
Mystic Generating Station, on the Mystic River in Everett, Mass.
The company further argued that if ISO-NE had requested to retain the Mystic units for transmission security rather than fuel security, the Tariff would allow for possible cost-of-service compensation until the transmission reliability need was addressed. However, the fuel security agreement restricted Mystic’s options in a way not faced by other resources, effectively penalizing it for entering into an agreement for fuel security instead of transmission security.
Exelon also pointed to delays in the completion of ISO-NE’s Energy Security Improvements (ESI) initiative. FERC last August granted the RTO a second extension to file the plan, until April 15. The NEPOOL Participants Committee expects to vote on the new fuel security market design at its April 2 meeting.
The RTO’s aspirations to develop a long-term market-based fuel security solution and competitively develop transmission solutions for the Boston area do not constitute substantial evidence that it is just and reasonable to eliminate a reliability safeguard, Exelon said.
In rejecting the revisions, the commission found that “instead of retaining such a resource for transmission security (as it would any other resource that was not previously retained for fuel security), ISO-NE would need to address this issue through either real-time operating procedures, such as shedding load, or through the use of a gap [request for proposals] solicitation.”
FERC said it remains open to ISO-NE and NEPOOL “proposing to revise the relevant reliability review timeline to ensure that resources are not unnecessarily retained when transmission solutions will be in place in time to address identified reliability needs.”
However, the commission did not find just and reasonable “the proposal to make a resource retained for fuel security ineligible to be further retained for transmission reliability purposes.”
FERC last month rejected a related request to roll back the sunset date for a Tariff provision that allows the RTO to retain a resource for fuel security reasons (ER20-645). (See FERC Rejects ISO-NE Fuel Security Sunset Rollback.)
CARMEL, Ind. — MISO might revise and refile a failed proposal designed to set penalties for non-capacity resources that exercise market power through physical withholding.
“We’ve reached out to the IMM to get their view of things,” Executive Director of Market Operations Shawn McFarlane said at the Market Subcommittee’s meeting Thursday. “It seemed like FERC was colloquially ‘not on board.’”
McFarlane said the commission thought the proposal placed too much burden on generators to prove when their operations would be uneconomic. “We’d have to address that issue before a refile,” he said.
Dustin Grethen, MISO market design adviser, said the RTO has observed congestion and binding constraints that could be relieved by non-capacity resources.
MISO will continue to monitor those instances over the upcoming months while it considers the possibility of a future proposal, Grethen said.
MISO counsel Daniel Malabonga characterized the filing’s aims as “uphill in the first place.” He said the RTO will have to find new “middle ground” should it choose to refile.
Potential Dollar Limit on Some Resettlements
MISO’s settlements team is considering subjecting the issuance of certain market resettlements to a dollar value minimum.
Director of Settlements Laura Rauch said the costs of accounting for resettlements as a result of a continuing error (defined as a long-running error that’s not easily discovered) can exceed the cost of the resettlements themselves. For instance, she said a $5,000 resettlement can be entirely eaten up by the “accounting costs of tracking the resettlement charges for all other impacted parties.”
After performing corrective resettlements, MISO has redistributed amounts to impacted market participants ranging from $20 to $1 million, with a median of less than $50,000. In some cases, MISO collects the resettlement amounts from redistribution from up to 220 market participants.
Rauch said the dollar minimum would not apply to most of MISO’s settlement adjustments — which are resolved quickly with corrections settlement statements — or to stakeholder disputes over settlements submitted within the 120-day deadline from the trade date. MISO will also continue to pursue FERC-required resettlements, she said.
Rauch asked stakeholders to suggest a reasonable dollar threshold for resettlements resulting from continuing errors. She said she would likely return to the subcommittee for its April meeting with a proposal.
Spinning Reserves May Get Embedded Deployment Cost Recovery
MISO may give its spinning reserves a simpler means of recouping costs for providing energy, stakeholders heard at the meeting.
The current clearing process for selecting spin service resources doesn’t incorporate costs the resources incur when deployed as contingency reserves, including the shutdown costs for demand response participants. Resources cleared and deployed for spin service “may have real deployment costs that are not recovered under MISO’s current Tariff provisions,” the RTO said.
MISO adviser Michael Robinson said the current selection process is “inefficient, creating uplifts and distorting price signals.” The RTO could include expected deployment costs when it selects spinning reserves, he told stakeholders.
Spinning reserves are resources that remain online and synched to the grid, meant to be available within 10 minutes. MISO has not included energy deployment costs for spinning reserves since it began its ancillary services market in 2009. Spinning reserves committed by MISO are guaranteed to be made whole to their production costs; however, assets committed outside of the RTO’s market don’t have the same make-whole guarantee.
“In some cases, we make the units whole through uplift, and that’s not good. In other cases, we don’t make the resources whole, and that’s not good from the owner’s perspective. … We’d like to sort this out and get all that embedded in a market price,” Robinson said.
He said the gap hasn’t been burdensome so far but could become an issue as more varied types resources offer spinning reserves.
Customized Energy Solutions’ Ted Kuhn said MISO may not currently be selecting the best prices in spin service because it cannot see which assets have high deployment costs. Robinson agreed and said higher deployment costs have become more prevalent in recent years.
MISO stakeholders are requested to provide their opinions on the best means of embedding production costs. The topic will be taken up again at next month’s MSC.
