FERC on Tuesday approved Tariff revisions refining ISO-NE’s rules for conducting competitive transmission solicitations, a process that may be tested for the first time this month (ER20-92).
The changes increase the information to be provided by transmission developers and provide more detail on the evaluation criteria the RTO will use.
ISO-NE plans to issue its first competitive transmission solicitation — for solutions to non-time sensitive needs identified in its 2028 Boston Needs Assessment Update and Needs Assessment Addendum — as soon as this month. The request for proposals (RFP) will address transmission facility overloads under peak load conditions in the Boston area and system restoration concerns with the underground cable system in the area. (See “Needs Update Reduces Thermal Violations” in ISO-NE IDs $8.7M Tx Fix for Boston Area.)
115-kV transmission and above in Boston area | ISO-NE
Two-Step Process
The RTO will use a two-step process, with developers first submitting plans describing a project’s interconnection to the existing transmission system, estimated costs, financing and any cost containment measures.
ISO-NE will review the proposals, with input from the Planning Advisory Committee (PAC), to ensure they address the identified needs and are feasible and cost competitive. The RTO will then identify finalists who will be required to provide additional details to guide its selection of the preferred solution.
The RTO also created a new pro forma agreement between it and the selected qualified transmission project sponsor (QTPS) spelling out the development, design and construction of the project, including project milestones, status reports and cost containment measures. The RTO’s agreement is modeled on the designated entity agreement PJM uses in its competitive transmission solicitation process.
The changes also include a clause allowing the RTO to cancel an RFP if new assumptions modify or eliminate the identified need.
Outside the Scope
The commission dismissed as outside the scope of the proceeding the Connecticut attorney general’s protest arguing that while the RTO’s proposals are an improvement, they are insufficient to ensure truly competitive procurements and thus not compliant with Order 1000. The AG contends the process does not adequately consider non-transmission alternatives (NTAs), such as battery storage and transmission line ratings, and asked the commission to order RTOs to report annually or biannually on their adoption of NTAs or other grid management options.
The Massachusetts Attorney General asked FERC to determine ways to improve the ability of NTAs to compete with traditional transmission solutions.
Transmission developer New England Energy Connection (NEEC), an affiliate of LS Power, asked the commission to encourage ISO-NE to establish a stakeholder process to address broader issues in the competitive solicitation process after the 2019 RFP.
NEEC said an “over-reliance on the immediate need designation” is a significant factor in the lack of competitive windows in New England to date and the region should consider replacing its sponsorship model with competitive bidding.
FERC said the Massachusetts and Connecticut proposals were outside the scope of the proceeding because the proposed Tariff changes don’t address NTA participation.
“Although we find that NEEC’s request to encourage ISO-NE to establish a stakeholder process to address broader issues in the existing transmission competitive solicitation process is also outside the scope of this proceeding, we note ISO-NE’s intention to hold stakeholder discussions following the 2019 RFP to consider additional changes to the competitive solicitation process,” FERC wrote.
ISO-NE spokesman Matt Kakley said the RTO does not have a firm date for release of the RFP, “though we are hoping to get it out this month.”
AUSTIN, Texas — Beth Garza announced Tuesday she will step down as director of ERCOT’s Independent Market Monitor, a position she has held since 2014.
Garza broke the news during her bimonthly report to the ISO’s Board of Directors, telling stakeholders, “My time as director of the IMM has come to an end.”
She told RTO Insider it became evident to her that Texas’ Public Utility Commission, which has oversight of the IMM, wanted someone else to fill the director’s position.
“I support the commission’s decision to have the IMM director they want,” she said. “I’m disappointed that I’m not the person for that role.”
The PUC, ERCOT and Potomac Economics, Garza’s employer for 11 years, are all parties to the IMM’s contract. However, that four-year contract expires at the end of the year.
The PUC requested proposals for a new contract and is currently in negotiations, with the hope of reaching an agreement before the end of year, said Andrew Barlow, the commission’s external affairs director. Potomac Economics is among those bidding for the new IMM contract.
Garza said the PUC would be “willing” to award the contract to Potomac Economics but with the understanding she needed to be replaced. She hinted at disagreements between the PUC and the IMM.
“There’s a built-in tension between the commission’s role to provide oversight and direction to the IMM and the IMM’s role to provide independent analysis,” Garza said. “That tension interacts squarely at the director’s position.”
ERCOT directed media inquiries to the PUC, which did not offer comment beyond Barlow’s.
Potomac and Garza have been fierce advocates of real-time co-optimization. The PUC earlier this year directed ERCOT to implement the market tool, which procures both energy and ancillary services every five minutes to find the most cost-effective solution for both requirements.
Garza said she would remain at Potomac in a non-public role.
The Washington, D.C.-based firm also provides market monitoring for ISO-NE, MISO and NYISO.
PJM said it was a quiet operations month in November with zero spinning events, nine post-contingency local load relief warnings (PCLLRWs) and one reserve sharing event with the Northeast Power Coordinating Council (NPCC).
The load forecast error came in at 2.22% — well below the 3% margin and a far cry from the unsolved load deviation witnessed during the first two days of October. (See “DR Load Forecast Error Unsolved” in PJM OC Briefs: Nov. 12, 2019.)
PJM’s 2019 Load Forecasting Error margin (Achieved 80% of the time)| PJM
Fall Restoration Drills
PJM said its fall restoration drills conducted between Sept. 25 and Oct. 30 went well, with only minor complaints about the simulator and event duration.
Some 143 companies and 52 PJM operators participated. All of the RTO’s nuclear plants received off-site power under the four-hour deadline with one exception, due to simulator issues.
Companies said the drill should last two days and requested more practice on cross-zonal procedures. The simulator itself took some getting used to, Brian Lynn told the Operating Committee on Tuesday.
The spring drills are scheduled for May 19 and May 20.
Manuals Endorsed
The committee endorsed:
Manual 38: Operations Planning — Periodic review to conform NERC standard references, remove the PJM-NYISO seasonal operating study and update Attachments A and B.
Manual 14-D: Generator Operational Requirements — Remove references to PJM’s Tariff regarding the definition of “generating facility.” The term is not defined in the Tariff, pending a ruling on FERC Order 845 compliance.
ST. PAUL, Minn. — Below is a summary of actions taken at the Midwest Reliability Organization’s (MRO) Annual Member and Board of Directors Meeting last week.
Revised the name of the Organizational Group and NERC Representative Oversight Committee to Organizational Group Oversight Committee.
Updated Policy and Procedure 1 regarding MRO Independent Directors’ removal of outdated language. It also raises the annual retainer from $56,500 to $79,625 while eliminating the $6,000 annual retainer per committee.
Revised MRO’s General Finance Policies to define intangible assets and the procedure for carrying them on the balance sheet. The change was suggested to all regional entities by NERC, with the goal of encouraging a low debt-to-asset ratio.
In addition, members voted to appoint Lam Chung — currently vice president and engineer of strategy, innovation and finance – as treasurer, thrift savings plan trustee and corporate compliance officer effective Dec. 5, replacing Ken Gartner. The Board of Directors agreed to elevate current Vice Chair Thomas Kent from Nebraska Public Power District to Chair effective Jan. 1, replacing Silvia Mitchell of NextEra Energy. Kent’s role will be filled by Brad Cox of Tenaska Power Services.
MRO Praised for Security Work
NERC Chair Roy Thilly praised MRO for taking a proactive approach to security, singling out the Security Advisory Council (SAC), established this year, as a particularly valuable resource. The SAC advises MRO’s Board of Directors, staff and registered entities on cybersecurity; physical security; and SCADA, EMS, substation and generation control systems; and promotes awareness of these subjects.
The SAC’s information-sharing functions are of particular interest to NERC, given the decision earlier this year to merge NERC’s Operating, Planning and Critical Infrastructure Protection committees into a new panel, tentatively called the Reliability and Security Technical Committee (RSTC). (See NERC Board OKsCommittees Merger.) A group like the SAC can help to fill any gaps left by the dissolution of the existing committees while the new group starts up, Thilly said.
“I get feedback from [NERC CEO Jim Robb] and from the [Electricity Information Sharing and Analysis Center] that they really like that model as a way of engaging the regions on the cyber issue, which has been difficult,” said Thilly. “I know Jim would like to see [that model] replicated in the other regions. So, thank you for that, and help us do that because with CIPC going away, there’s a forum function and information sharing function … that need to be captured.”
McMullen Honored on Retirement
MRO CEO Sara Patrick called on members to recognize Michael McMullen, the director of regional operations at MISO, who will retire this year after 13 years of service. McMullen was the inaugural chair of MRO’s operating committee and currently serves on the Reliability Advisory Council, formed earlier this year. In addition, he has served on several technical committees and groups at NERC.
“He was instrumental in standing up the operating committee and remained a committee member, providing leadership and technical guidance, for its eight-plus years of existence,” Patrick said. “We sincerely appreciate Mike’s dedication and contributions to the success of MRO and reliability of the bulk power system.”
Thanking the members for their recognition, McMullen said it was a pleasure to have served in MRO and he was confident in the organization’s work going forward.
“I think my biggest vote of confidence is that in my next stage, I do not own a generator and I do not plan on getting one,” McMullen said. “I know that we’ll remain reliable.”
MRO’s next board meeting will be held in St. Paul on April 1-2.
Six months ago, I discussed how PJM’s capacity market (the “Reliability Pricing Model”) reversed a deteriorating reserve margin, efficiently assuring resource adequacy years into the future while integrating demand response and renewable resources.[efn_note]http://energy-counsel.com/docs/Fuel-Security-PJM-Does-Seinfeld.pdf.[/efn_note]
RPM has been a bulwark against bailout claims for coal and nuclear units by enabling a transition from dirty coal and inefficient nuclear to cleaner natural gas and clean renewables. And the Capacity Performance refinement to RPM incents resources to be available when needed, further enhancing reliability.[efn_note]https://www.pjm.com/-/media/library/reports-notices/capacity-performance/20180620-capacity-performance-analysis.ashx?la=en (see for example conclusion at pdf page 34).[/efn_note]
Notwithstanding all this, the coal/nuclear bailout lobby created doubt about the “security” of generation resources that lack fuel on-site, i.e., natural gas generators without oil storage backup and, of course, renewable (intermittent) resources generally. This led to new buzzwords, “resiliency,” as something other than “reliability,” and resulted in a broad inquiry into “fuel security” at PJM.
“Between 2012 and 2016, there were roughly 3.4 billion customer-hours impacted by major electricity disruptions. Of that, 2,382 hours, or 0.00007% of the total, was due to fuel supply problems (Figure 1). Interestingly, 2,333 of those customer hours were due to one event in Northern Minnesota in 2014. And it involved a coal-fired power plant.”
Thanks again, Rhodium Group, for that great emperor-has-no-clothes exposé.
Cause of major electric system disturbances 2012-2016 | Energy Information Administration and Rhodium Group
Creating a Problem
So how could there be a “fuel security” problem? PJM acknowledged last summer that there is no current problem. But it created worst-case scenarios for a potential problem in the future, say 2023-2024.
PJM created 324 scenarios, and in some of the most extreme, it found load shedding (outages) could occur.
In the worst of the worst-case scenarios, PJM found that there could be 83 hours of load shed for an average of 2,452.8 MW. Now, 83 hours sounds like a lot, but we need to remember that load/demand during this peak period is around 140,000 MW. So if load shed is spread across the system, it’s an average of 1.5 hours for any given customer.[efn_note]The math is 83 load-shed hours times average load shed of 2,452.8 MW divided by 140,000 MW of peak load.[/efn_note] So this worst of the worst-case scenarios was tiny.
Now, how likely was this worst of the worst-case scenarios to occur in any given year? For starters, it was based on a one-in-20-year extreme-winter condition. And it was based on a “high pipeline disruption,” meaning the entire loss of pipeline flow in a right of way. This is an extremely rare event and has never caused a major detrimental gas supply loss to PJM generation,[efn_note]Please see detail and supporting reference in footnote 5 of my prior column. By the way, contrary to a claim made at a PJM task force meeting in the summer, in the 1994 “cold wave,” firm customers were not curtailed because of loss of gas supply. This is shown on page 6 of this NERC report, https://www.nerc.com/pa/rrm/ea/February%202011%20Southwest%20Cold%20Weather%20Event/NERC%201994%20Cold%20Wave%20Report.pdf.[/efn_note] but being very conservative, one could assume a one-in-10-year chance of that both happening in PJM and happening in the winter. Now, what’s the chance of that disruption occurring at the same time as the extreme 14-day winter condition? About 1/6, because 14 days are about one-sixth of a three-month winter period.
OK, here’s the math: 1/20 x 1/10 x 1/6 = 1/1,200. Yes, once every 1,200 years, we might experience a tiny 1.5 hours of outage for the average PJM customer. As I said about this six months ago, we should live so long.
Flash Forward to the Latest PJM Analysis
Over the last six months, PJM has run more scenarios: 1,180,380 to be exact. And, the best I can make out, the bottom line is the same.
Please note that the worst-case natural gas disruption is 4,945 MW (not 10,000 MW), for which the worst-case scenarios’ load shed is an even more trivial 10.4 MWh at an even more trivial VOLL cost of $156,000.
And even then, the VOLL costs involved are trivial.
But Wait, There’s More
These tiny risks (and tiny costs) overstate the real risk because of mitigation factors (that are admittedly hard to quantify).[efn_note]More detail and supporting references are in my prior column.[/efn_note]
Winter generation capability greater than summer capacity rating.
Load reduction in response to what would be very high energy prices in the worst-case scenarios.
Load reduction from public calls for voluntary conservation in the worst-case (emergency) scenarios.
Import assistance from neighboring regions such as occurred during the polar vortex.
Much Ado About Not Much
After extensive work by PJM, I think we’re where we began. Tiny risks layered on top of one another with tiny costs under worst-case scenarios.
LAS VEGAS — Stakeholders in CAISO’s Western Energy Imbalance Market last week reacted coolly to a proposal by Utah’s Deseret Power Electric Cooperative to tighten the market’s rules on transmission feasibility.
Deseret made the proposal during a Dec. 3 Regional Issues Forum panel that explored the differences between resource sufficiency and resource adequacy.
Don Tretheway, CAISO’s senior adviser for market design, said the difference is mainly timing.
“Resource adequacy is ensuring, on a forward basis, that you’ve contracted with sufficient steel in the ground so that you can meet your monthly peaks, your annual peaks. It’s really about … making sure that you can serve your load,” Tretheway said. “Resource sufficiency evaluations [are] a series of tests to ensure that someone’s not inappropriately leaning on an energy imbalance market [to meet demand] on a short-term basis.”
Four tests are conducted several times per hour to ensure an entity has met the agreed-upon threshold for participating in the EIM, Tretheway said, including a transmission feasibility test to determine if a participating entity has sufficient transmission capacity or unresolved transmission congestion. A balancing test determines if an entity’s actual load is within 5% of its base-schedule load for that hour, according to the ISO. A capacity test makes sure an entity has sufficient resources to meet its projected load, and a ramping test looks at ramping flexibility in 15-minute increments.
Clay MacArthur, vice president of power marketing at Deseret, said the EIM should adopt rules to address a loophole in the feasibility test that may allow entities to inappropriately spread around (socialize) the costs of congestion.
The transmission feasibility test, he said, determines if electricity can reach load within a particular balancing area. “It’s just a simple test that looks for congestion on the system,” he said.
The EIM’s design allows for the socialization of unforeseen congestion constraints within a given hour, but MacArthur said that’s not the problem. The feasibility test, he said, doesn’t account for an entity that knows it has transmission constraints but fails to report them ahead of time.
“They can just submit a base schedule that ignores that,” MacArthur told RTO Insider.
If an EIM entity knows of transmission constraints and includes them as part of its base schedule, it will bear the costs, MacArthur said. But if it doesn’t report its pre-existing constraints, the EIM’s market design can inadvertently shift the costs of those constraints to other load-serving entities across the market via neutrality charges. “If my schedules were balanced and somebody came into the hour with a known transmission infeasibility, why should I pay a share of that?” MacArthur said. “I can’t do anything to mitigate that.”
He proposed tariff language requiring EIM entities to “ensure that all financially binding base schedules submitted to the market operator are feasible and do not violate any known or expected transmission constraints.”
If they do, then the EIM would be required to notify the entity and give it a chance to revise its base schedule. If the entity doesn’t, then it may be subjected to congestion offset charges, the proposal says.
MacArthur called for greater market transparency by releasing suffiency test results and neutrality charges to market participants. That would allow for an objective evaluation of whether the market has a problem, he said.
MacArthur said he just meant “pass or fail” and “ones and zero,” without divulging privileged information.
His proposal prompted sometimes heated discussion between panelists and audience members, though not much agreement with MacArthur’s proposal.
Kelcey Brown, PacifiCorp’s manager of market and analytics, acknowledged her company had been a party to the problem described by MacArthur during the EIM’s early years, after starting operations in 2014, when utilities were still going through a learning curve. But she said the company put safeguards in place to ensure it wouldn’t happen again. She said she didn’t know of other examples.
“I’m not sure this is as big of an issue as Clay is referring to,” Brown said.
Petar Ristanovic, CAISO vice president of technology, agreed. “I don’t understand your concern, sir,” he told MacArthur.
MacArthur said the only way to determine the problems’ extent would be to have the information he’d asked for.
For about 30 minutes, panelists and audience members held a back and forth, trying to clarify or argue points.
At the end of the panel, Pam Sporborg, the new chair of the RIF, thanked the panelists “for a lively discussion,” and the audience responded with hearty applause.
MacArthur said that as the transmission customer of an EIM entity, Deseret couldn’t formally request further proceedings. CAISO could do that on its own, he said, or Deseret could file with FERC.
“That may be the only way to get it addressed,” he said.
VALLEY FORGE, Pa. — PJM Board of Managers Chairman Ake Almgren recognized fellow board member and interim CEO Susan Riley for her efforts to lead the RTO during a “challenging” season, telling the Markets and Reliability Committee on Thursday her work will continue under her successor, Manu Asthana.
“We are very excited to welcome Manu as our new president and CEO,” Almgren said. “He brings many decades of experience from the electric industry. Some were different experiences, but very relevant experiences. We are confident in his leadership moving PJM forward.”
Riley will resume her role on the board once Asthana arrives next month and will help ensure a smooth transition, some six months after former CEO Andy Ott resigned.
“Overall, I’m proud of the progress PJM has made to build stronger relationships with constituents, built on common respect and listening,” Riley said. “I know this great work will continue under Manu, and the board is anxious for him to start.”
FTR Vote Deferred
The MRC deferred voting on the first round of financial transmission rights credit-related policy changes after some stakeholders expressed concerns about the ripple effect the revisions may have on market design.
PJM said the recommendations, initially presented at the October MRC, will improve its credit risk policies after the Financial Risk Mitigation Senior Task Force delegated a more holistic FTR market review and possible design changes to a separate Market Implementation Committee task force. (See “FTR Market Rule Changes,” PJM MRC Briefs: Oct. 31, 2019.)
One change includes hosting five long-term FTR auctions a year, instead of three, in order to increase oversight and visibility into portfolio conditions so that more collateral can be collected if necessary. A second would alter the structure of Balancing of Planning Period auctions so that participants can buy and sell in any month of the year, rather than being limited to a specific quarter.
The PJM Industrial Customer Coalition (ICC) and the Consumer Advocates of PJM States (CAPS), however, said their longstanding concerns about increasing the auction frequency still stand.
“We think the monthly change bleeds into the market design element,” the ICC’s Susan Bruce said. “We’ve not fully thought through the impact of FTR underfunding. If we don’t have good information on transmission outages, we have concerns that it may affect underfunding and it may have implications for market design.”
“The advocate offices had very similar concerns,” said Greg Poulos, executive director of CAPS. “This is one item that has a little bit of impact on market design, something that consumer advocates have been asking to be reviewed since last year when the GreenHat [Energy] investigation was going on.”
PJM Chief Risk Officer Nigeria Poole Bloczynski reiterated that the independent GreenHat investigation recommended these very changes and said the task can revisit the issue, if needed.
“This is not a one-stop shop,” she said. “We will continue to make improvements.”
Riley chimed in, urging stakeholders to find consensus, saying, “If we could get to ‘yes’ on this, it would be a really big win.
“We thought long and hard about design changes versus credit changes,” she said. “I agree this straddles the two. I understand the concerns. Voting in favor of the increase in auctions enables better credit management. … It doesn’t mean that a review of this can’t be a part of market design changes that we consider.”
The MRC will reconsider the changes at its Dec. 19 meeting.
End of Life Issue Charge Endorsed
American Municipal Power and Old Dominion Electric Cooperative scored a big win on Thursday after stakeholders in a sector-weighted vote of 3.83 to 1.17 endorsed their joint problem statement and issue charge exploring end-of-life determinations.
While stakeholders rehashed a familiar debate before casting their votes over where PJM’s role in supplemental project planning should begin and end, the committee ultimately approved formalizing the discussion. (See Competitive TOs Push Against PJM Supplementals and “Stakeholders Mull Tx Asset Management Discussion,” PJM MRC Briefs: Oct. 31, 2019.) None of the 11 TOs voting endorsed the issue charge, according to PJM’s tally.
The MRC will continue working on the issue and recommend approval for any necessary governing document changes at its March meeting.
Comparative Cost Framework, Opportunity Cost Calculator in Flux
The MRC did not endorse revisions to the opportunity cost calculator or hear another first read of its pending comparative cost framework.
In the former issue, main motion sponsors Dominion Energy and Panda Power Funds are working toward a single-package compromise with PJM. (See “Opportunity Cost Calculator,” PJM TOs Wary of Cost Containment Rules.)
Real-time Values, Parameter-limited Schedules
Some capacity generators use real-time values (RTVs) to override unit-specific parameters for inappropriate reasons, PJM contends, causing unnecessary confusion during dispatch.
The original intent of RTVs was to provide a way for generation operators to communicate current operating capability to PJM if their resources couldn’t meet their unit-specific parameter limits or approved exceptions. Generators opt to use RTVs and forfeit operating reserve credits and make-whole payments as a result.
Except, some generators consistently use RTVs to increase notification time on parameter-limited schedules “to reflect the decision not to staff the resource during hours they project the resource will not be economic,” PJM said in a problem statement. The operational impacts mean that resources called in real-time based on their schedules cannot perform as expected.
PJM suggested a special session of the MIC to commence in 2020 to study the problem and recommend solutions.
Manual 03A: Energy Management System Model Updates and Quality Assurance — revisions stemming from a cover-to-cover periodic review and is phase one of an effort to update, reorganize and streamline the manual’s content.
Manual 13: Emergency Operations — revisions to incorporate the 2020 day-ahead scheduling reserve requirement.
Manual 15: Cost Development Guidelines — revisions that clarify that market sellers can only change the format of maintenance adders ($/MMBtu, $/MWh or $/start) during the annual review period for energy offer components. (See “Manual 15 Clarifications on VOM Costs,” PJM MIC Briefs: Nov. 13, 2019.)
PJM Manual 19: Load Forecasting & Analysis — a periodic review and documentation of the long-term load forecast.
Operating Agreement revisions that clarify the requirements for sharing forecasted unit commitment data to TOs for reliability studies.
Non-substantive changes to the Tariff, OA and Reliability Assurance Agreement that standardize cross references in all three documents.
Members Committee Elections
Members Committee Chairman Chuck Dugan, of East Kentucky Power Cooperative, led his last meeting Thursday before Vice Chair Steve Lieberman, of American Municipal Power, takes over next year.
Katie Guerry of Enel X will assume the role of MC vice chair. Brian Kauffman, also of Enel X, will take over as whip for the Other Supplier sector. Members also re-elected all existing whips, including:
Susan Bruce, PJM ICC, End Use Customers
Adrien Ford, Old Dominion Electric Cooperative, Electric Distributors
Michael Borgatti, Gabel Associates, Generation Owners
Sharon Midgley, Exelon, Transmission Owners
Load Management Test Rules
PJM’s new load management testing rules became official on Thursday after receiving endorsement from the MC.
In October, the MRC endorsed new load management and price-responsive demand testing rules for Capacity Performance resources after PJM said old measures failed to mimic real-life emergency procedures. (See PJM Stakeholders Support More Realistic DR Testing and “Stakeholders Urge Consensus on Load Management Testing Requirements,” PJM MRC/MC Briefs: Sept. 30, 2019.)
The new rules, effective with the 2023/24 delivery year, would give PJM authority over scheduling tests — instead of the resource itself — and provide advanced notification so participants can prepare. The changes would implement a three-step system that gives resources first notice of an upcoming test one week prior to the two-week testing window, with additional alerts by 10 a.m. the day before and the day of the scheduled test. There will be one test per year when there is no event, with half of resources tested in winter and the other half in summer.
Critical Infrastructure Resolution
Growing concerns over a pending Tariff attachment proposal from TOs that would create a new, confidential process to mitigate critical infrastructure reached a crescendo on Thursday when LS Power presented the first read of an advisory against the proposal.
Sharon Segner, vice president of LS Power, said her company believes the attachment conflicts with the OA because it will move forward without any vetting from the MC.
“We can’t veto or delay, but we can offer an opinion,” Segner said of the advising document. “It’s a voice that says the issues with the OA haven’t been addressed.”
At the heart of Segner’s argument is a belief that incumbent TOs don’t get exclusive rights to handling critical infrastructure on NERC’s CIP-014 list. Because the projects could carry significant regional implications, LS Power believes PJM should plan their mitigation. (See PJM TO Filing Stirs Up Transparency Concerns.)
“My company stands on the side of PJM,” she said. “My company believes that PJM is a world class transmission planner and, as a result of that, when it comes to national security, we believe PJM should be in charge.”
Incumbent TOs argue that NERC’s confidentiality standards — and their rights under PJM’s Attachment M-4 process — support their intention to file the mitigation plan at FERC without input from other sectors.
“There is no inconsistency between Attachment M4 and the OA,” said Pulin Shah, director of transmission strategy and contracts for Exelon. “The M4 process is not permanent. It will sunset in five years. There is a compelling need to move forward to address the loss of these substations.”
PJM maintained its neutrality in the debate and reiterated that all stakeholders agree about mitigating critical assets so they are no longer vulnerable to attack. (See PJM Remains Neutral in CIP-014 Debate.)
WASHINGTON — Last week was a busy one for the Solar Energy Industries Association.
The trade association held its annual policy summit at the Washington Plaza Hotel on Wednesday, on the eve of both the International Trade Commission’s midterm review of the Trump administration’s tariffs on imported solar panels and a Court of International Trade ruling affirming the exemption of bifacial modules from the tariffs.
On Thursday morning, SEIA held a rally outside of the trade commission’s headquarters in D.C., calling upon “solar workers, advocates and anyone passionate about fair solar trade policy” to attend and show support for ending the tariffs.
But Wednesday’s summit acted as a rally of sorts as well, as the solar investment tax credit expires at the end of this year, and legislation to extend it faces stiff competition for congressional attention amid impeachment proceedings and a Dec. 20 deadline to fund the government.
SEIA President Abigail Ross Hopper and keynote speakers urged attendees to be more active in contacting their representatives in Congress, particularly if those representatives are Republican.
The event opened with a speech from U.S. Sen. Catherine Cortez Masto (D-Nev.), who in July introduced the Senate version of a bill that would extend the tax credit for another five years. (The House version was introduced by Rep. Mike Thompson (D-Calif.)
“I need your help,” she said. “I need your help with some of my colleagues on the other side of the aisle. … Just make the call, if you haven’t already. They don’t need to publicly sign onto to the bill. … Just ask them to reach out to Mitch [Senate Majority Leader Mitch McConnell (R-Ky.)] and tell him why this is so important; why this needs to be passed; why this needs to be part of the package at the end of the day.”
Hopper echoed Cortez Masto’s call to action before she began her own speech, noting that she has found people in the industry to be timid when it comes to calling their representatives.
Many of the panels that followed focused on the best ways to lobby Republicans on solar energy policy. Speakers told their own success stories and described the gradually changing political landscape around renewable energy and climate change as encouragement for attendees.
Brandon Audap, vice president of government relations for Citizens For Responsible Energy Solutions, spoke about his efforts to lobby Republicans on climate change. His organization focuses only on trying to convince the GOP to enact “responsible, conservative solutions” to solve the problem.
As SEIA’s former director of federal affairs, Audap worked on the first tax credit legislation. Though “Republicans are more engaged on climate change,” there is no unified party stance on it, so his organization has had to canvas every elected official in Congress (250) individually, he said.
The good news for the industry: “The era of the Republican climate denier is coming to an end. It’s a dying breed. I could name a handful of serious climate deniers still.”
The bad news: “Don’t get me wrong. There’s plenty of guys who talk about climate change but have no intention of ever doing anything or advancing clean energy or tax credits.” He described a conversation he had with House Minority Whip Steve Scalise (R-La.), who told him, “‘Basically our guys are comfortable talking about airplanes and cow farts’” to mock the Green New Deal, a proposed resolution by Rep. Alexandria Ocasio-Cortez (D-N.Y.). Scalise’s reference came from a draft FAQ accidentally released by Ocasio-Cortez’s staff and later retracted, which Republicans have seized on to claim Democrats secretly want to ban air travel and hamburgers.
Audap said Scalise continued to say that “‘we’re going to ring all the political hay out of the Green New Deal and then get around to doing some serious policy.’”
The Economy, Stupid
The key then, panelists said, is to focus on the economic benefits of solar rather than the environmental ones.
Boyd Brown, one of the three partners in lobbying firm Tompkins, Thompson & Brown, described his firm’s successful efforts earlier this year to get South Carolina’s Energy Freedom Act passed into law. Both houses of the state legislature unanimously voted to pass the bill after its introduction in January, and Gov. Henry McMaster signed it into law in May. Among the provisions supporting solar power, the law permanently eliminated any caps on net metering. It also requires utilities to consider offering neighborhood community solar programs and for their integrated resource plans to fairly evaluate solar-plus-storage investments.
Brown, a former Democratic member of the South Carolina House of Representatives, laid out the challenge the solar industry faces on the lobbying battlefield. “You got to start peeling back this onion legislatively in these states where utilities have had the ability to run roughshod over the landscape over the last half-century,” he said. “You guys are really new to the game. And these folks are entrenched.” During the battle for the Energy Freedom Act, “I think there were like eight registered solar lobbyists in South Carolina, versus 67 utility lobbyists. So it was really a David-versus-Goliath match.”
South Carolina is also a rural, deeply conservative state, and concerns about climate change do not resonate with its residents, nor with those in similar states, multiple speakers said.
But the bill was spurred by and benefited from “a groundswell of pure hatred, really, for Big Nuclear and Big Energy” after the failure of SCANA’s expansion of the V.C. Summer nuclear plant, for which customers were left on the hook, Brown said.
“I’m not sure the words ‘climate change’ ever came out of my mouth when I was lobbying legislators in South Carolina. We talked about ‘energy freedom’; we talked about consumer choices; we talked about free-market and fair-market principles,” he said. “We were like, ‘Where are … the free markets that Republicans are supposed to believe in?’ So we were really able to … build a coalition around Democrats who believed in protecting the environment and Republicans who believed in fair-market principles.”
Corey Schrodt, legislative director for Rep. Francis Rooney (R-Fla.), advised attendees to “always localize” data they use in their messages, such as how much money constituents would save or how many jobs would be created. “When people see the numbers, especially big jumps in numbers, it catches their attention.”
He also stressed that every call, email and letter from constituents to their representatives is logged by staff. Each week, members of Congress are given statistics on how many messages they received and what issues they were about. “When you call in, it does get tracked. I can’t speak for every office, but I know that most offices use that information to their advantage in how they contact, how they message their own constituents.”
“Just put your best foot forward,” Audap said. “Don’t feel like you need to convince them on climate change to get their support for solar. That’s frankly irrelevant in a lot of offices, even some Democratic offices.”
Brandon Presley, Mississippi Public Service Commissioner and new president of the National Association of Regulatory Utility Commissioners, said for many residents, it’s not a matter of whether they believe in climate change. As an elected official in a poor district, “I represent people that worry about tonight how they’re going to feed their children, and how they’re going to put gas in the van to get them back and forth to school. And if I’m talking to them about climate change, although that’s important to me … [I’m] not making headway” with his constituents on solar policy.
Next Steps
The Court of International Trade on Thursday blocked the Office of the U.S. Trade Representative’s decision to revoke bifacial modules’ exemption from the solar panel tariffs, ruling that the office had violated the Administrative Procedure Act by not providing notice or opportunity to comment on a proposed decision.
“This is an important temporary reprieve for the bifacial module exclusion,” Hopper said in a statement after the decision. “We will continue to make the case that the … tariffs are harming the U.S. industry and the American consumer and that the bifacial exclusion was a fair and reasonable solution to the problem of domestic module supply shortages.”
The International Trade Commission will submit a report to President Trump on the tariffs as part of its midterm review by Feb. 7. At Wednesday’s summit, SEIA General Counsel John Smirnow said he thinks that the administration would eventually drop the tariffs, but he noted that Trump is notoriously unpredictable, especially when it comes to trade. The president’s tweets can lead to a drop in the stock market one day, and a rebound the next. “Anybody who tells you they know what is happening, what’s going to happen, dates certain … I’d be surprised if they actually do,” he said.
Erin Duncan, SEIA vice president of congressional affairs, asked Schrodt if a carbon tax or dividend would be the next big policy battle after the tax credit extension. Rooney is the only Republican supporter of the Energy Innovation and Carbon Dividend Act, which would tax the carbon emitted by fuels, deposit the revenue into a new Carbon Dividend Trust Fund and distribute the funds back to taxpayers.
“The unfortunate reality is that we’re headed into a campaign year,” Schrodt said. “I’ve been on the Hill long enough to know that we have from now to maybe until March to really do anything. It’s going to take smaller bites of the apple.”
Unmentioned by Schrodt is that Rooney is not running for re-election. His announcement came in October, one day after he told CNN he was open to investigating whether Trump should be impeached.
In his Nov. 21 response, van Welie noted the region’s efforts to integrate energy efficiency and demand response into the wholesale markets and addressed the senators’ concern that the Energy Security Improvement (ESI) market design project “further delays market reforms that recognize and facilitate state public policies to grow clean energy and address climate change.”
Van Welie said that although the ESI would benefit generators with stored fossil fuel, it could also provide opportunities for solar facilities with battery storage “or an offshore wind farm that operates at a high capacity factor during winter.”
“Rather than delaying the transition to a renewable future, ESI may actually accelerate the transition to reliable, zero-carbon renewable resources and storage technologies by recognizing and compensating these resources for the reliability attributes they provide,” van Welie wrote.
Price-responsive demand (PRD) energy market activity by month | ISO-NE
PC Chair Nancy Chafetz cut short the ensuing discussion, assuring stakeholders that they would have ample opportunity to voice their opinions at NEPOOL Technical Committee meetings over the coming months.
The PC also received a briefing from ISO-NE Director Brook Colangelo on the RTO’s cybersecurity work and its participation in last month’s GridEx V exercise. (See GridEx V Throws New Tech Curveball.)
COO Vamsi Chadalavada apologized for a computer glitch on Nov. 3 that caused the submission window for external transactions to close at 9 a.m. instead of 10 a.m.
The problem was due to a software error related to the daylight saving time transition, he said.
A new eMarket application had been placed in service Oct. 23, and a few participants could not enter or modify external transactions after 9 a.m. on Nov. 3, though the application performed as expected for all other supply offers and demand bids.
The day-ahead market was cleared with the offers and bids as of 10 a.m., per normal schedule, and the issue was fixed by early afternoon, Chadalavada said.
One stakeholder suggested that the RTO have extra staff on hand when transitioning to new software, just in case customers need service.
Natural Gas Prices Double from October
Chadalavada reported the energy market value for last month was $284 million, through Nov. 25, up $82 million from October 2019 and down $319 million from the same month a year ago.
Natural gas prices doubled from October to November, helping push average real-time hub LMPs to $35.52/MWh, up 74% from the prior month.
However, natural gas prices and LMPs were down 46% and 36%, respectively, from November 2018.
Average day-ahead cleared physical energy during the peak hours as a percentage of forecasted load was 99.6% during November, up from 98.8% during October, with the minimum value for the month of 95.7% posted on Nov. 8.
Daily uplift, or net commitment period compensation (NCPC) payments, in November totaled $3.3 million through the 25th, up $600,000 from October and down $1.3 million from the same month last year.
NCPC payments over the period were 1.2% of the energy market value.
Committee Officers Elected, Appointed
The Participants Committee re-elected Chafetz (Customized Energy Solutions); Vice Chairs Calvin Bowie (Eversource Energy), David Cavanaugh (Energy New England), Douglas Hurley (Synapse Energy Economics) and Tom Kaslow (FirstLight Power Resources); Secretary David Doot (Day Pitney); and Assistant Secretary Sebastian Lombardi (Day Pitney). In addition, Michael Macrae, energy analytics manager for Harvard Dedicated Energy, was elected vice chair representing End Users. He replaces Liz Delaney, who stepped down after leaving the Environmental Defense Fund to become director of wholesale market development for Borrego Solar.
ISO-NE appointed Mariah Winkler to serve as the new chair of the NEPOOL Markets Committee. Winkler has 10 years of experience in the Forward Capacity Market and led the Reliability and Transmission committees through discussions on issues such as FCM fuel security reliability reviews and competitive transmission solicitations.
The RTO appointed Emily Laine to replace Winkler as the new chair of the Reliability and Transmission committees. Laine also serves as secretary of the Demand Resources Working Group.
After 17 years serving the MC, most recently as chair, Alex Kuznecow will now serve as chair of the NEPOOL Working Groups.
2020 Budget
The PC unanimously approved a 2020 budget of $6,365,000 for NEPOOL, up $90,000 (1.4%) from 2019’s spending plan. NEPOOL expects to spend $6,625,000 by the end of this year, $350,000 above the approved budget. Most of the increase stems from $340,000 in above-budget spending for Day Pitney’s counsel fees, an 8.6% exceedance. Independent financial adviser fees and disbursements were $5,000 over budget (12.5%), and committee meeting fees were $30,000 more than planned (4.4%). They were partially offset by $25,000 in savings on the Generation Information System (-2.9%).
Breakdown of projected 2020 NEPOOL expenses | NEPOOL
Consent Agenda
The PC unanimously approved the Reliability Committee’s recommendation to revise ISO-NE Operating Procedure No. 2 to incorporate a new reference document and clarify the RTO’s role in approving the scheduling of planned equipment maintenance and outages.
It also approved the Markets Committee’s recommendation to change Market Rule 1 to sunset the fuel security reliability review provisions following Forward Capacity Auction 14, one year earlier than currently planned. The RTO said the review will not be necessary for FCA 15, when the ESI design is expected to be in place.
That compliance filing is due Jan. 21. Requests for rehearing of FERC’s order are due by Dec. 23.
Doot also mentioned the commission’s Notice of Inquiry in March for comments on whether it should change its method of calculating returns on equity for electric transmission and natural gas and oil pipelines (PL19-4). The proceeding has produced splits between transmission owners and load interests, as well as calls for new policies to increase the efficiency of existing lines and mandates on interregional planning. (See Tx Incentives NOI Brings Calls for Broader Reforms.)
He also drew attention to the D.C. Circuit Court of Appeals’ ruling Thursday indicating it will reconsider its precedent that allows FERC to issue “tolling” orders to indefinitely delay action on requests for rehearing. (See related story, DC Circuit to Reconsider FERC Tolling Orders.)
DENVER — Almost 500 members of the storage industry and assorted regulators, financiers, and utility and RTO representatives gathered last week for the GreenTech Media Energy Storage Summit 2019.
These are heady times for the industry. Seven states — California, Hawaii, Illinois, Ohio, Pennsylvania, Texas and West Virginia — have at least 50 MW of energy storage. In all, nearly three dozen states — blue, red and purple — have some sort of storage facilities, though some are 10 MW or less.
“The map is starting to fill out. That’s not a pattern you see with wind regions or solar regions,” said Daniel Finn-Foley, who leads consulting firm Wood Mackenzie’s energy storage team and focuses on front-of-the-meter energy storage applications.
Wood Mackenzie’s third-quarter market report indicates storage deployments were up 32% quarter-over-quarter to 430 MW, with 100 MW deployed during the period. Finn-Foley predicts the storage market will triple and come close to the $2 billion level in 2020, more than doubling to $4.2 billion in 2021, and that annual deployments will reach 5.4 GW by 2024.
“Energy storage is spreading across the United States in a way we haven’t seen other technologies do,” he said. “Storage has a value in whatever region it’s in. Years ago, we would have been confined to particular areas.”
Finn-Foley said the surging interest is driven by utility procurements and markets that see the need for storage’s fast-start abilities. That has led to a jump in grid operators’ interconnection requests.
“People are taking advantage of [storage’s] eligibility and hopefully making a little money. People are looking forward into these markets and making bets,” Finn-Foley said.
“No longer are developers going to the market and pushing up and saying, ‘Energy storage can do so much if you can give us a chance,’” he said. “It’s going to be the policymakers, the regulators, looking back down to the energy storage industry and saying, ‘We need you now, if we’re going to have these 100% renewable targets.’”
ISOs, RTOs Working to Accommodate Storage Resources
ERCOT is ground zero for storage’s growth, just as it has been for renewable energy. Though Texas currently classifies storage as a generation asset, developers have found the resource helps arbitrage wind power and meet demand peaks.
“We have a lot of people knocking on the door right now, a lot more than a few years ago,” said Paul Wattles, ERCOT’s senior analyst of market design and development. He recalled looking at the storage interconnection queue and seeing “almost nothing” in it.
Checking the numbers on a note in front of him, Wattles said ERCOT now has more than 5,600 MW of storage projects in the queue.
“I’m assuming that’s way back in the queue,” he said. “[Storage] is really in the category of noise, but with 5,600 MW in the queue, it won’t be noise for too long.”
Wattles said ERCOT’s scarcity pricing cap of $9,000/MWh, which the grid operator reached or neared for more than six hours this summer, “creates an opportunity for energy arbitrage, which I’m sure the batteries are well-qualified to take care of.” Storage providers are more likely to earn returns by providing ancillary service, he said, given the “island” grid operators need for fast-responding regulation service.
“Our challenge is to find friendly locations in ancillary service and the energy market for all types of resources,” Wattles said.
Storage in the ERCOT interconnection queue | Grid Monitor
SPP General Counsel Paul Suskie and James Pigeon, NYISO manager of distributed resources integration, joined Wattles on the panel as they discussed roadblocks to energy storage’s participation in U.S. markets and implementing FERC Order 841.
Suskie said SPP has largely complied with the rulemaking, designed to eliminate barriers to storage’s participation in wholesale electric markets. He said FERC wants the RTO to move energy storage requirements from the protocols into the Tariff, “which we’ll do.” (See FERC Partially OKs PJM, SPP Order 841 Filings.)
“What we’re seeing in the queue is solar and storage paired together” to take advantage of tax incentives, Suskie said. With more than 22 GW of installed wind capacity and wind bidding in at negative prices, getting paid to store off-peak power and then letting it back into the market “makes sense,” he said.
“We have more wind on the system than load,” Suskie said. “It’ll be an asset to store the wind energy. Wind can drop off dramatically, and we’re going to need more products to get us up quickly, and batteries will do that.”
NYISO is the only grid operator still waiting on an Order 841 compliance ruling from FERC. (ERCOT is not FERC-jurisdictional.)
“We’ve worked with stakeholders to see where we land in meeting all of FERC’s requirements and still find benefits while providing lowest-cost power,” Pigeon said. NYISO has proposed a model that allows storage resources to either blend into a higher aggregation with storage and demand response, or to come together as one, virtual, larger resource.
“By leveraging this new aggregation model, hopefully storage and DERs will be able to come together and help the ISO,” Pigeon said. NYISO currently allows four-hour storage resources and expects more interest, he said, which has led the ISO to propose two-, four-, six- and eight-hour increments.
“If the storage device decides it wants to run longer, it can do so at a discounted rate,” Pigeon said. “Hopefully, that provides a flexibility people can use and leverage.”
California Outages Open Eyes to Storage
California’s attempts to prevent wildfires with public safety power shutoffs in November left more than 2 million residents in the dark — and created additional demand for energy storage solutions.
“The experience of a shutdown is a real motivator,” said Thomas Plagemann, Vivint Solar’s chief commercial officer. “We’re talking a lot more with customers about resiliency. The ability to store some of your energy in the daytime, to keep the refrigerator running, charge your phone overnight … that resiliency is in high demand in California.”
“Storage has become a standard part of what we evaluate for with [California] customers, where it was demand-side management,” said Suparna Kadam, EnterSolar’s director of business development. “Resiliency is now more meaningful to customers.”
Colorado’s Polis: Seeing Value in Storage
As the governor of a state intent on reaching a 100% renewable grid by 2040, Colorado’s Jared Polis would normally have been the star of his presentation. That is, until he brought along Gia, a terrier mix rescued 10 years ago by Polis and his partner.
“She’s really into storage,” he said, as he placed Gia in the chair next to his. “Not so much on the generation side.”
Polis mentioned an upcoming adoption event for rescue animals at the governor’s mansion, but he also had another … pet cause on his mind.
A Democrat, Polis easily won election last year, running on a pledge to have the state’s grid running on 100% renewable energy by 2040. While the renewable goal is not state law, the legislature did codify a 50% emission reduction by 2030 that increases to 90% by 2050.
“Colorado is a very forward-looking state. The people want to make sure the future works for us, rather than against us. They understand this is the way Colorado is going, America is going, the world is going,” he said. “Sure, there’ll be potholes along the way — for instance, the lack of federal progress under this administration — but we see enormous progress at the local level.”
Polis said 14 municipalities have set more aggressive renewable goals than the state and numerous private sector companies “large and small” have announced renewable energy goals. Xcel Energy, the state’s largest electric utility, has announced an 80% carbon reduction by 2030, and Polis talked of visiting an Amazon distribution facility with a rooftop solar array nine football fields long that will provide 80% of the facility’s total energy needs.
“It’s all about the economics. The generation side, solar and wind, they are there. They have a lower cost than coal,” he said. “Natural gas comes and goes, but we’re not building out our capacity based on low prices now. The question is how we can retire legacy assets and give consumers opportunities for savings sooner rather than later.”
Polis sees energy storage as supplying some of the answers to the question. He noted that Xcel’s bids for wind-plus-storage came in “significantly” lower than existing coal production.
“I think that helped inspire their confidence in 100% green by 2030,” he said. “It’s amazing just to see the improvement on energy storage. It brings into the realm of the economically possible even more energy. I think people understand the savings and the resiliency that could result from increased renewable energy, coupled with storage. With storage, you have enormous opportunities over time for exponential, game-changing type technological advancements.”
Alice Jackson, president of Xcel Energy-Colorado, and Colorado Public Utilities Commissioner Frances Koncilja took a break from rate case arguments and regulatory filings to discuss the increase in renewable portfolio standards across multiple states and energy storage’s role. Six states and D.C. are chasing 100% RPS, with New York and California accounting for one-third of investment firm Morningstar’s RPS-based renewable energy growth estimate over the next 10 years, and solar, paired with storage, is expected to be responsible for much of the growth.
Koncilja said the PUC is just beginning to work with stakeholders to create storage requirements through its electric resource plan (ERP), which is conducted every four years.
“We have really left this to the market. The bids that came in [2018’s ERP process] were so robust and amazing, the question was, does a regulator really need to come in and deal with this?” she said. “We are moving away from least-cost to cost-effective. Least-cost might mean we would never get to the RPS we need.”
Xcel-Colorado saw an “overwhelming” response to renewable procurements. Jackson said there were so many responses to a 2017 request for proposals that it broke the company’s modeling tool.
“Normally, you would have gotten about 50 bids from customers. We got over 400 bids,” she said. “We were surprised by some of the [storage] pricing.”
Xcel-Colorado has agreed to an early retirement of 725 MW of coal-fired generation, which will require the utility to obtain an additional 450 MW of generation. It plans to add 1,100 MW of wind and 700 MW of solar and pair 275 MW of storage with solar.
“We’re not invited to make the film, we’re not invited to the Academy Awards, and we’re not invited to the after-party. We’re sort of the cleanup crew,” Koncilja said. “We are the implementation group. We do that through our rules and our statutes.”
Koncilja said recent state legislation included “Machiavellian” language that surprised the commission. The so-called “Turducken Bill” not only reauthorized the PUC, but also set carbon-reduction targets and established a process for issuing low-cost bonds to retire power plants in lieu of cleaner resources.
“We’re more attuned to how many things are being required of our utilities,” she said. “For me, it’s how do we make this a level playing field. It should be where everyone is bidding the same.”
