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November 8, 2019

MISO Planning Reserve Margin to Climb in 2020

By Amanda Durish Cook

MISO estimates it will need an 8.9% unforced capacity planning reserve margin for the 2020/21 planning year, a full percentage point above the current level, according to the RTO’s most recent annual loss-of-load expectation (LOLE) study.

The new margin will translate into an 18% planning reserve margin requirement on an installed capacity basis, compared with the current 17% target.

Resource mix and performance changes along with load profile and forecast changes drove the uptick, MISO said. The RTO reported larger resource sizes and a continued trend of increasing forced outages coupled with decreased forecasted load but more peak demand days across the year.

“In this year’s LOLE study, the changing resource mix and performance of the resource mix have contributed the most to the increase in the [planning reserve margin],” MISO Manager of Probabilistic Resource Studies Lynn Hecker told stakeholders at the Resource Adequacy Subcommittee’s meeting Wednesday. Hecker said that while the number of resources in MISO has decreased, the average size of units has increased.

“This shouldn’t be surprising to anyone because the PRM has been largely trending up because of changes in resource mix, rising forced outage rates and load uncertainty,” Hecker said.

MISO’s unforced planning reserve margin has generally risen since 2013, growing from 6.2% to nearly 9%.

Hecker said Wisconsin’s Zone 2 and lower Michigan’s Zone 7 are projected to be the closest to reaching their respective forecasted local clearing requirements based on results from MISO’s 2019 resource adequacy survey with the Organization of MISO States. This year’s OMS-MISO survey predicted adequate reserves through 2022.

“We have regular conversation with states … about what we’re seeing. The whole purpose of this conversation is us saying, ‘Hey, we see some zones that are going to be tight.’ We want to put it out there,” Director of Resource Adequacy Coordination Matt Ellis said.

Customized Energy Solutions’ Ted Kuhn said reserve margins are becoming so high that they may threaten the value proposition MISO touts to justify membership. Kuhn asked the RTO to conduct an analysis to show its recommendations are still more beneficial than maintaining individualized systems.

MISO and stakeholders may consider increasing the number meetings of the Loss of Load Expectation Working Group (LOLEWG) next year as the RTO mulls using a seasonal capacity construct. Should that happen, the LOLE study — which is based on an annual summer peak — may require fundamental changes. The LOLEWG currently meets about five or six times per year.

November 8, 2019

Climate is Human Rights Issue, Former NYPSC ALJ Says

By Michael Kuser

BENNINGTON, Vt. — About two-thirds of national constitutions now address environmental rights, but the legal profession has still been slow to recognize the nexus between climate change and human rights, a former New York Public Service Commission official told an audience at Bennington College on Monday.

“There’s very little in law that recognizes this climate crisis as a human rights crisis,” said Eleanor Stein, a former administrative law judge with the New York PSC who now teaches climate change law at Albany Law School and the State University of New York. She also serves on the board of the Rocky Mountain Institute.

Stein earned a master’s in climate change law and policy from the University of Strathclyde in Glasgow, Scotland, the first such program in the world.

Her appearance at Bennington’s Center for the Advancement of Public Action was one in a series of lectures on climate change and environmental justice.

Stein noted that her talk coincided with an event that will spell a serious setback for environmental justice advocates. Earlier the same day, the Trump administration had delivered formal notice that it was pulling the U.S. out of the Paris Agreement on reducing greenhouse gas emissions.

“Today was the first day that the United States, or any other country that was a party to the Paris Agreement, could indicate its intention to withdraw, and that’s because today is three years since the day that the agreement took effect, or ‘entered into force,’ as they say in the world of treaties,” Stein said.

“One year from today, that notification will take effect, and the United States will no longer be a party to the Paris Agreement,” she said. “Ironically, that day, Nov. 4, 2020, is the day after the next presidential election.

“The U.N. Charter and the Universal Declaration of Human Rights of 1948 lack any reference to environmental rights or environmental justice, but suffering environmental injustice prejudices your ability to hold onto other rights,” Stein said.

‘Big, Complicated Mess’

Asked about political developments favorable to the environmental justice movement, Stein referred to New York’s recent enactment of the Climate Leadership and Community Protection Act (A8429), which she called “a big, complicated mess of a law.”

The law requires 70% of the state’s electricity be generated by renewable resources by 2030, nearly quadruples its offshore wind energy goal to 9 GW by 2035 and requires the economy to be carbon-neutral by 2040. It also doubles the distributed solar generation goal to 6 GW by 2025 and targets deploying 3 GW of energy storage by 2030. (See “New Energy Law Could Affect CO2 Market Design,” NYISO Business Issues Committee Briefs: June 20, 2019.)

“In [the law] is something that was fought very hard for by communities of color in New York, and those are provisions that the state has to consider impacts on the most vulnerable communities as it makes its climate policy,” Stein said.

“Every action to slow or stop global warming is significant,” she said. “The Global North created the situation, but the Global South is paying the price in terms of human rights.”

November 8, 2019

MISO Weighs Seasonal Capacity, Accreditation Plan

By Amanda Durish Cook

MISO is proposing standalone fixes to its loss-of-load expectation (LOLE) study and capacity accreditation while it still conducts analysis to determine whether it should implement a seasonal capacity construct.

The analysis and proposals are the latest efforts in the RTO’s ongoing resource availability and need (RAN) initiative.

MISO LOLE — Davey Lopez, MISO | © *RTO Insider*

MISO planning adviser Davey Lopez called his presentation at the Resource Adequacy Subcommittee’s meeting Wednesday a “progress report” on the RAN effort, given that MISO suspended presentations on the project in September to allow time for analysis that could drive future draft rules. (See “RAN Respite,” MISO Resource Adequacy Subcomm . Briefs: Sept. 12, 2019.)

Lopez said MISO will finish a detailed analysis on a seasonal construct and have results for stakeholders by January, and that it is still targeting a March filing to change capacity resource accreditation. He said a seasonal construct might provide a more accurate representation of the footprint’s capacity supply.

“We know some resources perform differently throughout the year, and some might not be available all year long,” Lopez said. “We know some resources aren’t participating in our auction because they don’t want to be subject to must-offer all year long.” He said seasonal divisions of capacity supplies could provide the “granularity” that those resources require.

MISO executives this year began publicly questioning the effectiveness of continuing to measure system reliability according to the ability to meet demand during the summer peak hour.

CEO John Bear said the RTO must be mindful of reliability across all hours of the year, with resources being accredited based on availability and market prices incenting availability. He also said an efficient transmission system is needed to accommodate the shifting generation portfolio.

“We’re seeing significant change in our resource portfolio and how it performs. We’re going to need our stakeholders,” Bear said during an Oct. 22 Informational Forum, noting that solutions will become more complex.

MISO’s LOLE modeling assumptions have historically been tailored to covering a summer peak.

“But given that we’ve seen [maximum generation] events in recent history, primarily outside of the summer months … we’re asking ourselves if a summer focus still makes sense,” Lopez said.

Day-ahead offers have decreased since 2014 in relation to generation cleared in the Planning Resource Auction, he said. “Much of our requirement is being made up by emergency-only resources.”

LOLE Modeling and Accreditation Changes

Lopez said a “disconnect” exists between LOLE modeling and resource accreditation. He said MISO needs to better define risks and include seasonal effective outage rates, limitations in load-modifying resource availability and intermittent resource capabilities in its modeling. The LOLE study improvements can be made regardless of whether the RTO moves forward with accreditation changes or a seasonal construct, he said.

MISO could also tie a resource’s accreditation to its day-ahead offers during critical times, possibly using a resource’s day-ahead offers for the bottom 5% tightest margin hours over the last three years to calculate accreditation. The RTO must conduct more analyses to determine the impacts of factoring day-ahead offers into accreditation, Lopez said.

Lopez noted that MISO realizes it could not apply the day-ahead approach to intermittent resources, so it would instead continue to use its effective load carrying capability (ELCC) analysis to determine capacity credits for wind resources. MISO will devise an ELCC for solar generation as penetration increases.

In response to a question from Customized Energy Solutions’ Ted Kuhn, Lopez said using separate ELCC analyses across all resources might be too big a lift for RTO staff, although he would look into the possibility.

At the October RASC meeting, WPPI Energy Assistant Vice President of Planning Todd Komplin questioned what supporting research MISO had performed to verify the need for a seasonal auction or accreditation.

“It seemed that MISO jumped right into a seasonal resource adequacy construct without analysis behind it. We’re not necessarily opposed to a seasonal construct, but the data needs to show a need,” he said. “We haven’t really seen [data], and it’s been quite confusing.”

Komplin argued that more market participants than ever are using MISO’s Maintenance Margin supply look-ahead page and scheduling generation outages more judiciously, minimizing supply shortages.

He also said stakeholders have yet to see a “meaningful” LOLE analysis that reflects loss-of-load risks outside of summer. Customized Energy Solutions’ David Sapper added that MISO hasn’t considered its future resource mix in LOLE studies.

Kuhn also reminded MISO staff that they could consider just adding the now-hot September weather to the RTO’s definition of summer months and forgo capacity seasonality altogether.

MISO has called its short-term RAN fixes a success, reporting that stricter generation outage rules, better LMR availability reporting and annual real power testing for demand response have resulted in 5 to 10 GW of additional availability during times of need.

Dustin Grethen, MISO market design adviser, said this past summer broke a three-year pattern of declining margins and increasing emergency near misses.

“We had our tightest margins day after day after day in the summer of 2016,” Grethen said at the Market Subcommittee meeting in October, adding that 2017 was relatively manageable because of low load, but 2018 was again a study in volatility.

MISO has said its near-term RAN filings were meant to buy time to spell out bigger ideas to rectify supply imbalances brought on by increasing renewable generation.

November 8, 2019

MISO Looks Beyond FTRs for Market Protections

By Amanda Durish Cook

MISO is proposing new Tariff changes that would require a market participant to put up additional collateral — or face a suspension from trading — when it exhibits undue risk to the RTO’s wholesale market.

The proposal is separate from actions MISO has already taken to safeguard its financial transmission rights market. The RTO last month filed with FERC to apply stiffer rules to FTR traders, including a 5-cent/MWh minimum collateral requirement and a mark-to-auction valuation (ER20-73).

“These changes will cover the entire market,” MISO credit analyst Brian Brown explained at Thursday’s meeting of the Market Subcommittee.

Brown said the Tariff language will focus on evidence of default, manipulation and unreasonable risk to the market and would allow MISO to request additional collateral when it perceives “unreasonable credit risk” from a market participant. He said the RTO prefers to step up collateral requirements “rather than ban a risky or bad actor.”

The proposed changes would also allow MISO to reject applications from new and former market participants and those that have an uncured financial default in the RTO’s market and attempt to rejoin under a different name.

The changes would additionally require current and prospective market participants to provide more specifics in their annual certification forms, including information about any past defaults, bankruptcies, dissolutions, mergers or acquisitions, and any investigations.

“In reading our Tariff, we found MISO currently does not have explicit authority to act in order to protect the market. We have implicit authority, but we want to have explicit authority in these issues,” Brown said. “We just want to be able to protect the market when it’s threatened.”

MISO’s legal team has said it is targeting a filing in December.

Gabel Associates’ Travis Stewart last month said the first draft of the proposed Tariff language was vague and affords MISO with a “substantial amount of judgment.” He asked for a more descriptive proposal.

But Brown said MISO needs the latitude to be able to address a variety of risks to the market. However, he said the RTO has opened the proposal to stakeholder feedback through Nov. 21.

November 8, 2019

ERCOT Expects to Easily Meet Winter, Spring Demand

ERCOT said Thursday it will have sufficient installed capacity available to meet projected peak demand this winter and spring.

According to its final seasonal assessment of resource adequacy (SARA) for the winter months (December to February), ERCOT will have more than 82 GW of capacity available — more than enough to meet an expected winter peak of 62.3 GW.

The capacity includes 136 MW of winter-rated gas-fired and wind capacity that have become commercially operable since the release of the preliminary winter SARA. As much as 768 MW of planned winter-rated capacity could be available from new gas generation, wind and utility-scale solar projects.

The forecast projects more than 7 GW of resource outages this winter, based on historical data compiled since 2016.

“We studied a range of potential risks and believe there will be sufficient operating reserves to meet the forecasted peak demand,” Pete Warnken, ERCOT’s manager of resource adequacy, said in a statement.

ERCOT’s all-time winter peak is 65.9 GW, set in January 2018.

The Texas grid operator’s preliminary spring SARA for March to May foresees an additional 2.9 GW of gas, wind and solar units coming online to meet an expected peak demand of 64.2 GW. The final spring SARA report will be released in early March.

— Tom Kleckner

November 8, 2019

Supply Chain Survey Finds Ongoing Action on Cyber Risks

By Holden Mann

ATLANTA — Electric utilities have been largely proactive in their application of cyber risk protection programs across supply chains, according to NERC’s supply chain data request. However, much work remains to be done to ensure consistent adherence to supply chain standards, NERC said.

The organization presented the survey results at the meeting of the Member Representatives Committee on Tuesday. The goal of the survey was to fill in some holes in the understanding of low-impact bulk electric system cyber systems and how they differ from medium- and high-impact assets. Information on low-impact systems has previously been lacking because utilities are not required to inventory such assets.

“A lot of the low-impact cyber asset locations are with entities that have mediums and highs, so they’ve already got a [critical infrastructure protection] cyber compliance program in place,” said Howard Gugel, NERC’s vice president for engineering and standards. “They’re also subject to CIP-013 [procurement standards, and] they said they were going to voluntarily apply that, because they’re not going to have separate procurement systems for the lows, mediums and highs.”

NERC supply chain — Howard Gugel, NERC | © *ERO Insider*

Among the survey’s findings was that two-thirds of low-impact assets allowed external connectivity by third parties. Gugel described the consistency of this statistic as surprising given the diversity of operators participating in the survey.

“The amazing thing about this was, any way we split the numbers — if we looked at folks that only had low-impact BES cyber assets, if we looked at just the mediums and highs, or if we looked at entities that had the mediums and highs, and also lows — that same percentage was there for all of them,” he said.

But the findings became more varied as the team dug further into the details, breaking the overall cyber assets down by location: transmission stations and substations, generation resources, system restoration, etc. For operators with portfolios that included high-, medium- and low-impact assets — a category that included about 93% of the low-impact assets surveyed — the latter tend to be weighted toward the transmission side. For those that only own low-impact systems, most of their assets tend to be in generation.

Both types of operators are more likely to allow third-party electronic access to generation resources than transmission, but the divide is far starker with low-only asset owners. More than half of their generating resources in both the low and medium load (defined as less than 500 MW and 501 to 1,000 MW respectively) allowed external connectivity; by contrast, the split was more even for owners of low-, medium- and high-impact assets.

“It might cause us to have some more conversations with some of those entities; say, ‘What kind of controls do you have over this, and how are you looking at that access?” Gugel said.

Currently operators that have only low-impact cyber assets are not required to adhere to the portions of the NERC CIP reliability standards that apply to medium- and high-impact systems, partly because of the perception that such assets do not pose enough of a threat to include them. Gugel suggested that this attitude could need to be revisited: Although these assets may not be dangerous on an individual basis, collectively they have the potential to cause considerable headaches.

“I’m a transmission planner at heart and tend to look at blows to the system and impacts to transmission lines and such,” Gugel said. “From a cyber perspective, it’s a completely different beast — the ability to impact a bunch of blows from a remote threat actor is more than what I would consider for an N-1 from a transmission planning perspective, and it may rise to a risk that we should start considering.”

November 8, 2019

FERC, NERC Reviewing Comments on CIP Disclosures

By Rich Heidorn Jr. and Holden Mann

ATLANTA — Andy Dodge, director of the FERC Office of Electric Reliability, said the commission and NERC are reviewing the more than 70 comments filed in response to their proposal on disclosure of critical infrastructure protection (CIP) violations and will determine their next steps “probably in the next couple months.”

FERC NERC CIP — Andy Dodge, FERC | © *ERO Insider*

A white paper released in August proposed that NERC CIP Notices of Penalty (NOPs) include a public cover letter disclosing the name of the violator, the standards violated (but not the requirements) and the penalty amount. NERC would submit the remainder of the NOP, containing details on the violation, mitigation activity and potential vulnerabilities to cyber systems, as a nonpublic attachment, for which it would request critical energy/electric infrastructure information (CEII) designation. (See FERC, NERC Propose New CIP Disclosure Rules.)

From 2010 until December 2018, the public version of NERC’s CIP NOPs contained similar information as the confidential submission to FERC but excluded material NERC considered CEII, such as the name of the registered entity. In 2019, NERC began submitting public line-by-line redactions of information claimed as CEII.

The commission initially treats information claimed by NERC as CEII as nonpublic but has reviewed those determinations — and sometimes released additional information — in response to Freedom of Information Act (FOIA) requests. The staffs said they reconsidered their approach in response to an increase in FOIA requests.

“Some commenters liked the joint FERC-NERC approach. Some were totally opposed to it,” including some who thought all information should be shared, Dodge said.

Among respondents unsatisfied with the initiative was the Foundation for Resilient Societies, which criticized the proposal for requiring that any violations be fully mitigated before an NOP is submitted. It also disagreed with allowing utilities to request indefinite delays in public disclosure. As a result, “the public may become aware of adverse compliance trends only after a series of catastrophes occur,” the foundation said.

Public Citizen said the proposed disclosure requirements were a step in the right direction. However, the consumer advocacy group said further reforms were needed, including formal protection for whistleblowers and the creation of regional advisory bodies to provide feedback to FERC and NERC at the state level. It also criticized NERC for what it described as an overrepresentation of utility company executives in its leadership, which it said hindered the independence of the corporation.

At the other end of the spectrum, the MISO Transmission Owners said the level of detail envisioned for the NOPs could be dangerous for the security of the grid, warning that “this type of information could provide roadmaps to bad actors” targeting critical infrastructure assets. If greater transparency is required, the TOs said, the commission could consider indicating the degree of risk posed by the violation rather than the specific standard involved, and disclosing a range of penalties rather than the exact amount assessed.

Echoing this view, a joint filing — by the Edison Electric Institute, American Public Power Association, National Rural Electric Cooperative Association, Large Public Power Council, Transmission Access Policy Study Group, the Electric Power Supply Association, WIRES, and the Electricity Consumers Resource Council — argued that electric utilities already “have every incentive to protect the reliability of the BPS [bulk power system].”

They noted that most NOPs reported by NERC are the result of utilities voluntarily sharing information with the corporation. “Given that the public would require specialized training and expertise to derive any value from the name of the standard violated … it is not clear what benefit there is in automatic disclosure of this information,” said the group.

Transmission Line Ratings

Dodge also shared staff observations from the commission’s technical conference on transmission line ratings in September (AD19-15). (See FERC Considering Tx Line Rating Rules.)

Staff identified potential benefits of dynamic line ratings (DLRs) and ambient-adjusted ratings (AARs), including:

increased capacity for integrating renewables;
reducing congestion and curtailments;
improved transmission flexibility and situational awareness; and
increased transparency of line ratings.

Potential challenges to DLRs/AARs include:

possible reduction in available capacity during summer (when ambient temperatures exceed 104 degrees Fahrenheit) and winter seasons (when ambient temperatures exceed 32 F);
the fact that ambient condition forecasting is vital to DLR systems and transmission line AARs; and
AARs may not apply to all transmission lines.

Post-technical conference comments were due Nov. 1. Reply comments are due Nov. 16.

November 8, 2019January 15, 2025

NERC Board of Trustees Briefs: Nov. 5, 2019

ATLANTA — Below is a summary of actions taken by the NERC Board of Trustees at its meeting Tuesday.

SERC Bylaw Changes OK’d

The board approved amendments to SERC Reliability’s bylaws to change its governance structure effective Jan. 1, 2021.

SERC CEO Jason Blake and General Counsel Holly Hawkins briefed the NERC board on its revised bylaws. | © ERO Insider

The amended bylaws:

change the Board Executive Committee into a full hybrid board, including stakeholder and independent directors;
add at least three independent directors to the Board of Directors;
formalize SERC’s membership body to include a representative from each member company by transitioning the existing full board into a members group that will meet at least annually to advise the board on the business plan and budget, elect independent directors and approve bylaw changes, as needed;
change the Board Compliance Committee into the Board Risk Committee; and
add a Human Resources and Compensation Committee, a Nominating and Governance Committee, and a Finance and Audit Committee.

Howard Gugel, NERC | © ERO Insider

It “changes almost everything,” SERC General Counsel Holly Hawkins said of the revised bylaws, which were approved unanimously by the regional entity’s board last month.

SERC CEO Jason Blake called the new rules “transformational.”

NERC Chair Roy Thilly called it a “very positive development,” noting that all REs will now have hybrid boards.

“This moves SERC to the front of the pack in terms of good governance,” Trustee Fred Gorbet said.

ReliabilityFirst Bylaw Changes Approved

The board approved changes to ReliabilityFirst’s governance and oversight guidelines to:

modify the CEO and independent director compensation approval process;
appoint a lead independent director to serve with an appointed stakeholder chair and vice chair;
implement term limits for directors, consisting of four consecutive three-year terms;
appoint the CEO as a non-voting, ex officio member of the Board of Directors; and
require board approval for directors serving on more than five outside boards.

Committee Appointments

The board approved the following committee members:

Personnel Certification Governance Committee: Cory Danson, Western Area Power Administration, as chair for a term of two years. Current Chair Michael Anderson, American Electric Power, did not seek reappointment because his position changed at AEP. Margaret Quispe, SPP, will continue as vice chair.
Standards Committee: Amy Casuscelli, Xcel Energy, as chair, and Todd Bennett, Associated Electric Cooperative Inc., as vice chair for two-year terms.
Critical Infrastructure Protection Committee: Marc Child, Great River Energy, chair; and David Grubbs, city of Garland, Texas, and David Revill, Georgia Systems Operations, co-vice chairs, for terms beginning Jan. 1. The remaining positions on the Executive Committee will be filled at the December meeting.
Compliance and Certification Committee: three-year terms for Justin MacDonald, Midwest Energy, Cooperative Utility sector; Ashley Stringer, Oklahoma Municipal Power Authority, Transmission-Dependent Utility sector.

Approvals

The board approved:

The 2020-2022 Reliability Standards Development Plan and authorized NERC staff to file it with applicable regulatory authorities. The three-year plan for reliability standards development addresses FERC directives, emerging risks and the Standards Efficiency Review.
Reliability standard BAL-003-2 (Frequency Response and Frequency Bias Setting) and authorized its filing with FERC and other regulatory authorities. Howard Gugel, vice president of engineering and standards, said the revisions address inconsistencies identified in the Frequency Response Annual Analysis.
PRC-006-NPCC2 (Automatic Underfrequency Load Shedding), which removes redundancies with PRC-006-1, PRC-006-2, PRC-024-1 and PRC-024-2.

Reliability Risk Priorities Report Approved

The board approved the ERO Reliability Risk Priorities Report, prepared by the Reliability Issues Steering Committee (RISC), which reflects the committee’s efforts to define and prioritize risks and recommend what NERC and industry representatives should do to manage them. The report adds a 10th risk — critical infrastructure interdependencies — to the nine previously identified. (See ‘Interdependencies’ Joins RISC’s List.)

RISC Chair Nelson Peeler said the report also was modified to make it “simpler [and] cleaner.” It also incorporates survey results, which “will allow us to better track and trend as we go year to year.”

“I think we have had much better alignment than in prior years,” he added.

2020-2022 Reliability Standards Development Plan Approved

The board approved the 2020-2022 Reliability Standards Development Plan (RSDP) and authorized NERC staff to file it with applicable regulatory authorities. The plan seeks to address FERC directives, emerging risks and the Standards Efficiency Review.

– Rich Heidorn Jr.

November 8, 2019

NERC MRC Briefs: Nov. 5, 2019

ATLANTA — NERC Chairman Roy Thilly told the Member Representatives Committee on Tuesday that he has asked CEO Jim Robb to develop a plan to reduce the Board of Trustees’ quarterly meetings to three gatherings per year.

The board experimented with an abbreviated open meeting immediately after the MRC meeting, rather than the normal schedule of a half-day meeting the day after the MRC. The open board meeting was mostly action items, with committee meetings done last week through conference calls. (See related story, NERC Board of Trustees Briefs: Nov. 5, 2019.)

Thilly had said in August that the new schedule would be a trial run that could be used for future fourth-quarter meetings, which he said had fewer “essential” items on the agenda.

But on Tuesday, Thilly said reviews of the new format were not positive.

“NERC always strived for consensus, and I think we’ve achieved it, or nearly: The schedule we’ve chosen this time around didn’t work,” he said. “So, I don’t think you’ll see this particular schedule again.”

Thilly said he hoped to have a plan for the new schedule next year.

Trustee George Hawkins said the effort was not in vain. “Innovative organizations try new things,” he said. “I applaud the effort.”

Sterling Named Chair; Choudhury Vice Chair

Jennifer Sterling of Exelon and Paul Choudhury of BC Hydro were named MRC chair and vice chair, respectively, for 2020. The committee will be accepting nominations for sector representatives until Friday, with the election scheduled for Dec. 9-19. Sterling will replace Greg Ford of Georgia System Operations. The current sector representatives’ terms expire in February.

Changes to ERO Enterprise Effectiveness Survey

NERC management is planning to simplify the organization’s next ERO Enterprise Effectiveness Survey, to be issued next year, to improve effectiveness and efficiency.

The most recent survey, in 2018, included 76 questions and resulted in almost 5,000 raw comments. “The time and effort for stakeholders to complete the survey and for staff to review and condense this information is substantial,” NERC said. The new survey will be designed to balance “the need for stakeholder feedback with a more effective and efficient approach to the questions, results and action plans,” it said.

Kristin Iwanechko, associate director of regional and stakeholder relations, said NERC will present its proposed changes at the February 2020 MRC meeting.

MRC Governance Guidelines Approved

The MRC approved revised Governance Guidelines to replace the Approved Policy on Minutes of MRC Meetings, the Framework for the Operation of the MRC and the MRC Reference Document. The change reduces the number of documents guiding the committee to two: the guidelines and the NERC Bylaws.

E-ISAC Performance Metrics

Trustee Suzanne Keenan, chair of the board’s Technology and Security Committee, said the committee endorsed 2020 performance metrics for the Electricity Information Sharing and Analysis Center at its Nov. 1 meeting.

The performance metrics, intended to align the E-ISAC’s Long-Term Strategic Plan, were previously endorsed by the Electricity Subsector Coordinating Council’s Member Executive Committee.

The metrics will be incorporated in NERC’s overall corporate performance metrics after final approval by the board’s Corporate Governance and Human Resources Committee.

– Rich Heidorn Jr.

November 6, 2019February 13, 2025

Danly Sails Through Hearing as Democrats Huff

By Michael Brooks

WASHINGTON — FERC General Counsel James Danly received little scrutiny at his confirmation hearing Tuesday, even as Democrats complained about President Trump neglecting to pair his nomination to the commission with one from their party.

Trump nominated Danly last month to fill the Republican seat opened by the death of Commissioner Kevin McIntyre in January. If confirmed, Republicans would hold a 3-1 majority, with the seat of former Commissioner Cheryl LaFleur, who retired at the end of August and joined the ISO-NE Board of Directors, unfilled. His term would end June 30, 2023.

It is customary for presidents to send commission nominees to the Senate Energy and Natural Resources Committee in pairs, one from each party, when there is more than one vacancy, in order to avoid the minority party filibustering the nominee of the majority.

But in 2013, Senate Democrats eliminated the filibuster for presidential nominees other than those for the Supreme Court, meaning a motion to end debate needs only a simple majority. Still, Trump followed the pairing tradition when there were still two vacancies on the commission following the confirmations of Republicans Neil Chatterjee and Robert Powelson to join LaFleur, nominating McIntyre and Democrat Richard Glick.

“This is one committee that has worked very well as a bipartisan committee,” said Sen. Joe Manchin (D-W.Va.), the committee’s ranking member. “We’ve looked at the facts, looked at what’s best for our country and our regions, and we’ve been able to have input on both sides, without any conflicts whatsoever. And to put us in a situation to where we can have a conflict and it could be avoided, it’s just not right.”

Though not named at the hearing, it has been widely reported that Democrats have put forward Allison Clements, clean energy markets program director for the Energy Foundation, as their choice. Manchin said that “we have a person who is very competent, very qualified; she’s been vilified to a certain extent, thinking she’s too far to the left.” (See Dems, Enviros Upset Over Solo FERC Nomination.)

Manchin stressed that he did not blame Danly, whom he called “very, very bright,” nor Chair Lisa Murkowski (R-Alaska). He said he hoped the president “in his wisdom, in this next week, will bring her forward, and hopefully, next week, we can get her and a full-working FERC of five members.”

“I just want to say how deeply worried I am that we are on the precipice of the FERC becoming another political entity, another extension of the” Trump administration, Sen. Martin Heinrich (D-N.M.) said. “And there’s a lot of risk associated with that. In the short term, that may work well for one side and their view, but it risks creating a back-and-forth that would be truly untenable for our energy grid overall.”

During Danly’s opening remarks, a protester from Beyond Extreme Energy had interrupted, holding up a sign and chanting, “No more fossil lovers, wind and solar now!”

“You could see a scenario playing out where, in the short term, certain sources of energy are subsidized to the point of driving up energy costs substantially,” Heinrich said. “In a year, maybe the gentlewoman who was escorted out gets nominated and appointed to the FERC, and we can no longer permit natural gas lines at all in this country.”

“FERC is set up to avoid the need for pairings,” Murkowski said. “And I think this is one of the myths and misconceptions that has been out there.” She pointed to the fact that FERC commissioners’ terms are staggered by one year each “in an effort to make sure that we didn’t have these double vacancies. … Bipartisan pairings are not always the norm.”

Mirroring Murkowski’s comments, shortly after the hearing, the committee tweeted a graphic showing the history of nominees to FERC since 1981, with each nominee placed under one of three columns: “not paired,” “unbalanced” and “bipartisan pairing.” The list, however, includes nominees submitted when there was a single vacancy and when there were multiple vacancies in the same party — unlike the current situation.

Murkowski also noted that McIntyre’s seat had “already” been paired with Glick’s.

“We’ve been waiting for 10 months to get a name … so I don’t think it’s fair to tell the Republican nominee that we have to wait, given that we’ve been waiting for 10 whole months,” she said. “Know, colleagues, that when we get the Democratic candidate, we will hear that nomination.”

Speaking to reporters after the hearing, Murkowski said she hasn’t “had direct conversation with the president about the Democratic name moving forward. I have been really focused on trying to get the Republican name forward, and so when Mr. Danly’s name was advanced some weeks back, it was like, ‘Finally, we can move on!’”

DOI Nominee Gets Most Attention

“I hope [the lack of paired nominee] will not be what drives anyone to oppose your nomination,” Murkowski told Danly in addressing what she said she expected “will be the main source of the opposition to your confirmation this morning.”

It wasn’t. In fact, Danly received little attention, let alone criticism, compared with Trump’s nominee to be deputy secretary of the interior, Katharine MacGregor, currently deputy chief of staff for the department. Most Republicans virtually ignored Danly, and most Democrats saved their ire for MacGregor, using their allotted time to question her on drilling for fossil fuels on federal lands and whether she had ties to the oil and gas industry.

Nor did Democrats give any attention to a letter sent to the Energy Department’s inspector general and Office Of Government Ethics by Senate Minority Leader Chuck Schumer (D-N.Y.), asking them to investigate “the application of inconsistent and inaccurate ethics advice by the Federal Energy Regulatory Commission’s Office of General Counsel, which, notably, is managed by nominee for commissioner and FERC General Counsel James Danly.”

“It appears … that at least one commissioner [Glick] was provided deficient ethics advice that, because of the seriousness with which he took his ethical obligations, ultimately forced him to abruptly recuse and cease work on certain proceedings,” Schumer wrote. “Another commissioner [Bernard McNamee] sought a waiver of his obligations under the pledge, weakening his initial contractual ethics commitments.”

However, Danly correctly pointed out in response to Murkowski that his office has no oversight over ethics waivers. Those are handled by the commission’s designated agency ethics official, whom Glick said had changed his interpretation of rules under a pledge signed by all presidential appointees when Glick announced his recusal from matters involving his former employer, Avangrid, until Nov. 29. (See Glick Recusal May Mean No MOPR Ruling Before December.)

“I have, as general counsel, no role whatsoever in the provision of ethics advice,” Danly said. “Every agency in the federal government … [has] a designated agency ethics official — we call them the ‘DAEO’ — and the DAEO reports to one person and that is the head of the agency; in our case that would be the chairman. … I am not involved in any of the advice that’s given by the DAEO to any of the people in our agency.”

“I think [the letter] was absolutely timed to throw a wrench into the works, and I think you saw how cleanly Mr. Danly disposed of it,” Murkowski told reporters. “I think that was just a poor effort by Sen. Schumer to try and create some controversy for Mr. Danly’s hearing this morning. I don’t think it worked at all.”

The ‘Humble Regulator’

Danly stressed in his answers that he would strictly adhere to the laws governing FERC, namely the Federal Power Act and the Natural Gas Act. “I believe it is incumbent on every commissioner to act within the authorities granted by Congress when discharging the commission’s duties,” he said in his opening remarks.

Manchin asked Danly what he meant by “the humble regulator approach,” a phrase he used in an April keynote speech at a conference held by his former employer, Skadden, Arps, Slate, Meagher & Flom.

“It boils down to the concept that officials and agencies should do honor to the statute that they are charged with administrating,” he told Manchin.

Sen. Catherine Cortez Masto (D-N.M.) asked Danly if he agreed with the D.C. Circuit Court of Appeals’ ruling in Sierra Club v. FERC, the so-called “Sabal Trail” case, in which the court remanded the commission’s environmental impact statement on the Southeast Market Pipelines Project. The court ordered FERC to estimate the project’s impact on GHG emissions, including upstream and downstream impacts, or explain more fully why it could not do so.

“I agree with the D.C. Circuit when it hands down a binding ruling, yes,” Danly replied, smiling.

“The black-letter law of [the regulations] implementing the National Environmental Policy Act require that all direct and indirect effects and cumulative impacts of every major federal action be reviewed and considered when making a decision, and I have every intention of following that unequivocal black-letter law,” he responded.

“Even if you say it’s ‘an exercise in futility.’ Well, I hope you … please do your best,” Hirono said before her time expired.