Page 1200 – RTO Insider

February 18, 2018

NYISO Business Issues Committee Briefs: Feb. 14, 2018

RENSSELAER, N.Y. — NYISO power prices surged to an average of $99.55/MWh in January, up 89% from December and 148% from the same month a year ago, Rana Mukerji, senior vice president for market structures, told the Business Issues Committee on Wednesday.

The ISO’s year-to-date monthly energy prices averaged $101.54/MWh in January, an increase of 142% from a year earlier. Average sendout was 463 GWh/day, compared with 444 GWh/day in December and 431 GWh/day a year ago.

New York natural gas prices jumped 136% for the month, averaging $17.94/MMBtu at the Transco Z6 hub. Prices were up 369% from a year ago. Gas prices peaked at $140.06/MMBtu on Jan. 4, near the end of a two-week cold spell.

FERC on Jan. 12 granted a waiver request enabling the ISO to consider incremental energy and minimum generation offers that exceed $1,000/MWh if the generator is able to demonstrate such costs. The waiver covers Jan. 4 to Feb. 28. (See FERC Grants NYISO ‘Cold Snap’ Offer Cap Waiver.)

Distillate prices gained 28.2% year over year, with Jet Kerosene Gulf Coast averaging $14.47/MMBtu. Ultra Low Sulfur No. 2 Diesel NY Harbor averaged $14.83/MMBtu, up from $13.91/MMBtu in December.

The ISO’s local reliability share was 59 cents/MWh, up from 9 cents/MWh the previous month, while the statewide share dropped 74 cents from the previous month to -$1.52/MWh. Total uplift costs were lower than in December.

Evaluation of Energy Market Offer Cap

Reviewing the Broader Regional Markets report, Mukerji highlighted NYISO’s ongoing effort to resolve differences between regional offer caps that may interfere with economic- and reliability-driven interchange scheduling.

FERC this month accepted NYISO’s Order 831 compliance filing, which requires the grid operator to cap incremental energy offers at the higher of $1,000/MWh or a resource’s verified cost-based offer, which in turn are capped at $2,000/MWh when calculating locational-based marginal prices.

Mukerji also noted that FERC last month accepted the ISO’s motion to terminate its obligation to submit annual informational filings on its implementation of interface pricing and congestion management and market-to-market coordination initiatives with its neighboring RTOs/ISOs.

The report also said the ISO has analyzed real-time commitment (RTC) and real-time dispatch (RTD) convergence and last month presented the Market Issues Working Group with recommendations to continue to aid the convergence this year. The ISO aims to improve modeling consistency between RTC and RTD and assess improvements to look-ahead evaluations to facilitate more efficient scheduling and price convergence.

NYISO also is working to clarify the minimum deliverability requirements for external capacity from PJM into the New York Installed Capacity (ICAP) market, Mukerji said. At the Jan. 17 BIC meeting, the ISO received approval for ICAP Manual revisions regarding the documentation requirements for capacity imports across the PJM AC ties, which will become effective May 1. (See “BIC Recommends ICAP Manual Revisions,” NYISO Business Issues Committee Briefs: Jan. 17, 2018.)

Day-Ahead Market Congestion Settlements

The BIC on Wednesday recommended that NYISO’s Management Committee approve revisions to Attachment N of the Tariff that provide a methodology to allocate day-ahead market congestion rent shortfalls and surpluses resulting from changes in transmission facility availability to the responsible transmission owner.

Operations Analysis and Services Supervisor Tolu Dina explained how the methodology uses a de minimis threshold to determine circumstances when allocations to responsible TOs are not calculated.

The threshold applies to day-ahead constraint residuals (shortfalls and surpluses resulting from changes in transmission facility availability) that are less than $5,000, provided the sum of all such residuals below the threshold is not greater than $250,000 or 5% of the sum of all residuals for the month. Attachment N currently requires the ISO to conduct certain informational calculations once a year to help in assessing whether the de minimis threshold level presents any concerns.

External Capacity Rights

The BIC approved revisions to the ICAP Manual to better define the amount of capacity that can be imported into New York from neighboring control areas for the 2018/2019 capability year.

Josh Boles, the ISO’s manager for ICAP operations, said the New York State Reliability Council regulates the amount of emergency assistance from neighboring RTOs and “we’re only allowing imports up to a level where we would violate the one-day-in-10 criteria.”

Alternative Methods for Determining LCRs

The BIC recommended the Management Committee approve revisions to the Market Administration and Control Area Services Tariff to establish an alternative method for calculating locational minimum installed capacity requirements.

NYISO natural gas prices business issues committee — | *NYISO*

Zachary Stines, associate market design specialist, presented NYISO’s market design for determining locational capacity requirements (LCRs) for localities that minimize total cost of capacity at the level of excess condition while maintaining the reliability criterion and not exceeding transmission security limits.

The NYISO plan evaluates net energy and ancillary services revenue at different levels of installed capacity using data from the most recent of either the capability year after a quadrennial “demand curve reset” or the annual update.

The ISO has incorporated into the proposed Tariff revisions incremental revisions recommended by stakeholders at the Feb. 6 Installed Capacity Working Group/Market Issues Working Group meeting, Stines said.

BIC Rejects On Ramp/Off Ramp Changes

The BIC also voted against recommending that the Management Committee approve a market design proposal and related Tariff revisions for eliminating localities and revising the existing on ramp/off ramp rules to create a new locality.

Zachary Smith, manager of capacity market design, told the BIC that the proposed methodology is based on reliability planning principles developed to determine whether to create and eliminate localities.

The proposed design was intended to make locality price signals direct investment to supply that provides the greatest reliability benefit.

Mark Younger of Hudson Energy Economics called the proposal “a flawed market design.”

“It is attempting to use the transmission security test to estimate a resource adequacy requirement,” Younger said. “The result of the NYISO’s test as proposed is that it will understate the resource adequacy needs and would therefore result in creating localities too late and eliminating them too early.”

Mukerji said that while the ISO has fully mapped out its resources and budget for the year, stakeholders could choose to juggle priorities in a related working group to make room for reworking the on ramp/off ramp proposal.

— Michael Kuser

February 16, 2018

PJM Board Punts Capacity Market Proposals to FERC

By Rory D. Sweeney

PJM’s Board of Managers will ask FERC to choose between proposals by its staff and its Independent Market Monitor to insulate its capacity market from state-subsidized generation.

Rather than choose just one of the capacity reform plans on offer, the board instead voted Wednesday to direct PJM staff to file both the capacity repricing proposal it recommended and the MOPR-Ex proposal promoted by the Monitor.

“The board has decided that reform is necessary,” CEO Andy Ott wrote in a letter to stakeholders Friday. “The board has chosen a path that will definitively move the policy question to FERC while proposing a process that maintains opportunities for active, continuing involvement from stakeholders.”

Each proposal “represents a distinct, just and reasonable policy alternative to address the consequences of state intervention” in energy markets, Ott said.

“Deciding between these policy options requires a balancing of federal and state interests, raising questions of federalism and comity that have already presented themselves before the courts, including the U.S. Supreme Court.”

PJM Board Chairman Howard Schneider and CEO Andy Ott listen to consumer and public advocates at PJM’s 2017 annual meeting. | © *RTO Insider*

The board didn’t disclose its determination until Friday in order to develop an explanation for its decision. The vote came after a flurry of politicking over the past week from stakeholders, who sent seven letters to the board, almost all of which asking that the board not support PJM’s plan. Exelon was ambivalent about the RTO’s plan but asked that the board reject the Monitor’s plan.

The decision moves PJM another step closer to culminating the work of the Capacity Construct/Public Policy Senior Task Force (CCPPSTF) that dominated stakeholder activity in 2017. Stakeholders were at one point considering 10 different proposals, but the field eventually narrowed to proposals from PJM and the Monitor.

PJM said its plan would accommodate generator offers from state-subsidized plants by allowing them to bid into capacity auctions but ensure they don’t suppress competitive prices by removing those offers in a second “repricing” stage of the auction.

ZEC DOE 7th Circuit Court of Appeals PJM 2015 Annual Meeting FERC Capacity Market MOPR-Ex — Bowring | © *RTO Insider*

The Monitor’s proposal, known as MOPR-Ex, would extend the RTO’s minimum offer price rule (MOPR) to all units indefinitely, but in alternative versions it included carve-outs for states’ renewable portfolios and public power self-supply. Stakeholders, who saw the Monitor proposal as having the least impact on the current construct, backed it all the way to the Markets and Reliability Committee, but all of its different versions stalled there last month after Ott announced he would be recommending the RTO’s plan to the board no matter the outcome of the vote. (See “No Consensus on Capacity Revisions,” PJM MRC/MC Briefs: Jan. 25, 2018.)

The board’s decision represents a win for Monitor Joe Bowring, who had been maneuvering for months to navigate his proposal to stakeholder endorsement despite PJM’s clear indication that it would not support the proposal.

The board directed staff “to present the advantages and tradeoffs associated with each policy approach,” Ott said. Staff should make their preference known in the filing, but that “should the commission decide instead on a policy of mitigation, PJM believes MOPR-Ex would be effective in preserving competitive outcomes in PJM’s markets.”

The board also directed the filing to request “a time-bound settlement judge proceeding” after FERC chooses a proposal “with expectation that such a process will bring refinement, compromise and more consensus support for what ultimately will be presented to the commission later this year as a package of proposed rule changes.”

The board confirmed that the upcoming Base Residual Auction in May will proceed under the current capacity auction rules.

February 16, 2018

FERC Orders New Rules for Supplemental Tx Projects in PJM

By Rory D. Sweeney

PJM transmission owners’ processes for developing supplemental projects violate Order 890’s transparency and coordination requirements, FERC ruled Thursday in a victory for customers — and, potentially, competitive transmission developers (EL16-71, ER17-179).

PJM stakeholders have been battling for years with TOs over the rules involving supplemental projects — transmission expansions or enhancements not required for compliance with PJM system reliability, operational performance or economic criteria. TOs can develop, build and seek reimbursement for such projects without the approval of PJM, which only reviews them to ensure they don’t harm reliability.

Since 2012, according to an analysis produced for American Municipal Power, PJM’s $11.6 billion in baseline and network upgrades have been exceeded by $12.7 billion of transmission owner-identified (TOI) supplemental projects.

“I’ve frequently spoken about my concern about … the amount of transmission spend[ing] that is directed to categories that are not subject to competitive bidding under Order 1000 and in some cases subject to very little planning that’s done privately by the transmission owners,” Commissioner Cheryl LaFleur said at Thursday’s open meeting. “It’s obviously our responsibility to make sure that if customers are paying for transmission, it’s needed; that regional needs are considered, that things aren’t done individually and that the process is fair and transparent, and I think today’s order is a part of that responsibility.”

PJM FERC supplemental projects FERC Order 890 — PJM’s Transmission Replacement Processes Senior Task Force stands to become much more engaged now that FERC has ruled on a show-cause order that hampered the task force’s progress for about a year and a half | © *RTO Insider*

LaFleur is the only member remaining from the commission that issued a show cause order over the TOs’ supplemental projects in August 2016, which followed a technical conference on the issue in 2015.

The order caused PJM’s Transmission Replacement Processes Senior Task Force to go on a 10-month hiatus that, even after it ended, has been slow to progress as TOs remained reticent to discuss issues involved in the order. (See PJM TOs, Customers Await Ruling on Supplemental Projects.)

Order 890 Inconsistencies

The TOs responded to the show cause order by contending they were already in compliance with Order 890 and proposing a new Tariff Attachment M-3 that they said spelled out their processes.

The commission agreed with the TOs’ request to move the supplemental project language from PJM’s Operating Agreement to Attachment M-3 but said the attachment fell far short of compliance with Order 890.

FERC found that TOs’ handling of supplemental projects violates both the transparency and coordination principles of Order 890. It said that both the level of detail in the supporting information provided by TOs and the timing of providing that information — often either just before or during meetings to discuss those projects — fails to meet the order’s requirements.

The commission cited Subregional RTEP Committee meetings on Dec. 1, 2016, in which AMP said TOs presented almost 100 transmission projects for stakeholder review, 80% of which were supplemental projects. Two of the projects presented were already complete, seven were under construction and 24 were already in the engineering phase, “at which point it is not possible for stakeholders to provide meaningful input,” the commission said.

“The record in this proceeding indicates that the PJM transmission owners often provide models, criteria and assumptions as part of the supplemental project transmission planning process that are vague or incomplete and do not allow stakeholders ‘to replicate the results of planning studies’” as required by Order 890, the commissioners wrote. “In addition, in some cases, the PJM transmission owners provide the models, criteria and assumptions to stakeholders at the same time as a proposed supplemental project, at which point that project is often at an advanced stage of development and stakeholder feedback is less likely to be meaningful or effective.

“As a result of these two factors — the quality of the models, criteria and assumptions the PJM transmission owners provide and the point in the transmission planning process at which they are provided — stakeholders frequently are not in a position to comment on the transmission planning studies or the resulting transmission needs before the PJM transmission owners take significant steps towards developing supplemental projects to address those needs,” the commission wrote. “The fact that there may be multiple criteria and considerations underlying the need for a supplemental project does not prevent the PJM transmission owners from timely posting a thorough description of those criteria and considering stakeholder feedback before identifying a particular supplemental project. Similarly, the fact that those criteria may vary among the PJM transmission owners also does not prevent them from timely posting each transmission owner’s different criteria.”

The commissioners said the TOs’ practice of simultaneously presenting both the problems and their proposed solutions discriminates against potentially better alternatives.

“The most obvious solution will not always be the best solution. In many cases, supplemental projects address facilities that have existed for several decades, during which time the topography of the electricity grid and the set of potential technologies available to address the underlying need may have changed considerably. As a result, rebuilding the facility that was the most obvious solution many years ago may no longer be the best solution today,” the commission wrote.

FERC also sided with customers that the current process doesn’t clearly define when they should receive critical information about criteria and proposals and when they can comment during the analysis and project development.

M-3 Revisions

The TOs did prevail in their request to move the procedures for planning supplemental projects from the OA — which requires a super-majority endorsement from PJM stakeholders to make changes — to Attachment M-3 of the Tariff. The TOs have exclusive filing rights under Section 205 of the Federal Power Act to make changes in Attachment M-3; to make any changes, stakeholders would need the PJM Board of Managers to file a complaint under Section 206.

However, the commission also ordered revisions to the new attachment, saying it “duplicates and otherwise relies heavily on the provisions … that we found above to be unjust and unreasonable.”

The commission ordered the TOs to revise M-3 and to hold three meetings on each proposed supplemental project: the first to discuss “the models, criteria and assumptions” used to plan supplemental projects, the second to address the needs identified and the third to discuss the solutions proposed to meet the needs.

The revised M-3 must spell out a minimum number of days between each meeting, deadlines for posting the meeting materials beforehand and time frames for stakeholders to provide comments after meetings, the commission said.

“We also find that this additional transparency will help mitigate concerns that supplemental projects may be structured to avoid or replace regional transmission projects that would otherwise be subject to competitive transmission development under Order No. 1000,” the commission wrote.

FERC also ordered the TOs to detail what dispute resolution they plan to use, as the previous rules relied on the procedures in the OA. The commission also ordered PJM to make changes to its OA to ensure consistency with M-3 and compliance with Order 890. PJM and the TOs have 30 days to file the required revisions.

The commission shot down proposals by AMP and Old Dominion Electric Cooperative to require TOs to respond to stakeholder comments, greater PJM involvement in planning for and selecting certain supplemental projects, and PJM review and approval of TOs’ local transmission plans.

‘Encouraged’

AMP’s Ed Tatum said his company is still reviewing the order but is “encouraged by what we have seen so far.”

He pointed to the commission’s affirmations on transparency and coordination principles from Order 890, the need for meaningful input from consumers and the opportunity to replicate TO results.

“Since October 2016, the PJM transmission owners have been unwilling to move from their litigation position and fully engage absent an order,” he said. “Now that we have an order with clear direction, we are ready to roll up our sleeves and work with PJM and the transmission owners to implement the order and make sure consumers are getting the transmission system they need at right price.”

Representatives from Exelon and Public Service Electric and Gas did not response to requests for comment in time for publication.

Chairman Kevin McIntyre did not participate in the ruling.

February 16, 2018

MISO Recommends Cost-Sharing for Sub-345 kV Tx

By Amanda Durish Cook

CARMEL, Ind. — ‎MISO is proposing to eliminate a footprint-wide postage stamp rate and change its rules for market efficiency projects to include regional cost allocation for transmission projects under 345 kV.

MISO FERC cost allocation market efficiency projects — Moser | © *RTO Insider*

The RTO wants to lower its cost allocation threshold to cover 230-kV projects, a move that Director of Strategy Jesse Moser said will capture a reality in the footprint, where 230-kV lines are prevalent and transport a high volume of electricity.

Speaking at a Feb. 13 Organization of MISO States (OMS) board meeting, Moser pointed out that certain parts of the RTO operate at a maximum 230-kV rating, especially in MISO South. That voltage represents a “sweet spot for effective mitigation of congestion,” according to MISO.

“This puts essentially the whole footprint on an equal playing field in terms of getting a cost-shared project approved,” Moser said.

Postage Stamp Removal

MISO is also recommending that it scrap its footprint-wide postage stamp rate for market efficiency projects. The RTO currently allocates 80% of project costs to local resource zones based on expected benefits and recovers the other 20% via postage stamp allocation to all regional load. Instead, MISO wants to assign all costs to benefiting transmission pricing zones and work with stakeholders to create more specific benefit metrics. The move will make for “more granular, more targeted cost allocation,” Moser said.

MISO currently relies on the postage stamp rate as a means of recognizing both transmission benefits not currently quantified within its cost allocation and the changing nature of beneficiaries as the fleet evolves.

Currently, there is no regional cost allocation within MISO for transmission projects below 345 kV, and Minnesota Public Utilities Commission staff member Hwikwon Ham said if it were to abolish its postage stamp rate, it should detail a much more precise set of valued benefits.

In adding new benefit metrics for cost allocation, Moser said MISO may consider aspects such as deferred reliability projects and savings that could arise from opening up the contract flow path with SPP that bridges MISO South and Midwest.

“The benefit metrics discussion will continue,” Moser promised state regulators.

Wind on the Wires’ Natalie McIntire asked MISO to devise a benefit metric for projects that facilitate state renewable portfolio standards.

The RTO will also consider creating smaller transmission cost allocation zones for a more targeted cost allocation and will hold discussions with stakeholders, Moser said.

However, MISO will leave some market efficiency project requirements untouched, including the benefit-based allocation to all zones, a required benefit-to-cost ratio of at least 1.25:1 and the $5 million minimum project cost threshold.

The proposed changes would not apply to multi-value projects. Moser said stakeholders offered “a lukewarm response” to any possible changes to those projects.

MISO is seeking to draft a nearly final allocation proposal by June, with a FERC filing to follow in September or October. It hopes to get approval by the end of the year and introduce the new allocation in early 2019.

Entergy’s integration transition period, which limits cost sharing in MISO South, expires at the end of this year. The RTO has not revised its cost allocation rules since the integration of South in 2013.

‘Something You All Can Live With’

“We’re certainly zeroing in on some specific reforms,” Moser told stakeholders at a Feb. 15 Regional Expansion Criteria and Benefits Working Group (RECBWG) meeting. “We really tried to find areas where we could get broad support. We hope the overall package is something you all can live with.”

Xcel Energy’s Carolyn Wetterlin, chair of the RECBWG, reminded stakeholders that no allocation proposal will satisfy every stakeholder’s wish list.

“We’re getting into that phase where we really have to think about what we’re solid on and where we could give a little as we move toward a filing,” Wetterlin said.

Some stakeholders at the meeting asked for MISO to consider lowering the threshold further to 100 kV, given that some 100-kV projects are needed for reliability and provide economic benefits. Others pointed out that two years ago, FERC ordered a 100-kV minimum threshold for interregional market efficiency projects with PJM. But MISO has yet to propose a regional cost allocation for interregional economic projects down to 100 kV on the PJM seam.

MISO itself originally considered a 100-kV cost allocation threshold for market efficiency projects in a draft proposal issued last year.

Moser said 100-kV lines with solid business cases will still be eligible for local cost allocation, but the RTO prefers that costs for such low-voltage projects are not shared footprint-wide.

“We looked at all the perspectives we heard over the last year, and we view the 230-kV threshold as a reasonable compromise,” Moser added.

Since Entergy’s integration into MISO, the RTO has approved two 230-kV projects in MISO South that qualified under the “economic other” category, which are only eligible for recovery in zonal rates.

Other stakeholders argued for MISO keeping the 345-kV status quo, with one stakeholder saying lower voltage “Band-Aid projects” with limited footprint-wide benefits should not be allocated like higher-voltage “backbone” projects.

Last September, MISO Vice President of System Planning Jennifer Curran told the Board of Directors that the RTO anticipated a range of opinions among stakeholders on cost allocation approaches.

“It’s not surprising that we’ve heard a very large number of opinions,” Curran said at the time. “The one thing that holds true is that when MISO recommends transmission, we have to have a good, strong business case. We can’t recommend things that we don’t think will get passed.”

MISO will continue the cost allocation discussion with stakeholders at the March 15 RECBWG meeting.

February 16, 2018

ISO-NE, Mass. Set Ride-Through Rules for Solar PV

By Rich Heidorn Jr.

ISO-NE is asking distribution utilities in the region to adopt interim ride-through requirements for solar PV inverters that it developed with Massachusetts stakeholders, the RTO told its Planning Advisory Committee on Wednesday.

The RTO said it needs to ensure solar PV generation can remain stable during voltage and frequency excursions because of its rapid growth in the region. The RTO’s 2014 forecast predicted about 1,750 MW of solar by 2022. By 2016, however, the RTO had almost 2,000 MW, and the 2017 forecast predicts 4,000 MW by 2022. Massachusetts, home to 60% of the RTO’s solar resources, is expected to double its PV capacity in the next decade.

ISO-NE solar PV ride-through rules — | *ISO-NE*

The new rules are laid out in a source requirement document (SRD) ISO-NE developed with the Massachusetts Technical Standards Review Group, which includes representatives from developers, manufacturers, state regulators and utilities Eversource Energy and National Grid.

The SRD requires that solar inverters have voltage and frequency trip settings and ride-through capabilities and be certified under UL 1741 SA, the safety standard for inverters and interconnection system equipment used in distributed energy resources.

ISO-NE’s David Forrest said the SRD represents an effort to balance transmission and distribution system needs. “Ideally, we’d like DER to ride through any of these faults on the transmission system, [but] … we also have to look at issues on the distribution system,” he said. “So what the ISO is proposing is kind of a compromise between meeting the transmission needs and meeting the distribution needs.”

In Massachusetts, inverter-based solar PV projects greater than 100 kW will be subject to the new rules for interconnection applications submitted on or after March 1. Projects of 100 kW or less will be subject to the rule on June 1.

The RTO hopes utilities in all states will adopt the SRD, saying having one set of requirements for the region will minimize developers’ costs and simplify the modeling of DER in planning studies.

National Grid will require it in Rhode Island, and United Illuminating and National Grid are “looking at implementing the requirements” in Connecticut, Forrest said.

The Energy Policy Act of 2005 requires electric utilities to provide interconnection services based on the Institute of Electrical and Electronics Engineers’ (IEEE) Standard 1547 (Interconnecting Distributed Resources with Electric Power Systems).

ISO-NE said the SRD is “consistent with” Standard 1547 and can be met by all inverters certified under UL 1741 SA. “The key here is that we know that inverters meeting UL 1747 SA are available,” said Forrest.

The RTO sought interim rules while IEEE completes its work on a revised Standard 1547, he said. The institute hopes to complete Standard 1547.1 by late this year or early 2019. Once the revised standard is approved, UL 1741 SA will need to be updated to agree with the revisions, and it will take a year or longer for all inverter manufacturers to have their inverters tested and certified by safety company UL.

As a result, the RTO said it will be 2020 or later before utilities will be able to require use of the revised standard.

The SRD does not cover inverters for fuel cells, traditional generators or energy storage, although they may be covered in the future, Forrest said. “Down the road we may have to look at electric vehicles,” he added. “This isn’t a topic that is going to go away.”

February 16, 2018

MISO: Minimal Change to 2019 Tx Planning Futures

By Amanda Durish Cook

CARMEL, Ind. — MISO expects the 15-year future scenarios informing its 2019 Transmission Expansion Plan to look much like those for 2018.

MISO MTEP futures demand forecast — Hunziker | © *RTO Insider*

“There haven’t been any significant economic and policy changes. We can tweak and refresh these [2018] futures and adapt them for MTEP 19,” MISO Planning Manager Tony Hunziker told stakeholders at a Feb. 14 Planning Advisory Committee meeting.

Hunziker said MISO planners found the Trump administration’s plan to pull the U.S. out of the Paris Agreement on climate change will do little to disrupt the trajectory of the RTO’s renewable penetration trends.

MISO last year assembled MTEP 18 futures designed to be reused over multiple years, provided there aren’t extreme policy changes or economic shifts. The four futures include a limited fleet change future; a continued fleet change future; an accelerated fleet change future; and a future in which distributed and emerging technologies become more widely used in the footprint. (See MISO Ranks MTEP 18 Futures by Stakeholder Preference.)

As it promised, the RTO will apply an even 25% likelihood weighting to each of the four futures, effectively eliminating the weights. MISO had originally sought to apply equal weights in MTEP 18 but had to delay the plan for a year after stakeholders — especially from MISO South — insisted on having a say in deciding the futures’ likelihood. (See MISO Delays Removing MTEP Futures Weighting to 2019.)

This year, MISO projects a slight dip in load-serving entities’ demand forecasts, with the latest overall RTO forecast trending lower than forecasts prepared to inform MTEP 18. MISO now expects demand to grow at a preliminary 0.3% rate, lower than MTEP 18’s 0.5% growth rate and keeping the forecasted non-coincident peak below 136 GW through 2026. Hunziker said MISO has not yet rerun a resource forecast with the updated data.

The RTO now anticipates lower natural gas costs, predicting prices will remain below $6/MMBtu through 2033, compared with last year’s prediction of $6.50/MMBtu.

MISO also found that, compared to its MTEP 18 estimates, the capital cost of building new generation will slightly decline for all fuel types, except for coal, which increases slightly, and utility-scale solar, which decreases more dramatically from about $2,000/kW to $1,200/kW.

Forecasted coal retirements are predicted to hold steady, with MISO estimating that about 35 GW will shut down by 2032.

MISO will hold a March 20 workshop to further refine MTEP 19 futures with stakeholders. Hunziker asked for stakeholders to submit their comments about the reuse of futures and the RTO’s predictions by March 2.

February 16, 2018

FERC Rules to Boost Storage Role in Markets

By Michael Brooks

WASHINGTON — FERC on Thursday ordered RTOs and ISOs to revise their tariffs to allow energy storage resources full access to their markets, a move the commission said will enhance grid resilience (RM16-23).

The rulemaking, Order 841, requires each RTO/ISO to establish a “participation model” for storage resources to ensure they are eligible to provide all energy, capacity or ancillary services of which they are capable, while also enabling them to set clearing prices as both a buyer and seller. Grid operators will also need to establish a minimum threshold for participation that doesn’t exceed 100 kW.

FERC also required that storage resources be able to resell electricity into the markets at the wholesale LMP.

The order “will enhance competition in these markets and help ensure that they produce just and reasonable rates,” staff told commissioners at FERC’s open meeting.

The commission issued its Notice of Proposed Rulemaking on energy storage market participation in November 2016. It could be about two years until the new rules take full effect. (See FERC Rule Would Boost Energy Storage, DER.) FERC’s directives will become official 90 days after their publication in the Federal Register. RTOs will then have nine months to file their tariff revisions, up from the six months proposed in the NOPR in response to requests for additional time, staff said. The grid operators would then have a year to implement the revisions.

FERC PJM energy storage — LaFleur wearing an Eagles (Quarterback Nick Foles) jersey. Had the Patriots won the Super Bowl, Commissioner Powelson would be wearing a Patriots jersey | © *RTO Insider*

The commissioners said the order demonstrated their commitment to ensuring they were not “picking winners and losers” in the markets. Commissioner Cheryl LaFleur noted that the markets “were largely designed around the resources that prevailed when they were launched” but have evolved to accommodate new technologies.

“I think the storage participation model required by today’s order will facilitate storage being able to provide all the services it is technically capable of providing, for the benefit of consumers,” she said.

The order is “the kind of positive regulatory action that removes barriers to competition, allowing emerging technologies to compete in the marketplace,” Commissioner Neil Chatterjee said. “Put simply, it’s good regulatory policy that people from all political backgrounds can support.”

“In my view, today’s final rule also strikes the appropriate balance between prescriptive requirements and high-level directives,” Commissioner Robert Powelson said. FERC ordered RTOs/ISOs to take into account the unique physical and operational characteristics of storage, he said. “In doing so, we have given the RTOs and ISOs significant latitude to develop market rules that work best with existing market constructs and are respectful of regional differences,” he said.

The Energy Storage Association applauded the order.

“With this morning’s unequivocal action, the FERC signaled both a recognition of the value provided by storage today and, more importantly, a clear vision of the role electric storage can play, given a clear pathway to wholesale market participation,” CEO Kelly Speakes-Backman said in a statement.

Powelson at ESA Policy Forum

In an appearance at ESA’s Energy Storage Policy Forum at the National Press Club the day before FERC issued the rules, Powelson told attendees the order would demonstrate the commission’s commitment to fair and open markets.

He also spoke about the larger trends in electricity, and how storage will have a bigger role to play under the new rules. Increased use of renewables has led to “market-based decarbonization,” he said.

“Whether you’re a fan of the Clean Power Plan or not, we are not building coal plants right now, and we are not building … 1,200-MW cathedral nuclear plants,” Powelson said.

He pointed to the 2014 “polar vortex” and last month’s cold snap. “No one [in D.C.] wants to talk about … the benefits of demand-side resources,” Powelson said. “They want to talk about baseload, baseload, baseload.”

Tech Conferences for DER

The commission had also proposed directing RTOs to give aggregated distributed energy resources the same treatment as storage, but on Thursday it said it needed more information before it could take action, ordering a technical conference to be held April 10-11 and opening new dockets for the issue (RM18-9, AD18-10).

Among the changes under FERC’s proposal, a DER aggregator could register as a generation asset “if that is the participation model that best reflects its physical characteristics.” The commission hopes to remove the commercial and transactional barriers to DER participation in wholesale markets.

Previewing the technical conference, LaFleur and Powelson said they were particularly interested in how DER operates and is compensated in both the wholesale and retail markets. “There needs to be a crisp understanding of who pays what to whom for what,” LaFleur said.

“Distributed energy resources are becoming increasingly more integral to our resource mix, and we at the commission should make every effort to advance this issue without delay,” Chatterjee said.

Speaking to reporters after the meeting, Chairman Kevin McIntyre acknowledged “the quasi-disappointment that I heard between the lines from some of my colleagues, which I share. It would have been great if we could have addressed both storage resources and distributed energy resources today. …

“But really, after looking at the state of the record on those two side-by-side issues, we determined that we needed to bolster our record on the distributed energy resource side of things. So I think our conference will be very useful.”

February 16, 2018December 13, 2023

Sempra Moves Closer to Securing Oncor Acquisition

By Tom Kleckner

AUSTIN, Texas — Sempra Energy’s proposed $9.45 billion acquisition of Energy Future Holdings and its interest in Oncor took a major step toward reality Thursday before the Public Utility Commission of Texas.

The commission canceled a hearing on the merits of the deal scheduled for next week and directed staff to prepare a proposed order in the proceeding (Docket No. 47675). The PUC is expected to revisit the issue during its next open meeting on March 8.

EFH, which declared bankruptcy in 2014, holds an indirect 80% interest in Oncor, once its crown jewel but now the lone business remaining in its portfolio. Hunt Consolidated, NextEra Energy and Berkshire Hathaway Energy have all come up short in previous attempts to acquire Oncor, the largest electric utility in Texas.

“The fourth time’s the charm!” said an onlooker to a smiling Oncor CEO Bob Shapard, clapping him on the shoulder as he left the PUC’s hearing room.

Shapard and General Counsel Allen Nye, who will both retain positions on the post-acquisition board of directors as chairman and CEO, respectively, were singled out for praise by PUC Chair DeAnn Walker. She thanked them for their work in what she said was a “very painful process” for them.

Walker also apologized to a large contingent of Sempra representatives, which included CEO Debra Reed, for making the long trip from California for a discussion that took less than two minutes. “Come back and see us anytime,” she said.

Walker acknowledged the work of both parties involved in the transaction. San Diego-based Sempra and Oncor have agreed to a list of commitments in settling with all 10 parties that have intervened in the case, rendering a hearing moot. (See Sempra, Oncor Reach Agreement with Texas Intervenors.)

“The unanimous settlement agreement is incredibly positive and demonstrates support for the proposed Sempra transaction from all parties,” Oncor spokesman Geoff Bailey said in an email to RTO Insider. “We look forward to reviewing the proposed order from the commission and answering any further questions that they may have.”

Sempra said it was pleased with Thursday’s developments. The company announced its intentions to acquire EFH last August and received approval from the U.S. Bankruptcy Court for the District of Delaware in September. FERC gave its approval for the acquisition in December, but the transaction remains subject to the PUC’s approval and that of the bankruptcy court.

“If approved by the commission, we will have the opportunity to potentially bring this long ordeal to a close, and Texas will get a terrific partner in Sempra,” Bailey said.

February 16, 2018

OMS Board of Directors Briefs: Feb. 13, 2018

A clean energy consultant told Midwest regulators Tuesday that a future footprint with more renewables would benefit from modern transmission technologies.

Rob Gramlich, president and founder of Grid Strategies, said transmission technologies — dynamic line ratings, flow control devices and network topology optimization — will help manage congestion.

“We’re looking at a future where there are a lot of low-cost but remote resources,” Gramlich told the Organization of MISO States’ Board of Directors at the National Association of Regulatory Utility Commissioners’ annual meeting.

Gramlich said the technologies have improved dramatically and are ready for use today, but they need to be better valued monetarily.

“They’re there and ready, but the incentives aren’t in place,” Gramlich said. “It’s just hard to get low-cost improvements because they can’t be rolled into transmission owners’ rate base. … There’s a gap that state regulators can address.”

Dynamic line ratings are adjusted based on weather conditions, opening up transmission lines for more capacity when temperatures are cooler. Network topology optimization uses software to improve scheduling of transmission outages. Gramlich also said power flow control devices, like phase angle regulators, played a key role in PJM managing loads during the early January bomb cyclone cold snap.

“Operate the existing grid more efficiently and get more out of it,” Gramlich urged.

He expressed surprise at how many line limit and flow thresholds on the bulk power system are not exactly known, only estimated. “It’s not so often measured,” Gramlich said.

It’s time for the industry to develop a technology-managed smart grid, he continued, noting that much of the country’s sewer flows are managed through technology.

Such technologies are more widely used abroad, where incentives are in place, Gramlich said, pointing to Belgium, which makes widespread use of dynamic line ratings.

OMS DER Survey Begins

The board kicked off an effort to collect data from load-serving entities on the volume of distributed energy resources participating in their service territories.

OMS will survey LSEs across MISO through March 30 on the current and projected state of DER in their territories. The group plans to analyze the data to get a better understanding of the “structure, scope and pace of DER development in MISO.”

OMS MISO dynamic line ratings — OMS 2017 Annual Meeting in Chicago | © *RTO Insider*

The survey is part OMS’ ongoing initiative to help state and local regulators make informed decisions as increased DER adoption potentially dictates the need to develop policy around the interaction between distribution and transmission systems. Last year, OMS formed a temporary working group to formulate ideas on incorporating DER into the grid after holding a MISO-wide workshop. (See OMS Discusses Next Steps in DER Policy.)

“The OMS board has made DER a priority because of the inherent jurisdictional overlap raised by future integration of DER connected to the distribution system into transmission-level planning, operations, and energy markets,” OMS President, and chair of the Arkansas Public Service Commission, Ted Thomas said in a statement.

“In a multistate region, it’s critical that cooperation among states and their utilities occurs to provide the necessary visibility to DER deployment that enables the continued efficient and reliable operation of the bulk electric system,” said OMS Vice President Daniel Hall, chair of the Missouri Public Service Commission.

— Amanda Durish Cook

February 16, 2018

ISO-NE Outlook Highlights Fuel Security, Renewables

By Michael Kuser

ISO-NE’s 2018 Regional Electricity Outlook released Wednesday reiterates concerns about fuel security that were detailed in a separate report published by the RTO last month.

In a joint preface to the outlook, ISO-NE CEO Gordon van Welie and Board of Directors Chair Philip Shapiro said “the biggest challenge to the reliability of the grid is the lack of fuel infrastructure to supply the fleet of natural-gas-fired generators.”

The RTO’s Operational Fuel-Security Analysis examined 23 fuel-mix scenarios and concluded that power shortages because of inadequate fuel would occur in 19 of them by winter 2024/25, which would require emergency actions such as voluntary energy conservation and involuntary load shedding. (See Report: Fuel Security Key Risk for New England Grid.)

Shapiro and van Welie also cited further emission restrictions on oil-fired generators “and the reality that older oil and nuclear generators are becoming less economically competitive and may retire before the region has added sufficient new energy sources to replace them.”

The outlook pointed to the recent cold snap that hit the region from Dec. 26 to Jan. 7, during which “constrained pipeline capacity resulted in substantially higher natural gas and wholesale electricity prices, leading to less expensive oil and coal power plants operating instead of the usually competitive natural gas-fired generation.”

Oil supplies at plants around New England declined rapidly over the two-week cold spell as gas prices spiked and dual-fuel plants switched to oil, but the RTO avoided serious reliability issues thanks to LNG shipments. (See FERC, RTOs: Grid Performed Better in Jan. Cold Snap vs. 2014.)

Testifying before the U.S. Senate Energy and Natural Resources Committee on Jan. 23, van Welie said that since 2000, oil- and coal-fired generation’s share of ISO-NE’s power production has fallen from 40% to less than 10%, while natural gas has risen from 15% to about 50%.

ISO-NE fuel security — Projected Changes in Key New England Power Resources and Energy Efficiency | *ISO-NE*

The outlook noted that wind power last year for the first time surpassed natural gas for the volume of generation seeking interconnection in the RTO’s queue. About 4,000 MW of that proposed wind would be located offshore of Massachusetts, with most of the remaining 4,500 MW slated for Maine.

“Because of the large distances from some of the proposed onshore wind power projects to the existing grid, major transmission system upgrades will be needed to deliver more of this power from this weaker part of the system to far-away consumers,” the report says.

As the amount of wind and solar power continues to grow, in part driven by state policies, the RTO last month proposed a new two-stage capacity auction, Competitive Auctions with Sponsored Policy Resources, to enable its Forward Capacity Market to accommodate state policy-sponsored, clean-energy resources in the wholesale market while maintaining a viable economic model for existing power plants. (See CASPR Filing Draws Stakeholder Support, Protests.)

The RTO also says it’s keeping an eye on the increased adoption of electric vehicles and electric heating in New England as states in the region pursue decarbonization goals.

“The ISO plans to start working with regional stakeholders to quantify the impact of the states’ decarbonization policies on long-term demand so that we can understand their potential effects on the power system and reflect these in future Regional System Plans,” the report says.