Page 1220 – RTO Insider

July 23, 2019

Study: Carbon Adder Supports NY Clean Energy Goals

By Michael Kuser

NYISO’s effort to price carbon into its wholesale markets could help New York achieve its ambitious clean energy goals, but the policy would benefit from a boost in the social cost of carbon (SCC) or additional programs, according to a s t udy released Tuesday.

The study by the nonprofit Resources for the Future (RFF) indicates a $63/ton carbon price could drive clean energy penetration to as high as 64% of the state’s resource mix by 2025, “well on the way” to the 70% requirement for 2030. The SCC is currently estimated at $40/ton.

The target of 70% renewable generation by 2030 implies an increase in the share of non-emitting generation from its current level of approximately 60% (46% not including Indian Point, which is slated to retire in 2021) to roughly 88% in 2030 (for load-serving entities under the jurisdiction of the New York Public Service Commission) and 100% by 2040, according to the study.

“This analysis suggests pricing carbon within New York electricity markets could help to advance the adoption of clean energy, but a higher carbon price, additional companion policies or different policies will likely be necessary to hit the clean energy goals New York state has set for 2030.”

The think tank used its own Engineering, Economic and Environmental Electricity Simulation Tool (E4ST) to model the impact of carbon pricing on emissions and prices in New York and throughout the Eastern Interconnection based on expectations for 2025.

The study, “Benefits and Costs of Power Plant Carbon Emissions Pricing in New York,” was co-authored by RFF’s Daniel Shawhan and incorporates key assumption changes from an earlier version of the analysis presented last September to the Integrating Public Policy Task Force (IPPTF), a joint effort between the ISO and the PSC. (See ‘Negative Leakage’ from NY Carbon Charge, Study Shows.)

The ISO’s Market Issues Working Group (MIWG) took over in January from the task force, which over nearly a year and a half had developed the carbon pricing proposa l released last December.

“The most influential change was that we used what I consider to be better projections of the costs of solar and wind technology,” Shawhan told RTO Insider.

“The ones we used before were from the [U.S. Energy Information Administration’s] Annual Energy Outlook, and they’re just simply out of date,” Shawhan said. “So we used better assumptions … the medium cost projections from the National Renewable Energy Laboratory annual technology baseline. The effect of that change was to lower the projected cost of solar and wind, and, as a result, we get considerably more emissions reductions and we get a low projected cost to electricity users, lower than some of our prior projections.”

Clean Energy Legislation

NYISO market participants have been debating how the state’s newly enacted Climate Leadership and Community Protection Act (A8 4 29) and its mandated influx of renewables would affect the effort to price carbon. (See “New Energy Law Could Affect CO2 Market Design,” NYISO Business Issues Committee Briefs: June 20, 2 0 19.)

Along with the 70-by-2030 renewables target, the new law nearly quadruples the state’s 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.

Gov. Andrew Cuomo signed the bill July 18, the same day he announced the state was awarding a combined total of 1,700 MW in offshore wind contracts to Equinor’s Empire Wind project and to Sunrise Wind, a joint venture of Ørsted and Eversource Energy.

In addition, the state Department of Environmental Conservation is revising its Clean Air Act regul a tions to lower allowable NO_x emissions from simple cycle and regenerative combustion turbines during the ozone season, effective May 1, 2023, with generator compliance plans due by March 2, 2020. (See NY DEC Kicks off Peaker Emissions Limits Heari n gs.)

According to the RFF simulation results, New York electricity users in in 2025 would pay the equivalent of between 0.1 and 1.1% of the retail electricity rate for the carbon adder, while the net benefit to society as of that year would be between $108 million and $691 million per year, in 2013 dollars.

The analysis found a carbon adder drives New York renewable energy credit and zero-emission credit prices to zero, incentivizing renewables investment and the maintenance of upstate nuclear generation in the energy markets. It also found the carbon policy increases zonal average wholesale electricity prices in New York by $20 to $24, but with revenue rebated to end users, and other charges reduced, the average cost to end users is 9 cents to $1.21/MWh.

In addition, the study found the Regional Greenhouse Gas Initiative’s Emissions Containment Reserve, due to be introduced in 2021, will provide a mechanism for reducing the emissions cap if the RGGI allowance price falls to the reserve trigger price, resulting in lower total power sector emissions from the RGGI states taken together.

July 23, 2019February 19, 2025

Ohio Approves Nuke Subsidy

By Christen Smith

Ohio legislators approved a controversial bill Tuesday to subsidize FirstEnergy Solutions’ nuclear reactors on Lake Erie, making it the third state to provide a financial lifeline to the nuclear industry in PJM.

The Ohio House of Representatives voted 51-38 in favor of the $170 million Ohio Clean Air Act (HB 6). Republican Gov. Mike DeWine quickly signed the bill later that day, officially curtailing the state’s current renewable portfolio standards and tacking on monthly fees — ranging from 80 cents for residential customers to $2,400 for large industrial plants — to electricity bills for the Davis-Besse and Perry nuclear facilities. Some $20 million of the fees collected will support six solar power projects in rural areas of the state.

Ratepayers will also notice a $1.50 charge to supplement two Ohio Valley Electric Corp. (OVEC) coal plants — a House-crafted addition meant to attract support from electric distribution utilities, according to some critics. (See Ohio Nuke Bill: A Worthwhile Tradeoff?)

Davis-Besse Nuclear Power Plant

“We are very pleased that Gov. Mike DeWine signed HB 6 following its successful bipartisan passage in the General Assembly,” said John W. Judge, CEO of FirstEnergy Solutions. “We’re also thankful for the support and commitment by Speaker [Larry] Householder and Senate President [Larry] Obhof, who understood the importance of protecting 90% of the state’s zero-emissions electricity, substantial employment and the need to provide affordable rates from a diverse portfolio of generation sources for Ohioans.”

Judge confirmed that FES will rescind deactivation orders for both plants and prepare for necessary refueling in the spring.

With DeWine’s signature, Ohio joins New Jersey and Illinois as the only states in PJM to subsidize nuclear generation — a policy reaction to the economic impact of cheap, natural gas-fired generation setting prices in the wholesale markets. Supporters insist the support is justified because the RTO’s market structure doesn’t appropriately value the reliability and carbon-free emissions provided by nuclear power. Without them, proponents say states can’t achieve aggressive clean energy targets because renewables are intermittent. (See Nuclear, Gas Seen as Crucial to PJM’s Renewables Gro w th.)

Gregory Wetstone, CEO of the American Council on Renewable Energy (ACORE), characterized the plan as a “bailout” — echoing the sentiments of critics in both the clean energy and natural gas sectors who argue the subsidies will distort the wholesale energy market and spike electricity prices.

“At a time when the nation is accelerating its transition to affordable, pollution-free renewable power, this legislation goes in precisely the wrong direction with a bailout of aging and uneconomic coal and nuclear plants and a weakening of the state’s renewable portfolio standard,” he said.

“House Bill 6 is just the latest, though maybe the worst, of the retreats from the legislature’s brave stand for utility consumers through power plant competition in 1999,” said Bruce Weston, counsel for the Ohio Consumers’ Counsel (OCC). “Power companies have too much influence in Ohio, and that should be reformed.”

AARP joined ACORE, the OCC and the Ohio Manufacturers’ Association in calli n g on the governor to veto the bill, to no avail.

Todd Snitchler, CEO of the Electric Power Supply Association, said the bill “unfairly punishes competitive generators who are the largest power producers in Ohio. This bailout jeopardizes competitors’ investments and risks local tax revenues and jobs in the communities hosting competitive coal and natural gas plants that generate thousands of megawatts for Ohio and the PJM region.

“Passage of yet another nuclear bailout makes it more urgent than ever for the Federal Energy Regulatory Commission to swiftly implement effective measures to protect the integrity of PJM’s energy and capacity markets,” he added.

The House vote came six days after the Senate approved the bill, capping off months of hearings that debated the merits of saving the plants at the expense of RPS goals. (See Ohio Senate Clears Nu k e Rescue.) Householder (R) had reportedly worked behind the scenes to secure bipartisan support in his chamber by pushing the fees for OVEC, and slashing the RPS mandates long unpopular among state Republicans.

“We are reducing consumers’ bills, repealing wasteful government mandates and keeping good-paying jobs here in Ohio,” Householder said Tuesday. “This is legislation that makes sense for the ratepayers of Ohio.”

Under the plan, the nuclear charges would sunset in 2027, and the Public Utilities Commission would audit the facilities each year between 2022 and 2026 to determine if the subsidies are still needed — an attempt to placate critics who insist the plants aren’t losing money at all.

The RPS — the law determining how much electricity electric distribution utilities procure from renewable resources — will drop from 12.5% by 2027 to 8.5% until 2025, with no continuation of the mandate thereafter.

Opponents have vowed to seek a referendum opposing the bill on the November 2020 election ballot. ClearView Energy Partners said opponents have 90 days after July 23 to collect the necessary 265,774 signatures needed to get it on the ballot. The success of such a measure depends largely on the way election officials word the referendum, ClearView said.

July 23, 2019

FERC Upholds Fuel Cost Penalties Against CPV Plant

By Christen Smith

FERC on Monday upheld penalties levied against a New Jersey power plant for violating its fuel cost policy, saying the company acted in bad faith and ignored advice from PJM staff and its Market Monitor (ER19-1083).

Competitive Power Ventures (CPV) requested two waivers regarding its decision to bid its Woodbridge Energy Center, a 725-MW combined cycle plant in Middlesex County, into the energy market on Jan. 5, 2018, using its revised — but not yet approved — fuel cost policy. The company wanted FERC to waive the rules and reverse the penalty, given what it called the rare circumstances that led to the changes, or retroactively approve its revised policy.

During a discussion one week prior to the January auction, PJM and the Independent Market Monitor told CPV to submit energy offers based on its existing policy until its revisions were approved — which didn’t happen until Jan. 29.

CPV — Competitive Power Ventures’ Woodbridge Energy Center | *Competitive Power Ventures*

The company said it ignored the recommendation because it “does not believe it would have been selected to operate given the overall unit offers.” CPV said it was faced with the choice of making a cost-based offer using its approved policy, which no longer reflected its true costs, or using the unapproved but more accurate policy reflecting “in some cases lower” costs.

“CPV argues the purpose of imposing a penalty for submitting an offer inconsistent with an approved fuel cost policy is to prevent the ‘deliberate misrepresentation of fuel costs,’ and CPV had no intent to misrepresent its fuel costs,” the company wrote. ” … This situation will not repeat itself because CPV’s revised fuel cost policy is now approved, and the unique circumstances are unlikely to arise again.”

The Monitor argued granting either of the waivers would undermine the enforcement of fuel cost policies, market power mitigation and customers’ confidence.

“It would undermine the entire process of ensuring accurate cost-based offers and would provide precedent for requests for any participant that wanted to modify its fuel cost policy after-the-fact,” the IMM wrote. “CPV’s waiver requests represent a broad attack on the approved rules that ensure fuel cost policies are verifiable and systematic.”

The commission said it rejected the waiver because CPV failed to show it had acted in good faith.

“CPV does not dispute this timeline and admits it knowingly offered pursuant to the pending revised fuel cost policy, as opposed to its then-effective initial fuel cost policy as required by the Operating Agreement,” the commission wrote, noting CPV never explained why it waited until January to revise its policy or why it took nearly a month to provide a copy of its fuel supply agreement when the Operating Agreement allows just five business days to pass. “We find that these facts do not support a finding that CPV acted in good faith, and its waiver request fails.”

The amount of the penalty assessed on CPV was not disclosed.

A PJM stakeholder-crafted package pending before the Market Implementation Committee would create a “safe harbor” provision for sellers who violate their fuel-cost policies for unforeseen reasons. (See PJM Stakeho l ders Still Divided on Fuel-cost Policies.)

July 22, 2019

High Temps Put Con Ed on the Hot Seat Again

By Rich Heidorn Jr.

Temperatures finally receded Monday after a three-day heat wave that broiled cities from Oklahoma City to Boston. But Consolidated Edison remained on the hot seat after power outages hit 50,000 customers in New York City and Westchester County on Sunday night.

That included 30,000 customers in Brooklyn whose service was cut Sunday to prevent equipment damage. As of 3 p.m. Monday, the company was reporting almost 12,000 customers still without service.

The outage came just a week after a blackout attributed to failed relay systems that darkened part of Manhattan. (See Con Ed: Failed Relay Protections Caused NYC Blackout.)

An angry New York City Mayor Bill de Blasio said Monday he had lost faith in the utility, echoing Gov. Andrew Cuomo’s suggestion after the July 13 outages that it could be replaced.

“I spoke to Con Ed’s president last night. I spoke to him this morning,” de Blasio told reporters Monday. “No answers whatsoever as to why this happened and what is being done to ensure it will not happen again. This was obviously a predicable situation and therefore preventable.

“It’s very clear we have to question whether Con Ed as it’s structured now can do the job going forward or whether we need to go to an entirely different approach. So, I’m calling for a full investigation and [an inquiry into] whether we need a new entity to handle this situation going forward, because at this point, I do not have faith in Con Edison.”

Cuomo repeated his criticism in a tweet in which he announced he had deployed 200 State Police officers, 100 generators and 50 light towers to Brooklyn. “We’ve been through this situation with Con Ed time and again, and they should have been better prepared — period,” he said.

Con Ed’s stock closed Monday at $86.82/share, down more than $2 (2.4%) from its close before the two blackouts on July 12.

The company said Monday its actions were needed to prevent more severe outages.

“We are completely focused on getting customers back in service, and we regret the distress they are under,” it said in a statement. “The actions we took were necessary to prevent longer outages to the impacted customers that would have occurred as a result of additional equipment damage. Customer service representatives are in southeast Brooklyn providing assistance as crews work to restore the remaining customers in that area, as well as other parts of our service area.”

Con Ed earlier reduced voltage by 8% in some areas to maintain service. The company distributed dry ice to residents during the outage.

Company spokesmen told The New York Times that the outages were ordered to prevent damage to overhead lines at risk of overloading due to the heat. “It is the third day of the heat wave, so the system is really baking at this point,” one representative said.

Con Ed wasn’t the only utility that faced challenges in the heat. PSEG Long Island had about 6,000 customers without power Sunday evening, Newsday reported.

Other utilities scrambled to restore power after strong thunderstorms brought down lines. DTE Energy reported that 600,000 customers in southeast Michigan suffered outages as a result of the region’s largest storm in years. Consumers Energy said about 220,000 customers lost service as storms downed more than 2,600 wires.

Weather-related outages also were reported in New Jersey and Wisconsin.

July 22, 2019

Comments due July 26 on Revised Inverter Standard

By Rich Heidorn Jr.

NERC stakeholders have until 8 p.m. ET Friday to weigh in on proposed changes to reliability standard PRC-024-2 concerning inverter-based generation resources.

The proposal is intended to ensure that generator owners (GOs), operators, developers and equipment manufacturers understand how their plants are expected to respond to grid disturbances. It was based on disturbance analyses and the Inverter-Based Resource Performance Task Force’s PRC-024-2 Gaps Whitepaper. (See NERC to Try Again on Invert e r Rules.)

One of the most significant changes is in section 4.1.2., in which NERC proposes expanding applicability to include transmission owners “that own a bulk electric system generator step-up (GSU) transformer or collector transformer.”

It also requires inverters not to trip or “enter momentary cessation” — an interruption in their injection of current into the grid — within the “no trip zone,” except for “documented and communicated regulatory or equipment limitations.”

Revised Inverter Standard — Most solar PV generation is below the 75-MW threshold requiring registration with NERC. | *NERC*

The unofficial comment form references two issues that the standard drafting team (SDT) said must be addressed to ensure the reliability intent of the PRC-024 is achieved.

It notes that the existing standard refers only to “generator protective relaying,” which suggests the setting of voltage and frequency protection relays on the GSU transformers on synchronous generators are excluded.

“Because the GSU and the generator are connected to the same bus and have the same source (the generator), they see the same voltage (and frequency). Consequently, the voltage and frequency protection settings applied to the relays on the GSU must be included in the standard as the operation of those relays would result in tripping the generator, thus defeating the reliability intent of the standard,” it said.

Another issue identified by the SDT is that the standard applies only to GOs, excluding TOs that own GSUs or collector transformer and associated voltage and frequency protective relays.

However, none of those who had filed comments as of Monday said they knew of any GSU owners that were registered as a TO but not as a GO.

Commenters should use the Standards Balloting and Commenting System to submit feedback.

July 22, 2019April 14, 2025

ERO Budget Nears OK Despite Canada’s Concerns

By Rich Heidorn Jr.

The Electric Reliability Organization’s proposed $207 million budget appears headed for approval, but NERC’s increased spending to develop its cybersecurity capability is facing some pushback from Canadian utilities.

The Canadian Electricity Association and Ontario’s Independent Electricity System Operator questioned the 13.3% spending increase on the Electricity Information Sharing and Analysis Center (E-ISAC), part of a five-year strategic plan. The E-ISAC will account for about 27% of NERC’s budget next year.

NERC Chief Security Officer Bill Lawrence gave reporters a tour of the E-ISAC in June. | © ERO Insider

NERC is boosting 2020 assessments by 4.5% overall, but Canada (+7.2% to $0.013/MWh) and Mexico (+6.0% to $0.016/MWh) face bigger increases than the U.S. (+4.3% to $0.016/MWh).

“Canadians have voiced concern regarding the overall value proposition of the E-ISAC, especially given substantial increases in the value of cyber-related services and cybersecurity investments by Canadian government partners,” the CEA said, adding that its member utilities have “limited ability … to flow through NERC costs to ratepayers.”

It said the E-ISAC should take advantage of “capabilities already available from other agencies or partners (such as the Canadian Cyber Centre) to avoid unnecessarily fully building out its own capabilities.”

IESO noted that concern over rising electricity costs has led the Ontario government to promise a 12% rate reduction. “A rise in regulatory fees beyond the rate of inflation forces the IESO to adjust our budget in areas that may negatively affect our ability to execute on our strategic priorities,” it said.

The CEA and IESO were among six entities that filed comments on NERC’s initial budget proposal. (See ERO Budgets up 3.8%; Assessments up 2.9%.) NERC’s second draft budget, released July 15, adds $500,000 for modifications to its Atlanta headquarters to provide more meeting space.

Other Commenters

Other commenters on the initial draft were generally supportive of the expansion of the E-ISAC, although the Bonneville Power Administration called for more “transparency” on its programs and benefits. BPA noted that the E-ISAC and the Cybersecurity Risk Information Sharing Program (CRISP) are more than 30% of the NERC budget, saying it “would like assurance that as resources are transferred from other programs such as event analysis to E-ISAC that those programs will still be viable to the industry.”

The Edison Electric Institute expressed no misgivings over the expansion, saying “the execution of the E-ISAC’s long-term strategic plan for building a world-class ISAC is critical for providing timely sharing of security threat information.”

E-ISAC partners | © ERO Insider

The ISO /RTO Counc i l (IRC) Standards Review Committee said NERC should “ensure the E-ISAC is able to provide the most relevant and timely actions in response to bulk power system threats and vulnerabilities.”

NERC respon ded to the comments by detailing the E-ISAC’s programs and touting its access to the intelligence community. It said industry participation with the office has increased, noting 25 Canadian asset owners and operators had established user accounts since late 2018.

Personnel Costs

EEI and the IRC did question NERC’s personnel costs.

The IRC suggested NERC should cut spending in reliability standards and compliance programs to reflect reduced compliance requirements as a result of its Standards Efficiency Review. In May, the Board of Trustees approved the elimination of 84 reliability requirements. (See “Standards Efficiency Review Retirements OK’d,” NERC Standards News Briefs: May 8-9, 2019.)

The council also said that while risk-based monitoring has introduced some efficiencies in the compliance program, “the enforcement program continues to follow a lengthy process.”

“The 2018 average processing age for the entire ERO Enterprise inventory was almost a year, with 37% between one and two years old and 7% over two years old. Developing a quicker path to resolve issues of noncompliance, particularly those that pose minimal risk to the reliability or security of the BPS could affect personnel and future budget dollars,” it said.

EEI sought information on NERC’s salary increases and urged the organization to seek ways to reduce medical expenses, which are budgeted to increase by 13%. NERC said its budget includes a 3% increase over base salaries for “merit adjustments” and “up to 0.5% for equity and market adjustments” that was requested by its board.

The institute said NERC should continue seeking ways to minimize operational costs “and focus resources on activities that are aligned with NERC’s performance objectives and [Reliability Issues Steering Committee] priorities. If new risks are identified, NERC should re-evaluate and prioritize activities, including deferring certain work to efficiently manage resources.”

NERC said its salaries are based on guidelines from the board’s Corporate Governance and Human Resources Committee and market compensation and benefit studies. “NERC is committed to building and maintaining top talent with the required specialized expertise necessary to fulfill the ERO Enterprise’s mission-critical roles,” it said.

The organization said it also benchmarks benefit costs and that increases to its medical insurance plan were “below market for several years.”

“The past two years have shown higher increases due to recent loss experience and fewer medical insurance provider options in the state of Georgia,” it said. “NERC continues to negotiate these premiums and will have final amounts for 2020 at the end of 2019.”

The National Rural Electric Cooperative Association offered brief comments urging the ERO to continue its efficiency efforts, saying it “should be a long-term focus for NERC.”

$500K Increase

NERC presented its revised budget at the board’s Finance and Audit Committee (FAC) conference call Thursday. Interim CFO Andy Sharp said the additional spending, which was revealed in the second draft of the budget, will save money on catering and travel costs.

NERC increased its budget to create more meeting space at its Atlanta headquarters. | © ERO Insider

The additional spending boosts NERC’s 2020 budget to $83.4 million, a 4.5% increase over 2019, compared to 3.8% in the first draft. The office improvements will be funded through reserves, so the NERC assessment will not increase from the original draft.

In addition to the spending on the office, the second draft adds two employees converted from contractors, which it said will result in a slight savings.

The regional entities also presented their 2020 budgets at the meeting, none of which changed materially from the first drafts. All told, NERC and the REs are proposing about $207.3 million in spending in 2020, a 4.1% increase. Total assessments are projected to increase by 2.9%.

Approval Schedule

Written comments on the final budget draft, which are due by July 31, should be sent to Erika Chanzes, manager of business planning and regional relations (erika.chanzes@nerc.net).

The Member Representatives Committee will hold a call to receive input on Aug. 2. The FAC will meet Aug. 14 to recommend approval of final budgets, followed by board approval on Aug. 15 and a FERC filing Aug. 26, with subsequent filings to Canadian authorities.

July 21, 2019

SPP Ends 8 Days of Conservative Operations

By Tom Kleckner

DES MOINES, Iowa — SPP ended eight days of conservative operations last week, just in time to meet near-record demand in its 14-state footprint.

The RTO declared the alert, a level down from an energy emergency, on July 10, when it projected an above-normal number of primarily forced outages and a drop in wind production. Normal operations resumed on Wednesday.

SPP was already without 13 GW of non-variable resources when it declared the alert. Those outages peaked at slightly more than 14 GW on July 13, before finally falling to less than 10 GW on Thursday.

“At one point, 45% of our generation was unavailable to us through outages or derates,” Operations Vice President Bruce Rew told the Markets and Operations Policy Committee on July 16. He said outages were slightly less than 8 GW a year ago on July 13.

Rew said SPP was predicting a more normal wind production of 12 to 13 GW through the end of last week. Forecasters pretty much nailed their prediction.

“Less than 5 GW is a low wind day for us anymore,” he said.

Fortunately, the alert ended just as SPP was expecting to set new records for peak demand. Demand fell short Wednesday to Friday, though on Friday it came within 30 MW of the all-time mark of 50.6 GW, set in July 2016.

It was the sixth time the RTO has called for conservative operations this year, more than it did all last year. The first two alerts were called in February and March as a result of normal cold weather events. SPP has since issued alerts on May 29, June 4 and July 1 over what staff called “uncertainty factors.”

“What’s the weather forecast? Potential generation? Certainty of load?” Rew said. “We’re seeing outages extending a little longer than normal.”

A comparison of SPP’s July outages | *SPP*

Asked if SPP’s criteria for declaring conservative operations have changed, C.J. Brown, director of system operations, said no.

“We have gotten better at what we’re looking at from a certainty perspective,” he said.

Given the number of conservation alerts called this year, which have totaled 25 days, the MOPC asked SPP to further evaluate this year’s events and bring back a recommended policy and/or process improvement to October’s regular meeting. Members asked for more detailed information on the outages and the discrepancies between real-time operating capacity and assumed planned capacity, and to clarify the RTO’s current must-offer requirements.

July 21, 2019

MISO: Grid Can be Stable at 40% Renewables

By Amanda Durish Cook

CARMEL, Ind. — MISO’s grid can withstand major reliability risks even when renewables reach 40% of the generation mix, RTO staff said last week.

That finding represents a turnabout from a study last year that found the RTO would need to take significant steps to reinforce its grid to handle a jump from 30% to 40% renewable penetration. (See Study: MISO Grid Needs Work at 40% Renewables.) But it is now more confident about its ability to maintain reliability as renewable development intensifies.

“The challenge is a non-linear thing. There are certain points where it becomes more complex as you eat up some of the flexibility and capacity on the system. … There’s more megawatts of capacity needed on the system over time,” MISO Manager of Policy Studies Jordan Bakke said during a special workshop on the topic Wednesday.

MISO foresees continued wind growth in the northern part of its footprint, with most renewable generation in the South coming from solar. As more solar comes online, the daily peak risk hour shifts to later in the day as the sun sets, Bakke said.

“The characterization of renewable generation deployment is wind in the north and solar basically everywhere,” he said.

In a scenario in which renewables account for 40% the resource mix, MISO found they could serve 42% of peak load, 67% of shoulder or light load, and up to 81% of load when weather conditions for renewables are optimal. When renewable conditions are ideal, wind and solar generation drastically cut into the share of load served by natural gas and coal generation.

“Renewables try to replace other generation because of the economics,” MISO Senior Transmission Expansion Planning Engineer Nihal Mohan said.

Although MISO found frequency response degrades as more renewables are added, the system would remain stable at 40%, even when a hypothetical large generator of about 4,500 MW trips offline. When that happens, the system stays above the 59.5-Hz underfrequency load shedding threshold.

Bakke said MISO staff now think declining frequency response is not as serious as first suspected.

While frequency response seems to remain acceptable up to 40% renewables, staff say they’re still concerned about scenarios with combinations of high renewable output, low load and large generator disturbances.

And MISO is still concerned that reliability will suffer in other ways.

Under a 40% renewables scenario, the RTO may need to remedy low short-circuit issues with transmission lines equipped with dynamic support capabilities. It said members may be better off building HVDC lines rather than installing several synchronous condensers, then mitigating the small signal stability issues that such equipment produces.

“You can add small lines, you can add condensers, but they would probably add more stability issues,” Mohan said. “It’s probably better to think about this in advance and come up with an [all-encompassing] solution.”

“We’re able to get to a renewable energy penetration and deliver energy in a stable way” if MISO members are willing to move to new technologies, Bakke said.

MISO also found that at a higher penetration of renewables, the system would in most cases have more time to clear line faults.

Keeping with previous discussions on the renewable integration assessment, stakeholders asked how MISO envisions that electric storage resources will mitigate reliability issues.

“At this phase of study, we’re not considering storage,” Mohan said. Storage devices will make an appearance in the third phase of the ongoing study, he said.

MISO will host another workshop Sept. 13 to discuss its study results on a 50% renewable future. The final phase of the study will examine how the grid operates when locally sited renewables serve load.

July 21, 2019

NYISO Business Issues Committee Briefs: July 17, 2019

NYISO’s Business Issues Committee on Wednesday voted to approve updates that align the Transmission Expansion & Interconnection (TE&I) manual with Tariff changes made since the last comprehensive manual update, provide additional detail regarding interconnection study methodology, and clarify existing practices and procedures.

The Operations Committee reviewed and approved the revisions on Thursday.

The ISO’s senior manager for interconnection projects, Thinh Nguyen, detailed the TE&I Manual revisions and the Tariff revisions accepted by FERC over the past two years to alter the transmission expansion and interconnection procedures. Updates include:

Revisions made as part of the 2017 comprehensive queue revision, such as reducing the number of study agreements.
Creating deadlines for study reports.
Clarifying roles and responsibilities of parties in the interconnection process.
Making feasibility studies under Attachments X and Z options at the developer’s election, with two alternative levels of analyses.
Revising interconnection request data forms and requirements.
Providing parties the option to narrow the scope of studies required or uprate projects.
Allowing certain projects with multiple voltage levels to submit a single interconnection request.

The manual changes also reflect queue reforms aimed at improving the class year study process by revising start dates; creating the “bifurcated class year” process; affording additional opportunities for projects to withdraw from the class year study; and specifying how a project can finalize an interconnection agreement prior to completion of a class year study and/or request limited operations prior to execution of an interconnection agreement.

NYISO — New York Power Authority transmission lines near the Adirondack Mountains | *NYPA*

Other changes to the interconnection process reflected in the manual updates include clarification of interconnection study base case inclusion rules; updated small generating facility deposits and application fee requirements; clarification of the clustering process for small generating facilities; clarification of the process for evaluating alternative points of interconnection for small generators; and the requirement that certain large generating facilities install phasor measurement units.

The manual changes, consistent with the 2017 revision, also explain the process for calculating capacity resource interconnection service values applicable to the winter capability period and require stakeholder review of changes in transmission owner planning criteria, while also increasing the frequency of required updates to proposed in-service, initial synchronization and commercial operation dates.

External Capacity Resource Eligibility

Director of Market Design and Product Management Robert Pike presented the monthly Broader Regional Markets report and highlighted item 26, regarding an effort to clarify the minimum deliverability requirements for external capacity into the NYISO Installed Capacity (ICAP) market.

The ISO reviewed eligibility and deliverability requirements for external capacity from ISO-NE with stakeholders at the June 27 ICAP/Market Issues Working Group meeting and will return to future working group meetings to continue the discussions, he said.

NYISO will continue to evaluate what, if any, additional performance requirements and obligations are needed for deliverability to the New York Control Area border for purposes of external resource eligibility to sell capacity into New York.

LBMPs down 25% YoY in June

NYISO locational-based marginal prices averaged $24.43/MWh in June, up slightly from $23.10/MWh in May, but down about 25% from the same month a year ago, Pike said in delivering the monthly operations repo r t. Year-to-date monthly energy prices averaged $35.76/MWh, a 25% decrease from a year ago.

Day-ahead and real-time load-weighted LBMPs came in higher compared to May. Average daily sendout was 429 GWh/day in June, compared with 373 GWh/day in May and 445 GWh/day in the same month a year ago.

Transco Z6 hub natural gas prices averaged $2.10/MMBtu for the month, off slightly from May and down 14.1% from a year ago.

Distillate prices were down 13.2% year over year and lower from the previous month, with Jet Kerosene Gulf Coast averaging $13.50/MMBtu, down from $14.64/MMBtu in May, while Ultra-low Sulfur No. 2 Diesel NY Harbor dropped to $13.23/MMBtu from $14.54/MMBtu in May.

June uplift dropped to 7 cents/MWh from 13 cents/MWh in May, while total uplift costs, including the ISO’s cost of operations, came in higher than the previous month.

The ISO’s 19 cents/MWh local reliability share in June was down from 23 cents the previous month, while the statewide share dropped a penny from the previous month to -12 cents/MWh.

The Thunderstorm Alert cost for New York City was 77 cents/MWh, up from 19 cents in May.

— Michael Kuser

July 21, 2019

US House Takes on Grid Security

By Rich Heidorn Jr.

Grid modernization and security were the focus of two U.S. House of Representatives committees last week as four bipartisan bills cleared the Energy and Commerce Committee and a second panel held hearings on two other legislative proposals.

Grid Security — The House SST Committee’s Energy Subcommittee held hearings on grid modernization and cybersecurity last week.

On Wednesday, the Energy and Commerce Committee passed the following bills by voice votes, moving them to consideration by the full House:

The Enhancing Grid Security through Public-Private Partnerships Act (H.R. 359), introduced by Reps. Jerry McNerney (D-Calif.) and Bob Latta (R-Ohio), would direct the Department of Energy to encourage public-private partnerships to mitigate electric utilities’ physical and cybersecurity risks. The effort, in consultation with state regulators, industry and the Electric Reliability Organization, would promote the use of maturity models, self-assessments and auditing methods for measuring security, provide training to address supply chain risks, and encourage sharing of best practices and data collection.
The Cyber Sense Act of 2019 (H.R. 360), also introduced by Latta and McNerney, would require the secretary of energy to establish a program to identify cybersecure products for use in the bulk power system.
The Pipeline and LNG Facility Cybersecurity Preparedness Act (H.R. 370), introduced by Rep. Fred Upton (R-Mich.) — ranking member of the E&C Committee’s Energy Subcommittee — and Rep. David Loebsack (D-Iowa), would establish a program at DOE to improve the physical security, cybersecurity and resilience of natural gas transmission and distribution pipelines and LNG facilities.

The panel also approved a bill (H.R. 362) that would codify the role of Karen S. Evans, who was appointed in September as assistant secretary for DOE’s Office of Cybersecurity, Energy Security and Emergency Response.

Science, Space and Technology Committee

Evans was among the witnesses who testified Wednesday before the House Science, Space and Technology Committee’s Energy Subcommittee.

Subcommittee Chair Conor Lamb (D-Pa.) opened the hearing by touting two other pieces of legislation, the Grid Modernization Research and Development Act of 2019 — which calls for research on grid resilience, emergency response, modeling and visualization — and the Grid Cybersecurity Research and Development Act of 2019 (H.R. 4120), which would authorize a research and development program by the Department of Homeland Security, the National Institute for Standards and Technology (NIST), and the National Science Foundation to harden the grid from cyberattacks. The R&D program would include technical assistance, education and workforce programs. The bills will be introduced after the August recess.

Artificial Intelligence’s Role

Evans told the committee that DOE is seeking to spur innovation in big data and artificial intelligence, saying AI has a “critical role” in improving grid resilience. “We’re talking about … software-defined networks, autonomous solutions, really analyzing the data … to remove some of what is happening at a human level now that could be done by AI, by machine learning. That is the area that we are really exploring so that we can look at higher analysis of security, and also being able to model the resilience in real time.”

McNerney asked whether adversaries could use AI to attack the grid.

“For every great new innovation that we do … we also have to evaluate what are the potential risks associated with that and then engineer preventative solutions,” she responded. “We don’t want to stifle innovation. We want to take advantage of those things.”

Juan Torres, associate laboratory director for energy systems integration at the National Renewable Energy Laboratory, agreed.

“Just about any tool … can be used for good or for bad. That’s why it’s imperative for us to maintain that leadership in the advancements of these technologies so we are the ones using these for the right purpose and can actually deter any negative use or any attacks on these systems,” said Torres, who is also co-chair of DOE’s Grid Modernization Lab Consortium.

Torres said DOE is applying AI to four “foundational areas”: understanding complex systems theory; big data analytics; optimization to ensure distributed systems work together; and non-linear controls.

“What we’re seeing is with highly distributed systems, some of the linear control concepts that are used now on the grid may not apply in a highly decentralized type of system,” he said.

Wind, Solar Cybersecurity

Torres said DOE’s solar and wind technology offices are working with industry officials to identify the industry’s cybersecurity needs and those of distributed energy systems. DOE and the International Electrotechnical Commission on Wednesday hosted a cybersecurity workshop at the National Wind Technology Center at NREL’s Flatirons Campus in Boulder, Colo. “This event is bringing key government and industry players together for the first time to add the cybersecurity needs of the growing wind power industry,” he said.

AI would build on smart grid technologies that witness Katherine Hamilton, executive director of the Advanced Energy Management Alliance, said “have allowed the grid to operate more efficiently and with greater visibility.”

“The year of detective work necessary to determine that the Northeast blackout of 2003 was caused by a branch in Cleveland would no longer be the case thanks to these technologies,” she said.

Workforce Needs

The hearing also discussed the industry’s workforce needs. According to research funded by NIST, the U.S. has almost 716,000 people in the cybersecurity workforce and almost 314,000 job openings.

Hamilton said the workforce challenges extend beyond cybersecurity, noting that about 30% of utility employees and 40% of the industry’s engineers are millennials. “Millennials tend to change jobs faster than we’re used to in the utility workforce. You would start in the utility and retire in the utility. But people change jobs a lot faster and there are more types of jobs, so we need to find out what [kinds of] training are needed. … What are some of the skills that transfer really easily?

“In California right now, there are wildfires that are potentially going to cause public safety outages of 30 days or more … and there are not enough trained tree trimmers to do the work needed on vegetation management. You can’t send a kid out with a bushwhacker. These are really trained labor. So, there are a lot of job needs and opportunities, and there are people who don’t have jobs, and we need to somehow match those. So, bringing the public sector and the private sector together on that seems to me to be a good way to think about that.”

Hamilton said encouraging interest in STEM education and cybersecurity needs to begin in elementary school.

Kelly Speakes-Backman, Energy Storage Association

Witness Kelly Speakes-Backman, CEO of the Energy Storage Association, said she was glad her twin 15-year-old daughters were in the audience hearing the discussion. “Their high school has a program that is partnered with the U.S. Naval Academy specifically on cybersecurity, and I really want them to take it,” she said.

Torres said that in addition to sparking early interest in the STEM fields, industry and government should encourage mentoring to ensure a pipeline of future teachers and professors.

Hamilton said DOE and its National Labs also should be involved in encouraging what she called the “democratization” of innovation.

“Innovations are not limited to our labs, our universities or our utilities. They are everywhere. They are kids in basements playing with their apps,” she said. “So, trying to make sure that our research programs are able to connect the dots so that we can bring entrepreneurs to test and make sure that we have proof of concept [is important]. Because no utility is going to purchase a piece of equipment that was designed in somebody’s basement. They need to know that the Department of Energy and the National Labs have given it the seal of approval … by testing it and making sure that this all works.

“While part of that is about bringing new people into the industry — because there are so many new excited young people coming in — we also need to make sure that we then connect them to the programs that are existing to enrich the programs too,” she said.

A House subcommittee meeting last week heard testimony from (from left) Karen S. Evans, DOE; Juan Torres, National Renewable Energy Laboratory; Kelly Speakes-Backman, Energy Storage Association; and Katherine Hamilton, Advanced Energy Management Alliance.

Measuring Cost-effectiveness

Speakes-Backman, a former member of the Maryland Public Service Commission, had a different ask of DOE, saying it should help states develop ways to measure the cost-effectiveness of resilience measures. “This is an issue that I personally had after the derecho in 2011. Utilities can invest in reliability and there are metrics for that, but they cannot invest in resilience because there aren’t metrics for that to prove cost-effectiveness.”