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November 17, 2024

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PJM Operating Committee Briefs: Nov. 7, 2017

PJM FERC frequency response primary frequency response
Boyle | © RTO Insider

VALLEY FORGE, Pa. — PJM’s Glen Boyle presented the Operating Committee last week with a proposed solution to address FERC’s proposed primary frequency response rule.

The proposal, which came from meetings of the Primary Frequency Response Senior Task Force, would rely on individual resources to provide the capability with specific performance settings; PJM doesn’t plan on requiring units to maintain operating headroom.

“We didn’t see need for that right now,” Boyle said.

PJM is considering either a cost-of-service payment, where the resource owner files with FERC for cost recovery for performing during an event, or determining that the frequency response capital investment is already included in the cost-of-new-entry (CONE) calculation. The focus comes in response to a 2012 NERC report found that only 30% of units were providing primary frequency response and a Notice of Proposed Rulemaking last year from FERC that would require all new units, excluding nuclear, to provide the service. (See FERC Has More Questions on Frequency Response NOPR.)

“As far as looking at a pure, market-based mechanism, that’s something that PJM would be open to, but we’ve had some difficulties with identifying what the actual requirement is, as it changes on a literally minute-by-minute basis,” Boyle said.

He also highlighted concerns about measuring units’ responsiveness. “So there are some pretty significant challenges to a market-based compensation,” he said. Tom Hyzinski of GT Power Group agreed it would be difficult to develop a market to compensate a minute-by-minute response.

Several generator representatives, including Hyzinski and Calpine’s David “Scarp” Scarpignato, balked at exempting certain technology types and not compensating frequency response beyond capacity payments. Hyzinski suggested developing a product based on a resource’s ability to provide the service.

“You can’t have resources that don’t provide primary frequency response participating in the same capacity market and taking the same capacity payment,” he said, questioning whether the capacity market currently compensates for the capability to provide frequency response.

“I think you’ll want to look at a way that, if they can’t provide it, they somehow purchase … it,” Scarp said.

“That is another option that’s still out there on the table,” Boyle acknowledged.

Scarp said frequency response is an element of resiliency, and “PJM is saying in a lot of forums that it wants to value resiliency.” He asked that PJM staff working on the frequency response issue engage with those focused on resiliency.

Restoration Drills

PJM’s Ryan Lifer reviewed the results of the annual fall restoration drills held recently. There were 108 transmission owner participants, 17 from generators and 47 PJM staffers, Lifer said.

User feedback was positive for a centralized website where participants could upload all information in one location, he said. PJM plans to complete the site in time for the annual spring restoration drill, which will be held May 15-16. Communications checks will happen on May 14. Alternate dates are set for May 21 through 23.

PJM Expects Cold Winter Season

System operators are planning for a colder winter this year than in the past two, PJM’s Augustine Caven said. Analysts expect a weak La Nina effect to develop, causing colder conditions, along with above-average precipitation in the Great Lakes region and below average to the south.

“Southward shifts in the polar vortex caused unusually cold weather this past August, and the expectation is that if this trend continues, we’re anticipating greater risk of arctic cold,” Caven said. “In short, we expect a significant cold winter season, and we’re taking steps to be prepared.”

TOs Must Approve PJM Licensing of DIMA

PJM wants to offer its Dispatcher Interactive Map Application (DIMA) to all TOs, but there’s a catch. Because DIMA requires some confidential TO information to work optimally, all TOs will have to sign off on the plan, and those that want to use it will have to sign nondisclosure agreements and pay PJM a licensing fee.

PJM FERC frequency response primary frequency response
Hugee (left) and Kovler | © RTO Insider

PJM’s Ed Kovler and Jacqui Hugee outlined the advantages, including compiling data from multiple resources into one geospatial display, and the requirements, which include several Operating Agreement changes.

PJM Holds Ground on Expanding ‘Hot Weather Alert’ Definition

PJM FERC frequency response primary frequency response
Pilong | © RTO Insider

PJM’s Chris Pilong said that the RTO still plans to revise its “Hot Weather Alert” definition to include lower temperatures “during the spring and fall periods if there are significant amounts of generation and transmission outages that reduce available generating capacity.”

The revisions, part of a periodic review of Manual 13, have sparked concern among stakeholders who feel the alert should be very narrowly defined.

“It seems like we’re taking a Hot Weather Alert and turning it into a ‘hot weather and warm weather/stuff is out’ alert,” said Adrien Ford of Old Dominion Electric Cooperative. “My question for you to consider is … should we consider making them separate?”

American Electric Power’s Brock Ondayko said he’s “still opposed” to the procedure PJM is trying to develop. He had initially voiced his opposition when Pilong announced it at October’s OC meeting. (See “Grid Operator Communications Changes Spark Debate,” PJM Operating Committee Briefs: Oct. 10, 2017.)

“I think there needs to be discussion,” he said.

— Rory D. Sweeney

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8 Projects Set for 2018 MISO Market Roadmap

By Amanda Durish Cook

CARMEL, Ind. — MISO and its stakeholders will devote time to eight projects in 2018, including five-minute settlement calculations, external local resource zones and multiday energy market commitments.

MISO market roadmap 2018
Mia Adams discusses Market Roadmap projects as MSC Chair Kent Feliks and Vice Chair Megan Wisersky listen | © RTO Insider

The eight market improvements that MISO management selected from the annual Market Roadmap process were a smaller-than-usual crop of projects in order to make space for the RTO’s ongoing effort to replace its computer market system platform. MISO usually devotes time to about 20 market improvements per year.

“We are trying to significantly scale back, because a lot of resources are needed for the market system enhancement,” MISO Senior Manager of Market Strategy Mia Adams said during a Nov. 9 Market Subcommittee meeting.

In 2018, MISO and stakeholders will work to implement:

  • FERC-mandated five-minute settlement calculations;
  • Tighter thresholds on uninstructed deviations from dispatch instructions;
  • Automatic generation control for fast-ramping resources;
  • The designation of external resource zones in the annual capacity auction — a long-running agenda item at MISO’s Resource Adequacy Subcommittee meetings;
  • Short-term capacity pricing and reliability standards so energy can be provided within 30 minutes when needed;
  • Improved combined cycle modeling that can mimic more combinations of combined cycle units;
  • A multiday energy market that would keep generators with long start-up times switched on for more than one day; and
  • Rules to factor seasonal needs and risks into the capacity auction — a topic on which MISO is expected to release a white paper next month.
MISO market roadmap 2018
Adams | © RTO Insider

The 2018 work plan does not correspond with the final composite rankings of project importance by MISO, stakeholders and the Independent Market Monitor. For instance, devising a market resource definition for energy storage won top importance overall, but the effort is expected to remain in an idea-gathering stage in 2018. (See “Stakeholders Give Energy Storage Top Spot in Roadmap,” MISO Market Subcommittee Briefs: Aug. 10, 2017.) Other highly rated market projects, including automatic generation control, short-term capacity pricing, improved combined cycle modeling, seasonal consideration and a multiday energy market made the 2018 work plan but won’t be tackled in the order of their assigned importance. Four of the six of the top-rated projects originated from stakeholder requests; the other two came from the Monitor.

Automatic Generation Control Design Work Underway

‎MISO is currently working on a conceptual design for automatic generation control (AGC) software that will deploy its 400 MW of fast-ramping resources more quickly by regulating either up or down. MISO Executive Director of Market Design Jeff Bladen said the RTO is a year away from a final design stage. It hopes to implement AGC by late 2019.

Uninstructed Deviation

The RTO is nearing a final approach on stricter rules for uninstructed deviation.

Monitor David Patton has proposed a new deviation threshold based on a generator’s ramp rate instead of the current 8% deviation threshold from dispatch signals.

Last month, ‎Ameren Missouri urged MISO to keep the percentage threshold, saying it could be constricted to 7% or 6% over time. The company also asked MISO to only focus on generators that don’t move for an hour within dispatch instructions. (See Ameren Calls for Milder MISO Response to Uninstructed Deviations.) Since then, multiple stakeholders have voiced support for Ameren’s proposal.

Patton said his proposal will result in lower dispatch costs and day-ahead margin assistance payments. He also said the new calculation would save consumers money and result in better reliability.

“It’s surprising there’s not a vocal segment of the market behind this change,” Patton said. “I think asking generators to move at half of the rate they’ve offered with a 20-minute grace period is reasonable.” MISO and Patton will continue to refine an uninstructed deviation proposal in 2018.

MISO Asks for 5-Minute Settlement Delay

MISO will ask FERC for permission to delay the implementation date for its five-minute settlements for four months, Bladen confirmed. The RTO will ask for a July 1, 2018, effective date instead of the existing March 1 target in a filing expected within the next week. The extra time will be used for testing, and Bladen said MISO will let stakeholders know when different testing stages begin.

MISO is also moving back the go-live date on its new computer settlements system, aiming for early 2018 instead of a fourth-quarter implementation. The extra months will also be used for testing the new system.

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Counterflow: Clunker Poster Child

By Steve Huntoon

Are you up for a pop quiz today? OK here we go, and please no peeking ahead to the answers.

Q1. In their comments to FERC on the Department of Energy proposal, how many times did FirstEnergy and Murray Energy use the word “baseload” to refer to the generation they want subsidized?

  1. 4
  2. 40
  3. 400

Q2. What does “baseload” mean according to DOE’s Energy Information Administration, in percent of hours that a plant runs?

  1. About 40% of the time
  2. About 80% of the time
  3. About 100% of the time

Q3. What percent of hours did FirstEnergy’s W.H. Sammis coal plant, our clunker poster child, run last year?

  1. About 40% of the time
  2. About 80% of the time
  3. About 100% of the time

Q4. In their comments to FERC, how many times did FirstEnergy and Murray Energy use the word “premature” to refer to retirement of the generation they want subsidized?

  1. 17
  2. 117
  3. 170

Q5. How old are FirstEnergy’s Sammis units slated for retirement?

  1. 18 years
  2. 38 years
  3. 58 years

Q6. The ages of FirstEnergy’s Sammis units are…

  1. More than the average retirement age of coal plants for every year since 1999.
  2. Less than the average retirement age of coal plants for every year since 1999.

Q7. How much would it cost consumers to subsidize the Sammis units?

  1. $1 million.
  2. $1 billion.
  3. No one has the foggiest idea.

The Answers

The answer to Q1 is c, FirstEnergy and Murray Energy use the word “baseload” an amazing 400 times. Truth by repetition.

The answer to Q2 is c, about 100% of the time. The meaning of a “baseload” plant is one that “produces electricity at an essentially constant rate and runs continuously,” per DOE’s EIA glossary.[1]

The answer to Q3 is a, about 40% of the time. EIA data show Sammis 2016 generation as 8,112,503 MWh[2] relative to Sammis plant capacity of 2,220 MW. So the Sammis capacity factor is 41.7% (8,112,503 MWh divided by 2,220 MW divided by 8,760 hours/year).

Sammis power plant baseload power
Sammis Power Plant | Robert S. Donovan / CC BY-NC 2.0

Let’s pause here to observe that FirstEnergy’s Sammis plant, running about 40% of the time, cannot be a baseload plant, which by EIA definition must run about 100%. It is not even close.

And this isn’t some recent phenomenon due to low natural gas prices and/or renewable penetration. The EIA data show that the Sammis plant has had a poor capacity factor since 2009.

And I haven’t cherry-picked the Sammis plant. The Sammis units are the largest units that FirstEnergy has identified for future retirement to PJM.[3]

That’s why Sammis is our clunker poster child!

OK, back to the answers.

The answer to Q4 is c, FirstEnergy and Murray Energy use the word “premature” an amazing 170 times.

The answer to Q5 is c, 58 years. The retiring Sammis units were built from 1959-1962, per the FirstEnergy website,[4] and they’re scheduled to retire in 2020.

The answer to Q6 is a. The average retirement age of coal plants for every year since 1999 has never exceeded 54 years.[5]

Let’s pause here to observe that the retiring Sammis units are old, almost as old as me. They’re well past the average annual retirement ages of coal plants.

So there is absolutely nothing “premature” about the Sammis units retiring.

The answer to Q7 is of course, c. Nobody has the foggiest idea what it will cost consumers to subsidize the non-baseload, old Sammis units.

And the cost won’t just be squandered consumer money. Keeping clunkers like Sammis around will keep out new power plants that are three times as reliable as the clunkers.[6] Not to mention losing the environmental/public health benefits of cleaner generation.[7]

Let us hope FERC does the right thing.

  1. https://www.eia.gov/tools/glossary/index.php?id=B ↑
  2. https://www.eia.gov/electricity/data/browser/ (Select the “Plant level data” data set, search for Sammis, and select annual 2016 data.) ↑
  3. http://pjm.com/-/media/planning/gen-retire/pending-deactivation-requests-xls.ashx ↑
  4. https://www.firstenergycorp.com/content/dam/corporate/generationmap/files/W%20H%20Sammis%20Plant%20Facts.pdf ↑
  5. http://www.powermag.com/americas-aging-generation-fleet/ (Table 2) ↑
  6. As discussed in an earlier column, retiring units in PJM have an outage rate (“equivalent forced outage rate – demand” aka ERORd) that is three times the new units (14.56% versus 4.42%). http://pjm.com/-/media/committees-groups/committees/mrc/20170928/20170928-item-07-2017-irm-study-presentation.ashx (slide 7). ↑
  7. As discussed in an earlier column, the environmental/public health damage of coal generation amounts to about $32/MWh (even before greenhouse gas impacts), relative to $1.60/MWh for natural gas generation. https://www.nap.edu/catalog/12794/hidden-costs-of-energy-unpriced-consequences-of-energy-production-and (pages 92 and 118). ↑
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MISO Members to Vote on Change to Capacity Export Limits

By Amanda Durish Cook

CARMEL, Ind. — MISO stakeholders will vote on whether to broaden export limits for its upcoming capacity auction after WPPI Energy called for the RTO to act.

MISO FERC CILs WPPI Energy
Leovy | © RTO Insider

WPPI engineer Steve Leovy said MISO has not been distinguishing imports sourced outside the RTO from those sourced inside in calculating its capacity export limit (CEL), making available transmission capacity appear scarcer than it really is. MISO calculates capacity import and export limits for each local resource zone to assure that cleared capacity can be delivered.

“We have a small amount of excess capacity in Zone 1, so we stand to have an adverse financial impact if the limit binds,” Leovy said at last week’s Resource Adequacy Subcommittee meeting.

Leovy said Zone 1’s CEL is 516 MW, but the zone cleared 613 MW in the 2017/18 Planning Resource Auction. Zone 1 — which covers portions of Wisconsin, Minnesota, the Dakotas and Montana — has more contributing external resources than any other zone in MISO, Leovy said.

“We’re concerned with what we see is improper clearing in the coming Planning Resource Auction,” Leovy said. He asked MISO to calculate “appropriate, accurate” limits for the 2018/2019 auction. His motion, calling for the RTO to ensure alignment between the PRA and CEL calculations, will be voted on in an email ballot through Nov. 15.

MISO was planning to update CELs with the creation of external resource zones, but the proposal is now on hold until the 2019/20 planning year. (See MISO Postpones External Zones Until 2019 Auction.)

Rauch | © RTO Insider

Laura Rauch, MISO resource adequacy manager, said the RTO still plans to create new CELs that correspond with any new external zones that MISO designates. “Our concern is moving a piece of this forward without the rest of it,” she said.

Rauch also said MISO’s capacity import limits (CILs) and CELs are linked, and it would be inappropriate to update one without the other.

MISO’s CIL calculation was changed to account for counterflows created by exports to neighboring balancing authorities in response to a FERC order in 2015 (EL15-70, et al.). Leovy said a similar change is needed for CELs.

Some stakeholders said that while they could see others supporting an export limit change, they doubted stakeholders wanted to change CILs and local clearing requirements.

‘Shopped Around’

NRG Energy’s Tia Elliott said Leovy made a motion that didn’t result in action during a similar presentation at a spring 2016 Loss-of-Load-Expectation Working Group. “I’m concerned that maybe that this is being shopped around,” Elliott said.

“Thanks for the reminder that this is something that we’ve been discussing with MISO for quite some time. MISO is aware that this is an issue,” Leovy responded. “All I’m asking for is a vote to the timeline to get this fixed, and I don’t think this is forum-shopping or dodging the stakeholder process.”

Elliott also pointed out that the limits have already been set for the upcoming planning year in MISO’s loss-of-load-expectation study, and said changing them now would complicate the process.

Leovy said MISO may be able to implement a fix that doesn’t involve revising its Tariff, because it defines CELs as the megawatts of planning resources that can be “reliably exported” from a local resource zone. He believes the language supports transmission providers modeling the physical location of load and planning resources, giving MISO enough information to differentiate between external and internal capacity.

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OVEC Integration not up for Debate, PJM Says

By Rory D. Sweeney

VALLEY FORGE, Pa. — PJM members are questioning a request by the Ohio Valley Electric Corp. to join as a new transmission zone, but the issue is not up for debate, the RTO said last week. (See Unanswered Questions Force Special PJM Session on OVEC Integration.)

Ohio Valley Electric Corp OVEC PJM
Burlew | © RTO Insider

“So long as a [transmission owner] provides PJM with all of the required information, PJM studies that information and ensures it can reliably [integrate], then PJM must proceed,” Senior Counsel Jim Burlew said during a special informational meeting Tuesday. “PJM is the only entity to make a determination if a TO can integrate, and that’s based only on reliability.”

RTO officials said that procedure is based on the existing Tariff and Operating Agreement language. But members were not satisfied.

“I think the members have some concerns, and I think that PJM has a bit of an obligation to first of all hear, and second of all address, the concerns that may be raised in this forum,” American Municipal Power’s Ed Tatum said. “Why do they want to join the party?”

CFO Suzanne Daugherty, who chairs the Markets and Reliability Committee, agreed that “PJM has an obligation … to make sure you know what’s going on.” But she said CEO Andy Ott “is authorized to accept” membership applications if they don’t hinder reliability, as is the case with OVEC.

“This is consistent with several other parts of the Operating Agreement,” she said. “It’s an open party; there’s no cover charge.”

PJM IRM installed reserve margin Ohio Valley Electric Corp OVEC PJM
Tatum | © RTO Insider

Tatum continued to press, saying “there is discretion,” and that PJM would be “well advised” to take in further perspectives from members before deciding. Members are concerned that OVEC’s integration will result in significant upgrade costs and increase the existing generation oversupply without providing more load for PJM generators to serve. Tatum said he is specifically concerned about costs from supplemental projects for aging transmission infrastructure and reliability improvements that could be needed if one or both of OVEC’s generating units retire.

OVEC, which is headquartered in Piketon, Ohio, owns 2,200 MW of generation capacity but will have no load after a U.S. Department of Energy contract ends sometime before 2023. The company was created in 1952 to service a uranium enrichment plant near Piketon that ceased operations in 2001. The department ended the 2,000-MW contract in 2003 but maintains a load that can be 45 MW at its maximum but is generally less than 30 MW.

The company’s two coal-fired generating plants — the 1.1-GW Kyger Creek in Cheshire, Ohio, and 1.3-GW Clifty Creek in Madison, Ind. — are already pseudo-tied into PJM, and its eight “sponsors” can sell their portions of the output into the RTO’s markets. The generation would become internal to PJM following membership, eliminating the pseudo-ties.

“It might be older than Ed Tatum, and although I’m advocating strongly to not be replaced, it might need to be replaced,” Tatum said of OVEC’s transmission infrastructure. “We see major upgrades looming here … and that’s one of the concerns we have. … What we have here is a very unique situation in which you have very little load to allocate to.”

PJM, RESA, Dayton Power and Light Ohio Valley Electric Corp OVEC PJM
Kyger Creek Power Plant

“Our infrastructure has been consistently maintained for 50 years, meets all NERC requirements and will meet all PJM requirements,” OVEC attorney Brian Chisling said.

OVEC’s representatives didn’t provide many additional details. When Tatum asked about plans for transferring OVEC’s existing load, Chisling said it involved a “feature” of Ohio’s Certified Territory Act and referred him to a proceeding of the Public Utilities Commission of Ohio (15-0892-EL-AEC).

Daugherty explained that any required upgrade would be billed to OVEC’s zone and then distributed proportionally to the eight companies that own OVEC.

PJM’s Mark Sims explained that OVEC is “required to have a plan” for upgrades before it joins but doesn’t need to have upgrades done.

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PJM Market Implementation Committee Briefs: Nov. 8, 2017

VALLEY FORGE, Pa. — PJM Market Implementation Committee members last week expressed frustration over a proposal from the Independent Market Monitor on price-responsive demand (PRD) requirements, saying they hadn’t been given any time to review it prior to voting on the issue.

Ruth Ann Price of Delaware’s Division of the Public Advocate apologized on the Monitor’s behalf and took responsibility for requesting the late submission, but the measure failed to garner stakeholder backing. The proposal was so unexpected that it didn’t make it into the presentation PJM posted on the issue. It received 28 votes in support, or 15%, far below the 50% threshold for approval.

Two other proposals — one from PJM and the other from Calpine’s David “Scarp” Scarpignato — did receive enough support and will be presented at the Markets and Reliability Committee meeting on Dec. 7. Because of the Thanksgiving holiday, PJM moved the November MRC to the first week of December.

At issue is how PRD will be held to Capacity Performance requirements. PRD was developed before CP existed, but PRD bids cleared the annual Base Residual Auction in May for the first time since the new construct was implemented. PJM has proposed extending annual requirements developed for demand response to PRD and trigger CP penalty assessments during performance assessment intervals when the LMP is greater than the PRD price curve. Scarpignato’s “Proposal C” would make the assessment triggers any performance assessment interval. (See PJM Grilled on Price-Responsive Demand Rule Changes.)

DR provider Whisker Labs had presented another proposal but retracted it in favor of the Monitor’s proposal. The IMM argued that all PRD eligibility and performance should be measured from the participant’s peak load contribution (PLC). Both the planned PRD and the amount finally registered should be measured as the PLC minus the participant’s firm service level (FSL) and performance should be measured as PLC minus the actual load, the Monitor proposed.

price-responsive demand prd PJM
Marzewski | © RTO Insider

“The key difference is that in our proposal, it is based on the total consumption in the summer period,” the IMM’s Skyler Marzewski said.

Carl Johnson, representing the PJM Public Power Coalition, and Dave Pratzon of GT Power Group objected to the proposal’s late inclusion because neither had had a chance to review it and make voting recommendations to their membership.

“It’s tough when totally new proposals come in at the last minute with no explanation,” Pratzon said.

Monitor Joe Bowring explained to RTO Insider in an email following the meeting that his staff provided PJM with its proposal on Oct. 29, more than a week before the MIC, and attempted to present it at a meeting of the Demand Response Subcommittee the following day. He said they were told they could not present on such short notice.

“The IMM’s proposal was included in the posted matrix on Monday prior to the Wednesday MIC meeting,” Bowring said. “The IMM agrees that there was some miscommunication among the IMM, the DRS and the MIC.”

Pratzon requested an explanation for basing all measurements off the PLC. Marzewski said the measurement should reflect how much the participant can reduce from its overall peak demand, not how much it can reduce at that moment. PJM proposed using different peak-demand calculations for summer and winter measurements.

He remained unmoved.

“As of right now, I’m not seeing the justification for the different treatment,” he said.

price-responsive demand prd PJM
Carmean | © RTO Insider

Gregory Carmean, the executive director of the Organization of PJM States Inc., argued the baseline should be the load that the RTO would have purchased if not for reduction.

“It’s PJM that’s trying to turn this into a seasonal product” by changing the definition of the PRD measurement between summer and winter, he said.

Delaware’s Price, Joe DeLosa of the Delaware Public Service Commission and Greg Poulos, executive director of the Consumer Advocates of the PJM States, also voiced support for the Monitor proposal.

Advocates “want residential customers to be able to respond to price,” Poulos said.

Dave Mabry, representing the PJM Industrial Customer Coalition, argued that the purpose of PRD is to get “the customer back to paying for the capacity that he needs.”

“There isn’t a payment that flows back,” he said.

Scarp argued that point, and PJM’s Pete Langbein confirmed the performance is paid as a credit.

“Call that a payment, call that a credit, but that’s effectively what will happen,” Langbein said.

Scarp said “PRD was supposed to get away from” the “hypothetical difference” between what was scheduled to be used and what was actually used.

James Wilson of Wilson Energy Economics, who consults for consumer advocates in several PJM states, disagreed that the proposal increases winter-adequacy risks. PJM’s reserve requirements study always shows zero loss-of-load expectation (LOLE) in winter, he said, and “there’s a huge margin of excess winter capacity before we get anywhere near where that changes.”

Big Support for Jurisdiction Mention in DERS Charter

Stakeholders voted overwhelmingly to include explicit deference to state and local regulatory authority in the charter for the new Distributed Energy Resources Subcommittee. (See “DER Subcommittee Charter Sent Back to MIC,” PJM MRC/MC Briefs 10-26-17.)

FirstEnergy had proposed what it hoped was an uncontroversial amendment, which stated “Market rules must respect the distribution system and state/local jurisdictional agency standards and protocols to ensure safety and reliability. Rules should adhere to all pertinent jurisdictions and respect the relevant electric retail regulatory authority (RERRA).”

DER companies saw it as a potential barrier to market entry.

price-responsive demand prd PJM
Benchek | © RTO Insider

“The vagueness of ‘respect the … standards and protocols’ concerns us,” said Tom Rutigliano, who represents providers of distributed resources.

“I think it’s just a matter of clarification. It’s motherhood and apple pie — we have to follow these things. I really wonder why there’s the apprehension to having it in there. … I really don’t understand all the pushback,” FirstEnergy’s Jim Benchek said.

Exelon’s Sharon Midgley agreed. “This would give us a lot of comfort moving forward if this is added,” she said.

They got their wish. The original version of the charter received 17% approval, or just 26 votes in favor, while the amended version received 92% approval, or 160 votes in favor.

Seasonal DR Aggregation Registration Rules

EnerNOC’s Steven Doremus presented a proposed revision to PJM’s DR aggregation registration rules, arguing that the current method fails to maximize use of available resources. The proposal accompanied the first read of a problem statement and issue charge.

The current method is to take as the CP capability the lesser of the registrant’s summer or winter capability. The CP capabilities of the registrants are then added together for a total capability, but this leaves a substantial amount of DR undispatchable.

“The problem we see is this is not the most efficient way to register the customers,” Doremus said.

EnerNOC proposed adding up the summer and winter capabilities of all registrants and using the lesser of the two summations at the overall CP capability “to maximize the value.”

“It wouldn’t change the value; it wouldn’t change the annual requirement,” PJM’s Langbein said of the proposal. “It’s just how do we sum up winter and summer capabilities to ensure there’s an annual capability at the [Reliability Pricing Model]-resource level.”

Meetings Reduction

Responding to a request from the Members Committee, PJM staff reviewed the status of all issues assigned the MIC and subcommittees. Of the 23 issues, seven are completed and will be closed. Three others have proposals awaiting endorsement votes.

At the October Members Committee meeting, Vice Chair Mike Borgatti of Gabel Associates announced that the MIC, MRC, Operating Committee and Planning Committee will be directed to determine if any timelines can be relaxed to “free up a little room in the schedule.” The directive came at the request of stakeholders, who have been complaining about the roughly 500 stakeholder meetings PJM conducts each year. (See “Reducing the Workload,” PJM MRC/MC Briefs.)

Adrien Ford of Old Dominion Electric Cooperative thanked PJM for developing the review and taking a “leadership role” in streamlining the issues.

Account Cleanup

PJM will be automatically terminating accounts on its website that have been locked longer than nine months. The terminations will reduce security risks, as well as improve system performance, staff explained.

PJM.com has 141,000 accounts, but 60,000 have already been terminated. Of the remaining 81,000, approximately 37,000 have been locked for more than nine months, or about 46%. Only about 20,000 accounts are actively used.

Accounts can be restored, but account managers at member companies have been notified to review employees’ accounts and delete any unneeded ones.

— Rory D. Sweeney

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MISO Still Tweaking OMS Survey Assumptions

By Amanda Durish Cook

CARMEL, Ind. — MISO is proposing to once again revise the equation behind its yearly resource adequacy survey issued in partnership with the Organization of MISO States.

The new adjustment for the 2018 OMS-MISO survey adds a “likelihood” weighting to account for the in-service dates of potential new capacity still in the queue, said MISO Resource Adequacy Coordinator Ryan Westphal.

MISO OMS resource adequacy OMS-MISO Survey
Ryan Westphal at the Nov. 8 Resource Adequacy Subcommittee meeting | © RTO Insider

Including queue resources “is a pretty new process, so there’s no history of a success rate yet,” Westphal said during a Nov. 8 Resource Adequacy Subcommittee meeting.

Last year marked the first time the survey began including in its weighted resource adequacy averages a 35% capacity share of projects in the definitive planning phase of the interconnection queue. But MISO at the time didn’t contemplate adding likely in-service dates into the equation. The RTO is now proposing to weight projects represented within that 35% share based on the likelihood they’ll complete the queue by a certain year.

Under the proposal, next year’s survey will weight according to status — 10% for projects not yet started and in the first phase of the queue, 25% for projects in the second phase and 50% for those in the third phase. All projects with signed generation interconnection agreements will count fully toward offsetting resource adequacy requirements. MISO will also credit new wind and solar resources at 16% and 50%, respectively, of nominal capacity.

The new approach to weighting will result in a far lower forecast of potential resources. In last year’s survey, MISO predicted that 2.2 GW of potential resources in the definitive planning phase would come online in 2019. By applying the new weighting to the 2018 survey, MISO expects only 0.1 GW of potential resources will come online in 2019. By 2020, MISO sees 0.7 GW in operation instead of an earlier prediction of 3.3 GW. The in-service forecast climbs to 2 GW in 2021, but that represents just more than half the 3.8 GW predicted last year.

MISO OMS resource adequacy OMS-MISO Survey
Comparison of MISO potential resources in OMS-MISO Survey | MISO

Before this year, MISO stakeholders had criticized the survey as being too alarmist for not including any potential new resources without signed interconnection agreements. Inclusion of a portion of those resources in this year’s survey showed MISO will have 2.7 to 4.8 GW of excess resources from 2018 to 2022, a departure from the shortfalls predicted in previous years. (See Capacity Survey Shows MISO in the Black.)

Saying the new survey style could “dramatically” impact some zones, Exelon’s David Bloom asked for a zone-by-zone comparison showing how predictions for potential new generation will change from this year to the next.

“By changing the assumptions from year to year, I think what MISO is doing is changing results,” said Kevin Murray, representing the Coalition of Midwest Transmission Customers. “You’re going to go from reporting a surplus in 2019, to reporting a deficit simply by arbitrarily shifting assumptions.”

Westphal asked stakeholders to keep in mind that the change deals only with potential resources still in the queue, which the survey only began including last year. He said all generation with signed interconnection agreements will continue to be counted.

“Did the queue get worse in the last year? Did a bunch of resources drop out? What happened to lose about 2.1 GW in 2019?” asked Indianapolis Power and Light’s Ted Leffler.

Laura Rauch, MISO manager of resource adequacy coordination, said the 35% of new generation used in last year’s survey was not adjusted for the more realistic in-service dates.

“Last year, we took the in-service dates that owners provided with their queue application. Some of those generators hadn’t been studied yet,” Rauch said. She said updated in-service dates for potential wind resources have the biggest effect on MISO’s numbers.

Madison Gas and Electric’s Megan Wisersky said she was concerned change would spark public concern about capacity shortfalls.

“You look at how the survey gets used and abused out in the public,” Wisersky said. “Two things happen when the survey is released to people who don’t deal with these kinds of things every day. One: I know what happens when you show these types of deficits — things get dicey. Two: [People ask if] the queue process is leading to resource inadequacy. And that’s what I’m worried about when people without knowledge of these get ahold of them.”

Westphal said MISO has time to collect stakeholder advice and refine the survey over the next several months.

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Cooperation, DOE NOPR, State RFPs the Topics at NECBC Meeting

By Michael Kuser

BOSTON — Atlantic Canada, New York and New England are one region geographically, and the jurisdictions will be drawn into ever closer cooperation on energy.

That was the consensus among a dozen or so speakers at the 25th Annual Energy Trade & Technology Conference hosted by the New England-Canada Business Council on Nov. 8-9. Speakers also discussed proposed price supports for coal and nuclear generation and how FERC is likely to treat New England states’ contracting for renewables.

Battery for New England

Hydro-Québec CEO Eric Martel said that his company last year exported more than 15 TWh of electricity into New England, about 12% of what the region is consuming now. The company has partnered on six different projects being bid into Massachusetts’ recent clean energy procurement. (See Hydro-Québec Dominates Mass. Clean Energy Bids.)

“Our large reservoirs have a combined annual energy storage of 176 TWh,” Martel said. “Today we are producing for the Canadian people 170 TWh/year [and] we are exporting about 30 TWh, which makes our production today at 200 TWh. But today our limit [on exports] is the number of transmission lines.”

Hydro-Québec began developing non-hydro renewable generation in the early 2000s and has since added 3,500 MW of wind capacity in Québec, Martel said.

“We firm up our domestic wind generation using our hydropower resources, so it’s very important that our source for firming is a renewable resource also,” he said. “We’ve been planning for this energy transition that is taking place, but what needs to happen now is to build those transmission lines. At peak periods, hydropower can be adjusted almost in real time, so Hydro-Québec can be the battery for northeastern America.”

NB Power CEO Gaëtan Thomas suggested how to connect the region to that huge battery.

“The only way to do that is more transmission,” Thomas said. “Transmission is king; transmission is going to solve these issues. Our vision should be to tie the whole region together and get to net zero [emissions]. That’s the only way we’re going to avoid the hits [caused by climate change] on the Eastern Seaboard. We’re all connected to it; we have that in common.”

DOE NOPR DOA?

Many speakers agreed that the U.S. Department of Energy’s recent Notice of Proposed Rulemaking in support of coal-fired and nuclear baseload generation wouldn’t amount to much, if anything.

But Concentric Energy Advisors CEO John Reed cautioned about being too optimistic.

“If we have one lesson from this administration, if you look at immigration or health care, the answer is, if at first you don’t succeed, tweet, tweet again,” Reed said. “If this doesn’t go somewhere, and if you look at the initiatives that have occurred in Ohio, Illinois and New York to support baseload generation, what is going to come down as the next mandate, the next executive order on these issues? Because I don’t think the administration’s concerns in terms of supporting coal and nuclear and other baseload generation are going to go away.”

“What I would expect — and PJM is already looking into it — is how to price things perhaps differently,” said Avangrid CEO James Torgerson. “And I think the other organized markets will probably be told to do the same thing. I think each RTO and ISO is going to be looking at it from their perspective, and [if there is] an issue in their area that needs to be dealt with. FERC will probably push it back to the different regions to get it resolved on a regional basis, because you can’t just say it’s a national or international problem at this point; it’s in certain pockets.”

Michael Twomey, vice president for external affairs at Entergy, defended nuclear energy’s role as an emissions-free resource. Nuclear power’s contribution to New England’s energy needs has remained generally unchanged because the retirement of Vermont Yankee was offset by upgrades and increased capacity from other units, he said.

“Oil has effectively disappeared from the landscape, coal is reduced significantly, and hydro and renewables honestly haven’t moved that much,” Twomey said. “We’ve seen tremendous gains in carbon emissions reductions in New England over the last 15 years, but that’s mainly been attributable to the substitution of natural gas for oil and coal. Well, the oil and coal is going to be gone — soon — and there’s not going to be any more low-hanging fruit to achieve carbon reductions, so what we’re going to see is probably an increase in carbon emissions from where we are now, going forward, as you see new retirements.”

An Accommodating FERC?

FERC is entering a much more “state-centric” cycle, according to Rob Minter, vice president for government and regulatory affairs at ENGIE.

“Confidence in the markets for maintaining things like fuel diversity to keep nuclear plants alive, to integrate renewables, to achieve public policy goals like carbon reduction does not fit with the market structure that we now have,” Minter said. “Everyone’s trying to build the type of plants they want for their own objectives, for their own fuel reliability, for economic development, to save stranded assets that are uneconomic and underwater but make sense, like a nuclear plant you need to continue to have low carbon. These are not compatible with the current wholesale market that was created in the 1992 Energy Policy Act.”

“You start wondering how much of this [NOPR] is about reliability and fuel diversity versus some of the generators who have coal and nuclear plants aren’t really making as much as they did in the past,” Torgerson said. “So those are things being debated right now.” He predicted FERC will set a technical conference so industry participants can examine the issue more thoroughly.

To implement different state public policies on clean energy requires out-of-market actions that are fundamentally incompatible with the wholesale market design, Minter said.

“You can find a way to price those attributes into the markets, but my god, you end up putting dozens of pricing mechanisms and algorithms into an already complicated market,” Minter said.

He said although he would prefer fully competitive markets, they have “very little chance of success.”

“I would like for it to work; I would like to see fully competitive wholesale markets,” he said. “But regulators are not willing to accept the risk of very high energy prices that happen during periods of scarcity.”

Leo Desjardins, CEO of Conservation Resource Solutions, said the new, fully staffed commission has arrived at an inflection point for markets.

“Massachusetts probably gets its way on Canadian imports [and] FERC figures out how to accommodate regional and state carbon pricing,” Minter said. “And I think you’ll see that [the] large renewable procurements that states want, that end up being out-of-market, get accommodated. Only for so long can a commission like FERC fend off states. If the number of states [asserting their public policy] grows, and as the frustration level grows, they eventually have to cave in and accommodate.”

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PJM Planning and Transmission Expansion Advisory Committee Briefs: Nov. 9, 2017

VALLEY FORGE, Pa. — PJM’s Asanga Perera presented stakeholders at last week’s Planning Committee meeting with a problem statement and issue charge to address issues the RTO sees with its current process for evaluating market efficiency projects.

pjm market efficiency projects planning committee
Perera | © RTO Insider

“We have conducted two cycles to date since FERC Order 1000 was established, and during these two cycles, we recognized various challenges that we think are important to address going forward,” he said.

One of the issues, Perera explained, is that PJM’s benefit-to-cost calculations beyond 10 years are extrapolations, not more accurate simulations.

“We have discovered, in certain instances, we may end up either overstating benefits or understanding benefits, especially on a longer horizon,” he said.

PJM also must address modeling issues, timing of the proposal-window process, interregional analysis and project re-evaluation, Perera said.

Sharon Segner of LS Power applauded the focus on the process but asked if it could go further.

“This is a great discussion in terms of some of the challenges that the market efficiency window is facing,” Segner said. “Is there anything missing?”

PJM staff resisted suggestions to include a review of cost calculations, saying that’s being handled elsewhere.

Segner also warned against making any retroactive changes.

“It’s important to not undermine the work of the past, because that’s going to create a lot of regulatory uncertainty,” she said.

If the initiative is approved, the work would be assigned to a task force, Perera said.

Light-Load Analysis

pjm market efficiency projects planning committee
Sims | © RTO Insider

PJM has compiled some data to begin updating parameters for modeling light-load conditions. PJM’s Mark Sims presented the data.

“There’s definitely plenty of activity happening out there to draw some conclusions,” he said.

One focus is comparing high-voltage alarms with instances when high-voltage emergency procedures were taken. The alarms, which require generators receiving them to take action, precede emergency procedures that PJM takes.

“The alarm data is a good proxy to use moving forward to look for statistical values to develop parameters” for a test, Sims said.

PJM is also considering how to address the lag between recognizing an issue and compiling all the information to address it effectively.

“Between it happening and us fixing it, it could be a couple of years,” Sims said.

Summer Demand less than Expected

pjm market efficiency projects planning committee
Reynolds | © RTO Insider

Mild weather meant load never came close to reaching the peak summer forecast, PJM’s John Reynolds said.

The summer peak of 145,331 MW on July 19 was 5% below the forecasted peak of 152,999 MW and 4.4% below the 2016 peak of 151,945 MW. “The champ still reigns,” Reynolds said, referring to PJM’s all-time peak of 166,876 MW on Aug. 2, 2006.

There were 0.4 MW of load management July 19, he said, and there have been anecdotal accounts of a “significant amount” of peak shaving this summer.

The decline in weather-normalized load won’t mean an immediate drop in load forecasts.

“That would be an assumption that people should not make,” Reynolds said. “It will take time for that to work its way in full.”

The call for patience confounded Calpine’s David “Scarp” Scarpignato.

“I don’t want to wait 18 years to get the forecast right,” he said.

ARR Analysis IDs Constraints

An analysis of Stage 1A 10-year auction revenue rights found “infeasible facilities” both within PJM’s footprint and in market-to-market interactions with MISO, Perera said.

The internal constraint will be addressed by a project (b2774) in the Regional Transmission Expansion Plan, which is expected to be in service in 2020. Of the remaining nine M2M constraints, one will be addressed by a MISO Transmission Expansion Plan project that is expected to be in service this year. Three others have projects under consideration, two will be included in a future targeted market efficiency project proposal window and three are pseudo-tie flowgates.

Asked specifically about lines connecting to the Ohio Valley Electric Corp. — which is attempting to join PJM as a transmission zone — Perera said no new issues were identified. A project between OVEC’s Clifty Creek Power Plant and the Trimble County substation is one of nine M2M constraints under consideration.

— Rory D. Sweeney

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PJM’s Markets Competitive, Energy Prices Up, Monitor Finds

By Rory D. Sweeney

PJM’s markets were competitive in the first nine months of the year and energy prices were up $1/MWh compared to the same period last year, the Independent Market Monitor found in its quarterly State of the Market Report.

“Energy prices in PJM in the first nine months of 2017 were set, on average, by units operating at, or close to, their short-run marginal costs, although this was not always the case during high-demand hours,” the report said. “This is evidence of generally competitive behavior and resulted in a competitive energy market outcome.”

state of the market report
Quarterly total price and quarterly inflation adjusted total price ($/MWh): January 1, 1999 through September 30, 2017 | Monitoring Analytics

The load-weighted, average LMP in PJM was 3.5% higher in the first nine months of 2017 than during the same period in 2016, rising to $30.36/MWh. The Monitor said the increase was “primarily” due to higher fuel prices.

Coal and natural gas costs rose faster than electricity prices, undercutting generator revenues. Average energy market revenues decreased by 51% for new gas-fired combustion turbines, 28% for new combined cycle units and 17% for a new coal plant, while increasing 6% for nuclear units, the Monitor said.

Coal units’ dominance has dipped over time, while gas has risen. In 2008, coal represented 75% of the marginal resources and gas 20%. In the first nine months of this year, coal stood at 32.5% and gas rose to 52.9%, the Monitor said.

state of the market report
Monitoring Analytics

Wind continued to depress prices as the marginal unit. In the first nine months of 2017, 74.1% of the wind marginal units had negative offer prices, 18.9% had zero offer prices and 6.9% had positive offer prices.

Total energy uplift charges decreased $16 million (15.7%) to $86.3 million during the nine-month period. Demand response payments also decreased by $167.2 million (31.1%) to $370.6 million, while congestion costs fell $366.8 million (44.6%) to $455.4 million.

The impact of FERC’s ruling on balancing congestion — rejecting the notion that financial transmission rights are only intended to benefit load — was also evident this year. Revenues from auction revenue rights and FTRs offset 98.1% of total congestion costs for load during the 2016/2017 planning period, but only 79.7% of those costs for the first four months of the 2017/2018 planning period. In January, FERC accepted PJM’s compliance filing in response to the commission’s requirement that the RTO develop a method for allocating ARRs that doesn’t consider extinct generators. Under the new rules, PJM assigns balancing congestion to real-time load and exports and regularly updates its ARR allocations to reflect generator retirements. (See FERC Accepts PJM’s FTR Plan, Rejects Rehearing Requests.)