Environmental advocates criticized FERC for ruling last week that New York state failed to act in a timely manner on water quality permits sought by Millennium Pipeline.
New York State Department of Environmental Conservation Headquarters
In its Sept. 15 order, the commission ruled that the New York State Department of Environmental Conservation (DEC) had waived its authority to issue or deny a water quality certification for the project by failing to act within the one-year time frame required by the Clean Water Act (CP16-17).
In a statement, the department said it is reviewing FERC’s decision and would “consider all legal options to protect public health and the environment.” It would have to file any appeal with the D.C. Circuit Court of Appeals.
But opponents of the natural gas pipeline extension — the 7.8-mile Valley Lateral spur to the Valley Energy Center in Wawayanda, N.Y. — were not as circumspect.
“This is just another warping of the law by FERC,” Maya van Rossum, director of the Delaware Riverkeeper Network, told RTO Insider. “It’s not the first time, and it probably won’t be the last, that FERC acts only to help its friends in the pipeline industry.”
Sierra Club Atlantic Chapter Director Roger Downs said in a statement that “nowhere is FERC granted the right to override” a state’s authority to regulate its water quality.
Timeliness of the Essence
Millennium Pipeline in July filed with the commission a request for notice to proceed with construction, asserting that the DEC had failed to act before the statutorily imposed deadline. The department responded days later that it had not waived its authority, which it exercised on Aug. 30 when it denied Millennium’s application for certification.
| Millenium Pipeline
Millennium and the department differed on when the one-year review process began, with the company contending that the clock started ticking when it submitted its application to DEC in November 2015. The DEC countered that the one-year period did not begin until it received a “complete” application on Aug. 31, 2016. (See Pipeline Sues to Force NY to Issue Permit for CPV Plant.)
FERC said in its order that the “starting point for interpreting a statute is the language of the statute itself,” and that “Section 401 [of the Clean Water Act] provides that water quality certification is waived when the certifying agency ‘fails or refuses to act on a request for certification, within a reasonable period of time (which shall not exceed one year) after receipt of such request.’ Thus the term ‘receipt’ specifies the triggering event.”
The commission ruled that “giving effect to the plain text of a statute, the one-year review period began November 23, 2015” — when the DEC received the application.
New Pattern
Gavin Donahue, CEO of the Independent Power Producers of New York, last week told participants at the group’s fall conference that “the siting of natural gas pipelines is FERC’s jurisdiction, but the DEC has developed a pattern of denying water quality certificates for projects, most recently evidenced by the decision on the Millennium Pipeline.” (See NYPSC Chair Promises ‘Continuity’ on State Energy Policies.)
New York environmentalists might have thought they were succeeding in stopping pipelines after the 2nd U.S. Circuit Court of Appeals last month ruled that the department acted within its authority to deny water quality permits sought by Williams Co. for its Constitution Pipeline.
Now the natural gas industry sees hope. Following the Millennium order, Reuters reported that Williams now plans to seek a similar permit ruling from FERC.
The Trump administration sided with utility witnesses Tuesday on legislation to streamline approvals for managing vegetation near power lines on federal land, an effort to reduce wildfire risks.
Witnesses from the Bureau of Land Management, the National Forest Service and two utilities endorsed separate House and Senate bills to amend the Federal Land Policy and Management Act (FLPMA) and provide authority to exempt existing rights of way (ROWs) from reviews under the National Environmental Policy Act (NEPA).
The Wilderness Society, however, said it opposed the House bill, the Electricity Reliability and Forest Protection Act (H.R. 1873), because it would impose “counterproductive limitations and obligations on both utilities and federal land managers, inappropriately shift costs from utilities to taxpayers and agencies, and undermine the public interest in the management of their public lands.”
Witnesses from the Bureau of Land Management, the National Forest Service and two utilities endorsed separate House and Senate bills to streamline approvals for managing vegetation near power lines on federal land. Left to right, Glenn Casamassa, National Forest System; John Ruhs, Bureau of Land Management; Mark Hayden, Missoula Electric Cooperative; Scott Miller, The Wilderness Society, and Andrew Rable, Arizona Public Service. Miller said he supports a Senate bill but not the House legislation.
The group told a Senate Energy and Natural Resources Committee hearing Tuesday that it prefers Section 2310 of the Energy and Natural Resources Act of 2017 (S. 1460), a comprehensive energy bill cosponsored by committee Chair Lisa Murkowski (R-Alaska) and ranking member Maria Cantwell (D-Wash.).
Blackout Prompted Standards
It was the August 2003 Northeast blackout — triggered by contact between a power line and a tree — that led Congress to enact mandatory reliability standards as part of the 2005 Energy Policy Act. FERC, which deputized NERC to develop the standards, approved the corporation’s vegetation standards in 2013.
Both bills pending before Congress would provide authority to exempt existing ROWs from reviews under NEPA. They also would allow utilities to trim vegetation within ROWs or “hazard” trees adjacent to ROWs that have contacted or are in imminent danger of contacting transmission lines as long as they notify the appropriate agency within 24 hours, according to summary attached to BLM’s testimony.
Rable
Testifying for the Edison Electric Institute, Andrew Rable, manager of forestry and special programs for Arizona Public Service, laid out utilities’ difficulties in employing integrated vegetation management (IVM), which combines the planting of low-growth vegetation in ROWs with pruning and use of herbicides to ensure sufficient distance between plants and electric facilities.
“Transmission line ROWs crossing federal lands face multiple layers of jurisdiction and decision-making, which can hamper electric companies’ ability to manage vegetation and reduce wildfire risk in a timely manner,” he said.
Rable said that although the two bills are largely similar, the House’s is preferable because it sets shorter deadline for approval of vegetation management plans (90 days versus 180 days) and provides “more flexible and less burdensome” rules.
The two bills both provide limited liability protections. According to the BLM summary, the House version protects a utility from wildfire liability to the U.S. when federal agencies blocks it from addressing hazard trees or vegetation in imminent danger of contact with power facilities. The Senate’s would protect utilities from strict liability following a land agency’s “unreasonable delay or failure to approve or adhere to a vegetation management plan or an MOU,” BLM said.
Hayden
Mark Hayden, general manager of the Missoula Electric Cooperative, which has about 15,000 customers in western Montana and eastern Idaho and 300 miles of distribution lines crossing federal land, told the committee the 2017 wildfire season has devastated his region’s economy.
“I fully recognize that the fires burning in Montana today were all lightning sparked. But for me, these fires serve as a vivid reminder and warning of what could occur as a result of long delays in permit approvals and inconsistent application of policies by federal land managers,” said Hayden, who said the ability of utilities to develop relationships with federal officials is hampered by frequent turnover at Forest Service district offices.
Examples Cited
Hayden cited a New Mexico cooperative that received a $38.2 million bill from the Forest Service — almost twice the co-op’s $20 million in liability insurance — for the costs of fighting a 152,000-acre fire caused when a tree fell onto a power line.
The Benton Rural Electric Association in Prosser, Wash., applied to renew its ROW permit in August 2015, four months before it was due to expire. “After waiting 15 months, Forest Service officials have now proposed nothing short of a full blown environmental assessment for which costs could exceed $100,000 for facilities that have been in place for more than 70 years,” Hayden said.
In 2009, when the Missoula co-op felled trees killed and weakened by an insect infestation, the Forest Service required it to remove the timber “using an expensive, labor-intensive method to minimize impact to ‘flora and fauna’ from mechanical equipment,” Hayden said. “Ironically, the Forest Service conducted a timber sale on the same tract later in the year using the exact mechanical forestry techniques that we were prohibited from employing. In essence, we were held to a higher standard than they held themselves.”
When the co-op requested permission to bury about 6 miles of overhead lines on Forest Service land, approval took 18 months — granted just days before Hayden was to testify before Congress regarding the delay.
BLM Committed to Streamlining Process
Ruhs
John Ruhs, acting deputy director of operations for BLM, said his agency supports both bills and “is committed to improving and streamlining its permitting processes.”
The agency, which administers almost 16,000 authorizations for electricity transmission and distribution facilities, allows utilities to conduct “minor trimming, pruning and weed management” after notifying the agency, Ruhs explained. Trees that present an imminent hazard can be removed without BLM pre-approval. “For actions that fall outside the scope of the ROW grant and do not present an imminent threat, BLM approval is needed, and additional analysis may be required.”
Ruhs said the legislation “would expand the BLM’s toolbox to help reduce the threat of catastrophic wildfires like those we are currently experiencing.”
Casamassa
Glenn Casamassa, associate deputy chief of the Department of Agriculture’s National Forest System, said his agency supports most of the language of both bills. But Casamassa said some provisions duplicate existing requirements in Forest Service policies.
“USDA is aware of the frustrations some utilities experience as a result of delayed responses for maintenance approvals and inconsistency across agency field offices and has been actively taking steps to address these concerns under existing authorities,” he said. The Forest Service has 2,700 authorizations for 18,000 linear miles of power lines.
Climate Change Impact
Miller
Scott Miller, senior director for The Wilderness Society’s Southwest region, said utility vegetation management (UVM) practices have improved substantially since 2005. “At the same time, the importance of strong UVM practices continues to grow as climate change is causing longer wildfire seasons, larger and more severe wildfires, longer growing seasons, changing plant species distributions, increased insect and disease activity, and more intense, more frequent and longer-lasting drought, wetness and weather events,” he said.
Miller said the society, which claims more than 1 million members, opposes H.R. 1873 because it “fails to appropriately recognize the federal land management agencies’ obligations or the public’s interest in federal land management and because it fails to provide for the necessary cooperation that will improve effective and sustainable UVM on federal lands.”
The Senate bill, in contrast, provides “a thoughtful framework for legislation to advance UVM on public lands” and “corrects the many flaws” of the House bill.
“H.R. 1873 would prevent utilities and land managers from including activities in vegetation management plans that would require anything beyond annual notice, description and certification by the utility for its planned activities. It also would give utilities (including those without approved plans) blanket approval to conduct vegetation management activities to meet clearance requirements, leaving the agencies with no authority but to allow such activities, and leaving the utilities with little incentive to cooperate or even prepare a vegetation management plan.”
Granting a blanket exemption for vegetation management from NEPA “would undermine sound stewardship of our public lands,” he continued. “We note that both the Forest Service and BLM have already established a number of categorical exclusions that apply to many routine UVM activities, and those authorities are routinely utilized by the agencies in the context of UVM.”
The Senate bill, in contrast, would encourage cooperation between utilities and federal land managers, he said.
The group said the House bill’s provisions on liability are “overbroad and unclear.”
“Nothing in the bill states that the release of liability is limited to situations where the secretaries’ decisions are an actual and proximate cause of the damages, potentially leaving the agencies (and ultimately, taxpayers) to cover the damages caused by the utilities’ negligence (or even gross negligence).”
CARMEL, Ind. — MISO will file a response to FERC’s recent deficiency letter on the RTO’s new constrained area category after an internal review, stakeholders learned on Thursday.
FERC issued the letter Sept. 6 (ER17-2097), inquiring about:
What past outage information or expected future congestion estimates MISO plans to use to impose a dynamic narrowly constrained area designation;
What conduct and impact thresholds MISO plans to use for mitigation;
Whether dynamic narrowly constrained areas could also be simultaneously designated as simple narrowly constrained areas;
Whether MISO’s existing binding reserve zone constraints would be used to apply mitigation measures
MISO Director of Market Evaluation and Design Dhiman Chatterjee said the RTO is working with its Independent Market Monitor to respond to the deficiency letter.
“We believe those are more clarifications [than changes] that they’re asking for. It’s a matter of providing more information, is our initial take on it,” Chatterjee said during a Sept. 14 Market Subcommittee meeting.
Under MISO’s proposal, filed July 14, dynamic narrowly constrained areas would address intense, short-lived congestion by allowing the Monitor to apply mitigation if the constraint has bound in 15% or more hours over at least five consecutive days. The definition would differ from FERC-defined narrowly constrained areas, which must bind for more than 500 hours annually. (See MISO Embraces Monitor’s New Constrained Area Category.)
The new category also would require the Monitor to have identified economic or physical withholding, or uneconomic production in the area. MISO proposed a $25/MWh “conduct threshold” for such determinations, meaning the behavior must have impacted LMPs or market clearing prices by at least that amount.
VALLEY FORGE, Pa. — Stakeholders at last week’s Market Implementation Committee meeting endorsed the first phase of what amounts to a two-phase implementation of Manual 11 revisions to facilitate intra-day generation offers.
PJM was requesting endorsement of manual revisions needed to implement intra-day offers on Nov. 1 as planned. The proposal received 72% approval but not before a lengthy discussion about how frequently generators can elect to opt in or out of making changes to offers in real-time auctions.
PJM and its Independent Market Monitor have differed on the issue, but the two sides came to an agreement that market participants must specify in their annually approved fuel-cost policies (FCPs) the conditions under which they will opt in. This came as a surprise to several generation representatives, including Gary Greiner of Public Service Electric and Gas. He believed the language previously had read that generators would be able to make that election monthly.
PJM’s Lisa Morelli had called the change “minor,” but Greiner took issue with that characterization.
“What I’m hearing now is we have to build it into the fuel-cost policy so we no longer have that monthly option; that’s gone. It’s a once-a-year, permanent thing, unless we want to create a new fuel-cost policy that says we’d want to opt in and [include] everything around all of the mechanics of what we’re going to do intra-day. [Then] we have to stay with an opt-out decision for one year. Is that a minor change?” he asked. “That’s a massive change.”
“So, I should not have used the word ‘minor,’” Morelli acknowledged but pointed out that the language had been the same at the August Markets and Reliability Committee meeting. (See “Division Remains on Oversight of Intraday Offers,” PJM Markets and Reliability Committee Briefs: Aug. 24, 2017.)
PJM’s Jeff Schmitt said such flexibility could be worked into a generator’s FCP.
“As long as we have an approved fuel cost policy … we’d work with you to get there,” he said. “It’s certainly workable from my perspective.”
“I’m uncomfortable with having a predefined trigger that determines when I’m opting in or opting out,” Greiner said.
NRG’s Neal Fitch asked several questions to clarify whether he was correct in assuming that the new rules provided leeway for opting in and out more frequently than just annually.
“To the extent that there is a change in desire down the road, you’re not limited to once per year,” Fitch said.
PJM and the IMM remain at odds about whether market participants must specify in their FCPs the frequency with which they can update price-based offers.
“PJM isn’t necessarily opposed to having that level of detail, but we don’t think that it’s required,” Morelli said.
She also laid out the second phase of revisions, which will be presented for endorsement next month. They would change how offers are capped and how often the three-pivotal supplier (TPS) test is run.
PJM and the IMM mutually proposed re-evaluating which schedule, either the cost- or price-based, is cheapest and reapplying the offer cap when offers are updated. The current rules do not allow for such re-evaluation, which wouldn’t allow market power mitigation to keep up with intraday updates. Since units can self-schedule with 20 minutes of notice, PJM and the IMM proposed running the TPS test on such units every hour following the first hour of operation.
Stakeholders also endorsed related revisions to Manual 28 by acclamation with no objections or abstentions.
MTSL Revisions Kaput
Stakeholders rejected a joint PJM-IMM proposal to revise how black start units are compensated for fuel storage, with some generators complaining that the issue is not significant relative to other issues the membership is addressing.
The measure, which would have paid units based on the portion of fuel they need for black start rather than how much is stored, received 48% approval. The proposal, which was based on the minimum tank-suction level (MTSL) for the fuel-storage tanks, would have saved customers about $210,000 annually. (See “PJM Indifferent on Black Start Fuel Compensation,” PJM MIC Briefs: July 12, 2017.)
NRG’s Fitch said the way the proposal was presented seemed “inappropriate” and “flawed.”
“I hope we do a better job in the future deciding when and where we need to work on the small stuff,” he said.
John Horstmann of Dayton Power and Light called the proposal “shortsighted” because the value of having fuel when needed during a system emergency far exceeds the “minuscule” savings from proportional compensation.
“You can’t even measure these savings on a customer’s bill,” he said.
Others, however, said the principle was the point.
“The status quo is not defensible. There are units being paid more than it takes to provide black start service,” the IMM’s Catherine Tyler said.
“I realize that these are not major dollars, but dollars are dollars, and customers have to pay those dollars,” said John Farber with the Delaware Public Service Commission.
The Monitor noted that the final proposal was a compromise between it and PJM. The RTO estimated the pro rata calculation would have reduced payments by about 95%, so it included a $12,000 “dual-fuel unit adder” that only cut payments in half.
“We do feel that the dual-fuel adder is somewhat arbitrary,” Tyler said, adding that it would need to be justified or eliminated in the future.
FTR Forfeiture Rebilling to Start
PJM’s Brian Chmielewski announced that, barring any further action from FERC, implementation of PJM’s revised financial transmission right (FTR) forfeiture rule will begin with September billing statements and rebill back to the Jan. 19 effective date of the related FERC order. Manual revisions to address the changes ordered by FERC received 82% approval in an endorsement vote.
FERC’s order on the issue (EL14-37) required PJM to evaluate the net effect of a market participant’s entire virtual portfolio of up-to-congestion trades (UTCs), incremental bids (INCs) and decremental offers (DECs) on congestion constraints. A forfeiture is triggered if at least 75% of the energy flowing between the bus where a virtual transaction is made and the worst-case bus — the location at which the transaction has the biggest impact on congestion — is reflected in the constraint. (See FERC Orders Portfolio Approach for PJM FTR Forfeiture Rule.)
Following PJM’s request in 2013 to define UTCs as virtual transactions, FERC initiated an investigation to examine how PJM planned to apply its FTR forfeiture rule to UTCs. PJM had implemented the rule in 2000 to prevent market participants from using virtual transactions to create congestion that benefits their FTR positions but hadn’t included UTCs.
“We just rewrote the entire section because it’s essentially an entirely different, new rule,” Chmielewski said of the manual revisions. “We are on the same page with the IMM. Our numbers are very close to matching.”
He acknowledged that the calculations under the revised forfeiture logic were higher, but “I wouldn’t say they are significantly more in all cases.”
“I think relative to total target credits, the percentage is still very low, but relative to the previous rule, they’re higher,” Chmielewski said.
Several stakeholders noted the existence of protests in the FERC docket, but Chmielewski said that wouldn’t impact the effective date.
Now is the Winter of Our Discontent (with DR Rules)
East Kentucky Power Cooperative’s (EKPC’s) Chuck Dugan proposed a problem statement and issue charge to investigate the impact of winter demand response (DR) not performing on an assessment day due to a maintenance outage. Such nonperformance on a winter peak day reduces a market participant’s winter peak load (WPL), which reduces the participant’s winter DR capacity nomination. An unexpectedly low nomination can result in needing to secure replacement capacity to fulfill a commitment and avoid a daily deficiency penalty, which happened to an EKPC customer, Dugan said.
“We’re paying the resources to be available all year,” said Tyler, adding that the Monitor opposes the proposal.
“They’re already doing what you paid them to do, which is be off,” Dugan countered.
Stakeholders will vote on the proposal at next month’s meeting.
EE Waiver for Kentucky?
Chris O’Hara, PJM’s deputy general counsel, said the RTO plans to submit a Section 205 filing with FERC asking for a prospective waiver of its Tariff to bar Kentucky participants from its energy efficiency resources (EERs) market. The waiver would be limited to Kentucky and only after FERC makes a ruling on the issue.
The request evolved from a Kentucky Public Service Commission staff finding in February that EERs are a retail product under its regulatory oversight that, like other Kentucky retail customers, aren’t eligible to participate in wholesale markets such as PJM. PSC commissioners issued a declaratory order to that effect on June 6. Four days earlier, Advanced Energy Economy requested that FERC declare whether it has sole jurisdiction over EERs.
“To the extent that’s a change to what we’ve said, it is a change,” O’Hara said in response to questions about whether PJM had revised its position on the issue. PJM received stakeholder endorsement to examine how it allows EER aggregations to participate in its wholesale markets. The initiative also was to investigate the potential for creating an “opt-out” mechanism for regulators like what PJM developed for demand response in response to Order 719. (See States, Enviros Differ on Jurisdiction over Energy Efficiency.)
EKPC’s Dugan supported the waiver request, sympathizing with PJM’s position “between a rock and [a] hard place” jurisdictionally. Tom Rutigliano, a consultant who represents EER clients, sought — and received — assurances that the waiver would not extend past Kentucky.
Tyler voiced concerns that PJM is requesting permission to discriminate among market participants “especially in a way that limits competition.”
VALLEY FORGE, Pa. — The Northern Virginia Electric Cooperative (NOVEC) last week added to the pile of proposals to reform PJM’s capacity construct, but the details were familiar for anyone who’s been following the Capacity Construct/Public Policy Senior Task Force (CCPPSTF).
Customized Energy Solutions’ Carl Johnson, representing NOVEC as a member of the PJM Public Power Coalition, acknowledged that the Manassas-based cooperative usually doesn’t take an active role in PJM’s stakeholder process. But Johnson said it felt the need to get involved based on concerns that the existing proposals relied too much on logic and theory and failed to account for sometimes-illogical human behavior.
“Newton, if he’d lived long enough, might have come up with a fourth law: power plants that are in service tend to stay in service,” Johnson said.
NOVEC argued that some of the proposals encourage generators to seek a subsidy designation rather than remove the influence of out-of-market payments from competitive bidding. It’s equally concerned with proposals that would suppress auction prices in a “race to the bottom” and ones that would result in high prices, Johnson said.
“We’re concerned about other proposals making the market considerably more vulnerable,” he said.
NOVEC’s offering proposes revisions that evolved from recommendations previously advanced by James Wilson of Wilson Energy Economics, which consults for consumer advocates in New Jersey, Pennsylvania, Maryland, Delaware and D.C. Wilson argued at the Sept. 11 meeting of the CCPPSTF that “if a state follows a deliberate process and provides the market substantial advance notice of its actions, it should be assumed the market has fully absorbed the resulting resources and there is minimal, if any, impact on the auction prices.”
“We propose a solution … that simply requires that the appropriate information about those resources be published along with the planning parameters for each auction, such that other market participants can set their bids in accord with their expectations of the bidding of those resources,” NOVEC’s proposal explained. “The subsidies would then be added to the resources’ competitive offers, and the resource stack would clear as usual.”
The remaining nine proposals have all added responses to a list of stakeholder questions, including how they would handle subsidized resources and impact other PJM processes.
American Municipal Power’s Steve Lieberman provided additional details on AMP’s proposal that encourage bilateral contracts. It would require that load and capacity resources with bilateral contracts or self-supply notify PJM and the Independent Market Monitor of the arrangement. The contract price would be reported — with the participants’ names masked — by PJM and the IMM after the annual capacity auction.
The proposal is a response to the “mismatch of expectations between the buyers and the sellers,” said AMP’s Ed Tatum. “A better [way] to think about one of our objectives here [is] to make bilaterals more balanced.”
EnerNOC’s Katie Guerry expressed concern that requiring companies like hers to negotiate contracts with every load-serving entity would increase administrative costs greatly and potentially increase prices for customers. Tatum disagreed with Guerry’s assessment but did not elaborate.
LS Power’s Tom Hoatson clarified his company’s perspective on the definition of a subsidy.
“Our view is if [a subsidy is] available to everyone, we probably would not treat it as a subsidy. But we’re open to discussion,” Hoatson said.
Exelon’s Jason Barker asked where the Illinois zero-emission credit program (ZECs) fit because it appears to conform with LS’s definition of being available to all units in the technology class. Hoatson pledged that the company will review the language, saying its intent is to include ZECs.
“Is the purpose just to capture ZECs?” Barker asked, noting that the proposal doesn’t backdate to subsidies prior to 2017.
“No,” Hoatson said, “but they seem to be the new subsidy du jour, so we wanted to capture them.”
Adrien Ford of Old Dominion Electric Cooperative said its proposal was meant to make PJM’s two-stage repricing model “less worse.” PJM’s proposal would remove subsidized units to maintain a competitive clearing price at the expense of so-called “in-between” offers that would clear in the repriced second stage but didn’t in the first stage. ODEC’s proposal was designed to fully synthesize an auction as if subsidized units never existed and competitive units covered the entire demand.
“We think that is a problem with all two-stage approaches, including ours,” she said.
Exelon’s Sharon Midgley said her company would rather not change a thing, even though it offered a proposal.
“Our firm really believes that reforms are not necessary at this time,” she said. “Really, there is no reliability problem here, so we do strongly prefer the status quo.”
NRG Energy’s Neal Fitch called PJM’s proposal “a good working model to start with, with some necessary adjustments.” NRG’s proposal would lower capacity commitments for bids that cleared in the first stage to address “in-between” units with commitments for all resources proportionally reduced below their offer amounts.
Wilson suggested adding a mechanism that would allow units to drop their commitments, arguing that a few units likely would, allowing the remaining units to be committed closer to their full offer. Fitch said the idea was “probably a next-level step” if the proposal is implemented.
Ruth Ann Price, of the Delaware Division of the Public Advocate, asked proposers to analyze how their proposals would impact state renewable portfolio standards, renewable energy credits, ZECs and the Regional Greenhouse Gas Initiative.
PJM plans to conduct a stakeholder poll on the 10 proposals before the task force’s next meeting on Sept. 26. After that, another round of proposal explanations and revisions is likely to follow. The task force hopes to recommend one of them for stakeholder endorsement by the end of the year.
VALLEY FORGE, Pa. — The difference between the reserve measurements in PJM’s real-time security-constrained economic dispatch (SCED) engine and its emergency management system (EMS) has been shrinking since PJM implemented calculation changes. (See “Reserve Differences Explained,” PJM OC Briefs: Aug. 8, 2017.)
PJM’s Joe Ciabattoni presented a graph that measured the absolute error as a percentage as part of his executive operations report presented at a Sept. 12 Operating Committee meeting. Prior to July 11, when PJM removed a 2% “back off” in the EMS that assumes resources will achieve only 98% of their stated capability; the error was relatively flat at just over 9%. Since then, the difference has declined by about half a percentage point.
Graph indicates that the difference between the reserve measurements in PJM’s real-time security-constrained economic dispatch engine and its emergency management system has been shrinking since the RTO implemented calculation changes. | PJM
Stakeholders have expressed concern that SCED was not pricing shortages accurately because publicly available reserve data didn’t match LMP changes. PJM explained previously that the publicly available data is from the EMS, while the actual shortage pricing comes through SCED, which is confidential. The measurement differences, PJM argued, created the appearance that there were more shortages than actually existed.
With the small sample size, Ciabattoni hesitated to suggest the issue has been resolved.
“Even though these numbers have appeared to improve slightly, I think we need more time,” he said.
TOs to Receive Confidential Generation Data for System Restoration
PJM’s Dave Schweizer presented proposed Operating Agreement changes that would provide transmission owners with confidential data about generators that are part of the TOs’ system-failure restoration plan.
PJM currently provides such information when a unit is providing black start service or is modeled in the TO’s EMS plan. The information includes real-time unit status, real and reactive power, outage data and reactive capability. PJM proposes adding “system-restoration planning data,” such as unit start times, ramp rates, start-up loads and low-load operating capabilities.
The requested changes are in preparation for PJM’s request for proposals (RFP) on black start units coming in January. (See “Black Start RFP Process Offers Opportunity to Re-examine System Setup,” PJM OC Briefs.) GT Power Group’s Dave Pratzon asked if PJM would be able to identify where black start proposals would be “useful rather than just a shot in the dark,” citing costs of developing proposals for multiple potential sites as a deterrent for developing proposals that aren’t likely to be approved.
Schweizer said the RFP is for the entire RTO, so “we wouldn’t be able to reach out … and say, ‘you could put black start there’ because it’s an open process.”
He acknowledged staff continues to look for ways to make the process “less onerous.”
PJM’s Ken Seiler said staff have been working with gas-pipeline operators for at least a year to increase gas-electric coordination, the results of which are expected to be rolled out over the next three years. Details are coming, he said, but specifics — such as which gas-fired units that are dual-fuel are connected to more than one pipeline — aren’t.
“There’s going to be a lot of things that we can share … in terms of megawatts and what pipelines they’re associated with that may be impacted, but we’re not going to get into specifics because we don’t want to identify any potential sensitivities that we have within the system,” he said.
The discussion came as part of PJM’s ongoing focus on system hardening and resilience.
“I think it will be great for people to get a feel for the extent of the types of research and operations improvement you make,” said Pratzon, who had made the initial inquiry.
Staff are currently reviewing a list of about 50 extreme event contingencies and expect to have the gas-related ones complete prior to the winter.
PJM’s Ryan Nice provided an update on staff efforts to roll out synchrophasor technology, which takes high-speed, time-stamped measurements of phase angles, voltage and frequency. PJM is using the more precise information for advanced energy-management applications. (See “PJM Seeks to Tap Synchrophasors’ Potential,” PJM Operating Committee Briefs.)
Nice said he is particularly excited about system-wide heat maps for measurements such as voltage magnitude, voltage angle and frequency.
“A human being understands nothing more rapidly and more intuitively than a colored map,” he said. “It makes us more responsive to the state of the grid.”
Staff have had to address how the sheer volume of data that PJM needs to handle has overwhelmed software that has performed well for other grid operators. PJM is the “abnormally big kid in the daycare center, and we break all the toys,” he said.
PJM has begun a demonstration project that will run a linear state estimator using only synchrophasor data. The project will run into 2018, at which point PJM will have to decide whether to purchase the system.
PJM phasor measurement unit locations | PJM
If successful, the system could be an equivalent replacement for the current EMS state estimator without relying on the same systems and software.
“It’s a miniature EMS system. It can do a lot of the same things, maybe a little bit more [rudimentarily],” he said. “A vulnerability that would work on the EMS system would not work on the synchrophasor network.”
Eclipse Analysis
The August solar eclipse resulted in less reduction in solar output and more load reduction than expected. PJM planned for a loss of up to 2,500 MW in solar generation, but an analysis found it dropped by about 2,220 MW between 2 p.m. and 4 p.m. on Aug. 21.
Also unexpected was a 5,000 MW load decrease during that period. Staff believe that might have in part stemmed from a corresponding temperature drop of about 3 degrees Fahrenheit, but PJM’s hourly data is inconclusive. Staff also are investigating whether customer behavioral changes played a role, noting that the residential control-automation system Nest announced it received positive feedback when it solicited approval from customers to reduce air-conditioning demand during the eclipse. (See “Eclipse Hot Takes,” PJM Markets and Reliability Committee Briefs: Aug. 24, 2017.)
PJM’s Joe Mulhern acknowledged that PJM’s calculations for behind-the-meter solar arrays are estimates. Staff believe they have the information about 90% triangulated from a database that oversees solar renewable energy credits (SRECs), time and location estimates and other publicly available data.
The analysis will provide a historical basis to plan for the 2024 eclipse, which will likely have a greater impact on the RTO “based on the amount of solar in the queue,” Mulhern said.
CARMEL, Ind. — MISO’s preliminary analysis of implementing multi-day unit commitments shows the project may be worthwhile, the RTO said last week.
The project would involve MISO publishing multi-day price forecasts and recommended commitments for a week at a time. The RTO’s day-ahead market currently is not designed to forecast economic commitments beyond the following day.
MISO Markets System Analyst Chuck Hansen said the RTO plans to create multiday “super forecasts” to prevent the uneconomic cycling of generators.
MISO studied the impact of committing units for a full week at a time over a year for 85 generating units with long lead times or high startup costs. The study found that although the units were turned off more frequently than turned on —on average, the units were committed an additional 110 hours per year but decommitted from 691 hours — they would see an increase in annual profits of $653,000/unit.
“You can see when a unit was on but it should not have been running because it would have made about $80,000” in some cases, Hansen said during a Sept. 14 MISO Market Subcommittee meeting.
“It’s a little like [being a] Monday morning quarterback,” Hansen said of the after-the-fact study, which relied on past locational marginal prices.
Hansen also acknowledged that forecasts decline in accuracy the further out they’re done, requiring MISO s to create more accurate price forecasts. “Assuming we can generate a very good forecast … we’re going to answer how we can improve,” he said.
“I hope that when we get there, MISO has enough faith in its forecast to make these commitments,” said ITC Holding’s Ray Kershaw.
MISO is still in the early stages of developing the multi-day model, and staff will resume stakeholder discussions on the potential benefits in November and December, Hansen said. He also asked generation owners to consider whether they would be willing to change their commitment schedules based on a MISO-originated, week-ahead forecast.
Several stakeholders, including representatives from DTE Energy, Ameren and Xcel, voiced support for MISO’s exploration of the issue.
SARATOGA SPRINGS, N.Y. — New York state’s ambitious renewable procurement, New York City’s carbon reduction plan and the costs of offshore wind were among the topics Thursday at the 32nd Fall Conference of the Independent Power Producers of New York. Here’s some of the highlights:
New York Officials Excited by Response to Renewable RFP
New York officials are happy about the competitiveness of the responses to their June solicitation for up to 2.5 million MWh of large-scale renewable energy, which they say is the most ambitious in the country.
More than 4,000 MW of renewable energy capacity — the equivalent of more than 9.5 million MWh per year — qualified to submit proposals, said Alicia Barton, CEO of the New York State Energy Research and Development Authority.
That is six times the generation that was previously secured under the prior renewable portfolio standard and almost four times the amount that the state sought to procure, Barton said. “We hope that that level of competition will drive really terrific proposals and terrific prices,” she said.
A total of 88 facilities — including utility-scale solar, landfill gas, hydroelectric and wind projects — qualified for the request for proposals, which was issued by NYSERDA and the New York Power Authority.
“We were also very pleased to see that some project developers took us up on our invitation to propose projects that would also provide grid value and included storage in the proposals,” she said.
Bid proposals are due Sept. 28, and the state expects to make the selection awards in November.
NYSERDA Working with Commercial Fishermen, Feds on Offshore Wind Siting
IPPNY Board Chairman John Reese, senior vice president of Eastern Generation, moderated a panel that included Doreen Harris, director of large-scale renewables at NYSERDA. Harris manages the master plan for offshore wind that is due out by the end of the year.
The state hopes to get 2,400 MW of generation from offshore wind by 2030. Harris’ team has been working closely with residents of Long Island and other coastal areas, and particularly with commercial fishermen.
“We’ve been spending a lot of time actually on the fishing dock, understanding how they work,” Harris said. “We’ve also undertaken over 20 different studies and surveys, which are now underway. These are desktop analyses as well as ‘boats in the water,’ so to speak.”
Siting is an important element of the master plan, and that brings in the Interior Department’s Bureau of Ocean Energy Management, which is responsible for offshore wind leasing in federal waters.
BOEM, which has identified more than 100 GW of offshore wind potential off the Atlantic coast, has issued or is preparing to issue leases off New York and seven other states. The first offshore wind lease for New York, a nearly 80,000-acre site off the Rockaways in Queens, went to Norway-based Statoil for $42.5 million last December. (See New York Seeks to Lead US in Offshore Wind.)
Only 2% of the Offshore Study Area is needed to meet New York’s goal of 2.4GW by 2030 | NYSERDA
“New York can make our recommendations to the federal government, but it is ultimately a federal process,” Barton said. “We are also looking at what this means for New York; specifically, what are the rules of the road to operate in New York if you’re a project developer? We intend to develop those guidelines using the information and the outreach we’ve conducted … which would set the stage for longer-term processes and considerations around transmission.”
NYC Seeks 80% GHG Cut by 2050
New York City has its own clean energy goals, including an 80% reduction in greenhouse gases by 2050, starting from a 2005 baseline.
“In the more near term, we have a goal of 35% reduction in emissions from the building sector by 2025, and that’s truly important and aggressive,” said Anthony Fiore, deputy commissioner of energy management for the city’s Department of Citywide Administrative Services. “The city consumes about 30% of the electricity that’s generated in the state and is responsible for about 40% of GHG emissions in the state.”
Mayor Bill de Blasio said Thursday that he wants to require owners of buildings with more than 25,000 square feet of space to retrofit them for energy efficiency. The plan, which de Blasio announced in Brooklyn, could affect as many as 23,000 properties.
Electricity is responsible for about 30% of citywide emissions, and 50% of the energy consumed by the city is produced by generation within it.
“That fleet of generation, 70% of it is more than 45 years old,” he said. “That is less efficient on average than the rest of the state generation, so that presents some unique risks to the city as that generation fleet continues to age. We all know the difficulty in repowering, and the city has had a strong voice and advocated strongly with [FERC] on changing some of the repowering rules, buyer-side mitigation, to help make that easier. These things are difficult, so there’s a real risk there.”
Though some may debate the effect of GHG emissions on climate change, “what is not deniable is the air quality impacts and public health outcomes from emissions,” Fiore said. “This is really important for New York City. We have large corridors of above-average asthma rates that really affect the most vulnerable populations.”
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Any improvement in airborne pollutants means fewer lost workdays, fewer lost schooldays, better educational opportunities for our children, better opportunities for career development and an overall better economy, he said. “Health care dollars are real, and avoided deaths and morbidity need to be calculated and factored into the choices we make.”
Michael Ferguson, director of U.S. energy infrastructure at Standard & Poor’s, said his company’s focus is on risk.
“Any time you’re going from an industry that is small right now, with only 30 MW of installed capacity [Block Island], to one in which there are very grand ambitions over time … there’s going to be risk involved,” Ferguson said.
The declining levelized cost of energy for offshore wind in Europe means “that stakeholders in the financial sector are willing to take a lower return on these,” Ferguson said. “That’s indicative of the fact that the market believes there’s less risk in these projects now than there was before.”
Talk of lower risk profiles might be fine for a banker, but for Robert Bryce, a senior fellow at the Manhattan Institute, “offshore wind has been hyped nearly as much as a Kardashian wedding.”
He cited some large projects that were announced but never built — such as the Atlantic Wind Connection by Google — and big plans by the Obama administration that never materialized, such as 10 GW by 2020 and 54 GW by 2030.
“In January, the Long Island Power Authority agreed to a $1.6 billion, 20-year power purchase deal to buy power from the South Fork Wind project from Deepwater Wind,” Bryce said. “For that project, Deepwater Wind will also collect $70 million in tax credits … the South Fork project is 90 MW. I could today build 180 MW of natural gas-fired capacity for about the same amount of money that Deepwater Wind is collecting just in tax credits.”
LIPA has agreed to pay $220/MWh for the power from South Fork, Bryce said. “How many of you in this room are getting $220/MW? None. The prevailing price last year in New York was about $34/MW. Therefore, so far what we’re seeing is that offshore wind is at least six times as expensive as conventional electricity.”
Clint Plummer, vice president of development for Deepwater Wind, responded that LIPA had determined that South Fork was the most cost-effective way of serving eastern Long Island. “Yes, you may be able to build a natural gas-fired plant in the middle of Texas for less, but if you want to build something to supply East Hampton, N.Y., you can’t,” he said.
“Three dollars per dekatherm may be the cost of natural gas delivered to Henry Hub in Louisiana, but it does not reflect the cost of natural gas delivered over a bulk transmission system and then through a distribution system to a local power plant, and it doesn’t reflect the heat rate when you run through an existing or even a new natural gas-fired power plant. So, it’s a false comparison.”
The forum’s 150 attendees were mostly industry stakeholders, regulators and RTO officials. But there was also a three-woman contingent from Mothers Out Front, a climate change activist group, who pressed RTO planners on the region’s continued reliance on fossil-fueled generation. Carol Chamberlain, of Arlington, Mass., raised concerns about methane leaks in the natural gas supply chain. Randi Soltysiak, of Somerville, Mass., criticized the RTO’s plan for not shifting more heavily to carbon-free sources.
“To me, forming a new 10-year plan around increasing fossil fuels in 2017 is not only irresponsible, but it’s morally unconscionable in the face of the climate destruction that we’re seeing,” she said. “We need to do better. This is New England. They’re [setting 100% renewable goals] in Australia and they’re doing it in California.”
Others in the audience questioned transmission spending and the dearth of storage in the region. The RTO got its first grid-scale battery, a 16-MW facility at Yarmouth Station, last year.
Passive demand resources and energy efficiency are expected to more than double over 10 years to 4,475 MW in 2026. Solar PV, including BTM generation and resources participating in ISO-NE wholesale markets, also is expected to more than double over the planning horizon, from 1,918 MW (nameplate) in 2016 to 4,733 MW by 2026. BTM PV will reduce summer peak loads by 1,035 MW in 2026.
But the RTO expects natural gas to comprise 56% of its capacity by 2026, up from 44% now, said Michael Henderson, the RTO’s director of regional planning and coordination, who gave a presentation on the plan.
Declining Net Loads
Although planners expect the gross peak summer load to grow 1% over the 10-year planning horizon, they forecast net load — including energy efficiency and solar generation — to drop 0.6% per year, from almost 126,800 GWh in 2017 to less than 120,000 GWh in 2026.
The 50/50 net summer peak forecast for 2026 is about 26,300 MW, down 0.6% from 2017. The 90/10 net summer peak forecast, however, rises by 0.5% to more than 29,000 MW in 2026.
Energy efficiency — supported by more than $1 billion in spending annually by the New England states — is expected to reduce the 90/10 net winter peak load from almost 21,900 MW to 20,600 MW, easing concerns over having sufficient natural gas for power generation during the heating season.
Resources
Despite declining net loads, the RTO says its net installed capacity requirement will grow from 34,300 MW in 2022 to 35,700 MW in 2026. Barring retirements, New England’s resources would exceed the ICR by at least 1,700 MW throughout the planning horizon.
“However, the region will likely still need to rely on operating procedures that provide load and capacity relief every season from 2018 through 2026, especially under extremely hot and humid conditions, severe winter weather, and during infrastructure-outage conditions of both electric power and natural gas facilities,” the report says. “The region also will likely face additional retirements of aging oil and coal-fired generation.”
The RTO’s interconnection queue has 76 active projects totaling almost 13,000 MW, including 6,400 MW of natural gas, 5,400 MW of wind generation and 77 MW of batteries.
Almost all the proposed natural gas generation is in Connecticut, Massachusetts and Rhode Island, consistent with the plan’s conclusion that “the most reliable and economic place for resource development” remains near load centers in southern New England. About 80% of the RTO’s load is south of Massachusetts’ northern border, Henderson said.
Two-thirds of the wind capacity would be added in Maine, with the remainder mostly offshore projects off the southeast coast of Massachusetts.
Transmission Needs
The report notes changes in the criteria and inputs used in assessing system needs, including the adoption of NERC transmission planning standards. The RTO also is using a new probabilistic methodology to determine the amount of generation assumed out of service in its base case analyses.
The report includes about $4 billion in proposed, planned and under-construction transmission upgrades. Since 2002, the RTO has spent $12.4 billion to add 714 transmission project components. “With these system upgrades in place, combined with the changes in assumptions to needs assessments … the need for additional reliability-based transmission upgrades, as shown by the steady-state studies of peak load, is expected to decline over the planning horizon. Conversely, generation retirements and studies reviewing system performance, accounting for the integration of nonsynchronous resources and improved load modeling, may drive the need for some additional reliability-based transmission upgrades.”
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Future drivers of transmission include integration of large-scale renewable resources and distributed resources, aging infrastructure, adding interchange capability with neighboring systems, and complying with new NERC standards, the report says.
“The overall need for major additional reliability-based transmission projects is expected to decline over the planning horizon. The low growth of net peak load means it no longer is a major driver of the need for new reliability-based transmission projects,” it continues. “The development of [Forward Capacity Market] resources in favorable system locations also defers the need for major new projects.”
The RTO has yet to identify the need for market-efficiency transmission upgrades (METUs), because reliability upgrades have reduced system production costs, particularly out-of-merit operating costs. New economic and fast-start resources also have helped eliminate congestion and uplift costs.
While the study projects sufficient capacity and transmission to meet reliability criteria, it says the limited natural gas pipeline system is a fuel-security risk, especially in winter.
Panel Discussion
In addition to the presentation on the system plan and a keynote speech by former EPA Administrator Gina McCarthy, the forum included a panel discussion on planning for the “hybrid” grid. (See related story, Ex-EPA Chief Angry but Optimistic Over Climate Change.)
Outgoing ISO-NE Board Chair Paul Levy moderated the discussion, which focused on integrating renewables, storage and other distributed energy resources.
Chris Root, chief operating officer for Vermont Electric Power Co., said his state is showing where the region is headed.
About one-quarter of its typical peak load of 1,000 MW is provided by solar on sunny days. More than 35% of its needs come from in-state run-of-river hydro and hydro imports from Canada and New York. It also has 120 MW of wind, with an additional 30 MW under construction.
“Ninety percent of the time, there is not a single carbon-producing generator running in the state of Vermont,” he said.
But wind output must be curtailed during heavy hydro runoff periods because of insufficient transmission, he said. “There hasn’t been a public policy transmission project yet. Everyone’s scared to be No. 1 on that,” he said.
Stephen Pike, CEO of the Massachusetts Clean Energy Center, said he would like to see “a truly educated and engaged customer base.”
He said that when his organization offered businesses a free feasibility study on adding solar or storage, it could find only 30 takers, well below the 50 it sought. “It’s extremely frustrating,” he said. “Frankly I thought we’d be overwhelmed with requests for assistance.”
Root agreed with the need for more customer education, saying few people know that it takes about 6 acres of PV panels to generate 1 MW. People say, “‘I have six panels on my roof.’ [I say,] ‘Great — you can run a hairdryer.’ A typical women’s hairdryer is 1,500 W. That’s [the capacity of] all the panels on the roof during that time you’re running it.”
Ed McNamara, regional policy director for the Vermont Department of Public Service, predicted consumers will become more educated about the varying cost of power as electric vehicles become more popular.
“Think of how many people you know who know exactly which gas station has the cheapest gas,” he said. “If you’re now moving into electric vehicles, people are going to care about what their rates are.”
Nicholas Miller, senior technical director for GE Energy’s consulting business, said even industry professionals in the U.S. aren’t as informed as they should be. While European engineers have become increasingly comfortable with high renewable penetration rates, in the U.S. “lots and lots of PV starts to get really scary.”
“There are many distribution systems in northern Germany that regularly run at 300% instantaneous [solar] penetration — that is 3 MW of solar for one 1 MW of load. The distribution system looks like a spread-out power plant pushing power onto the grid,” he said. “That makes utility distribution people in the U.S. — including in New England — hair catch on fire. We’ve got a ways to go.”
The New York Public Service Commission last week issued a procedural order to begin implementing its 2016 ruling prohibiting energy service companies (ESCOs) from enrolling new low-income customers and requiring them to unenroll existing ones.
PSC Meeting underway
While litigation had delayed execution of the December order, the state’s Appellate Division this month lifted a temporary restraining order and denied a stay on implementation sought by the National Energy Marketers Association, clearing the way for the commission to act.
PSC Chair John Rhodes
The December order included 11 clauses establishing implementation deadlines and a waiver process for ESCOs seeking to offer low-income customers a guaranteed savings product. The more recent order revised the deadlines to account for time lost under the temporary restraining order. (See Court Blocks NYPSC Order Barring ESCO Contracts.)
Paul Agresta, DPS General Counsel
“I think this order is extremely useful, it addresses any possibility for confusion and it brings clarity to the implementation and to the timing,” PSC Chair John Rhodes said during a Sept. 14 commission meeting. He was supported by commissioners Diane Burman, Gregg Sayre and James S. Alesi.
The commission’s general counsel, Paul Agresta, testified that the new order does not affect ESCOs that had filed for waivers consistent with the December order. “Those ESCOs do not need to de-enroll customers from their guaranteed savings products until the waivers are acted upon by the commission,” he said.
One Waiver Granted
Immediately after issuing the procedural order, the commission approved a petition for waiver from one ESCO (Ambit Energy), while denying two others (Drift Marketplace and M&R Energy Resources).
Bruce Alch, DPS Office of Consumer Services
A petition must demonstrate the ESCO’s ability to calculate “what the customer would have paid the utility and to ensure that customers would be paying no more than they would have paid the utility, and appropriate reporting to demonstrate compliance with these assurances,” Bruce Alch, of the Department of Public Service (DPS) Office of Consumer Services, told the commission.
In helping to set the waiver procedures, the DPS Utility Intervention Unit (UIU) recommended that the commission deny any petitions that failed to meet that criteria and impose strict reporting requirements on any ESCO granted a waiver. Alch said the attorney general’s office and the Public Utility Law Project, a consumer advocacy group, both agreed with the UIU’s comments.
DPS staff recommended that the commission approve the petition for Ambit Energy to continue to serve low-income customers.
“Unlike the other ESCOs, the only product Ambit sells in New York state is a guaranteed savings product,” Alch said. “In support of its petition, Ambit provided models which replicate the utility tariffs and enable it to closely bill the customer what the utility would have billed the customer.”
Rhodes noted that “with this order, we also begin to lay out the standards for what it means to definitively establish the ability to provide guaranteed savings. That clarity is important, it’s helpful to the industry and it’s helpful to customers.”
PSC Commissioner Diane Burman
Burman cast the only ‘no’ vote on all three waiver petitions, urging that the commission “take a step back.”
“The process has been confusing,” she said.
The commission directed ESCOs to block the enrollment of any new low-income customers on or before Sept. 22 and to unenroll customers within 30 days of receiving customer lists from the utilities.
NEMA on Friday filed comments protesting the PSC’s claim that ESCOs overcharge customers and cited data showing that they have saved New Yorkers more than $10 billion since 2002.
New VDER Compensation System
The commission last week also issued an order establishing a “value of distributed energy resources” (VDER) compensation system as a first step in moving beyond net energy metering. The new order grandfathers solar and other distributed energy systems installed before March 9, 2017, into the existing compensation scheme for the life of their operation.
Homeowners and small commercial customers that install solar or other small distributed systems between March 9, 2017, and Jan. 1, 2020, will be compensated through net metering for 20 years. All other systems installed after March 9 will be placed onto the new VDER compensation system after the utilities file final calculations and tariffs, which will take effect Nov. 1.
The commission in March adopted a new “value stack” pricing mechanism for solar and other DER, along with issuing two other orders to transition utilities into “distributed system platforms” and align their incentives with DER providers (Case NYPSC Adopts ‘Value Stack’ Rate Structure for DER.)
“This is a concrete first step that creates more active and more value-reflective pricing to spur development of those projects that are most valuable to the grid,” Rhodes said.
Last week’s order raises the maximum size of solar projects (from 2 MW to 5 MW) in order to decrease development costs and increase the competitiveness of the community solar market. It also establishes the first compensation values for energy storage systems when combined with eligible forms of DER and requires utilities to work with the state to integrate storage into the electric grid.
The commission anticipates considering final action early next year, following further analysis by utilities, stakeholders and DPS staff.
