Page 1316 – RTO Insider

October 25, 2018February 19, 2025

McIntyre Steps Down; Chatterjee Named FERC Chair

By Rich Heidorn Jr.

President Trump announced Wednesday that he has appointed FERC Commissioner Neil Chatterjee to replace Chair Kevin McIntyre, who stepped down citing a “serious setback” in his battle with a brain tumor.

Chatterjee | © RTO Insider

McIntyre said he would remain on the commission but would relinquish the chair’s role “and its additional duties so that I can commit myself fully to my work as commissioner, while undergoing the treatment necessary to address my health issues.”

McIntyre’s status became the subject of increasing speculation after the chairman missed the commission’s open meeting Oct. 18, the second he has missed since a fall that left him visibly uncomfortable at the meeting in July.

In March, McIntyre issued a statement saying he had undergone “successful surgery” for a “relatively small” brain tumor that was discovered in summer 2017. At the July meeting, he wore a sling after disclosing he had injured his arm and suffered compression fractures in two of his vertebrae in a fall.

‘Full Attention and Vigor’

In a letter to the president, dated Oct. 22, McIntyre said that since taking office in December 2017, he has “pushed full steam ahead with all of the important work of the agency … with full attention and vigor, despite facing some health challenges along the way, including compression fractures in multiple vertebrae this summer.”

“However, I very recently experienced a more serious health setback, leaving me currently unable to perform the duties of chairman with the level of focus that the position demands and that FERC and the American people deserve.”

Chatterjee, a Republican like McIntyre, had served as chair for several months last year before McIntyre’s arrival. In a statement Wednesday, he said he took the chairmanship “with a heavy heart … while my friend and colleague, Kevin McIntyre, focuses on what’s most important: his recovery and his family.”

“I am confident that the commission will continue to benefit from his consummate knowledge of the law and of energy policy through his service as commissioner. On behalf of the entire FERC community, I wish Kevin and the McIntyre family continued strength and resolve at this challenging time.”

Chatterjee praised McIntyre for his “steadfast leadership.”

McIntyre | © RTO Insider

“Although this is a difficult period for the commission, I want to assure my fellow commissioners, staff within the building and stakeholders outside it that it’s my full intention to build upon Kevin’s hard work. But above all, I look forward to the day when my friend is back at full capacity.”

Commissioners Cheryl LaFleur and Richard Glick also issued statements on the transition.

“I am very sorry to hear about Chairman McIntyre’s decision to step down as chairman. I want to extend my warm wishes to him for his recovery, and I look forward to continuing to work with him. He and his family are very much in my thoughts during this time,” LaFleur said. “I also look forward to continuing to work with Chairman Chatterjee in his new role. This is a time for close cooperation among everyone at the commission, and I will work as hard as I can to keep our work moving forward.

“We have experienced a lot of change and transition during my time at the commission,” she continued. “I know that our wonderful employees will stay strongly focused on their important work and the mission of the organization during leadership changes, as they have in the past. We are very lucky to have such a strong team in place across the commission.”

“It is far more important that Kevin focuses his efforts on recovery than on the additional executive responsibilities of the FERC chairman,” Glick said. “I look forward to continuing our close working relationship. I will continue to work with my colleagues on the commission’s important responsibilities. FERC rightly has a reputation and tradition of being a nonpartisan decision-making body. In the coming weeks, let us reaffirm our commitment to consensus building and to maintaining the agency’s independence as we engage the nation’s energy business.”

“I thank Chairman McIntyre for his leadership at the agency and pray for his swift recovery and return to good health as he continues as a commissioner,” said Sen. Lisa Murkowski (R-Alaska), chair of the Senate Energy and Natural Resources Committee. “I’m confident that Chairman Chatterjee will once again effectively lead the agency, and I will work with my Senate colleagues to restore a full complement of commissioners as quickly as possible.”

McIntyre told Trump he “will forever be grateful for the opportunity to serve as chairman and for the trust and confidence you placed in me to lead FERC at such a critical time in its history.”

2-2 Split Maintained

By stepping down from the chairmanship but remaining on the commission, McIntyre is ensuring that the panel maintains the 2-2 Republican-Democrat split it has had since the resignation of Republican Commissioner Robert Powelson in August.

The 2-2 split could threaten pending gas pipeline certificate cases. Democrats LaFleur and Glick have insisted the commission’s analyses include consideration of downstream greenhouse gas emissions, which McIntyre and Chatterjee have opposed.

Earlier this month, Trump nominated the Department of Energy’s Bernard McNamee as Powelson’s replacement. McNamee is scheduled for a confirmation hearing before the Senate Energy and Natural Resources Committee on Nov. 15. (See Trump Nominates DOE’s McNamee to FERC.)

ClearView Energy Partners predicted in a message to clients Thursday that McNamee will be confirmed during the lame duck session following the mid-term elections.

“However, if the Senate focuses on other business, the White House might nominate a Democrat to take over from Commissioner Cheryl LaFleur, whose term expires on June 30, potentially early in the new year,” ClearView said. “It is often (but not always) easier for a narrowly divided Senate to more expeditiously confirm nominees in bipartisan pairs, as both sides are theoretically motivated to approve both nominees in order to ensure the ascension of their preferred candidate.”

October 25, 2018

CAISO Updates Storage as Transmission Asset Plan

By Hudson Sangree

Stakeholders weighed in Tuesday on CAISO’s second revised straw proposal to treat storage as transmission assets (SATA) for purposes of accessing market revenues.

The SATA plan deals with storage resources providing reliability-based transmission services, but it specifically excludes consideration of whether those resources are connected to transmission or distribution lines and leaves them out of the transmission planning process, for now.

During a conference call to discuss the proposal, Karl Meeusen, the ISO’s market design and regulatory policy lead, said major questions under consideration include “how to utilize [a storage resource] if it is selected for cost-of-service” recovery as a transmission asset and, once selected, how it could participate in the market to the benefit of ratepayers while ensuring it is used efficiently and effectively.

Transmission assets have traditionally fully recovered their costs through CAISO’s transmission access charge (TAC), but the ISO has proposed three cost-recovery options for regional SATA projects.

The first proposal would provide the assets full cost-of-service-based recovery with ratepayers footing the bill via the TAC. The second would involve partial cost-of-service-based recovery and allow projects to retain energy market revenues, leaving the owner with lower recovery through the TAC but more potential upside — and risk — from the market. The third would allow full cost-of-recovery with market revenue sharing between owners and ratepayers to both offset recovery from the TAC and incentivize the resource to bid into the market.

FERC said in a January 2017 policy statement that energy storage facilities should be permitted to provide multiple services and earn both cost- and market-based revenue streams. (See Storage Can Earn Cost- and Market-Based Rates, FERC Says.)

In the past few years, CAISO has weighed 27 battery storage proposals and one pumped hydro storage project as transmission assets. But it has allowed only two of the projects to move forward, including one in Oakland. Both were approved in the ISO’s 2017/18 transmission plan.

In general, Meeusen said, “We think most storage resources are [better] situated as market resources.”

Deborah Le Vine, the ISO’s director of contracts, said SATA projects would be covered under contracts that ranged from 10 years for battery storage to 40 years for pumped hydro facilities, reflecting the resources’ expected life spans, although most pumped hydro facilities last “a hell of a lot longer” than 40 years, she said.

Storing wind and solar energy to use later is a major challenge for California. | *Pixabay*

Some stakeholder concerns have already been addressed, but those that remained include the possibility that SATA projects could suppress market prices and have limited competition.

Another concern expressed by stakeholders was whether the resources would be able to adequately participate in the real-time market; for instance, if a pumped hydro facility would have adequate time to pump water to its upper reservoir or if batteries would have enough time to charge.

Maybe storage projects could also be allowed to participate in the day-ahead market, some commenters suggested.

“I think it’s a fair comment to say [a storage project] might need more than three or four hours to charge,” Meeusen said. “We need to think about it hard.”

Meeusen and other CAISO officials asked for some of the comments to be submitted in writing.

Stakeholder comments on the second revised straw proposal are due Nov. 6. The draft final proposal is scheduled to be released Dec. 10, with a stakeholder meeting planned Dec. 17 to discuss it.

The final proposal will likely go to the ISO’s Board of Governors in early February, officials said.

October 25, 2018

Mexican Regulator Says Market Reform Results ‘Clear’

By Tom Kleckner

MEXICO CITY — Participants in Mexico’s reformed electricity market point to its growing pains and lack of transparency when saying “it needs legs.”

CRE Commissioner Marcelino Madrigal | © *RTO Insider*

Marcelino Madrigal, one of seven commissioners on the country’s Energy Regulatory Commission (CRE), takes a more glass-half-full approach to the 2014 reforms.

“It has been four years of implementing the electricity energy reforms, but the actual results are there,” Madrigal said during a recent Gulf Coast Power Association breakfast meeting. “The results are clear in terms of success. Basically now, people really have access to this market. We have new companies in the system bringing a cleaner energy supply. … This has provided an opportunity for everyone to invest, from really large companies to small ones, to even the households with solar panels.”

And indeed, there are bright spots in the market. CRE has issued 533 generation permits through September, much of it for rooftop solar. It has also registered 22 power marketers and issued 49 permits for retail market-qualified suppliers and four for basic suppliers. (Basic services are defined as pre-regulatory reform contracts and new contracts less than 1 MW, while qualified services are defined as demand 1 MW or greater, acquired directly or through the wholesale market’s qualified suppliers.)

The Ministry of Energy (SENER) says that clean energy sources were responsible for 21.1% of Mexico’s power in 2017, though large hydro dams accounted for about 85% of that figure. Given that, it would seem the electricity sector is on track to meet its clean energy goals, set by the 2013-14 constitutional energy reforms, of generating 35% of its power from renewables by 2024.

Madrigal said 20.7 GW of clean energy is currently in operation, with another 28.5 GW planned. In comparison, CRE has granted permits for 22.2 GW of new fossil generation.

“We are living in two worlds,” Madrigal told his audience, which included the Mexico chapter of the Women’s Energy Network. “We are seeing a worldwide decrease in the cost of wind and solar. This is the new world, where new generation comes with very competitive prices. It comes quickly and very fast.

“What is the old world? It’s the one we’re used to. Old technologies, coal, fossil fuels, things like that. The rapid development of renewables creates … new opportunities with lower prices and cleaner fuels that the consumer is already accessing.”

Madrigal said the key to the new world is consumer access, which leads to greater comfort as the industry changes.

“The rules to access this new world are already there,” he said, pointing to capacity and clean energy certificate auctions at the wholesale level and the growth of distributed generation.

“You can access those opportunities,” Madrigal said. “We’re seeing those lower prices in the markets worldwide, not only Mexico. The instruments are there, and people are using those instruments. Factories, small enterprises are using rooftop solar. Big companies are accessing the auctions. About 30% of demand comes from private consumers. This is a good signal. The consumers are realizing there is this new world of opportunities.”

Understanding the Opportunities

Madrigal referred repeatedly to the importance of the retail market, where less than 1% of consumers have selected power from a registered qualified supplier. The state-owned utility, the Federal Electricity Commission (CFE), has long been the country’s sole provider and is the second most powerful company in the country, second only to the state-owned oil company, Pemex.

“If you give consumers the opportunity to acquire their own energy, they will do it,” he said. “It’s just a process of understanding the opportunities in the market and a mindset change. You have to now understand you have options in acquiring energy, as you do in any other [market].”

Madrigal doesn’t compare Mexico’s retail market to California’s or PJM’s. He compares it to Chile, Colombia and Peru, which have had retail markets up and running for as long as 30 years. In Chile, qualified suppliers provide fully two-thirds of the retail power, while in Peru and Colombia they account for 46% and 32%, respectively.

“We still have a way to go. We’re at 1%, but it’s only been a year,” Madrigal said. “I expect this market will go gradually, but maybe I’m too ambitious.”

He very well may be. One market participant said consumer choice may be touted as the end game, but there has been “absolutely zero effort” to promote or facilitate the market.

Other challenges abound. Madrigal said a key will be a successful first financial transmission rights auction, which is scheduled for January after months of delay. The auction’s contracts will only cover three years, leading market participants to ask how they finance a 15-year purchase agreement with only three years of pricing security.

Not surprisingly, the lack of clarity over FTR costs means not a single bilateral renewables contract has been signed between a generator and a consumer.

“I believe the FTR market is crucial for the qualified supplier market. You need an instrument to manage congestion risk … that is the key part that this market needs,” he said.

Madrigal also lists better financing instruments for smaller-scale investments in renewable energy and a greater understanding of the retail market by the qualified segment as hurdles to overcome.

“For the most part, the main pieces of the regulatory framework have been completed,” said Madrigal, who was appointed to CRE in 2014. Each commissioner serves a seven-year term, with one rolling off every year.

The Path Forward

Market participants complain about a lack of transparency, especially with retail rates. CRE established a methodology to determine rates earlier this year, but SENER quickly rescinded the new rates and approved a confusing “deferred” application when prices skyrocketed and consumers protested. (See “Market Architect Calls for Increased Transparency,” Overheard at the GCPA Mexico Electric Power Market Conference.)

“Tariffs today are not the same as they were,” he said. “The user needs to be more comfortable with the scheme. Once they understand it, of course, maybe they’ll feel more comfortable in accessing the other options in the market. More renewables are coming online in 2019 and 2020. The market will gradually start to pick up a little bit more. You need fresh energy to be competitive, and that energy is coming online.”

Successful participants in Mexico’s three long-term auctions. | *CRE*

Indeed. Zuma Energia in August dedicated its $600 million Reynosa 1 project, the country’s largest wind farm at 424 MW of capacity, in the state of Tamaulipas. A result of the second long-term auction in 2016, it’s located on community lands known as ejidos. (See Land Rights a Challenge to Mexico Tx Developers.)

The largest solar plant in the Americas, Enel Green Power’s 232-MW, $160 million Tlaxcala project, is scheduled to open next year.

All indications are the market reforms will continue. July’s election of Andres Manuel Lopez Obrador abruptly brought his left-wing party into power. While Lopez Obrador has talked of taking a wait-and-see approach to the petroleum sector’s reforms, most industry insiders expect him to leave the electricity market alone.

Madrigal said the transition meetings — Lopez Obrador’s administration won’t be sworn in until Dec. 1 — at SENER are going well. He said CRE is represented “in case they want to know something about how the regulations work.”

Staying on message, Madrigal said, “The work continues as normal. We have our regulatory program, and we are implementing it. We’ve been developing a framework where everyone can access this market. There have been clear, good results.

“The implementation of reform is something that takes time, but the benefits for everyone will come with a little bit more time,” he said. “I think the results so far indicate to us that this is the path forward.”

October 24, 2018December 12, 2023

SERC Taps ReliabilityFirst Exec as CEO

SERC Reliability Corp. on Monday announced Jason Blake, vice president and general counsel of ReliabilityFirst, as its new CEO, effective Nov. 15.

He will replace Gary J. Taylor, who has served in the position since 2016.

“Our search encompassed a variety of industry segments including public power, investor owned utilities, and the electric reliability sector,” Tom Linquist, managing partner of Lyceum Leadership Consulting, SERC’s search firm, said in a statement.

“I have the utmost confidence that Jason will provide the superior level of leadership, management and vision required to take SERC to the next level in our mission of promoting effective and efficient administration of the bulk power system within our jurisdiction,” SERC Chair Greg Ford said, citing Blake’s “extensive experience.”

Blake, who joined Cleveland-based ReliabilityFirst in 2010, led the organization’s legal and regulatory affairs, enforcement and external communications departments. He also was corporate secretary and a member of the CEO’s executive team.

Before ReliabilityFirst, Blake gained business and regulatory experience in private practice in Pittsburgh and Cleveland. He is a graduate of The Ohio State University and the University of Pittsburgh School of Law.

ReliabilityFirst is the NERC-delegated regional entity (RE) for the Great Lakes and Mid-Atlantic regions of the United States. Charlotte, N.C.-based SERC, is the RE for all or portions of 16 Central and Southeastern states.

“This is a great move, not just for SERC, but for the entire [Electric Reliability Organization] enterprise,” ReliabilityFirst CEO Tim Gallagher said in a statement. “Our pride in seeing him named CEO is matched only by our sadness in seeing such a great friend and valued colleague leave the RF family.”

RF has begun a search for Blake’s replacement. Megan Gambrel, managing legal and regulatory counsel, was appointed interim general counsel.

Taylor is departing SERC after a little more than two years as CEO. He joined SERC in 2015 and served as chief operating officer after retiring from Entergy, where he served as group president of Entergy’s utility operations and CEO of its nuclear unit.

Blake and SERC officials did not immediately respond to requests for comment.

— Rich Heidorn Jr.

October 24, 2018

NY Details Carbon Charge on Wholesale Suppliers

By Michael Kuser

RENSSELAER, N.Y. — NYISO on Monday proposed a framework for applying and billing carbon charges to New York energy suppliers under the state’s proposed scheme to price greenhouse gas emissions in the ISO’s wholesale electricity market.

NYISO staffer Nathaniel Gilbraith to l d New York’s Integrating Public Policy Task Force (IPPTF) emissions from Clean Energy Standard-eligible wholesale suppliers would not be subject to the carbon charge nor would upstream or fugitive CO₂ emissions and other greenhouse gas emissions such as methane and nitrous oxide.

Historical NYISO Fossil CO2 Emissions by Generator Type | *Brattle Group*

Exempt resources would include those participating in the Special Case Resource, Emergency Demand Response, Demand-Side Ancillary Services and Day-Ahead Demand Response programs, he said.

Why Exempt?

“Our rationale for this is because they’re primarily load reduction,” Gilbraith said. “Resources in these programs infrequently produce energy using emitting resources. About 90% of all program megawatts are pure load reduction with no local generation.”

In addition, collecting data from these resources would create potentially sizable new reporting requirements for the resources with few resultant carbon charges returned to loads, he said.

“I don’t want us to lose sight of the optics of creating exemptions from the program we ultimately introduce and the public’s receptivity ultimately to a major new initiative,” said Howard Fromer, director of market policy for PSEG Power New York.

“Sometimes these resources may be seen as emergency resources, but in the neighborhoods in which they exist they’re not always so well received,” Fromer said. “It’s a politically easier sell to say we are not exempting anyone. If you are putting out carbon in this sector, and you’re in the wholesale market … we’re capturing all of this.”

Applicable emissions would include those associated with startups, no-load levels and generation that receives wholesale market compensation. The ISO will work with resources to establish a reference emissions allocation method.

Emissions associated with heat and steam sales fall outside the scope of a wholesale electric sector carbon charge, Gilbraith said. Cogeneration resources will report emissions associated with the provision of wholesale energy and ancillary services, excluding those associated with heat and steam sales.

Verifying Data

NYISO will develop internal processes to verify supplier emissions as reasonable and accurate.

Cogeneration, behind-the-meter net generation (BTM:NG) resources and distributed energy resources in particular, will be required to submit data allowing the ISO to verify the emissions associated with wholesale energy and ancillary service sales, Gilbraith said.

RGGI and Eastern Interconnect (EI) CO2 Emission Reductions (2017–2031) | *Brattle Group*

Inaccurate, insufficient or untimely data submissions will be subject to penalties administered consistent with the existing penalty review process, he said.

NYISO’s Tariff defines BTM:NG as a “facility eligible to serve both its host load, which is a behind-the-meter load, and then sell excess capability as a wholesale sale into the NYISO markets,” Gilbraith said. “When the resource serves host load … it’s not a wholesale market transaction and therefore it falls outside the scope of a wholesale electric sector carbon charge.”

BTM:NG resources will report emissions associated with the provision of wholesale electric energy and ancillary services — that is, “net generation” — and not emissions associated with serving their host load, Gilbraith said.

Billing and Invoicing

The previous week, the ISO proposed to base the carbon impact on LBMP (LBMPc) on real-time system dispatch to determine carbon charges and credits, as opposed to forecasting the impact. The change would be consistent with the LBMPc used to allocate residuals to loads, and the ISO would also create a new billing code for carbon charge settlements. (See NYISO Proposes Border Pricing Plan for Ca r bon.)

NYISO would submit emissions data pursuant to explicit timelines aligned with current practice, and for the daily bill and the first monthly invoice, supplier emissions will be automatically populated with an initial emissions estimate based on the carbon component of the reference level, Gilbraith said.

Suppliers’ reference levels will be determined by the ISO’s market mitigation analysis department, which has “means of tracking whether or not bids are competitive at a 10,000-foot level, so they include provisions including heat rate for the supplier,” Gilbraith said. “So we’ll enhance that product to include a carbon component for each bid, and note that will be the basis for the initial carbon charge.”

Suppliers will be required to submit emissions true-ups within 60 days of the initial invoice, which is usually sent five day after the end of the month, he said. There will be a mandatory penalty for failure to submit emissions true-ups on time. Suppliers will be able to further true-up emissions data after the four-month invoice but not after the final bill closeout.

Stakeholder Concerns

The ISO asked market participants to submit written comments on the proposal, but several stakeholders balked at the request without more feedback coming the other way, as in an updated proposal from NYISO.

Michael DeSocio, the ISO’s senior manager for market design, summarized stakeholders’ desire for clarity on the schedule and on exactly what the grid operator is proposing ahead of the planned announcement of a final proposal on Dec. 17.

“If we’re going to go through this process, we’ll probably need more than another meeting or two, and we’ll look to create additional meetings and lay out what that schedule looks like,” DeSocio said.

IPPTF Chair Nicole Bouchez, NYISO’s principal economist, said the task force would release a revised schedule as soon as possible.

The task force next meets at NYISO headquarters Oct. 29 to discuss allocation of carbon charge residuals and the transparency of carbon impacts. That meeting will also hear a Calpine presentation, delayed from this week, on how a carbon charge might affect hedges on transmission congestion contracts.

October 24, 2018

MISO to Evaluate Alternatives to Michigan SSR

By Amanda Durish Cook

MISO is currently accepting proposals for a transmission or generation solution to offset reliability issues caused by the planned suspension of a DTE Energy coal-fired plant near Detroit, Mich.

The RTO hopes stakeholder-submitted proposals will prevent the need to create a future system support resource (SSR) agreement for Unit 9 of the 520-MW Trenton Channel Power Plant, in operation since 1968. DTE closed Units 7 and 8 at the plant early last year.

Trenton Channel Power Plant | *DTE Energy*

The company plans to shutter the remaining plant in June 2023, but in modeling for 2022, MISO found the shutdown could provoke multiple thermal overload and voltage violation issues that can n ot be resolved by generation redispatch or new operating guides.

DTE has said the plant will resume operations in mid-2025, but MISO no longer models a return date in suspension studies, contending suspended generation rarely returns. (See FERC OKs New MISO Retirement P rocess.)

MISO has so far received seven suggested solutions involving transmission upgrades, including submissions from DTE Energy and ITC, although only one solution has been formally submitted to the RTO’s Transmission Expansion Plan (MTEP) for study and modeling. Solutions must be put before the MTEP process before consideration, and the RTO said solutions will be studied in the MTEP 19 cycle.

MISO will also accept new generation solutions to address issues caused by the retirement, but during an Oct. 22 special conference call, staff said new generation proposals must be submitted through the interconnection queue for consideration and study. The generation queue doesn’t currently contain a project that can mitigate issues from a Trenton suspension. MISO staff said a generation solution may require a Trenton SSR designation to keep the plant online until the new generation comes online.

October 23, 2018December 12, 2023

SERC Taps ReliabilityFirst Exec as CEO

SERC Reliab i l i ty Corp. on Monday announced Jason Blake, vice president and general counsel of ReliabilityFirst, as its new CEO, effective Nov. 15.

He will replace Gary J. Taylor, who hasd served in the position since 2016.

“I have the utmost confidence that Jason will provide the superior level of leadership, management and vision required to take SERC to the next level in our mission of promoting effective and efficient administration of the bulk power system within our jurisdiction,” Chair Greg Ford said, citing Blake’s “extensive experience.”

Blake, who joined Cleveland-based ReliabilityFirst in 2010, led the organization’s legal and regulatory affairs, enforcement, and external communications departments. He also was corporate secretary and a member of the CEO’s executive team.

ReliabilityFirst is the NERC-delegated regional entity (RE) for the Great Lakes and Mid-Atlantic regions of the United .States. Charlotte, N.C.-based SERC, is the RE for all or portions of 16 Central and Southeastern states.

RF has begun a search for Blake’s replacement. Megan Gambrel, managing legal and regulatory counsel, was appointed interim general counsel.

Blake and SERC officials did not immediately respond to requests for comment.

— Rich Heidorn Jr.

October 22, 2018

SPP Strategic Planning Committee Briefs: Oct. 18, 2018

LITTLE ROCK, Ark. — SPP Board of Directors Chair Larry Altenbaumer last week unveiled a proposal to reduce the number of face-to-face meetings and add more executive sessions, saying it would improve the board’s focus on its strategic plan.

SPP Chair Larry Altenbaumer shares his thoughts on changes to the Board meetings. | © *RTO Insider*

While no final decisions have been made, Altenbaumer told the Strategic Planning Committee he is proposing adding two executive time slots to the board and Members Committee’s quarterly meetings and eliminating the two non-quarterly face-to-face board sessions. The executive time would be used for discussions with the state regulators’ Regional State Committee and the Members Committee.

Altenbaumer called the changes part of the board’s “broader evolution,” but that he was sensitive to concerns about taking discussions behind closed doors. He said the executive sessions are not intended to be decision-making meetings but will improve the quality of the discussions.

“Does this reduce the transparency of the organization? We want to be very much on guard that does not happen,” Altenbaumer said. “We want to ensure that in the forums where decisions are made that all stakeholders have the opportunity to participate. I think [meeting with] an outside resource in a smaller setting provides a greater quality of interaction.”

The new chairman, who took his position at the head of the table following April’s board meeting, said he was driven by the outcome of efforts to integrate the Mountain West Transmission Group. SPP received pushback late in the process from the RSC and members, who felt cut out of some of the earlier discussions.

The work to integrate Mountain West is officially ongoing, but most Western entities are now focused on securing reliability coordination services from SPP and CAISO with the pending shutdown of Peak Reliability. (See Peak Reliability to Wind Down Operations.)

“Despite a lot of effort and a ton of meetings [with Mountain West], I think we failed at effectively communicating with both the RSC and our members,” Altenbaumer said. “I had a lot of one-on-one interactions with members to address an issue. On many strategic issues, there is a variety of opinions on how those items need to be addressed. If we can facilitate a discussion with all members on the Members Committee, we’ll get a more robust discussion and up-front direction for all our stakeholder groups to address those issues.”

Altenbaumer said the organizational strategy should be determined by the board and Members Committee, but he remarked, “I don’t think we’ve always acted as owners of that strategy.” He said he prefers setting aside time to “discuss matters of strategic importance” in place of quarterly reports.

The chairman reassured the SPC that it is still the committee responsible for developing SPP’s strategic plan.

“This is where the technical expertise resides,” he said. “I hope there will be dialogue back and forth to ensure we’re discussing issues of strategic matters.”

Altenbaumer wants to eliminate the board’s June education session and the December meeting in which the board approves the budget. The December meeting would become a conference call.

He is also proposing the board delegate to the Markets and Operations Policy Committee decisions “that need not be brought to the board.”

SPC Takes No Action on Clean Energy Rule

The committee decided not to have SPP provide comments on EPA’s proposed Affordable Clean Energy (ACE) rule, determining there is little to be gained, but much to lose.

In explaining the ACE rule to the SPC, Vice President of Engineering Lanny Nickell said the rule is “less onerous” than the Obama administration’s Clean Power Plan, which required a 32% cut in emissions below 2005 levels by 2030.

SPP’s Lanny Nickell (r) discusses the proposed Affordable Clean Energy rule as Director Mark Crisson takes notes. | © *RTO Insider*

The ACE rule applies only to existing coal-fired plants and does not set a federal carbon-emission rate, requiring states to set unit-specific standards, Nickell said.

“From a reliability perspective, it’s a lot more flexible and easier to anticipate than output limitations,” he said.

Nickell conducted several CPP studies after its 2014 release. The final analysis indicated that a state-by-state compliance approach could result in nearly 40% higher costs than a regional approach.

Nickell said there is no reason for SPP to study the ACE rule’s “rate-based approach” or to issue a statement. “I don’t have any personal concerns about its reliability implications,” he said. EPA has issued an Oct. 31 deadline for public comments.

SPP Director Phyllis Bernard in discussion with Evergy’s Denise Buffington. | © *RTO Insider*

“We haven’t made a quantitative analysis” of the new rule, he pointed out. “It would be an opinion we are offering, what we think the implication of ACE would be. We would be making an opinion without a quantitative analysis.”

“I love you guys, but you’re thinking like electrical engineers rather than politicians,” said Director Phyllis Bernard, who has a strong background in administrative law. “Your opinion, while qualitative, is far superior from the opinion of someone out there who is putting out spin. You can make a difference. If you say nothing, the default position may go back to something you don’t want to hear. If you think something in the proposed rule is positive, you should say that.”

Several members urged SPP to rely on the facts — no reliability impact; the market is producing emission-reductions through the dispatch of cleaner fuels — and provide comments.

“If you don’t say anything, someone will go on the record and dictate the final rule,” said Basin Electric Power Cooperative’s Mike Risan.

“Once we say something, it invites questions,” Altenbaumer countered. “One of the first questions I would ask is, ‘How can you make that assertion if you haven’t done any studies?’ I don’t know why you go down that path if there are no benefits, other than a feel-good.”

Mike Ross, SPP’s senior vice president of government affairs and public relations and a six-term member of the U.S. House of Representatives for Arkansas, cautioned against going public with comments on the rule.

“If we’re not careful, we’re going to be labeled pro-environment or anti-environment, pro-coal or anti-coal, pro-Trump or anti-Trump. That’s not our job,” Ross said.

“Our job is to be fuel agnostic and let the markets choose the fuel source and to focus on reliability. The proposed rule by this administration is going to be adopted, whether we comment or not, and since it won’t impact reliability, I don’t think we should comment. It’ll be tied up in the courts for years. When we are trying to make decisions on 40- and 50-year assets, our country needs a national energy policy that transcends administrations and political parties.”

Asked whether the ISO/RTO Council has weighed in on the ACE, CEO Nick Brown noted that the industry group was silent on the CPP.

“It’s certainly not going to step up as a group and comment on this, as it doesn’t appear to have any impact on the bulk power system,” Brown said.

— Tom Kleckner

October 22, 2018

SPP Stakeholders Stop Work on Unreserved Tx Waiver

By Tom Kleckner

LITTLE ROCK, Ark. — SPP stakeholders last week directed the Seams Steering Committee to stop work on proposed Tariff changes that would have granted a waiver from charges for unreserved transmission use across the seams.

The Market and Operations Policy Committee’s action during its Oct. 16-17 meeting means SPP’s current practices for unreserved use will continue. They have resulted in about $23,000 in service charges since 2016, but only when that unreserved use is reported to the RTO.

The revision request (RR308) would have granted transmission customers a four-hour grace period for unreserved service during an unplanned transmission outage. SPP’s Tariff and its business practices do not allow exemptions for transmission customers using the RTO’s system to take transmission service because of outages, whether planned or unplanned.

The SSC was unable to reach a consensus during its monthslong discussions, with some members saying temporary use of interconnected systems should be a benefit and others calling for transmission owners to be compensated. The four-hour grace period was a compromise position.

“Several members thought the four-hour grace period was at least some justification to take this to FERC and stakeholders,” American Electric Power’s Jim Jacoby, chair of the SSC, told the MOPC. “It seemed to have at least some backing. From an AEP perspective, that’s a benefit of interconnected systems. We ought to give customers some time [to arrange service during an unplanned outage].”

SPP attorney Mike Riley | © *RTO Insider*

RR308 received little support from SPP’s legal department. Associate General Counsel Mike Riley pointed to excerpts from FERC Orders 890 and 890-A, which address situations where a customer is unaware of changing conditions that result in additional service requirements. Riley said FERC’s language does not exempt “any class of transmission customer from the potential assessment of unreserved use penalties” and refers to entities “serving native load in multiple control areas.”

“Not being a FERC commissioner, it’s hard to say what the [language] is intended to cover, but when I read words like ‘multiple control areas,’ that seems applicable to us,” said SPP’s David Kelley, director of seams and market design.

“If SPP and the stakeholders have a basis for filing and justifying this four-hour window, or grace period, we’ll absolutely file it,” Riley said. “But based on 890’s provisions, where FERC appears not to make a distinction between reserved use and unreserved use, we’ve got an uphill battle.”

Riley agreed with the concept of a grace period before assessing penalties, saying it should be a business practice in the Tariff.

“We just haven’t seen or found a justification that would get us over the 890/890-A hurdle, but it’s up to FERC,” he said.

Several members suggested SPP could conform its practices with those of MISO — which Southwestern Public Service’s Bill Grant said MISO does not apply unreserved charges in similar situations — through their joint operating agreement. But Kelley pointed out, “Even if we address this issue through the JOA, we’ll still have to make a filing at the commission. We still have to get around the hurdles of what we’re arguing.”

“This is not being applied consistently,” Grant said. “Only when SPP knows about it.”

“What we’re trying to do is address the unfortunate bystander that doesn’t know what’s going on, and only finds out about it when they get a bill,” AEP’s Richard Ross said.

On the sidelines, some members referred to the TOs who reported unreserved use as “tattletales.”

The MOPC’s motion passed over 10 opposing votes and five abstentions.

October 22, 2018

SPP Generator Interconnection Group Wraps up Work

By Tom Kleckner

LITTLE ROCK, Ark. — SPP members last week approved one of two Generator Interconnection Improvement Task Force recommendations but took no action on the second and agreed to disband the group.

The task force was formed last year to identify improvements in the RTO’s transmission study process, which is backlogged with more than 62 GW of interconnection requests. Its work will be carried on by various working groups.

The Market and Operations Policy Committee approved the GIITF’s suggestion to address generator interconnection studies in regions where the amounts of new generation being requested exceed load during spring and other light load periods.

SPP currently divides its footprint into cluster groups for individual study. In the high variable energy resource case, all VERs inside the cluster are set to 100% of capacity while external VERs are set to 20% to simulate counterflow to the internal generation.

With the increase in VERs, the amount of counterflow contained in the Integrated Transmission Planning models is high enough that the simulation is no longer needed, and the 20% setting has resulted in situations with insufficient load to absorb all the generation being requested. Under the new rules, the external VERs remain at the base reliability dispatch setting used in the ITP process.

“The changes here allow the energy to flow a further distance to a neighboring zone, which should identify [needed] transmission upgrades,” said Tradewind Energy’s Derek Sunderman.

Task force Chair Al Tamimi, of Sunflower Electric Power, said the change “might help us move forward with [definitive system impact studies].” Staff is working on study requests that date back to 2015.

OG&E’s Greg McAuley (right) states his position as AEP’s Richard Ross listens. | © *RTO Insider*

“That should tell us something,” Oklahoma Gas & Electric’s Greg McAuley said. “We’re dancing around the problem. We have too much generation coming in, and we have no place to put it.”

McAuley pointed out that the Holistic Integrated Tariff Team is also working on the problem. “We don’t know where they’re going to land,” he said.

The measure passed with six opposing votes, mostly from transmission owners, and 14 abstentions.

Members declined to take a vote on the GIITF’s recommendation to change the criteria for allocating network upgrade costs to interconnection customers by adding a new energy resource interconnection service (ERIS) criterion.

Under the proposal, SPP would have first allocated cost responsibility to requests with 20% or more of the generator’s output flowing across a constrained element, as under current practice.

After applying the 20% transfer distribution factor (TDF) test, the proposal would have added a second screening to determine which requests have at least a 5% TDF. If the number of such requests resulted in a cumulative TDF of 20% or more, a mitigation would be assigned to the cluster, with the cost allocated to those requests with at least a 5% TDF.

SPP said the change would have resulted in the identification of four additional constraints in the DISIS-2016-001 study.

But several members said the recommendation didn’t go far enough in identifying constraints caused by interconnection requests. Staff agreed the current process doesn’t catch enough constraints.

The committee also accepted a storage white paper for incorporation into SPP’s generator interconnection processes. The document describes proposed rules for processing and evaluating storage interconnection requests. Two members opposed the motion and three abstained.