WASHINGTON — U.S. Rep. Greg Walden (R-Ore.) said the agenda of the House Energy and Commerce Committee that he chairs will hew close to traditional party positions, emphasizing the importance of letting states and market forces guide development rather than policies and regulations.
Walden | NARUC
Walden made the comments while addressing the National Association of Regulatory Utility Commissioners at its annual winter meeting. He requested the opportunity to roll out the agenda to the conference, according to NARUC President and Pennsylvania Public Utility Commissioner Robert Powelson. “With a unified government, we actually have a rare opportunity to enact reforms that build on energy abundance, modernize our energy infrastructure and promote domestic manufacturing and job growth,” Walden said. “You can be certain that we will ensure our efforts focus on the issues that matter most to consumers.” (See Interdependence Key to Cyber Efforts, Congress Told.)
The country has been held back by a “Washington-centric, regulatory and environmental agenda,” he said, that was “picking winners and losers, putting reliability at risk and driving up costs.”
The committee will review the interaction between federal and state government on resource planning, such as the Public Utility Regulatory Policies Act, and address “recent efforts by the EPA to erode states’ authority through the Clean Power Plan.”
He called on the new administration to install new commissioners at FERC quickly and indicated the nuclear industry would be a major focus of the committee.
“The Yucca Mountain project must remain central to our nuclear waste-management system,” he said, adding that plans could include authorizing an interim storage facility, along with moving forward on fuel reprocessing. (See related story, Panelists Weigh Prospects for Nuclear Waste Solution Post-Obama.)
Georgia Public Service Commissioner Tim Echols asked Walden’s view on how reprocessing might make the national energy policy more sustainable.
“It’s something, obviously, that other countries do pretty effectively, and I see no reason why we can’t take a look at that seriously in this country,” Walden said. “It’s about time.”
He noted that while the Yucca Mountain project was canceled by the Obama administration, the total future liabilities and payments paid by the U.S. Treasury for nuclear-waste storage doubled to nearly $30 billion over the last eight years. The federal government can no longer collect a nuclear waste fee from ratepayers, he said, but the fund already has $36 billion and collects $1 billion in interest annually.
WASHINGTON — While FERC has given states a wide berth for determining the avoided-cost rate for qualified facilities under the Public Utility Regulatory Policies Act, other regulatory inconsistencies and utility “recalcitrance” have hindered the law’s implementation, a panel of experts told regulators this week at the National Association of Regulatory Utility Commissioners’ winter meeting.
PURPA was established in 1978 to diversify the country’s energy supply, increase efficiency, reduce dependence on fossil fuels and develop a market for independent power producers. It requires electric utilities to purchase the output of cogeneration and small power-production “qualifying facilities” (QFs) at the cost a utility would incur for supplying the power itself or by obtaining supplies from another source. The law leaves it to each state’s utility commission to formulate those “avoided costs.”
No Second-Guessing
“We have been very explicit about this: We are reluctant to second-guess a state’s determination on avoided costs,” said Lawrence Greenfield, a senior attorney at FERC.
The Energy Policy Act of 2005 amended PURPA to allow termination of the must-buy requirements if FERC finds that the QF has nondiscriminatory access to make market sales. The commission has ruled that includes QFs of more than 20 MW that participate in RTO markets. (See FERC: Entergy not Required to Buy from Large QFs.)
Greenfield noted that the most recent litigation over PURPA has been in non-RTO regions.
“I’m not sure what that says exactly about RTO markets, whether they are more efficient or less efficient, more pro-QF or less pro-QF, but it is an interesting observation that the litigation seems to be concentrated in non-RTO markets,” he said.
He later added that retail choice and resource diversification might draw consumers to other generators “and that might indirectly impact QFs, but we certainly haven’t seen it in the cases we have had.”
Irene Kowalczyk, director of global energy at paper and cardboard manufacturer WestRock, said it’s “probably harder” to get PURPA-based contracts in open-access states because the utilities don’t own the generation and aren’t issuing major requests for proposals.
‘Black Box’ Avoided-Cost Formulas
“In regulated markets, PURPA is somewhat working,” Kowalczyk said, though she added that states’ avoided-cost formulas are often a “black box,” with inconsistent methodologies and no overall framework.
“Notwithstanding the complaint about FERC’s 1-mile rule, today’s complaints about PURPA are nothing new and echo complaints made 30 years ago, when PURPA was initially implemented,” said Ari Peskoe, a senior fellow in electricity law at the Harvard Law School.
The “1-mile rule” requires developers to maintain a 1-mile buffer between projects to qualify them as separate QFs. The commission implemented the provision to prevent developers from “disaggregating” large generation projects into smaller units to qualify under PURPA.
Peskoe argued that much of the blame for slow implementation should be focused on utilities.
“When a utility today claims that it has an abundance of QF energy, I suggest it’s worth investigating how the utilities actions may have contributed to that situation,” he said, noting that many utilities continue to overestimate demand growth in their integrated resource plans. “To what extent utilities’ inaccurate load forecasts, failure to account for those mistakes and lack of foresight about the development of renewable energy technologies contribute to their perceived abundance of QF energy, should the utility be held accountable for these mistakes? How can regulators do so while protecting ratepayers? These are obviously not easy questions to answer, but I suggest they are worth asking.”
Combined Heat and Power
Kowalczyk, who also represented the Industrial Energy Consumers of America, said the rules need to be revised, clarified and standardized across all states so that utilities regard QFs in the proper context.
“The RTO rules treat industrial CHP [combined heat and power] and waste-heat recovery QFs as if they’re merchant power plants that sell power as their primary business,” she said. “To achieve the lowest cost possible for the ratepayers, states should encourage utilities to develop technology-specific avoided cost rates for each resource type. … The minimum term for QF contract should include 10 to 12 years of capacity payments for QFs of all sizes in fully regulated non-RTO areas and in RTO markets for smaller QFs.”
Kowalczyk added that it’s hard for CHP units to perform as capacity resources because their output is entirely dependent upon the steam requirements of plant’s primary manufacturing process. The rule’s inconsistencies have reduced enthusiasm for such projects. “I don’t think any new CHP-type facilities have been installed in those RTO markets … because they can’t get the financing. The RTO markets aren’t sufficient to provide sufficient compensation that is certain to enable those QFs to be built. So what we’ve seen since the passage of the Energy Policy Act of 2005 is a significant reduction in the amount of CHP and waste-heat recovery-type facilities being built.”
Payments to QFs in PJM are often based on energy and capacity clearing prices, she said, though Peskoe noted that courts have ruled that the avoided-cost rate can’t be based on spot-market prices.
Greenfield said FERC prefers that utilities and QFs negotiate mutually agreeable terms, but that it’s also interested in seeing QFs sign long-term agreements. He added that FERC doesn’t have any specific revisions to the law that it would like to see made to the law.
“We at FERC are largely agnostic about changing PURPA,” he said. “Our view is: Whatever Congress tells us to do, that’s what the hell we’re gonna do.”
In a separate NARUC session, acting FERC Chairman Cheryl LaFleur had the same message. Changes that people have asked FERC to make to PURPA rules “are really legislative changes,” she said.
WASHINGTON — Former FERC Chairman Norman Bay says he told the Trump transition team he would likely leave the commission if he was replaced as chairman.
Bay’s Feb. 3 resignation, which came after President Trump appointed Cheryl LaFleur as acting chairman, left FERC with only two commissioners, one short of the quorum needed to rule on contested cases. (See FERC OKs Pipelines, Delegation Order Before Losing Quorum.)
Speaking at the Energy Storage Association’s annual policy forum at the National Press Club on Wednesday, Bay said he was following FERC tradition that the chair leaves after he is replaced.
“The tradition at FERC, with one exception” — LaFleur — “is for a former chairman to leave,” Bay said. LaFleur remained on the commission after Bay replaced her as chairman in 2015.
But Sen. Dean Heller (R-Nev.), who also appeared at the storage forum, said he was disappointed at Bay’s departure, saying it was “effectively paralyzing the commission.”
For her part, LaFleur told an audience last week that Bay’s departure was “somewhat to our surprise and certainly to our disappointment.”
Although Trump is expected to name a Republican as chairman when he fills the three vacancies, LaFleur said she intends to serve her complete term through June 2019.
“My whole FERC tour of duty has been a little non-standard,” LaFleur said Feb. 14 during remarks at the National Association of Regulatory Utility Commissioners’ winter meetings. “I’ve been a commissioner, then acting chairman, then chairman, then commissioner again. But the last three weeks have been the strangest set of plot twists yet.”
One of the plot twists: LaFleur learned of her appointment on Jan. 25 via a message from the White House dated Jan. 23. It was reportedly delivered two days late because it originally was sent to FERC’s old address, which the agency vacated for its current headquarters more than a decade ago.
She said her focus remains unchanged: reliability and grid security; transmission; and “building a clean and diverse energy mix.” Her priority as acting chair, she said, is to “keep the important work of the 1,300 people who work for the agency moving forward in a time of uncertainty and transition.”
Bay told the storage forum he promised Commissioner Colette Honorable he would be presidential “in the classic sense of the word” and not say what the commission should or should not do.
Nevertheless, he offered some advice for future commissioners. “It’s going to be very important for a future commission to retain a very important tradition at FERC, which is a tradition of bipartisanship, if not nonpartisanship, in the way that the commission addresses energy issues.”
He highlighted the high rate of unanimity in the commission’s orders. “Even when we were only down to one Republican commissioner, there were only two matters where the three Dems were on one side and the Republican commissioner was on the other,” he said. “I hardly need to say this in a ballroom in Washington, D.C., but there seems to be more partisanship than ever, and I think that when partisanship hits an independent agency … it is not a good thing for the American people.”
Asked by Burwen what he was going to do next, Bay said his “real ambition is to become a travel bum for a while.” True to his words, he left the Press Club wearing a backpack.
A federal judge on Wednesday rejected a request to halt a federal lease of waters off Long Island for an offshore wind site (16-cv-2409).
Nine commercial fishing organizations and businesses and coastal towns in New Jersey, Rhode Island and Massachusetts sought an injunction in December to halt the lease even before the U.S. Bureau of Ocean Energy Management awarded it to Norwegian company Statoil. The company won the rights to the 80,000-acre New York Wind Energy Area with a $42.5 million bid.
The fishing groups said the lease would cause irreparable harm to fishing areas that produce scallops and squid; the municipalities cited “economic and natural resource interests” in the site.
“To meet the standard for irreparable harm, plaintiffs must present sufficient evidence that the purported injury is certain, great, actual, imminent, and beyond remediation. Plaintiffs have failed to do so,” D.C. District Court Judge Tanya S. Chutkan wrote. “Most significantly, plaintiffs have not shown that their purported injuries are imminent or certain.”
BOEM conducted an environmental assessment of the lease area. The plaintiffs claim the bureau, part of the U.S. Department of the Interior, violated the National Environmental Policy Act and the Outer Continental Shelf Lands Act.
“Plaintiffs’ only argument for why there is an imminent and irreparable harm, despite construction being years away if it happens at all, is that once the lease is issued, Statoil will have made a significant financial investment in the development of a wind facility and will have attained some ‘property rights’ in the ocean area, meaning the balance of harms for whether to issue an injunction later in this case will have changed,” the judge explained. “In the court’s view, this factor does not weigh strongly enough to create an imminent harm sufficient to warrant preliminary injunctive relief. The court maintains its authority to ultimately enjoin the lease in this litigation if necessary. Moreover, Statoil’s decision to invest in this lease is already made with full awareness that its proposals for a wind facility may be rejected and it may never construct or operate such a facility.”
The lease is one of the linchpins of Gov. Andrew Cuomo’s plan to develop 2.400 MW of offshore wind facilities off Long Island by 2030. (See 90-MW Wind Farm OK’d off Long Island.)
WASHINGTON — Energy storage is providing tangible benefits to the grid, and rules need to be implemented to ensure it finds its proper place, a panel of experts told regulators last week at the National Association of Regulatory Utility Commissioners’ winter meetings.
Storage “all felt very on the fringe. And now, especially with the FERC [Notice of Proposed Rulemaking] that was just issued, it’s more in the mainstream,” said Public Utilities Commission of Ohio Chairman Asim Haque, who moderated the panel.
“I think almost everyone believes we’ll have more storage in the future than we do now, and I don’t think we know in the long run how it will develop. … I think if it develops to the extent that we think it might be developing, it will just be its own thing,” acting FERC Chairman Cheryl LaFleur said. “You’ll say electricity is: generation, transmission, distribution and storage, rather than fitting it into the others.”
With its ability to act quickly, storage is providing significant “capacity value,” ICF International’s Ken Collison said. Capacity value is the capability to provide firm energy in the hour of need: A combined cycle unit with a forced outage rate of 5% has a 95% capacity value, meaning it is available on a firm basis 95% of the time. ICF’s research found that a 100-MW storage system with one hour of stored energy can provide 46 MW of firm capacity (46% capacity value), while one with four hours of storage can provide 99 MW of firm capacity.
Storage is unique because it can be both a load when needed and a generation resource when needed, Collison said.
That reaction speed translates to value for customers. Ned Bartlett, Massachusetts’ undersecretary of energy and environmental affairs, said the hours with the top 1% of demand account for 8% of ratepayers’ costs, and the top 10% account for 40%. That represents “remarkable peak opportunities” for storage, he said.
However, storage’s flexibility also creates some regulatory issues, LaFleur said. Previous precedent has limited installations to either cost-based transmission rates or market-based services. FERC believes that is too limiting, she said, and issued a policy statement in January to clarify that the commission is open to opportunities for units to serve both roles but with protections to ensure they aren’t paid twice for the same service. (See Storage Can Earn Cost- and Market-Based Rates, FERC Says.)
LaFleur’s Dissent
“I dissented on that order. I was concerned with some of the broader language in the policy statement about the potential impacts on wholesale markets of having other payments streams,” she said. “I thought it came awfully close to implicating some of the questions we have pending before us now with respect to state policy initiatives and how they’re valued in the wholesale markets, which I know we’ll be looking at.” (See related story, LaFleur Plans Tech Conference on State Generator Supports.)
Among the flurry of orders the commission issued before former Chairman Norman Bay resigned Feb. 3, FERC also ruled on a complaint by Indianapolis Power and Light, finding that MISO’s Tariff unreasonably limits the services energy storage can provide. It ordered the RTO to craft more inclusive Tariff language within 60 days. (See MISO Ordered to Change Storage Rules Following IPL Complaint.)
Collison noted that one of the biggest advantages of storage is it presents less permitting and siting issues. “You can site it at the place of need,” he said.
And sometimes, it’s even mobile. “The number of people who come up to you and describe the different things they’re doing with car batteries, including charging at work, bringing it home and powering the house from it. Really exciting; really confusing at times,” Bartlett said.
Massachusetts’ “ambitious” goal is to have 300,000 electric vehicles on the road by 2025, he said.
WASHINGTON — Electric vehicles and distributed energy resources are increasing the need for utilities to experiment and conduct market research, speakers at an Institute for Electric Innovation forum said last week.
“What differentiates us from every other competitive service is we have an … obligation to serve 100% of the customers. We don’t have the ability to define our niche market and confine our advertising to that market,” said Karen Lefkowitz, vice president of smart grid and technology for Pepco Holdings Inc. “Serving 100% of the customers used to be easy because everybody had the same stuff. … Now things have gotten really complicated, because now we actually have to understand our customers.”
Regional Preferences
When Pepco rolled out smart meters at its utilities in D.C., Maryland and Delaware, Lefkowitz said, the company tested avatars for a video series explaining how customers could use the data collected by the devices. To the company’s surprise, different regions preferred different avatars, Lefkowitz said.
“It tells us that customers’ opinions and their attitudes can be vastly different in a relatively short geographic difference. They’re influenced by incentives their states are offering; they’re influenced by the culture of the community that they live in. They’re influenced by the rate that the local utility is charging. So when we look to the future and see all the choices that customers have … we need to understand what drives the customer. We need to understand what appeals to them, and we need to understand why they’re looking elsewhere for their services.”
“I think you always want to be experimenting,” agreed Arizona Corporation Commission Chairman Tom Forese. “Focus groups and polling data … could be very helpful in understanding the needs of the customers. Nothing really can compensate for just raw experimentation because pollsters are always shocked and surprised: ‘We didn’t see that coming.’”
Manal Yamout, vice president of policy and markets for Advanced Microgrid Solutions, recalled when the California Public Utilities Commission ordered Southern California Edison to obtain 50 MW of 15-minute storage in response to the shutdown of the San Onofre nuclear plant. The company ended up procuring 250 MW of storage with a four-hour output.
“Why would they do that? They didn’t have to,” Yamout said. “The answer is that, unexpectedly, distributed storage resources had the ability to give Edison something it didn’t quite know it wanted until it had to think about it.”
Although it was the storage target that caused the procurement, it was the multiple functions storage could fill that led the company to exceed the target, she said.
“I think we’re in a place in the elect power industry that’s … like the beginning of the Internet, where serious policy and regulatory change has to occur to let things explode,” said moderator and IEI Executive Director Lisa Wood, quoting from a book by AOL founder Steve Case.
“Our regulators are in a tough place. The world is changing very fast,” said Lefkowitz. “For the very first time, they’re now adjudicating between who should have the ability to put assets on the electric system that historically has been the domain of the utility.”
Forese said he believes the utility must retain a central role. “If the utility is not directing traffic for new technologies, then I think we’ll get the opposite of what we’re trying to accomplish,” he said.
EVs’ Impact
Lefkowitz predicted electric vehicles will “change the world” but said it won’t happen quickly because it takes about 15 years for the entire vehicle fleet to be replaced with newer models. (See columnist Steve Huntoon’s alternate view, Electric Cars – Three Ugly Facts.)
Time will be essential in ensuring Pepco is “ahead of the curve,” Lefkowitz said: Charging an EV requires the equivalent of half of a house load.
“If we don’t size our distribution transformers appropriately and everybody comes home to the neighborhood and charges their car at the same time, we’re going to at minimum blow the fuses on all those distribution transformers — we’ll be spending a lot of time driving around to replace fuses. And at worst, we’re going to be spending trillions of dollars across the nation upgrading transformers.”
Lefkowitz said EVs will change Pepco’s peak load in the D.C. area from 4-5 p.m. to perhaps 7-8 p.m.
“So our planning has to be a lot more expansive and future-looking and rely a lot less on 100% history that no longer is necessarily a good predictor.”
She predicted an expansion of Pepco’s incentives to encourage off-peak charging, saying a pilot program in Maryland proved very popular.
“We’ve been talking about [time-of-use] tariffs and the right pricing for three decades,” Wood said. “But EVs may be the thing that actually brings that to life.”
CAISO will likely be forced to curtail a massive amount of renewable energy this spring when increased solar output is expected to coincide with unusually “bountiful” conditions for hydroelectric production, the ISO’s top manager said.
“The last several years, the hydro system has been de-rated fairly significantly — [by] up to 4,000” MW, CEO Steve Berberich said during a Feb. 16 meeting of the ISO’s Board of Governors. “We’re going to see that flip and we’re going to have that 4,000 MW this year, plus we’ve added another couple thousand megawatts of solar.”
Last spring, CAISO confronted a number of instances when over-generation reached 2,500 MW, Berberich noted. In those cases, the ISO could “lay off” about 1,000 MW of the excess on the Energy Imbalance Market, while the rest was handled with decremental bids — otherwise known as economic curtailments.
Curtailments are expected to soar this year as the increase in solar capacity combines with high spring snowmelt to fuel possible record surpluses. California’s snowpack currently stands about 175% of normal, according to the state Department of Water Resources.
“We could see [over-generation] as high as 6,000 to 8,000 MW at a time, which will be the biggest over-generation that we’ve had,” Berberich said.
On a related note, Berberich reminded board members that CAISO’s “duck curve” forecast predicted that the ISO would be dealing with 13,000-MW solar-driven generation ramps in 2020.
“This last Sunday [Feb. 12], we blew through 15,000 MW,” Berberich said. “So we’re seeing this quicker and deeper than we expected and we’ll have to continue to monitor that.”
In 2013, CAISO published the California “duck curve” chart to illustrate the long-term impact of increased renewable penetration on its daily operations.
That forecast showed how the adoption of solar and other renewable resources would steadily undercut the ISO’s “net load,” which represents the portion of load being served by dispatchable resources such as gas-fired generation and imports.
The “duck curve” is coming faster than expected. Introduced in 2013, the curve predicted CAISO would be dealing with 13,000-MW solar-driven generation ramps by 2020. The ISO exceeded a 15,000 MW ramp earlier this month.| CAISO
Net load is calculated by subtracting the energy generated by variable renewable resources from total electricity demand. The curve turns sharply higher at sundown, indicating the need to rapidly ramp flexible resources to serve load.
A research report published last year by the ScottMadden consulting firm indicated that the “belly” of the curve was deepening more rapidly than originally predicted, with the corresponding ramping effects spread across the entire year and not just the typical spring day characterized by high renewable output depicted by the graph. (See Report: Calif. ‘Duck Curve’ Growing Faster than Expected.)
WASHINGTON — Little more than a month after taking office in 2009, President Barack Obama ordered the Nuclear Regulatory Commission to stop work on a permit for licensing the nuclear waste depository at Yucca Mountain in Nevada. Obama acted at the behest of then-Sen. Harry Reid (D-Nev.).
The license application for the site, almost 140 miles northwest of Las Vegas, was the product of 30 years of work and $15 billion in spending, and the cancellation outraged nuclear operators and state regulators.
With Reid retired and a new president in office, two major political obstacles to Yucca are gone. But that doesn’t mean it will be quick or easy to solve the problem that has left the waste stored at almost 100 nuclear sites around the country.
“The last eight years has … just been a major setback for our nuclear waste policy,” Andy Zach, a staffer on the House Energy and Commerce Committee, told the National Association of Regulatory Utility Commissioners.
“It is going to take us a long time to dig out from where we are. That goes across the board: setting up an organization; reconstituting the key support contractors who did the work on the license application. … There has been an atrophy of talent, physical assets and a knowledge base that is going to have to be rebuilt.”
Michael McKenna, president of lobbying firm MWR Strategies, said the government has to be “nimble” enough to move toward Yucca and also develop an interim storage facility until the site is approved and ready to accept shipments.
But Jack Spencer, vice president of the Heritage Foundation’s Institute for Economic Freedom and Opportunity, said he believes an interim site is a mistake. “I think it releases all the pressure to complete Yucca Mountain,” he said.
Spencer said he believes Nevada’s opposition to the site can be overcome.
“I think that Nevada probably is largely against nuclear waste at Yucca Mountain in the context of it’s been [forced on it].
“I am nothing if not a believer in a free market, and I think most things have a price on them. And I think by … empowering [Nevada] to have some regulatory control — to say, ‘This is what it’s going to cost you’ — I think that we will probably negotiate something that will lead to a solution there.”
Spencer also said the 1982 Nuclear Waste Policy Act, which directed the Department of Energy to build a repository for used nuclear fuel and other high-level radioactive waste, should be rewritten.
“I think ultimately what we need in order to have the system work is to have the waste producers responsible for waste management,” he said. “My theory is [utilities] can do it cheaper than the government.”
The New England Power Pool’s Integrating Markets and Public Policy collaborative process will suspend its monthly meetings until May to allow ISO-NE more time to develop a market design for accommodating state-sponsored clean energy contracts without disrupting the Forward Capacity Market.
In addition to providing the RTO with time to develop a “conceptual market approach that could be implemented in the near term,” the delay will give states time to analyze long-term proposals discussed to date and for them to hold “off-line” discussions with stakeholders, IMAPP Chair William Fowler said in a memo released Wednesday.
ISO-NE’s proposal could be presented to the IMAPP group as soon as May and implemented for FCA 13 in February 2019, which will procure resources for the 2022/23 capacity commitment period. Any proposed market rule changes to its Tariff would require FERC approval.
NEPOOL Secretary David T. Doot told RTO Insider that FERC’s plans for a technical conference were cited by one IMAPP participant in a conference call Thursday as another reason to go slow. (See related story, LaFleur Plans Technical Conference on State Generator Supports.)
The original timeline set out last summer had hoped to have NEPOOL complete its work in December 2016. A revised schedule issued in November contemplated a proposal sent to ISO-NE by the second quarter of this year.
“The ISO’s near-term priority is for the region to develop a workable proposal for accommodating state-supported resources while minimizing their potential to suppress FCM prices and affect regional reliability,” ISO-NE spokesman Marcia Blomberg said.
Stakeholders in the IMAPP process have identified multiple paths to accommodating clean energy resources, including the introduction of a price on carbon or a two-tiered approach to the FCM that creates a separate class for clean energy. (See Markets vs. Climate Goals the Subject at NECA Conference.)
New England is the furthest ahead in contemplating the effects of out-of-market contracts on wholesale electricity markets, but the issue is gaining currency in NYISO and PJM. Three New England states are currently reviewing out-of-market long-term contracts for clean energy procurement. (See New England to Charge Ahead on Clean Energy Makeover in 2017.)
“Once the ISO has a market-based proposal, it would go through the NEPOOL Markets Committee for discussion. With recent state targets in mind, the ISO anticipates needing a near-term solution in place for FCA 13, likely requiring a FERC filing by the end of 2017 to impact the March 2018 FCM windows [for resource qualification]. The ISO is examining options and is targeting additional stakeholder discussions by May 2017,” Blomberg said.
Work on proposals will continue among stakeholders over the next several months, with interim IMAPP updates provided at NEPOOL’s monthly Participants Committee meeting.
“These are very complex discussions and sometimes there were reasons for a high [degree of] optimism and other times a low [degree of] optimism,” said Doot, an attorney with Day Pitney. “But this is hard and it’s going to take some time.”
WASHINGTON — Acting FERC Chairman Cheryl LaFleur said Tuesday that the commission will schedule a staff-led technical conference on how wholesale power markets can accommodate state policymakers’ initiatives to support generation.
Speaking to the winter meeting of the National Association of Regulatory Utility Commissioners, LaFleur noted that the commission has pending complaints challenging the zero-emission credit programs created by Illinois and New York to prevent their nuclear plants from retiring. The cases cannot be resolved until the commission regains the quorum it lost with the Feb. 3 resignation of former Chairman Norman Bay.
“We have several cases pending that raise those issues. While we can’t issue orders in those cases, one thing that [Commissioner] Colette [Honorable] and I have talked about that we can do is to organize a staff-led technical conference to bring people in before us, build a record and hear from the states, from the environmental community, from others — from the generators and the ISOs — to try and discuss some of those issues. So that’s something we are going to do.”
LaFleur noted that ISO-NE and PJM made changes to their capacity markets “to try to make sure that they were properly rewarding the resources you could always count on to be there when most needed,” a reference to the Pay-for-Performance program in ISO-NE and Capacity Performance in PJM.
“What the markets do not currently do is compensate nuclear resources for their carbon-free attributes. The markets weren’t designed to do that and that’s something the state programs are seeking to do,” she said.
“I think we only have three choices here: One is for the stakeholders and the ISOs in part to somehow have a design solution that retains the benefits of the competitive markets for customers but in a way that adapts to some of these state issues. That’s door one.
“Door two is we can litigate it out. I loved winning the [Order 745] case in the Supreme Court, but litigation is never my first choice for how to resolve things.
“And door three is some kind of gradual reregulation. … If the states want to reregulate, that’s fine, but I’m concerned that we’ll have unplanned reregulation as the markets just get cannibalized and we lose some of the reliability benefits for customers.
“So door one — making a decision to work this out and adapt the markets — is by far the best solution, and we’ll need the help of all the smart people in this room to do that.”
NARUC President and Pennsylvania Public Utility Commissioner Robert Powelson said he welcomed the conference and also praised PJM CEO Andy Ott for “step[ping] up on this issue.”
PJM is expected to issue a white paper in March on the subject.
