Jorge Bermudez has resigned from one of five unaffiliated positions on ERCOT’s Board of Directors after his recent marriage triggered a conflict of interest.
Bermudez’s wife is an officer with an ERCOT market participant affiliate, Citibank. The affiliate is not directly involved in the ERCOT market, but the ISO’s bylaws outline a number of stringent requirements for unaffiliated directors. ERCOT said its legal department determined the relationship to be a conflict “based on those requirements.”
“We have no reason to believe at this time that this conflict resulted in any inappropriate actions during his service to the board,” ERCOT spokesperson Robbie Searcy said. The ISO’s board Tuesday will vote again on any matters that Bermudez participated in during its August meeting “to ensure all board actions of record are consistent with these bylaws,” she said.
“For some odd reason, he chose his wife over ERCOT,” joked Texas Public Utility Commissioner Ken Anderson during the commission’s open meeting Oct. 7.
Anderson and his fellow commissioners closed the meeting by heaping praise on Bermudez. The PUC has regulatory oversight of ERCOT and approved Bermudez’s selection to the board in September 2010.
“He’s such a tremendous gentleman, but what are you going to do with kids today? They run off and fall in love,” Commissioner Brandy Marty Marquez said. “It’s sad to lose him.”
In a statement, ERCOT CEO Bill Magness said Bermudez’s “expertise and careful deliberation, particularly regarding financial matters, will be missed greatly.”
Under ERCOT’s bylaws, the board’s Nominating Committee will select and vote on his replacement, retaining an executive search firm to begin the candidate selection process. The candidate must be approved by both the ISO’s membership and the PUC, with the latter’s approval coming “within a time frame that will … avoid or minimize the length of unaffiliated director vacancies on the board.”
Candidates must have experience in one or more of the fields of: senior corporate leadership; professional disciplines of finance, accounting, engineering or law; regulation of utilities; risk management; and information technology. Candidates must be independent of any ERCOT market participants.
Bermudez had 33 years of experience with Citigroup, retiring in 2008 as chief risk officer. He is currently CEO of the Byebrook Group , a research and advisory firm in the financial services industry.
336 MW of Wind and Solar Added in September
An additional 336 MW of wind and solar began operating in September, according to ERCOT’s latest generator interconnection status report. The new additions were:
Duke Energy Renewables’ 110-MW Los Vientos wind farm in South Texas;
Invenergy Wind’s 120-MW Gunsight Mountain Wind Farm in West Texas; and
OCI Solar Power’s 106-MW facility, contracted to San Antonio’s CPS Energy, north of Abilene in West Texas
The ISO now has 25,254 MW of wind capacity and 9,391 MW of solar power operating, under study or with signed interconnection agreements.
The additional capacity helped ERCOT set new demand records for October with peaks of 59,359 MW and 59,909 MW, respectively, during the late-afternoon hours of Oct. 5. The Texas grid operator’s final Seasonal Assessment of Resource Adequacy for October and November had projected a peak demand of 54,400 MW this fall.
VALLEY FORGE, Pa. — PJM is considering a significant increase in the performance participation threshold for participants in its regulation market.
The current minimum participation threshold of 40% may be increased to 75%, RTO officials told the Operating Committee meeting last week. Each unit is evaluated for participation based on its average scoring over the past 100 hours of regulation service on three components: precision, accuracy and delay.
| PJM
American Electric Power’s Brock Ondayko said increasing the participation thresholds could have a major impact on the number of megawatts available to respond, noting that steam units, which make up the vast majority of RegA participants, average a 75% performance score.
As part of a quarterly report on regulation performance, PJM’s Eric Hsia provided a graph of participants’ average performance and frequency of participation. The results provided a stark contrast between participation in RegD — a dynamic regulation signal meant to stabilize constant frequency deviations — and RegA, a signal that is sent every four seconds.
Regulation-capable units that accept the offered price for participation are expected to align their output with the signals they receive from PJM. The RTO’s data show that, while there is far more participation in RegA, participants in RegD participate far more often.
Responses Hard to Predict
PJM said it is seeing wide variability in primary frequency response between evaluated frequency events, with many generators either not responding, withdrawing responses or responding in the opposite direction — decreasing output, for example, when frequency declines. Additionally, a “significant portion” of primary frequency response is coming from load, which can’t be predicted or controlled, PJM’s Danielle Croop said.
It’s a “roll of the dice” every time to see what’s going to happen, she said. Croop presented several graphs of units’ responses to recent frequency response events that showed the units either not responding, stopping their response, not providing sustained response or responding in the opposite direction.
One potential cause of the erratic performance is that a unit’s “operating control mode” is following some other indicator and not in droop mode allowing them to respond to frequency deviations, she said. Units that don’t respond at all might be operating in modes or with governor settings, that don’t allow for response — or have their governors turned off altogether, she added.
About 69% of frequency response in 2016 has come from coal-fired units, Croop said. In response to a question from Ondayko, she speculated that the participation level of natural-gas-fired units at just 19% was likely due to three factors:
Units must be on the grid to provide frequency regulation, so fast-response natural gas units that run sporadically often won’t have an opportunity to get involved;
Control systems might be “squelching” or preventing the response; or
Units might be operating so close to their maximum capacity that they don’t have much room to adjust.
Units that are providing regulation are not expected to also provide primary frequency response, Croop said, and so aren’t calculated into PJM’s expected performance.
FERC last week rejected MISO’s plan for ensuring it terminates reactive power payments when generating units are no longer capable of providing the service or are transferred out of a fleet. FERC said MISO’s proposed method wasn’t “timely” enough, ordering the RTO to make another compliance filing within 60 days (ER 16-2187 and EL 16-61).
MISO contended its approach was similar to one the commission approved for PJM, which requires a generation owner to either file a revenue requirement adjustment or make an informational filing with FERC. (See FERC OKs PJM Revisions on Reactive Power Payments.)
However, while generation retirement and suspension notices are public and made 90 days in advance in PJM, MISO proposed a “generation owner make its filing on or before the date of the change in status for a generation resource.”
FERC also said MISO’s proposed effective date “on the first day of the month immediately following acceptance of the revenue requirement by the commission” fails to guarantee that the termination date and the last day of revenue requirement align. MISO submitted the Tariff revisions to comply with FERC’s June order to show cause that it was not continuing to pay resource owners with deactivated units for reactive service.
In a related order, FERC last week set for hearing and settlement proceedings Illinois Power Generating Co.’s proposal to reduce the reactive power compensation for its coal-fired plant Newton Power Station in southeastern Illinois from $1.6 million to about $821,000 effective Sept. 15, 2016, when the plant’s Unit 2 was scheduled to deactivate (ER16-2422 and EL 16-119).
FERC said further decreases could be warranted because the company, a unit of Dynegy, did not provide capability reports or cost information on the remaining equipment that will continue to provide reactive service at the plant. Dynegy announced the shutdown in May.
Colorado-based environmental group Western Resource Advocates was an early proponent of CAISO’s Energy Imbalance Market and is actively supporting the ISO’s effort to transform itself into an RTO serving the broader West.
Gardner | Western Resource Advocates
RTO Insider spoke with senior policy advisor Nancy Kelly and staff attorney Jennifer Gardner — both based in the organization’s Utah office — about California’s push for regionalization of the Western grid and its political challenges.
Kelly, an economist, previously worked for Utah’s Office of Consumer Services and followed the regional effort to form a transmission organization in the West prior to the Western Energy Crisis of 2000-2001. She also served on the board of the Western Electricity Coordinating Council from 2002 to 2014.
Gardner, who focuses primarily on clean energy issues, said she is trying to play an active role in the regionalization discussion “to make sure governance is structured fairly for all of the relevant parties that have been involved.”
[Speaking to Kelly] You were once with the Utah consumer advocate, and that agency is currently taking a skeptical view of PacifiCorp joining CAISO. Given your background, how do you weigh consumer issues in your perspective on regionalization?
Kelly: “I think a regional organization and a regional system operator is a necessary tool to reliably operate the resource mix that we’re going to be facing as we transition from our current resource base to a new resource base over the next five to 10 years.
“However, from a consumer perspective, I also believe it’s going to bring down costs, and I think we’re already seeing how it can bring down costs by reliably operating an increasing mix of renewables that have no fuel costs — free wind, free sun — so those resources can get bid in very cheaply.”
[Executive Director of the Utah Office of Consumer Services] Michele Beck has said that she wants PacifiCorp to perform a state-by-state consumer benefits study before it joins CAISO. Would you seek such a study before the utility advances with regionalization?
Kelly: “I think that everyone realizes that PacifiCorp has to be able to make the case [for consumer benefits] in front of each of its six [utility] commissions before it could join as a participating transmission owner. And, yes, I’d think that we’d want to see forecasts of those benefits.
“I think one of the concerns for some in the regulatory community is whether the benefits will grow in the future. They grow as the penetration of renewables grows and as coal plant retirements occur. Some in the regulatory community — and some consumer groups — are concerned that those future benefits may not be realized, and I just don’t think that will be the case. The very drivers that drive those benefits will be increasing in the future rather than going away.”
Given the relative simplicity of joining the EIM compared with creating an expanded RTO, would it make sense to step back from regionalization of the ISO and see what develops as more utilities join the EIM?
Kelly | Western Resource Advocates
Kelly: “Having a regionwide EIM would be a great first step. The additional benefits in moving to an RTO would be further reductions of gas burns, because of the ability to share resources across time zones and across hours in ways that you can’t do with an energy imbalance market. Because [utilities] come into the Energy Imbalance Market with resources that match [their] load, [they’re] only balancing within the hour. By moving to day-ahead, you can reduce the number of resources that need to come into the day beyond the number of resources that come into the hour, so you get greater savings.
“I think the EIM can continue to grow separately from the speed of progress on the regional system operator. As utilities and customers in the West experience those benefits, I think they will become even more willing to do the hard work necessary to take the next step.”
How do you see the West working through the thicket of RTO governance issues, because there seem to be a lot of points of contention both inside and outside California?
Gardner: “We’re really working with a complicated situation. We’ve got six states within PacifiCorp’s footprint with very different politics and policies. I think the biggest issue that we’re finding is … if this seems like a California-driven effort, there’s going to be an expected amount of skepticism. I think that’s normal when you look at all of the policies and political implications at play.
“We’re finding that [California is] going to have to give a little to get something in return. One of the biggest issues that came up in the [governance] process was the issue of voting [in an RTO]. We could all agree that we wanted some kind of advisory body that would provide input to a future independent board, but we couldn’t agree what its voting rights would look like. For example, does California get more votes than Utah because it has a greater load profile?
“Those are the kinds of complicated issues that we’re working through. Ultimately, we want a fair and balanced governance model that recognizes the variety of interests involved in this complicated market structure and that’s ultimately fair to participants — whether it’s a state, a utility or [nongovernmental organization] like us.”
What next steps must be taken to work through the governance issue?
Gardner: “Right now, California needs to pass legislation by the end of 2017. That legislation needs to be clear that CAISO has the legal authority to actually transition to a regional system operator with a fully independent regional board that is advised by a Western states committee of state representatives — and that also has some type of formal stakeholder process. Once we have that legislation in place — then and only then — can we start a transition process that’s necessary to transform CAISO into a regional organization.”
Do you think there’s a willingness on the part of the California legislature to give up enough in the next year?
Gardner: “I can’t say for sure what the temperature of the California legislature is. I think some of the biggest concerns in California primarily focus on making sure that, under a regional expansion model, California isn’t losing clean energy jobs to other states in the West.
“Do I think that’s a fair characterization of what we’re trying to do? No. But when you look at where they’re coming from, this is a California entity, and for the life of that entity, it is charged with implementing — arguably — California policy. So what has to happen is a little bit of letting go and realizing that California can still have its policies and its individual state requirements — and so can Utah. But, ultimately, operation of that regional market must take place by an independent entity. Once we get over those concerns, I think we can make progress, but it’s going to be a heavy lift.”
Kelly: “Within California, there are certainly different interests. What seems to be clear is that CAISO understands that it needs the expansion in order to operate the level of renewables that are coming down the pike — effectively and at lower costs while maintaining reliability.
“I think that CAISO — maybe more than anyone else in the West — gets that. But I do hear in a lot of conversations skepticism about what’s really driving CAISO, and I do think sometimes they’re seen as expansionist and imperialist.”
What are your thoughts on the Mountain West Transmission Group proposal to create a competing RTO in the West? Does that seem like a serious effort — and one that would be competitive with the ISO?
Kelly: “I think it’s totally serious. Whether it’s competitive or not is unknown. They have put out a request for information to four different RTOs, including the CAISO, SPP, MISO and PJM. So they are looking to either form a single tariff group or [create an RTO] if the numbers come in right. I think they’ve been looking at the results of their benefits studies and they’re waiting for information on their requests for information. If they were to choose CAISO, it wouldn’t be competing at all. It would provide transmission access across the West, which I think would be an excellent thing for renewables and customers in the West.
“We’ll support any efforts to improve operation and reliability going forward. I think we would prefer to see one — as opposed to many — simply because that would create the best opportunities to share back and forth across the region.”
Limon Wind Turbines in Colorado | Western Resource Advocates
Is there any policy point that would cause your organization to withdraw its support from the regionalization effort?
Kelly: “I would say that we definitely support an independent board with an open stakeholder process. I think having the governance right is important for our organization. We would not support an organization run by a board appointed by the governor of California. We understand that would never go in the rest of the West.
“Our desire is to see the formation of an organization that can really meet the needs of the entire West and that’s where we’re focusing our work.”
Gardner: “It would be hard to convince Western Resource Advocates to not support this, but there are a few things that could cause us to step back and re-evaluate how we’re engaging in this effort.
“The first would be what happens in California during the 2017 legislative session. We want to make sure that any legislative package is narrowly focused on the issue at hand — which is to enable the California ISO to actually transition to a regional market — rather than [legislators] trying to slip in a lot of additional initiatives.
“We want to ensure that any governance model is fair to all stakeholders involved, and that states outside California are given an equitable say in governance and a seat at the table.
“So it’s really hard to say right now what will be a deal breaker for us. I would say that, depending on what happens with California legislation, we’ll know a lot more about where things stand and whether this process is going to turn out with an equitable governance structure in the long run. But, so far, we’ve been very encouraged and we’re certainly not stepping back anytime soon.”
Imperial Irrigation District last week approved an agreement to secure an additional 3 MW of renewable energy from the Hoover Dam, bringing the reallocation total up to 10 MW for the next 50 years.
IID will pay an all-in rate of $27 to $29/MWh, compared with its all-in average ranging from $50 to $75/MWh. Delivery will begin Oct. 1, 2017, after the dam’s current contracts expire.
“This is an example of how IID is working to diversify its energy portfolio while, at the same time, investing in low-cost energy resources,” IID Board President Norma Sierra Galindo said. “It serves as an important reminder of the true nexus between water and power.”
State Building Energy Efficiency Program Apparently Stalled
A program established by the General Assembly in 2011 to increase energy efficiency in state buildings may be stalled, according to an Oct. 4 report issued by Acadia Center.
The “Lead by Example” (LBE) program was enacted with the goal of achieving a 20% reduction in energy use in state buildings by 2018. LBE required the Department of Energy and Environmental Protection to develop a plan achieving minimum energy savings targets by certain dates and to submit annual reports to the Energy & Technology Committee of the General Assembly regarding the status of implementation.
According to the Acadia Center, annual LBE status reports for 2013, 2014 and 2015 do not appear to have been submitted.
Branford Expected to Approve Ordinance Banning Fracking Waste
Branford officials are expected to approve on Oct. 12 a proposed ordinance banning fracking waste from being used for any purpose within the town. The proposed ordinance does not affect transport of waste materials through Branford on Interstate 95.
If Branford approves the ordinance, it will be the fifth state municipality to enact such a regulation. The towns of Washington, Coventry, Mansfield and Portland also have banned fracking waste.
New proposed regulations addressing how the state will monitor the movement and usage of fracking waste are due between July 1, 2017, and July 1, 2018, according to the state’s Fracking Waste Moratorium.
City Council Seeks Alternative To Second Transmission Line
The Ketchum City Council is seeking a renewable energy alternative to a second Idaho Power transmission line that is expected to cost ratepayers $30 million. The line was intended to address outages in the northern Wood River Valley if the existing transmission line fails.
The council voted last week to ask the state’s Public Utilities Commission to require Idaho Power to analyze the costs, benefits and reliability of an alternative project.
Members of the Ketchum Energy Advisory Committee “believe the $30 million proposed for the line is not the most efficient use of the funds,” Ketchum Planning Director Micah Austin said at last week’s council meeting.
Alliant Energy has apologized to customers who were surprised by higher-than-normal bills, but stands by their accuracy.
Alliant installed a new software system that increased the number of checks it performs on customers’ monthly usage. When the system found usage that was a lot higher than in previous months, it sent estimated bills to customers.
The company said it has temporarily stopped disconnections for affected customers and that it will help them set up payment plans and waive late-payment fees.
Solar Farm Anticipated for Former Westover Air Base Land
The Chicopee City Council is expected to create a solar field on land outside Westover Air Reserve Base that once held about 128 homes.
Chicopee acquired the land in 2011. Last week, the council was asked to approve a 20- to 25-year lease with Con Edison Development, which was selected through a bidding process to design, construct and maintain a solar farm on the property.
The solar farm is expected to cut the base’s electric bill by 5%, or $100,000 a year.
Pittsfield’s city council will vote Tuesday on whether to spend $562,000 to upgrade Covanta’s waste-to-energy recycling facility to keep it open for at least four more years.
In July, Covanta announced plans to close the Pittsfield facility in March 2017, stating that high operating costs and the size of the plant made it unprofitable.
The money, which would come from Pittsfield’s economic development fund, would pay for a state-mandated recycling enclosure and upgrades to the facility’s fossil fuel boiler.
Hurricane Matthew has dissipated, but it left about 491,000 residents in the state without power in its wake as of Monday morning, according to the Department of Public Safety.
The figure, which includes about 310,000 Duke Energy customers, was as high as 600,000 on Sunday. Duke could not estimate how long it would take to restore service, but the prognosis is not good. “In some of the harder hit areas, we expect to have to rebuild portions of our system before we can restore power, and that takes time,” spokeswoman Meredith Archie said.
Duke has deployed about 5,600 workers to respond to outages and help with clean up, Archie said. Some communities on the state’s coast have been evacuated because of dangerous flooding.
The Development Services Agency is offering up to $8 million to advance research on cleaner, economical and greater use of the state’s coal and/or its combustion products.
The agency expects to issue eight to 10 awards for up to two years of research. Amounts will range from $3.5 million for full-scale projects to $100,000 for paper studies.
Proposals are due by the end of October to the Coal Development Office.
WASHINGTON — FERC’s Order 1000 is providing savings to ratepayers, but a lack of transparency in RTOs’ competitive solicitations is undermining confidence, and limited opportunities may doom nonincumbent developers, speakers told the Energy Bar Association Mid-Year Energy Forum last week.
The range of comments were similar to those FERC heard at its June technical conference on the landmark rule. More than 60 stakeholders filed post-technical conference comments last week before the deadline Oct. 3 (AD16-18). (See Five Years Later, FERC Takes Another Look at Order 1000.)
“We’re out of the policy debates and into implementation,” said Brian Weber, managing director of transmission development for Transource, a joint venture of American Electric Power and Great Plains Energy.
Weber said it is “too early to make broad brush changes” in the rules, given that some RTOs have yet to complete their first Order 1000 solicitations.
Other speakers at the EBA session saw no need to wait to fix problems.
Paul Jett of Midcontinent MCN, GridLiance’s operating company in MISO, said FERC’s policy is sound, but the implementation “is off to a slow start” because the continued existence of state rights of first refusal and RTOs’ reliability project “carve outs” for incumbents have left an “extremely narrow” set of projects open to competition.
George Dawe, vice president of Duke-American Transmission Co., echoed Jett’s complaint, saying incumbent transmission owners weren’t the only ones to oppose competition. RTOs don’t like it, Dawe said, because “they’re in the spot of having to pick winners and losers.”
“So we end up with these design flaws … created in the very beginning because those two entities in particular didn’t want competition in the first place. And so you end up with arbitrary voltage thresholds, cost allocation issues [and] limited benefit metrics to determine which project should be eligible” for competition.
FERC needs to “course correct,” he said, by reassigning the competitive selection job from the RTOs to their Market Monitors.
Dawe and other speakers also said more transparency is needed to increase confidence in the selection process.
Weber said that’s one reason his company likes the sponsorship model used by PJM rather than the practice in CAISO, where the ISO accepts competitive bids on a solution developed by its engineers.
“You propose your solution and if your solution is the best solution it saves the need for all the issues which may come with more of a competitive bid process,” Weber said.
“There are some regions that have issued very subjective criteria — multiple criteria — but really only give one of the criteria that they’ve issued,” he continued. “So that leaves you in a situation at the end where you can’t draw a straight line between the end result and what was communicated up front.”
Weber contended competition should be limited to capital costs, saying the inclusion of operations and maintenance and tax considerations introduces too much subjectivity into the evaluation.
“We’ve been involved in certain regions where … you put everything in an Excel spreadsheet, there’s a multi-hundred-page contract behind it that covers every potential outcome and the decision is made on a single cell in [the] spreadsheet.”
Judy Chang of The Brattle Group said the introduction of competition and cost caps is providing benefits to ratepayers, a conclusion with which other speakers agreed.
“Cost containment and cost caps … look to be the new normal,” Dawe said. “It’s hard to imagine there would be a successful bid that doesn’t include some form of containment.”
Brattle says annual transmission spending has increased since FERC issued Order 1000 in 2011. It predicts $120 billion to $160 billion in transmission investments over the next decade.
But that may not be enough for the growing number of independent transmission developers, Jett said. “If you’re a developer and Order 1000 transmission projects are your only path to success, you’ve got a problem today,” he said.
“If these design issues are not addressed quickly, I have to wonder how long will developers be able to hang on.”
U.S. agencies are calling for public input by Oct. 21 on the nation’s first fresh-water wind farm.
The project, 8 to 10 miles off the western end of Lake Erie north of Cleveland, consists of six wind turbines.
Its goal is to increase Great Lakes participation in the offshore wind industry, said Lorry Wagner, president of the Lake Erie Energy Development Corp.
Canada to Create New Rules, Single Board for Offshore Energy Projects
Canada is working to establish a comprehensive set of rules for approving and monitoring offshore energy projects and a regulatory board to oversee them.
The new rules would address offshore wind, wave and tidal current technologies, according to Department of Natural Resources documents.
Several federal departments currently have authority to regulate offshore renewable energy activities, the department said.
Federal pipeline regulators issued a rule last week expanding their power to address pipelines that pose a threat to public safety or the environment.
If the rule is finalized, the Department of Transportation’s Pipeline and Hazardous Materials Safety Administration will be able to issue emergency restrictions and safety measures on gas or liquid pipeline operators whose lines pose a public danger.
“Pipeline incidents can have devastating impacts on local communities and the environment,” Transportation Secretary Anthony Foxx said in a statement.
Appeals Court Hears Tribe’s Argument to Stop ND Pipeline
Opponents of the $3.8 billion, four-state Dakota Access oil pipeline argued last week before a federal appeals court to keep a temporary work stoppage in place for a small area of North Dakota.
The Standing Rock Sioux Tribe argued before a three-judge panel of the D.C. Circuit Court of Appeals that the pipeline impacts sites of historic, religious and cultural significance and threatens the area’s water supply.
The land at issue spans 20 miles on either side of the Missouri River at Lake Oahe.
US Officials Approve Expansion Of Montana’s Largest Coal Mine
Cloud Peak Energy
U.S. officials approved a 117 million-ton expansion of Montana’s largest coal mine after the Interior Department found the mine would generate about 160 million tons of carbon dioxide over the next five years, one-half of 1% of annual projected emissions in 2020.
The expansion of Spring Creek Mine was first approved in 2012 but then delayed when environmentalists filed legal action.
Griffiths describes himself as “a startup guy,” which served the nascent CAPS organization well when it was all just ideas. The concept of a single voice for all of the state consumer advocates within PJM’s territory had been around for some time — Griffiths himself had started thinking about it in the early 2000s — but the opportunity didn’t materialize until 2012 when FERC, in a market manipulation settlement with Constellation Energy, ordered that $6 million in fines should benefit PJM consumers.
Griffiths, who had been representing demand response provider Comverge at PJM after seven years in the Pennsylvania Office of Consumer Advocate and 18 years at the state’s Public Utility Commission, emerged from the hiring search. (See Consumer Advocates Name Director.)
“They had the money, but … they didn’t have the structure,” he said. “I’ve always enjoyed the creative anxiety that makes me perform well in startups. … There’s a lot of problems to solve and there’s not a lot of structure.”
Well, the structure is now there. Protocols, policies, procedures — they’re all in place. Griffiths was able in April to get the members to convene and decide how the organization should be run.
The members developed policies for prioritizing the issues the group will pursue. Members also identified a need for a conflict of interest policy and made improvements to bylaws, financial policies and reimbursement policies, Griffiths said. The updates are scheduled to be approved at CAPS’ next board meeting, he said.
Pleased with the progress, he realized that he had reached the extent of his usefulness to the organization, he said. “The organization was coming together in the right way, and I could step away without feeling like I was leaving gaps,” he said. “It’s been great personally; it’s been great professionally; and it’s time for me to get the right person in here.”
He plans to find his successor and retire by the end of the year.
Rather than someone who can build something from nothing, CAPS’ next executive director should be a strong administrator, Griffiths said. Because most consumer advocates are attorneys and have the legal aspects covered, candidates don’t necessarily have to be lawyers, he said. Engineers and policy experts stand just as good a chance at being the right fit.
“We’re looking for somebody from the RTO space, hoping to find somebody with some consumer perspective,” he said. “If we get somebody who’s been in the stakeholder process, they will know the policy map” and won’t have too steep of a learning curve.
Luckily, the successful applicant will soon have help. Space has been carved out in the budget for the new executive director to also hire an administrative assistant, Griffiths said.
In March, FERC approved PJM’s creation of a funding mechanism to support CAPS through a charge to residential electric customers. Beginning next year, CAPS will receive an initial annual budget of $450,000. FERC approval would be needed for any budget increase of more than 7.5%. (See FERC Approves PJM Funding of Consumer Advocates.)
Application details are available for download on CAPS’ website.
WASHINGTON — The Energy Bar Association opened its conference last week with four present and former regulators discussing their career challenges as women and minorities. Although the speakers’ recollections dated back decades, they said the issues they confronted remain salient today.
Former Texas regulator Robert W. Gee recalled how he moved to D.C. to find work after being told he wouldn’t be hired by major law firms in Houston because he was Asian American.
Although he found Washington “more hospitable,” he was nevertheless told in an interview at one federal agency that if he were hired, “’we’re going to have to keep an eye on you because we hired [a minority] in the past and she didn’t work out.’”
Overachieving
The “difficulty getting that first job has always been with me,” he said. “It’s sort of like the fear factor that drives you. You have to prove to people that you’re better than the next person.”
Puerto Rico native Carmen Cintron, FERC’s acting chief administrative law judge, felt a similar need to overachieve. As a woman and a Latina, she said, she had “two strikes” against her when started her career at the Federal Communications Commission.
“I still work 24/7. And I work when I’m on vacation. And I think that was because I had to prove, more so than anybody else, that I can do the work and complete the assignments in a timely fashion,” she said.
Former FERC Commissioner Vicky A. Bailey recalled being bused to her high school during the integration of schools in Indianapolis. She praised the “courage” of former Indiana Gov. Robert D. Orr for appointing her to the state Utility Regulatory Commission, where she was the second female and first African American appointee.
FERC Commissioner Cheryl LaFleur, the first in her family to attend college, cited a high school classics teacher and former New England Electric System CEO John Rowe for mentoring and sponsoring her. Although she was not immune to sexism — she recalled seeing “girlie” pinups in a utility locker room — she said her most difficult time came in her 30s when she was trying to raise two young children as a working mother. While other people talked of their five-year plan, she said, her concern was, “How do I get to Friday?”
Divisive Campaign Rhetoric
Although each of the speakers’ stories was one of triumph, the issues they confronted remain — as evidenced, they said, by the rhetoric in the 2016 presidential race.
The issue was raised by a questioner from the audience, who said the campaign’s rhetoric was reminiscent of 1930s Germany.
Although no one mentioned him by name, it was clear the questioner, and the speakers on the dais, were thinking of Republican presidential nominee Donald Trump.
LaFleur responded by recalling her regret over not challenging a client’s anti-Semitic remarks at a dinner to celebrate a legal victory 40 years ago.
She said she finds “very troubling … what our public discourse has come to [concerning] people who are different than we are.”
“In your own life, I think it’s important to have the courage to speak up if somebody says something that’s inappropriate no matter how difficult and awkward it is to say ‘We don’t do that,’” she said.
Gee also responded.
“If we let this type of rhetoric divide us, we will become another Weimar Germany. We could become that,” he said. “There are people who would like to see that happen. We cannot allow that to happen.”
Bailey, now a Republican, grew up a Democrat, the daughter of a domestic worker.
“It has been hurtful to hear some of the divisive rhetoric that has been spewn across the TV,” she said. “I am now an African American who happens to be a Republican. I’m waiting for someone in leadership to stand up and say, ‘This is not what we’re about.’”
New England generators say a rule meant to prevent withholding of generating resources unfairly cost them $100 million during an August heat wave (EL16-120).
The New England Power Generators Association filed a complaint with FERC on Sept. 30, saying ISO-NE’s peak energy rent (PER) adjustment created “absurd” results during a six-hour period of intense heat that featured unexpected outages and high prices.
The PER adjustment reduces capacity suppliers’ monthly capacity payments by an amount that approximates the “peak energy rents” earned by a hypothetical generator in the real-time energy market.
NEPGA asked FERC to order ISO-NE to “return the PER adjustment to a just and reasonable level” effective immediately.
The association said that on Aug. 11, as temperatures approached 100 degrees across New England, energy demand rose to 25,195 MW, the highest peak demand in several years. ISO-NE entered the day with 3,334 MW of reserves.
A morning lightning storm in Connecticut caused voltage problems that led to transmission outages and the loss of 3,113 MW of generation. ISO-NE implemented demand response at 2:25 p.m. At 2:50 p.m., the wholesale price peaked at $2,690.60/MWh, with the hourly price settling at $1,438.97/MWh, according to the complaint.
“Far from earning significant compensation during this emergency, the vast majority of capacity resources incurred significant losses across these operating hours. In other words, suppliers have been put in the untenable position of paying load to run during the electricity system’s most critical hours,” NEPGA wrote. “Suppliers incurred an aggregate penalty through the PER adjustment mechanism of over $100 million for just six hours on Aug. 11, while the total cost of energy paid by load for those six hours was only about $18 million.”
The generators added that 37 hours subject to the rebate over the past 20 months have caused suppliers an estimated $193 million in financial penalties.
| ISO-NE
When the hourly real-time energy market price exceeds a predetermined daily “strike price,” the RTO calculates an “hourly PER” value that roughly equals the difference between the real-time clearing price and the strike price. These monthly values are added for the month, averaged over a rolling 12-month period, and then deducted from suppliers’ monthly capacity payments.
The PER adjustment is intended to discourage economic withholding and to provide a hedge to load against price spikes in the real-time market.
“The rebate has become an unjust and unreasonable penalty,” NEPGA said. “The problem is that ISO New England calculates the rebate based on the earnings of a hypothetical generator in the real-time energy market, but the vast majority of generators that pay the rebate earn their energy market revenue in the day-ahead energy market.”
According to the complaint, the Aug. 11 strike price was approximately $233/MWh. Capacity resources in the real-time energy market were paid approximately $1,400/MWh but had to pay a rebate penalty of roughly $1,075/MWh.
NEPGA tried and failed to persuade FERC to eliminate the PER adjustment two years ago. (See ISO-NE Gens. Challenge Capacity Rules Ahead of FCA.) An appeal to the D.C. Circuit Court of Appeals is pending.
FERC last year approved a Tariff change submitted by ISO-NE that eliminates the PER adjustment on June 1, 2019, at the start of the 10th capacity commitment period. The RTO said reforms in the day-ahead energy market and its Pay-for-Performance program that starts on the date have made the rule unnecessary (ER15-1184).
Imperial Irrigation District last week approved an agreement to secure an additional 3 MW of renewable energy from the Hoover Dam, bringing the reallocation total up to 10 MW for the next 50 years.
The Development Services Agency is offering up to $8 million to advance research on cleaner, economical and greater use of the state’s coal and/or its combustion products.
Federal pipeline regulators issued a rule last week expanding their power to address pipelines that pose a threat to public safety or the environment.
