November 5, 2024

Congress May Order CFTC to Back Down on Private Rights

By Rich Heidorn Jr.

spp
Boozman

WASHINGTON — U.S. Sen. John Boozman (R-Ark.) last week introduced legislation that would force the Commodity Futures Trading Commission to grant SPP the same broad regulatory exemptions the commission granted other grid operators in 2013.

The commission’s 2013 order exempted electricity transactions subject to FERC-approved tariffs from most provisions of the Commodity Exchange Act (CEA). SPP was not party to the order because its day-ahead market was not fully implemented at the time.

Unlike the 2013 order, the draft order CFTC is considering for SPP includes a preamble stating the commission’s intent to preserve “private rights of action” under Section 22 of the CEA. (See Witnesses Ask CFTC to Drop ‘Private Rights’ Clause.)

spp
Massad

CFTC Chairman Timothy Massad testified Thursday at a hearing of the Senate Appropriations Committee’s Subcommittee on Financial Services and General Government, which is chaired by Boozman. The Arkansas senator did not raise the issue.

However, a Boozman spokeswoman said the senator introduced an amendment that was included in the manager’s package at the Senate Agriculture Committee’s markup on the CFTC’s reauthorization Thursday.

“The amendment would ensure the current regulatory framework remains in place and prevent inconsistent regulations between FERC and CFTC,” said spokeswoman Sara Lasure. She said Sen. Joe Donnelly (D-Ind.) co-sponsored the amendment.

Speaking at the Gulf Coast Power Association’s annual meeting in Houston last week, SPP CEO Nick Brown said the RTO was working with Boozman to bar the commission from allowing private rights of action for wholesale electric markets.

“To open this to 100 [U.S.] district courts is just insane in my mind,” Brown said. “I don’t know a better word for it. … This would just be a field day for the legal community.”

Other grid operators have expressed concern that the commission’s reference to private rights in the SPP order could undermine their 2013 waiver.

“The real risk is for market participants who are in the [congestion revenue rights and financial transmission rights] markets,” ERCOT CEO Bill Magness said. “When I had to come back to meetings at ERCOT and talk about CFTC again, it was a very unhappy day. We thought we were done with these discussions for a while.”

MISO Reliability Subcommittee Briefs

MISO met NERC’s frequency response requirement for 2015, although performance was not as good as a year earlier, adviser Terry Bilke told an April 13 Reliability Subcommittee meeting.

The RTO’s estimated annual frequency response was -475 MW/0.1 Hz in 2015, complying with its obligation of -211 MW/0.1 Hz under NERC’s frequency response standard (BAL-003-1).

Still, results from local balancing authorities were not as good as in 2014. “I was kind of hoping we’d see incremental improvement year-over-year,” Bilke said, adding that the decline was small enough to be attributed to sampling error.

“We’re still okay,” RSC chair Tony Jankowski said. “But there’s nothing that says we’re going to be OK except for past performance. And obviously, that’s [no] guarantee.”

Data for the first quarter of this year showed that more than 400 generators provided no frequency response in the first quarter, while about 100 plants were determined to be harming MISO performance. Fewer than 200 generators rated an “OK” response, with a small number classified with “theoretical perfect performance.”

Monthly Real Time Unit Commitment Performance (MISO) reliability subcommittee briefs
Daily real-time unit commitment rating at peak hour for March (top) and monthly performance (bottom).

“Interestingly, one of the best performers was a wind farm,” Bilke said.

That assessment comes as MISO stakeholders are being asked to respond to FERC’s Feb. 18 Notice of Inquiry, which seeks comment on whether RTO pro forma interconnection agreements should be changed to require all new generation be capable of providing frequency response (RM16-6).

Jankowski said the language in the notice indicates that FERC does not recognize all the factors at play.

“From the market’s perspective, I don’t think we have any indication that a generator is a frequency response generator or not, or a good performing generator or not,” he said. “So to have any sort of expectation that we don’t have enough [frequency response] because the market clears wrong, I don’t buy that. There isn’t a constraint for frequency response.”

MISO thinks frequency response should be compulsory for new generation and voluntary for all existing generation, Bilke said. He added that if reliability declines in light of a changing resource mix, FERC should revisit the issue.

Comments on FERC’s notice are due April 25. Jankowski urged the RSC to be “proactive” in making suggestions on frequency response incentives and penalties through local balancing authorities.

“Nothing precludes us from doing this today,” he said.

March Incident Breaks 3-Month Perfect Score on Commitment Performance

Last month’s sole “unacceptable” rating for real-time unit commitment performance — occurring March 22 — was attributed to an operator’s mistake.

“We had a unit that was left on in an operator error,” Steve Swan, MISO senior manager of dispatch and balance, said during a monthly operations update. “They misread the runtime. It’s been addressed.”

March otherwise contained all “excellent” daily performance ratings, receiving an overall score of 2.9 — just shy of “perfect,” but breaking a trend of perfect 3 rankings in peak hour unit commitment since December.

The month had no minimum or maximum generation alerts or warnings nor any tie-line errors lasting longer than 15 minutes.

Swan also reported that -45,308 MW was added to MISO’s inadvertent interchange balance in January, bringing the running total of imbalances since 2009 to -749,641 MW.

By the end of this month, MISO expects to complete two bilateral inadvertent interchange paybacks, where two balancing authorities swap under-generation for over-generation. Swan said MISO is also performing “internal data mining” to investigate why the footprintwide balance continues to be negative.

Seams Quarterly Report Released

MISO has released its latest quarterly report on seams issues.

“We historically haven’t gotten a lot of review on [the report],” said Ron Arness, Seams Management Working Group liaison. He noted that, although feedback is light, stakeholders continue to request the report every year.

— Amanda Durish Cook

AEP’s Crowder Joins GridLiance

Independent transmission company GridLiance continued to gather up industry expertise last week with the announcement that American Electric Power’s J. Calvin Crowder has joined the company as president of the South Central region, which includes the ERCOT, MISO South and New Mexico grids.

Calvin-Crowder - AEP - Gridliance
Calvin Crowder

Crowder will oversee business development activities with public-power agencies from his base in Austin, Texas. Crowder was most recently president of AEP’s Electric Transmission Texas (ETT), which he helped grow to $3 billion in assets.

“Calvin is a highly regarded electric utility industry executive who brings an in-depth understanding of the utility business, collaborative management style and excellent relationships with RTO officials as well as state and federal regulators,” GridLiance CEP Ed Rahill said in a statement.

Crowder has 25 years of experience in the industry, much of it with AEP and its Central and South West predecessor. He has focused his career on regulatory and legislative matters, securing a $1.5 billion investment for ETT in ERCOT’s Competitive Renewable Energy Zone.

Crowder earned his bachelor’s degree in economics and his master’s degree in regulatory economics from New Mexico State University.

Kansas City-based GridLiance, formed in 2014, completed its first acquisition of transmission assets earlier this month. (See GridLiance Closes Acquisition of Tri-County Co-Op’s Tx Assets.)

— Tom Kleckner

SPP Markets and Operations Policy Committee Briefs

SANTA FE, N.M. — The Markets and Operations Policy Committee voted last week to use a level-payment plan to resolve years of incorrect credits for transmission upgrades.

The Z2 Payment Plan Task Force brought two payment plan options to the committee, recommending the level-payment plan over a staggered-payment option. The task force’s recommendation cleared the 66.7% threshold for acceptance at 77.4% after a voice vote was inconclusive.

Under the level-payment plan, each entity with a net payable will be given the option to pay the entire amount at once or in equal installments every three months, beginning in November, with the final installment due in August 2017. FERC’s interest rate for refunds will apply to the outstanding balances. (See “Z2 Task Force to Present Final Recommendations,” SPP Briefs.)

The dollar amounts to be billed remain an unknown, which led to much of the members’ reluctance to approve the recommendation. Midwest Energy’s Bill Dowling called the schedule “problematic,” saying he has “zero” money in the budget to handle bills that may be coming his way.

“I’m still questioning why we have to decide now, without knowing how many zeros we’re talking about here, let alone how many commas,” he said. “It’s really tough to figure out where this money comes from, or how I get the money, until I get an invoice that says I have 30 days to pay.”

David Kays OG&E markets and operations policy committee
Kays © RTO Insider

“If we wait until later to decide and some other action is needed, like going to FERC, that might prolong this process even further,” responded Oklahoma Gas and Electric’s David Kays, the task force’s chair.

“Ultimately, the amount you will pay or receive will be what it’s going to be,” said Aundrea Williams of NextEra Energy Resources. “Voting on the payment plan doesn’t really affect what you’re going to owe and receive.”

Kays said the software used to calculate the credits is scheduled to be in production by June 1. He said historical data will be available for stakeholder review in time for the MOPC’s October meeting.

SPP will review stakeholders’ data with them in late May. Kays said staff will walk through the calculations and demonstrate the software is performing correctly.

Stakeholders will be exposed to confidential data, which will require signing nondisclosure agreements. Staff assured members the NDAs would not preclude their ability to communicate with FERC.

Market Working Group Gives Updates on Revision Requests

Richard-Ross,-AEP-(copyright-RTO-Insider)-web
Ross © RTO Insider

The committee approved a Market Working Group revision request to clean up the Tariff’s out-of-merit-energy (OOME) language (RR 145) while remanding a second back to the working group for additional work (RR 154).

RR 145 is intended to correct dispatch and set point instructions for variable energy resources, clarify OOME treatment for qualifying facilities and make other minor changes to the Tariff’s OOME provisions.

The second change, RR 154, would make it clear when SPP should perform a repricing of the day-ahead and real-time balancing markets. Current protocols and the Tariff allow for the repricing in the day-ahead market “for any reason at any time,” said American Electric Power’s Richard Ross, the MWG’s chair.

Ross also:

  • Updated the committee on its work regarding the SPP Market Monitoring Unit’s nine suggested improvements to the market design. (See “Market Working Group Addressing Monitor’s Recommendations,” SPP Board of Directors/Members Committee Briefs.) Two of the nine recommendations — minimizing the over-allocation of transmission congestion rights and auction revenue rights in the day-ahead market, and improved reporting on planned outages — are complete, Ross said. A final report is expected to be presented at the July MOPC and board meetings.
  • Briefed the committee on the MWG’s Price Formation Task Force, which was created to “identify concerns with current pricing methodologies” and propose solutions. The task force is currently analyzing feedback gathered from the MOPC and the MWG.
  • Told the committee that estimated costs for Integrated Marketplace RRs since September 2013 have surpassed $11 million. He said nine of the 10 RRs will be implemented this year and next.

SPP Pondering ‘One-Offs’ as Potential Seams Projects

Sam-Loudenslager,-SPP-Regulatory-(copyright-RTO-Insider)-web
Loudenslager © RTO Insider

SPP Principal Regulatory Analyst Sam Loudenslager brought the committee up to date on the RTO’s effort to create a new class of seams transmission projects, which was rejected by FERC in November.

SPP had proposed a new transmission category to identify projects that fall outside the Order 1000 interregional planning process or may not be eligible for cost allocation. FERC rejected it, saying the plan was too broadly drawn (ER15-2705). (See FERC Rejects SPP Proposal for Seams Transmission Projects.)

The RTO’s staff has been seeking further direction from FERC to determine whether to make another filing. Loudenslager said his recent conversations with FERC staff indicated “they didn’t think we could present a filing that would pass their legal concerns.”

He said FERC staff focused on SPP’s criteria for seams and interregional projects. “They didn’t think we had been through the process enough.

“They suggested we might need to differentiate between [seams and interregional] projects,” Loudenslager added. He said staff encouraged SPP to bring them potential projects that “didn’t pass muster with MISO” as potential “one-offs.”

SPP’s current rules designate transmission facilities of 300 kV or above as “highway” facilities whose costs are allocated entirely on a regionwide, postage stamp basis. Facilities between 100 kV and 300 kV are “byway” facilities, with two-thirds of the costs assigned to the host zone and one-third allocated region-wide. Projects below 100 kV are allocated entirely to the host zone.

“We need a more convincing argument with FERC about why this needs to be a standard one-off,” said Carl Monroe, SPP’s chief operating officer. “We do have special circumstances where these one-offs have to be done outside the Order 1000 process, especially if they don’t fall into the stipulation of shared costs. That way, parties outside MISO could agree to a process where we might be able to find agreement with MISO members that fall outside the Order 1000 process.”

Loudenslager said FERC staff suggested SPP work with Associated Electric Cooperative Inc., a member of the Southeastern Regional Transmission Planning process based in Missouri. “To the extent we came up with something on AECI that didn’t pass muster with MISO,” he said, “they encouraged us to bring it to them as a one-off.”

MOPC Chair Noman Williams, chief operating officer for SouthCentral MCN, suggested staff continue to develop a business practice to add some structure to the one-off process.

“Have it at least all laid out so we don’t have to recreate the process [each time],” he said.

Staff Says No Further HPILS Construction Needed

Staff told the MOPC no additional construction is needed for the 2014 High Priority Incremental Load Study (HPILS) because of slumping oil prices and dropping rig counts.

The HPILS study, commissioned to address unexpected load growth resulting from oil and gas shale production, recommended $439 million in transmission upgrades to serve needs through 2013.

In approving the HPILS report in 2014, SPP’s board directed members affected by HPILS loads and assumed generation additions to provide updated forecasts of those loads and generators before the quarterly MOPC and board meetings. The board also directed members to notify staff should additional notices-to-construct be required.

Jay Caspary, SPP director of research, development and special studies, said 110 MW of load remains unserved in North Dakota’s Bakken Shale play through 2017 and 200-300 MW is unserved in New Mexico’s Permian Basin oil fields in Eddy and Lea counties near the Texas Panhandle. He said the loads are “consistent with previous projections” and recommended no change in HPILS project construction.

Basin Electric Power Cooperative completed a 75-mile, 345-kV line in North Dakota in December, while Southwestern Public Service has energized three projects in the Permian Basin, adding 40 miles of 345-kV lines (which operate at 230 kV) and 19 miles of 115-kV lines. SPS is working on another project between Lubbock, Texas, and Hobbs, N.M., which is scheduled to be in service by 2020.

Some stakeholders questioned the accuracy of the load forecasts, given the low price of oil and dropping rig counts.

“These forecasts coming from folks who believe the price of oil will go back up to $50 or $60 a barrel kind of flies in the face of logic,” Empire District Electric’s Rick McCord said. “It doesn’t make sense to come in here and say [the recent slowdown] doesn’t have an impact. Could [SPP planners] give us some sort of an indication [of how much] load growth doesn’t show up to change what we’re doing?”

“We feel these [projections] are right for the system,” Caspary said. “The load growth is still there. It’s not what it was, but it’s still amazing compared to the rest of the SPP system.”

Ross asked whether staff could use its SCADA system to check “withdrawals off the transmission system.”

“I’m sure we can do that,” Caspary said, “but the directive we got was to look at the forecasts.”

Consent Agenda/RRs

The committee approved in a near-unanimous vote a revision request to SPP Business Practice 7650, which defines procedures for processing competitive transmission proposals as part of the RTO’s Integrating Planning Process.

MOPC Meeting Underway © RTO Insider
MOPC Meeting Underway © RTO Insider

The RR clarifies the steps taken to determine which detailed project proposals (DPPs) are equivalent to a transmission project in the Integrated Transmission Plan’s Transmission Owner Selection Process’ (TOSP) portfolio. The Business Practice Working Group (BPWG) said the criteria changes will further improve SPP’s ability to “efficiently and accurately” complete the DPP process within the ITP’s required timelines. DPP projects approved for construction as a competitive upgrade may be eligible for “incentive points” within the selection process.

A review of the first TOSP found a combined 1,672 DPPs were received for the 2015 ITP Near-Term and 10-Year assessments, and an additional 1,664 DPPs were submitted for the 2016 ITPNT. Stakeholders expressed their concerns that the drain on resources would affect the 2017 ITP10 schedule and lead to less-than-optimal solutions.

McCord, the working group’s chair, said submitting better DPPs would allow staff to spend more of the 30-day assessment window on needs and solutions, rather than ensuring incentive-point qualification, and lead to more innovative solutions. The language changes to the business practice would be effective with the 2017 ITP10.

ITC Holdings’ Marguerite Wagner cast the lone negative vote, following precedent set during the stakeholder process. The RR was approved by the BPWG and two other groups, with ITC Great Plains the sole dissenting vote each time.

“We don’t oppose the language,” Wagner said, “but we oppose the application of this language in the middle of the three-year cycle.” She said technology improvements could help reduce the number of DPPs, “so it’s unclear this is necessary at all.”

The committee also approved four other RRs from the BPWG and seven additional RRs from the MWG and two other working groups as part of the consent agenda:

  • BPWG-RR 147, clarifying the methodology to define a competitive upgrade’s 50% completion status;
  • BPWG-RR 148, updating BP 2150 to reference the current webRegistry;
  • BPWG-RR 149, updating BP 6150 to reference NERC reliability standards;
  • BPWG-RR 150, updating BP 4300 to reference a NERC reliability standard;
  • MWG-RR 25_MPRR 211, adding language to identify offer costs eligible for recovery with a “market” or “reliability” commitment;
  • MWG-RR 128, clarifying description of day-ahead start-up eligibility recovery rules;
  • MWG-RR 137, aligning enhanced combined cycle language with that for quick-start resources;
  • MWG-RR 142, preventing a resource from registering as a quick-start resource and a multiconfiguration combined cycle resource;
  • ORWG-RR 141, allowing use of updated ratings for facilities, elements and flowgates that reflect current ambient conditions or more relevant system conditions; and
  • ORWG-RR 146, removing the criteria revision process from the SPP operating criteria, as the process is now a MOPC process.

Criteria Review

SPP Director of Planning Antoine Lucas reviewed with the MOPC a planning criteria study of the Integrated System’s (IS) transmission grid that evaluates thermal and voltage limits and includes a stability assessment.

Lucas said a 2013 criteria study of the IS members — Basin, Western Area Power Administration-Upper Great Plains and Heartland Consumers Power District — identified four projects totaling $10.56 million to be completed before joining SPP in October 2015.

The study was updated when two additional IS members, Central Power Electric Cooperative and Tri-State Generation and Transmission, joined SPP in January. The 2016 integration study added two additional projects totaling more than $3 million.

— Tom Kleckner

FERC Affirms ISO-NE’s MOPR Exemption for Renewables

FERC has again upheld the ISO-NE limited exemption for renewables from the RTO’s minimum offer price rule, saying it was necessary to protect consumers from paying for excess capacity (ER14-1639).

ferc iso-ne mopr renewablesThe commission voluntarily agreed to reconsider the issue after NextEra Energy and other generation owners asked the D.C. Circuit Court of Appeals to review FERC’s January 2015 order rejecting their challenge of the exemption (15-1070).

The generators claimed the exemption, which is limited to 200 MW annually, suppressed clearing prices in the Forward Capacity Market. The exemption was contained in an order in which FERC accepted ISO-NE’s compliance filing in response to the commission’s requirement for a sloped demand curve.

The companies had relied on a previous FERC order that recognized that exemptions could suppress capacity prices. However, the commission said that a unique set of facts presented in a specific case could justify an exemption.

“The renewables exemption fulfills the commission’s statutory mandate by protecting consumers from paying for … capacity that cleared through the [Forward Capacity Auction] and separately paying for renewable resources built by state entities to meet state policy objectives,” FERC said.

– William Opalka

Federal Briefs

EPA issued a formal notice amending its 2012 rules governing toxic air pollutants from power plants in response to the U.S. Supreme Court ruling them illegal.

EPASourcegovThe agency issued a formal notice amending the Mercury and Air Toxics Standards, saying that the costs of regulating emissions such as mercury, nickel and arsenic are reasonable and far outweighed by the public health benefits. EPA had issued a similar finding, but while the rules were being written. The Supreme Court ruled that the cost analysis should have been done before.

The court remanded the rules back to the D.C. Circuit Court of Appeals, which declined to halt their enforcement. EPA’s new cost analysis is largely based on its earlier one, with some supplementary material.

More: The Hill

EPA Ups Methane Emissions Estimates

EPA last week increased its estimates of U.S. methane emissions, a change likely to figure in a battle over regulations the agency plans to issue on oil and gas drillers. The change, which increased 2013 emission estimates by 13%, were contained in an annual inventory the agency submitted to the U.N.

The agency said the new data show that the oil and gas sector is the largest source of methane, accounting for a third of U.S. emissions. The agency had said previously that cattle and other livestock were the largest source.

Methane has a much larger effect on global warming than carbon dioxide but dissipates more quickly than CO2.

More: The Washington Post

Brenner Returns to FERC As Administrative Law Judge

LawrenceBrennerSourcegovFERC Chairman Norman Bay appointed veteran jurist Lawrence Brenner as senior administrative law judge.

The appointment marks Brenner’s second appointment as a FERC administrative law judge. He also served as an ALJ for the Department of Labor and the Nuclear Regulatory Commission. Additionally, Brenner has been a Maryland Public Service Commissioner since 2007.

Prior to his appointment, Brenner practiced law in Maryland, D.C. and New York. He earned a bachelor’s degree in economics from Brooklyn College and his doctorate from the State University of New York at Buffalo. Brenner also served in the Army in the Vietnam War.

More: FERC

Feds Seek Review of Dakota Access Spill Plan

DeptofINteriorSourcegovEPA, the Department of the Interior and the Advisory Council on Historic Preservation want the U.S. Army Corps of Engineers to take a closer look at the Dakota Access pipeline plan.

The three federal agencies have asked the corps to perform another review of its spill contingency plans for the Energy Transfer Partners project. If constructed, the pipeline will stretch from North Dakota to terminals in Illinois. The corps has a role in the review process because of the pipeline’s multiple waterway crossings.

The pipeline received the final state regulatory approval from Iowa on April 8, but construction cannot begin before all federal approvals are obtained. There are also numerous legal challenges to the proposed pipeline, which could delay the start of construction.

More: The Associated Press; Newton Daily News

Company Proposing Nuclear Waste Storage Facility in NM

Holtec International has filed a letter of intent with the Nuclear Regulatory Commission to build a $5 billion storage facility for nuclear waste near Carlsbad in Lea County, N.M. The company intends to build a long-term facility, with the idea that it would handle the waste while a permanent solution is found.

Holtec, a major supplier of stainless steel vessels used for dry-cask storage of nuclear waste, said its facility would store waste for up to 100 years, but it plans to initially apply for a license for 40 years.

If approved, it would give federal authorities time to come up with a longer-term solution for storing waste from commercial reactors. The government planned to use the Yucca Mountain repository in Nevada, but opposition led the Obama administration to pull the plug on that facility.

More: The Associated Press

Former NRC Scientist Gets Prison for Hacking Attempt

A former Nuclear Regulatory Commission scientist was sentenced to 18 months in prison for attempting to infect the Department of Energy computer network with malware.

Prosecutors said Charles Harvey Eccleston, a disgruntled, ex-NRC employee, first tried to sell email information to a foreign country at its embassy in the Philippines.

He later met with undercover federal agents in a sting operation, agreeing to upload a virus onto government computers.

More: The Associated Press

FERC Approves Transco Expansion in Jersey

WilliamsPartnersSourceWilliamsFERC has approved Williams Partners’ Transco Garden State Expansion Project, a series of compression improvements to an existing line aimed at boosting delivery in central New Jersey.

The $116 million New Jersey project will deliver an additional 180,000 dekatherms a day of natural gas to customers of New Jersey Natural Gas, which serves about 500,000 customers in Monmouth, Ocean, Morris, Middlesex, Sussex and Burlington counties.

Opponents complained that FERC’s action is another illustration of the agency’s willingness to side with pipeline operators.

More: Williams Partners; NJ.com

TVA to Seek Early Permit for Small Modular Reactors

TennesseeValleyAuthoritySourceTVAThe Tennessee Valley Authority plans to apply for an early site permit for building small modular nuclear reactors on its Clinch River site, but federal design approval is expected to take a decade.

TVA’s application to the Nuclear Regulatory Commission will only evaluate the possibility of constructing an as-yet chosen design at its Clinch River site. It is starting the process with public meetings to discuss environmental and safety aspects.

The NRC review of the early site permit is expected to take three or more years. Design certification of a small modular reactor is expected to take up to five years, so a project could not realistically begin construction until the early 2020s.

More: Oak Ridge Today

Mass. Staffers Say Pipeline Co. Filed Misleading Documents

TennesseeGasSourceTGPThe Massachusetts Department of Environmental Protection staff accused Tennessee Gas Pipeline of filing misleading information to FERC in a bid to get permission to begin logging a pipeline right of way in a state forest.

The department says the Kinder Morgan subsidiary told FERC that Massachusetts officials wouldn’t require a water quality certificate before allowing logging operations in a bid to get approval for tree cutting in the Otis State Forest as part of a pipeline construction project.

Tennessee Gas officials mischaracterized statements from state authorities, the department said.

More: The Republican

Forest Service Allows Pipeline Surveying in Va.

USForestServiceSourcegovThe U.S. Forest Service has granted developers of the Atlantic Coast Pipeline permission to survey new routes through the Monongahela and George Washington national forests. The agency previously rejected the planned route for the $5 billion, 500-mile project.

The agency is still requiring developer Dominion Resources to investigate alternate routes that don’t go through national forests. The Forest Service previously criticized surveys done by project contractors, suggesting the surveys were flawed and shouldn’t be used by FERC in determining approval.

More: Augusta Free Press

US Nuclear Workers Allegedly Sold Information to China

ChinaGeneralNuclearSourceCGNAn East Tennessee resident who worked as a senior manager in the Tennessee Valley Authority’s nuclear program is one of six Americans workers in the nuclear industry accused of selling information to China’s top nuclear power companies.

None of the workers was named in a federal espionage conspiracy indictment against China General Nuclear Power, Chinese nuclear engineer Szuhsiung “Allen” Ho and Ho’s firm, Energy Technology International. Ho allegedly conspired to solicit information that would allow his country to produce nuclear material based on American technology.

Aside from the Tennessee resident, whose gender was not specified, the Americans referenced in the indictment are engineers. Four work for an unnamed Pennsylvania-based nuclear energy firm, while the fifth works for a Colorado-based firm that supplies technical support to the nuclear industry.

More: Knoxville News Sentinel

Damages Awarded to Nuclear Plant Operators

ConnYankeeSourceNRCThe Court of Federal Claims has ordered the federal government to pay $76.8 million in damages to three New England nuclear plant operators for failing to create a permanent repository for spent nuclear fuel.

The ruling is the third time that the government has been ordered to pay Connecticut Yankee, Maine Yankee Atomic Power and Yankee Atomic Electric for costs they incurred for on-site storage of nuclear fuel at their decommissioned plants in Maine, Massachusetts and Connecticut. The companies sued in 1998, and the latest order covers costs incurred by the three companies from Jan. 1, 2009, to Dec. 31, 2012.

More: New Haven Register

ITP Work Continues as Transmission Planning Improvements Loom for SPP

By Tom Kleckner

SANTA FE, N.M. — Only a few months away from revising its transmission planning process, SPP is continuing to work under the old Integrated Transmission Planning (ITP) format.

The Markets and Operations Policy Committee last week approved the scopes for the final studies to be conducted under the old rules. (See “MOPC Approves TWG, ESWG Recommendations” below.) Members then sat through the Transmission Planning Improvement Task Force’s joint education session for the MOPC and the Strategic Planning Committee, getting an early look at recommendations that will be made in July.

The task force, assigned to develop “progressive, forward-thinking, regional planning processes,” shared its current recommendations, which include:

  • Implementing an annual ITP planning cycle;
  • Using a standardized study scope;
  • Establishing common reliability planning models; and
  • Creating a staff/stakeholder accountability program by stressing timely data exchanges, reviews and approvals within the planning process.
Brian-Gedrich,-NextEra-Energy-Transmission-&-Harry-Skilton,SPP-at-MOPC ITP SPP
Skilton, Gedrich © RTO Insider

“We want to treat this as a process improvement,” said NextEra Energy Transmission’s Brian Gedrich, the task force’s chair.

SPP currently conducts a 20-year assessment focused on a strategic economic study (ITP20) without issuing notices to construct (NTCs); a 10-year assessment that can issue NTCs for mostly 100-kV projects and above; and a near-term assessment aimed at reliability needs and maintaining long-term firm service over a five-year horizon.

Gedrich said the current process winds up creating too many models “that don’t necessarily line up with each other,” and that scope documents can be “a real problem.”

“We recreate a scope every time we start, and that can take a lot of time to get through the approval process,” he said. “What’s key to speeding up the process is [eliminating] slippage that has to be re-evaluated. Today, we basically have a three-year cycle. The [studies] are done sequentially in their own silos. We’ve found the three-year planning cycle to be too long … it can’t be responsive to changes.”

Gedrich said using a “holistic” planning approach and reducing the number of futures in new analyses to three would also speed up the process.

“We need to standardize the scope up front and not recreate the document every time,” he said. “The futures would be more incremental changes.”

Annual-ITP-Planning-Cycle-(SPP) - transmission planning improvement

The task force is recommending a transition to the new planning process in September 2017. The model builds and scope development would lead to the initial ITP assessment, to be completed in July 2019.

To keep up with the timeline, the current planning cycle will need to be completed and the necessary revisions to the new process would have to implemented. Those changes would include modifying the Tariff and other governing documents and securing the necessary tools and resources.

“The goal is results,” Gedrich said. “We don’t want to fail at the beginning. We want to be ready, so we don’t hit a glitch.”

The task force has a white paper out for review and comment. It will come back to the MOPC and Board of Directors in July for final approval.

MOPC Approves TWG, ESWG Recommendations

The MOPC accepted the Transmission Working Group’s 2017 near-term and 2017 10-year assessments, an assessment of the system’s compliance with NERC transmission planning (TPL) reliability standards, and re-evaluations of the 2016 near-term assessment and NTC evaluations.

The 2016 ITPNT identified 86 proposed upgrades comprising 49 projects and recommended 35 NTCs be issued. Fourteen additional NTCs are to be modified. The assessment will also result in eight NTCs being withdrawn, primarily because alternative projects were identified. The $140 million in withdrawn NTCs leaves the 2016 ITPNT with nearly $230 million in approved NTCs.

The recommended 2017 ITPNT scope will evaluate as potential violations NERC TPL-001-4 planning events that do not allow for nonconsequential load loss or curtailment of firm transmission service.

Stakeholders debated the scope’s use of NERC standards. Antoine Lucas, SPP’s planning director, said staff is seeking to incorporate the new TPL standard into the planning process rather than doing TPL assessments separately as in the past.

“This will be the last ITPNT as we know it,” American Electric Power’s Richard Ross said. “I don’t want staff [spending] a whole lot of time trying to fix problems with a process that’s about to be abandoned.”

The committee also approved the TWG’s recommendation to remove consideration of TPL-001-4 events not already considered in the 2017 ITP10’s original scope. The motion passed with 13 nay votes and five abstentions.

TWG Chair Travis Hyde, of Oklahoma Gas and Electric, said the group’s review of the TPL-001-4 standard revealed the 2017 ITP10 models did not meet SPP’s modeling requirements and that the assessment could not be used for compliance.

The committee also approved the Economic Studies Working Group’s updates to the 2017 ITP10 scope, which will result in using natural gas prices from the ABB reference case rather than NYMEX futures and updating language to allow for a Clean Power Plan and a reference case portfolio.

The ESWG must still complete needs assessments and develop solutions and a portfolio for the 2017 ITP10.

PJM: MOPR Could be Improved, but not by BRA

By Suzanne Herel

PJM last week asked FERC not to order changes to the RTO’s minimum offer price rule before May’s Base Residual Auction but agreed the standard should be changed to counter subsidized offers from existing generators. The RTO said revisions could be made for next year.

pjm mopr base residual auction BRA Davis Besse Nuclear Power Plant
Davis Besse Nuclear Power Plant Source: Wikipedia

Eleven generating companies had asked FERC to expand the MOPR, which currently applies only to certain new resources (EL16-49).

The complaint was filed before the Public Utilities Commission of Ohio approved power purchase agreements for FirstEnergy and American Electric Power. PUCO unanimously approved modified versions of the PPAs, which the companies said are crucial to keeping underperforming members of their Ohio fleets running, on March 31 (14-1297-EL-SSO and 14-1693-EL-RDR). (See FERC Action Awaited Following PUCO OK on PPAs.)

In their complaint, the generators said they feared such agreements could lead to below-cost offers from existing resources that would suppress capacity clearing prices.

AEP and FirstEnergy told FERC last week that granting the complaint would lead to higher prices for consumers.

PJM: Don’t Rush Changes

In its answer, PJM said FERC should not rush to change the MOPR by next month.

“However, PJM agrees that under certain circumstances and given the existing PJM MOPR, sell offers in [Reliability Pricing Model] auctions submitted by existing generation capacity resources could result in unjust and unreasonable rates when such resources are subsidized by state-approved out-of-market payments,” the RTO said.

FERC could find the MOPR provisions to be “incomplete and unsustainable” and direct PJM to revise the rules in time for the May 2017 BRA, it said.

Delaying changes “would allow the commission to carefully and comprehensively identify the problem raised by complainants and allow an orderly process to consider alternatives through an open stakeholder process,” PJM said. The RTO suggested that FERC keep the issue open so that it could report back with results from its analyses.

“Such a ‘staging’ of this proceeding would provide stakeholders an inclusive role in formulating a rule having widespread application and send the appropriate signal that the issue requires further analysis and focus,” PJM said.

The RTO said that if the commission decides to take action before next month’s auction, it should consider two narrowly drawn, short-term alternatives: PJM could reject a sell offer that it believed would result in an unjust and unreasonable outcome, or FERC could order PJM to require a price floor for the PPA-related resources.

Higher Prices?

In its protest, AEP called the complaint “the latest in a continuing effort by various generators and marketers … to block AEP and FirstEnergy from implementing reasonable measures to benefit Ohio retail customers in a way that does not interfere with wholesale markets.”

There is no “emergency” requiring immediate FERC action, it said, calling “fanciful” the complainants’ notion that “the effect of the AEP PPA will be to dump thousands of megawatts of otherwise uneconomic generation into the upcoming capacity auction and materially suppress prices.”

On the contrary, it said, excluding 6,000 MW from the AEP and FirstEnergy PPA units “for no valid economic reason could cause a substantial unwarranted cost increase to consumers in the PJM region.”

It also said that because the complaint was filed before PUCO ruled, it doesn’t take into account the amendments the commission made to the company’s proposal.

FirstEnergy said the complaint was based on flawed assumptions.

“The complainants create a so-called market solution that is facially discriminatory and preferential and that would penalize and harm the retail customers of FirstEnergy and AEP while likely benefiting the complainants’ shareholders with increased market share,” the company said.

It, too, said there was no reason to address the issue before the May BRA.

State Briefs

Constellation, Bloom Energy Begin Microgrid Construction

The City of Hartford, Constellation and Bloom Energy have started construction of an 800-kW fuel cell microgrid that will provide 100% of the electricity for a school, a library, a senior center and a health clinic during nonemergencies. It will also provide emergency power to these locations in addition to a local fuel station and grocery store.

bloomenergysourcebloomConstellation is providing engineering, procurement, construction and operation services. Bloom Energy is providing the fuel cells. The city will buy the electrical output at or below current market rates through a 15-year power purchase agreement.

The project, the state’s first to be developed through a public-private effort, is scheduled for completion in the third quarter of 2016.

More: Constellation

State’s Clean Energy Budget at Risk 

ConnGovMalloySourcegovEnvironmentalists, union leaders, solar company executives and several lawmakers condemned a proposal by lawmakers to divert $22 million in clean energy funding to help close a state budget gap.

Gov. Dannel P. Malloy has proposed an alternative budget proposal that would close the budget shortfall without tapping into the funds. The state is facing a budget shortfall of $933 million.

More: Hartford Courant

IOWA

MidAmerican Energy to Build 2,000-MW Wind Farm

MidAmericanEnergySourceMidAmericanMidAmerican Energy says it will spend $3.6 billion to build a 2,000-MW wind farm in the state. Gov. Terry Branstad called it the largest economic development project in the state’s history.

The cost of the project will be recovered through federal wind energy subsidies over 10 years, MidAmerican CEO Bill Fehrman said. When completed in 2018, it will bring the amount of wind energy produced by the company to 85% of its total annual sales, he said.

Fehrman would not say where the wind farm would be located. Negotiations are ongoing with state property owners, he said.

More: The Gazette

MAINE

New Solar Bill Passage Longshot Without Support

MaineGovLePageSourceGov - CopyA bill aimed at boosting the state’s solar industry passed the House 81-69 but faces a likely veto from Gov. Paul LePage. Opponents say the measure would saddle customers with higher electricity prices to pay for solar subsidies.
The bill would replace the current net metering system with hourly metering and a 20-year price guarantee on the rate that businesses and homeowners are compensated for producing electricity. Proponents say it would help create jobs in the solar industry and reduce reliance on fossil fuels.

State officials are sharply divided on the benefits, or lack thereof, of the bill, however. Public Utilities Commission Chairman Mark Vannoy has said it would cost ratepayers $22 million in the fifth year of the plan; Public Advocate Tim Schneider, meanwhile, says the bill would save consumers $122 million over the 20 years.

More: Portland Press Herald

MICHIGAN

Groups: Enbridge Violating Mackinac Pipeline Pact

A group of environmental organizations and Native American tribes are calling on state officials to terminate the flow of oil through Enbridge’s Line 5, alleging the twin pipelines’ advanced corrosion violates terms of a 1953 easement.

The groups cited data posted on Enbridge’s website from a 2013 inspection that shows the pipeline suffers from corrosion in nine places, two dents and 35 weld cracks. One area of corrosion shows a 26% loss of pipeline wall thickness; the original easement agreement called for the pipes to be at least 0.812 inches thick.

“The law and this easement agreement are clear: State leaders cannot wait another year or more while Enbridge continues to violate safety conditions it agreed to and withholds safety inspection and other data from the public and the state,” said environmental attorney Liz Kirkwood.

More: Detroit Free Press

Michigan State Now Coal-Free

OLYMPUS DIGITAL CAMERA

Michigan State University’s T.B. Simon Power Plant has switched from coal to natural gas, ending the university’s use of coal. President Lou Anna Simon announced the transition on April 14.

Bob Ellerhorst, the university’s director of utilities, said that the coal plant would have required expensive emissions controls to continue operating.

MSU first announced its coal-free intentions in 2012 as part of the university’s Energy Transition Plan, which also stipulates that 40% of campus power will come from renewable sources by 2030. Currently, 15% of MSU’s electricity is sourced from renewables.

More: Lansing State Journal

Entergy’s Palisades at Center of Public Forum

PalisadesNuclearSourceWikiA public forum concerning the relicensing of the Palisades nuclear plant is scheduled for April 21 in Kalamazoo.

The Sierra Club of Southwest Michigan, Michigan Safe Energy Future and D.C.-based Beyond Nuclear will lead a discussion on whether Palisades’ operating license should be renewed. At 45 years old, the Entergy-owned plant is one of the oldest in the U.S. with one of the most brittle reactor vessels.

Kalamazoo is one of many cities in the state within a 50-mile secondary radiation zone of Palisades, which is situated on Lake Michigan.

More: MLive

MONTANA

DEQ to Keep Studying Suspended Coal Mine Project

MontArchCoalSourceArchState environmental officials will continue to study the potential effects of the proposed 20-million-ton-per-year Otter Creek coal mine near the Wyoming border, even though its sponsor, bankrupt producer Arch Coal, suspended the project.

The Department of Environmental Quality said it wants to determine the extent to which streambeds need to be protected at the site near Ashland. The work would prove valuable if the mine is revived or another proposal takes its place, a department official said.

A filing in Arch’s federal bankruptcy case reveals the company lost a key coal lease for Otter Creek more than three months before the St. Louis company announced it was suspending its application.

More: Billings Gazette

NEBRASKA

Lawmakers Pass Wind, Climate Change Resolutions

NebSenKenHaarSourceGovThe state Legislature passed a bill boosting wind energy development by a 34-10 vote, which proponents said will reduce regulatory obstacles for wind developers and make the state competitive with neighbors that produce more wind power.

Lawmakers followed up that tangible support for wind power by approving a non-binding resolution calling for official recognition of climate change. The resolution, passed by a vote of 28-3 in the nonpartisan body, calls for a special panel of legislators to examine climate change. “I think that’s progress,” sponsor Sen. Ken Haar said.

Wind power appears to be gaining support in the state. “Our customers are demanding a certain mix of renewables, and we have to recognize that,” said Sen. Dan Watermeier, who previously opposed wind energy.

More: Lincoln Journal Star

Pipeline Regulator Agrees to Recuse Self from Keystone Issues

The new director of the Public Service Commission’s division overseeing national oil and gas pipelines, a former engineer for Keystone XL pipeline sponsor TransCanada, said he will recuse himself from working on any issues related to the pipeline.

Scott Coburn made the promise before he was hired by the PSC by a 4-1 vote. Commissioner Crystal Rhoades opposed, saying the hiring gives the appearance of a conflict of interest.

TransCanada has withdrawn its plan to build the pipeline to existing lines leading to Gulf refineries, but the company has reserved its right to reapply.

More: The Associated Press

NEW HAMPSHIRE

North Country Chamber Drops Northern Pass Opposition

northernpasssourcenorthernpassThe North Country Chamber of Commerce has halted its opposition to the Northern Pass transmission project, which would import Canadian hydroelectric power. The chamber switched its position to neutral, citing a divided membership.

“We represent members who are both in favor and opposed to the Northern Pass project,” the group said in a press release. “Therefore, we would like to be listed as neutral interveners and be the conduit for sharing information to our members.”

Two chamber board members resigned in protest and a third said the board was pressured by developer Eversource Energy. The chamber voted three times over a five-day period in March and April until it finally changed its position from “opposed” to “neutral.”

More: New Hampshire Union Leader

NEW JERSEY

Officials, Customers Blast Jersey Gas Rate Hike

NJNatGasSourceNJNGLocal elected officials and customers of New Jersey Natural Gas held a media event in front of a pizza joint to denounce the company’s proposed 24% rate increase, which came after its executive compensation in 2015 increased about 40% from the previous year.

“What makes the 24% increase really outrageous and unacceptable is when you juxtapose it to the excessive increases in compensation for the executives at New Jersey Natural Gas,” Belmar Mayor Matt Doherty said. “We’re talking about Wall Street-type salaries to manage the smallest gas utility in the state of New Jersey.”

The company defended the request, saying it is the first rate filing since 2007. The filing is now undergoing review by an administrative law judge.

More: NJ.com

NEW MEXICO

Anti-Coal Advocates Protest As PNM Rate Hearings Begin

NewMexPRCSourcegovAbout 50 climate change activists protested outside the state’s Public Regulation Commission offices last week at the start of three weeks of hearings over Public Service Company of New Mexico’s $123.5 million rate case. The protesters are calling for the utility to reduce its reliance on coal generation.

PNM’s proposal involves a contract with Navajo Mine Coal Company to supply fuel to the Four Corners Power Plant. The company has defended its continued use of coal, calling the fuel an “affordable and reliable option” and contending that rates would be pushed even higher without it.

PNM says the 15.8% rate boost, its first in five years, is required to recover more than $650 million the company has spent improving its distribution network. The commission last year rejected a rate-increase request by the company.

More: Santa Fe New Mexican

Commission OKs Complaint Against PNM

The Public Regulation Commission voted unanimously to require Public Service Company of New Mexico to respond to a complaint by a clean-energy advocacy group over its loan to another company for the purchase of the San Juan Coal Mine.

PNM revealed earlier this year it formed a subsidiary, New Mexico Capital Utility, to loan Westmoreland Coal $125 million to purchase the mine on property adjacent to the San Juan Generating Station.

The PRC last month voted against a request by New Energy Economy, an anti-coal nonprofit, to investigate PNM’s dealings in the mine purchase. But last week, the commission decided to allow a new complaint by New Energy to move forward and gave PNM 20 days to answer the complaint.

More: Santa Fe New Mexican

NORTH CAROLINA

State to Require ‘Environmental Justice’ Reviews of Landfills

Source: Duke Energy
Source: Duke Energy

The state will begin requiring “environmental justice” reviews of any landfills that it permits in response to objections that low-income residents and racial minorities are disproportionately affected by Duke Energy’s statewide coal ash cleanup.

While the reviews are still being developed, advocates say they are expected to exceed state and federal health requirements. They will evaluate adverse socioeconomic, environmental and health risks associated with the facilities.

Coal ash, the byproduct of coal-burning generators, contains substances including mercury, cadmium and arsenic that can be harmful to people. An attorney with the Southern Environmental Law Center said people of color and low-income residents live closest to some of the state’s coal ash waste sites.

More: North Carolina Health News

OKLAHOMA

Commission Rejects OG&E Solar Billing Plan

OKCorpCommSourcegovThe Corporation Commission voted 3-0 against an Oklahoma Gas & Electric plan to change the way it calculates the bills for rooftop solar users and directed the utility to fully explore the issue in its pending rate case.

The order came almost two weeks after the commission indicated it wasn’t happy with its options in OG&E’s distributed generation tariff. The utility filed the case under a state law that allows regulated utilities to charge a different rate to rooftop solar users if they aren’t paying their fair share of grid costs.

OG&E proposed a demand charge for the first time on residential and small commercial customers. The typical solar residential customer using 6 to 8 kW would pay $16 to $21 per month in demand charges.

More: The Oklahoman

PENNSYLVANIA

Judge: Sunoco May Build Pipeline Without Landowners’ Permission

SunocoLogSourceSunocoA Lebanon County judge has ruled that Sunoco Logistics may bury a natural gas liquids pipeline across the properties of three landowners who refused to sign easement agreements.

The Mariner East 2 pipeline will run 350 miles from the Marcellus Shale to a Delaware River terminal near Philadelphia.

The residents say they will appeal the ruling. They say Sunoco should not be considered a public utility, as the Public Utility Commission deems it, because most of the product flowing through the new line is expected to be shipped overseas.

More: Lebanon Daily News

SOUTH DAKOTA

County Officials Approve Brady II Wind Farm’s Construction

SouthDakotaWindNextEraSourceNextEraHettinger County officials have approved a permit for a second phase of the 72-turbine Brady Wind Energy Center project. The Planning and Zoning Board and the County Commission voted unanimously to approve the conditional-use permit, but it must still receive Public Service Commission approval.

Brady Wind II is technically a separate project with a separate power purchase agreement than the nearby Brady Wind I project. Developer NextEra Energy Resources has said that if Brady Wind I is denied by the PSC, it may not move forward with Brady Wind II.

Combined, the two phases of Brady Wind call for 159 turbines generating about 300 MW of power. SPP member Basin Electric Power Cooperative has signed a PPA with NextEra for Brady II’s energy.

More: The Bismarck Tribune

TEXAS

Tribes Protest Coal Mine on Mexico Border

RailroadCommissionofTexasSourcegovMembers of several Native American tribes joined long-running attempts by environmentalists and local activists to shut down the Eagle Pass coal mine near the Mexican border, which they say threatens ancestral burial grounds. The tribes say transporting the high-sulfur coal, which is shipped to Mexico, would release hazardous particles into the air, and that the discharge from the operations would run off into a creek that ends in the Rio Grande.

Members of the Lipan Apaches, the Pacuache Band of the Cohuiltecan Nation and the Carrizo Comecrudo Tribe have teamed with the Comanche Nation of Oklahoma to criticize Dos Republicas, a company owned by Mexican companies partnered with the North American Coal Corporation and its subsidiary Camino Real Fuels.

More than 100 activists marched 9 miles from the Rio Grande to the mine on Saturday.

More: The Texas Tribune; San Antonio Express-News

VERMONT

Hearings Contentious on Renewable Energy Siting

VermontCommCheneySourcegovThe state’s process for deciding where solar and wind energy projects can be located were the subject of contentious hearings before two House of Representatives committees.

Margaret Cheney, a member of the Public Service Board, criticized several aspects of a Senate-passed bill now under consideration in the House, which would give the public more leverage over siting decisions. She said the bill called for the board to reopen a study of wind turbine noise complaints that would require a new case to be brought to the board.

Cheney said the vast majority of projects draw no complaints, but of those that do, “I think that some of it is growing pains in a changing world.”

More: The Associated Press

WYOMING

Developer Says Wind Farm To be Operational by Year-End

WyomingRockyMntPowerSourceRockyMountainSPower says construction has begun on the controversial 46-turbine Pioneer Wind Park, the first new wind farm in the state since 2010. The 80-MW project could provide as many as 179 temporary construction jobs.

Pioneer’s power purchase agreement with Rocky Mountain Power requires it to be in commercial operation by the end of 2016. The project also faces a legal challenge. The Northern Laramie Range Alliance is appealing state regulators’ decision last year to amend its permit after sPower acquired the project from Wasatch Wind.

The NLRA has challenged Pioneer at the state Supreme Court, FERC and in federal court, losing in each venue.

More: Casper Star-Tribune

SPP to Cut Planning Reserve to 12%, Reduce Capacity Needs by 900 MW

By Tom Kleckner

SANTA FE, N.M. — Capitalizing on their $5.6 billion transmission buildout, SPP members voted last week to reduce the RTO’s planning reserve margin to 12% from the current 13.6%.

Mike Wise, Golden Spread Co Op SPP planning reserves capacity needs
Wise © RTO Insider

The Markets and Operations Policy Committee approved a recommendation by the Capacity Margin Task Force that members said will reduce SPP’s capacity needs by about 900 MW, saving about $1.35 billion over 40 years. The Strategic Planning Committee endorsed the task force’s recommendations, contained in four white papers, as well.

The culmination of almost two years of work by the task force left SPC Chairman Mike Wise almost giddy with excitement. Wise said the reduced margin was made possible by SPP’s transmission expansion.

“We’ve tied all of the real old legacy balancing authorities together in a substantial way,” said Wise, senior vice president of commercial operations and transmission for Golden Spread Electric Cooperative. “One example of that is the old [Southwestern Public Service] area in SPP. That only had 59 MW [of] import capability. Now that capability is approximately 2,300 to 2,500 MW. … No longer is it an island.”

The white papers captured the task force’s work related to load-responsible entities (LREs), the planning reserve margin (PRM) and PRM assurance policy, and included a deliverability study. (See SPP Capacity Margin Task Force Shares ‘How Low’ Reserve Margin Can Go.)

The MOPC approved the policy package with one no vote and four abstentions. If approved by SPP’s Board of Directors next week, the capacity margin policies would become effective next summer.

“These policies identify who is responsible for resource adequacy, what the resource adequacy requirement is, and how and when the resource adequacy requirement can be and should be met,” said Sunflower Electric Power’s Tom Hestermann, the task force’s chair.

Tom Hestermann, Sunflower Electric SPP planning reserves capacity needs
Hestermann © RTO Insider

He said the policies are dependent on each other to balance economic and reliability benefits, and said they should be approved and implemented collectively.

The reserve assurance policy addresses concerns that current mechanisms to ensure sufficient reserve margins are inadequate. The policy incents LREs to correct planning reserve deficiencies.

Hestermann said the deliverability policy recognizes the Integrated Marketplace’s successful performance and the expected adoption of the assurance policy. It would allow SPP to determine the deliverability of generating units within its footprint, enabling entities to purchase capacity on a short-term basis through bilateral contracts to meet the PRM requirement.

The Nebraska Public Power District’s Paul Malone said he couldn’t support the use of non-firm resources in transmission planning.

“You’re putting firm resources on par with non-firm resources,” he said. “I don’t see how you can do that.”

“The task force was very adamant that firm transmission be necessary in order to deliver to resources to serve load,” responded Lanny Nickell, SPP’s vice president of engineering. “You could still use the transmission services process, with the added benefit of getting [transmission congestion rights].”

Malone offered a motion directing staff to evaluate the use of coincident peaks in determining the reserve margin. The motion was amended to add an evaluation of other regions that include non-firm resources in their reserve margin calculations and passed unanimously.

As it has done during every step of the process, Oklahoma Gas and Electric abstained from the vote. Greg McAuley, OG&E’s director of RTO policy and development, said his company wouldn’t stand in the way, but it would voice its concerns.

“The deliverability issue, to us, is a theoretical exercise. It sounds good on paper, but it hasn’t been tested,” he said. “We’re not convinced this has been vetted enough to the extent we’ll be comfortable with it. If this turns out to be a bad decision, it’ll be difficult to go back. We urge caution and a methodical approach to this … we would like to see more thought and more study go into it.”

Changes will need to be made to SPP’s Tariff and planning criteria, as the policies would replace “capacity margin” terminology with “reserve margin” terminology.

The task force will now turn its attention to developing a resource-adequacy workbook and guidelines with SPP staff.