Kentucky Overturns Nuclear Moratorium: Now What?

By Amanda Durish Cook

Kentucky has dropped its decades-long nuclear moratorium, but experts on both sides of the nuclear debate say the move probably won’t result in new reactors for now.

The law, signed by Kentucky Gov. Matt Bevin on March 27, eliminates the requirement that nuclear power facilities have “means of permanent disposal” of nuclear waste, allowing a less onerous Nuclear Regulatory Commission-approved waste plan.

Carroll

Sen. Danny Carroll (R), the bill’s sponsor, said it was important that Kentucky start looking to diversify its energy portfolio, pointing out that nearby states take advantage of nuclear energy. Carroll said the law will “keep Kentucky competitive with the energy portfolios of surrounding states.”

“When you run a business, you look for varied funding streams. You don’t put all your eggs in one basket. … That’s what we’re doing in our state. Out of fear of nuclear energy, out of efforts to protect the coal industry, whatever the case may be, we are putting all our eggs in one basket,” Carroll said last year, when an earlier version of the bill languished after Senate approval. Kentucky does not house any nuclear generation.

The law eliminates the requirements that cost of waste disposal be known and that the facility have “adequate capacity to contain waste.” It also grants the Kentucky Public Service Commission the authority to hire consultants “to perform duties relating to nuclear facility certification” and allows it to prohibit construction of low-level nuclear waste disposal sites in Kentucky. The PSC can also direct the Energy and Environment Cabinet to review the nuclear permitting process. Kentucky PSC Director of Communications Andrew Melnykovych declined to comment on the law.

14 States

According to the National Conference of State Legislatures, 14 states currently have restrictions on the construction of new nuclear power plants: California, Connecticut, Hawaii, Illinois, Maine, Massachusetts, Minnesota, Montana, New Jersey, New York, Oregon, Rhode Island, Vermont and West Virginia. Most of the state moratoriums were made because of an absence of a permanent repository for spent fuel in the U.S. Wisconsin’s legislature ended its moratorium last spring.

President Obama ordered NRC in 2009 to stop work on a permit for licensing the nuclear waste depository at Yucca Mountain in Nevada. Obama acted at the behest of then-Sen. Harry Reid (D-Nev.) As a result, waste is being stored in spent-fuel pools and dry cask storage at operating and retired nuclear plants. (See Panelists Weigh Nuclear Waste Solution Post-Obama.)

The Trump administration’s 2018 budget requests $120 million to relicense Yucca Mountain.

Christine Csizmadia, the Nuclear Energy Institute’s director of state governmental affairs and advocacy, said she shared Carroll’s idea that long-term energy planning should not exclude certain generation types.

“You want to have an open option on the table, and that’s something that they couldn’t even consider before,” Csizmadia said. “It’s going to open the door to healthier conversations because now lawmakers aren’t confined and they can have long-term, open conversations.”

Csizmadia said that although she does not envision new nuclear building permits in Kentucky in the near term, she hopes Wisconsin’s and Kentucky’s actions will spark a trend. “That’s exactly what we’re hoping for, and why not? The thing about states is that they can be very competitive with each other; there’s a snowball effect. I don’t see why there wouldn’t be similar repeals. A lot of these moratoriums were made 20 years ago, and attitudes have changed.”

Nuclear Power a Distraction

Not everyone’s attitude toward nuclear energy has changed, however.

“Lifting the nuclear moratorium is not going to produce plants. Nuclear is such a politically charged question that it sucks all of the air out the room when planning,” said Arjun Makhijani, president of the Institute for Energy and Environmental Research, who has testified against overturning Minnesota’s nuclear moratorium. Minnesota’s legislature came close in the 2015/16 legislative session.

Far from opening up planning to new resource types, Makhijani said the moratorium reversal could shut down other, more important energy planning conversations.

“The main result is it’s going to divert the attention of Kentuckians away from the kind of energy policy that will be useful to create jobs in the state,” Makhijani said. “In a state that is hurting from coal industry job losses [the idea that] there are plans to replace those jobs with the nuclear industry — the most polite thing that I can say is that it’s very far-fetched. The idea is that we should have all options [but] the options have to make sense in economic terms and in planning terms. We’re entering the era of distributed energy and smart grids.”

Makhijani argues that the country’s aging nuclear fleet is often in need of repairs, requiring new valves and pumps and expensive shutdowns. He noted that nuclear plants cannot economically ramp up and down, making them too inflexible to be paired with increased wind penetration.

“I think the suffering communities in Kentucky, the coal miners, should be economically protected. But I don’t think they can be protected by promising a return of coal jobs or replacing it with nuclear industry. Nuclear is more expensive and less economic than coal. Nuclear is sort of in hospice care right now,” he said.

Summer, Vogtle Plants

Csizmadia and NEI spokesman John Keely said they did not know of any sites in Kentucky that have been eyed for nuclear development. But Keely said nuclear power can help fill the need for clean energy as coal plants retire.

Nuclear power is being revived, he said, with two new reactors being built by South Carolina Electric & Gas at its Virgil C. Summer nuclear plant near Jenkinsville, S.C., and two by Georgia Power at its Vogtle site near Augusta.

Virgil C. Summer Nuclear Plant Construction | SG&E

However, Makhijani said these new reactors are being subsidized by ratepayers and plagued by cost overruns and delays. “It’s even unclear whether those reactors will be finished,” he said, alluding to U.S. nuclear giant Westinghouse Electric’s bankruptcy filing Wednesday. Westinghouse is the lead contractor at both construction sites.

Makhijani also cautions against seeing small modular reactors as an option, saying they won’t be cost effective unless large numbers of them are purchased, and even then, several of them will need to be installed to generate a significant amount of power.

Still, a permanent repository is needed no matter how many more states light up a welcome sign for nuclear energy, Makhijani said. But he maintains that Yucca Mountain is not the ideal site.

“It’s much better than leaving it around in five dozen or odd sites in storage. There are terrorism risks, there are environmental risks, there are safety risks,” he said. Each 1,000-MW nuclear reactor results in 30 Nagasaki-sized bombs worth of plutonium per year in spent fuel, Makhijani said. “Today there is more civilian-made nuclear waste around than all the plutonium of all of the nuclear weapons worldwide,” he added.

Keely maintains that nuclear moratoriums “were a manifestation of the 60s’ anti-nuclear attitude … and can’t be defended anymore. It’s that basic and that pragmatic.”

He also said today nuclear has bipartisan support. “This used to be somewhat of a left-right issue and that’s no longer the case.”

New Campaign Urges Renewed Effort to Expand CAISO

By Robert Mullin

A coalition of environmental, renewable energy and business groups called on California officials Tuesday to reignite CAISO’s effort to expand its operations into other areas of the West.

The groups — which include the Natural Resources Defense Council, Environmental Entrepreneurs, Union of Concerned Scientists and the Solar Energy Industries Association — issued a letter urging Gov. Jerry Brown and top state lawmakers to support legislation facilitating the ISO’s transition into a Western RTO.

“An integrated Western Grid is essential to a goal that we know all of you share: meeting our ambitious clean energy targets while driving down energy costs and creating new good-paying jobs,” the letter said. “We urge you to continue the process toward legislative authorization of a transition to a fully independent board for an independent grid operator that all Western utilities and generators will have the opportunity to join.”

CAISO western RTO California's Energy Future

The coalition kicked off its Secure California’s Energy Future campaign in response to the Trump administration’s move to roll back the Clean Power Plan, EPA’s chief initiative to combat climate change by reducing carbon emissions from the nation’s power plants. (See Trump Begins Attempt to Undo Clean Power Plan.)

“California has an opportunity — and a responsibility — to continue its leadership in responding to our climate crisis by working to integrate the Western grid,” Ralph Cavanagh, codirector of NRDC’s energy program, said in a statement. “While the White House and some in Congress are trying to roll back the climate progress we’ve made, Sacramento can take action and secure California’s energy future.”

Reduced Costs, Increased Reliability

The campaign’s supporters contend that integration of the Western grid would reduce costs and increase reliability for the region’s electricity customers, reduce the need to curtail output from renewable resources and “safeguard against price gouging by unscrupulous power marketers,” while at the same time allowing state governments to retain control over their energy policies. They also tout the benefits to California’s economy, including expansion of the state’s clean technology sector.

“Every day, California is basking in clean, affordable, reliable solar electricity,” SEIA CEO Abigail Ross Hopper said. “By enabling the state to fully utilize this solar resource, including sharing it across state lines, Californians will reap the benefits of increased jobs and investment and billions of dollars in electricity savings.”

A 2015 California law requires the grid operator and state energy agencies to explore ISO expansion to help the state meet its 50% renewable energy mandate. California lawmakers must sign off on any such expansion, which would necessitate that the state yield its direct oversight authority over CAISO once the grid operator becomes a multistate organization.

Brown Presses Pause Button

With skepticism mounting against regionalization efforts, Brown last August postponed CAISO’s expansion effort, saying he wanted state agencies to take more time to develop a governance proposal for the new RTO. (See Governor Delays CAISO Regionalization Effort.) Before that announcement, Brown had expressed hopes of delivering a proposal to state lawmakers before they concluded their 2016 session in September.

Progress on regionalization has since slowed. While the ISO last October released the third draft of a proposal outlining the principles for governing a Western RTO, nothing formal has been submitted to the legislature for consideration. (See Latest CAISO Proposal Fills out Western RTO Governance Plan.)

“We continue to be involved in discussions with stakeholders, and we get requests for briefings from lawmakers about the studies” related to the economic and environmental impacts of regionalization, CAISO spokesperson Anne Gonzales told RTO Insider. “The ISO is a technical resource for policymakers to understand the studies and the governance changes.”

Gonzales said the ISO has no stakeholder meetings scheduled to further discuss regionalization.

Agreement on a governance plan represents the biggest hurdle for expanding CAISO. Skeptics outside California have expressed concerns about the populous state’s potentially outsized influence over a Western RTO, while those within California are worried about losing the ISO as a key instrument for achieving the state’s environmental goals. (See Governance Plan Critics Urge Slowdown of Western RTO Development.)

The new campaign appears to be an attempt to jump-start the effort to overcome barriers to grid integration.

Other campaign supporters include the Independent Energy Producers Association, Bay Area Council, Health Care Without Harm, Sierra Business Council, Silicon Valley Leadership Group and SunPower.

Mountain West, SPP Tout RTO Membership to Colo. PUC

By Tom Kleckner

DENVER — SPP and the Mountain West Transmission Group pitched the benefits of RTO membership Tuesday in an open forum before Colorado’s Public Utilities Commission as the two entities pursue a possible collaboration.

Taking advantage of the opportunity to get the last words in, SPP COO Carl Monroe grabbed a podium microphone just before the meeting adjourned to let his audience know the RTO would be holding its regular quarterly governance meetings in Denver in July, and that it would be a chance to see first-hand how SPP works with its members.

Coincidence?

Maybe not. SPP scheduled the meetings in the middle of last year, about the same time Mountain West was considering joining CAISO, MISO, PJM or SPP. Mountain West announced in January it was entering into discussions with SPP to further explore the relationship. (See Mountain West to Explore Joining SPP.)

The PUC scheduled the forum so regulators, consumer advocates and other stakeholders could gather information and discuss with Mountain West participants the potential benefits, costs and risks of the options under consideration. More than 70 attendees registered to participate, a number Commissioner Frances Koncilja noted was larger than normal.

Mountain West is an informal collaboration of 10 electricity service providers serving 6.4 million customers in the Rocky Mountains. Its members’ coincident peaks total just more than 12 GW, and it generated almost 70 million MWh of energy in 2015. Were it to join SPP, it would create a sprawling organization spread over 17 states.

Monroe told the commission that Mountain West would increase SPP’s size (575,000 square miles of service territory encompassing about 18 million people) by about a third. The new RTO’s Tariff would include seven of the eight DC ties between the Eastern and Western Interconnections, except for one in Canada. SPP also has two DC ties with the Texas Interconnection.

“We own the gateway facilities that go into” the ties, Monroe said. “We’ve spent a lot of time coordinating and understand those ties.”

“This is a very complicated transaction,” Koncilja told RTO Insider. “It will be up to the utilities to persuade us it’s a good thing for the ratepayers. This is just the first of many meetings.”

Mountain West members said they were pursing RTO membership to improve efficiency by eliminating pancake transmission rates and taking advantage of modern market designs to maximize transmission capacity. A 2016 Brattle Group study found Mountain West could save $53 million to $71 million annually through 2024 by participating in a day-ahead market and replacing its nine tariffs with a single one.

“It’s not that we have decided to go forward,” said Steve Beuning, Xcel Energy’s director of market operations. “We are in the process of evaluating what it means to go forward and [determining] the terms and conditions … that Mountain West considers essential before moving forward.”

Familiarity

Beuning said he was impressed by the knowledge in the group’s proposed RTO membership.

“This familiarity with the issues of our proposal, and an understanding of the particular needs of utility service providers in the western U.S., really helped lead to a deep and meaningful discussion,” he said.

Former FERC Commissioner Suedeen Kelly, an attorney with Akin Gump provided an overview of RTOs and ISOs, their functions and their regulatory relationship with FERC, while touting the virtues of regionalization and economic dispatch.

Former FERC Commissioner Suedeen Kelly (right) shares her thoughts on Mountain West’s SPP membership with Colorado PUC Chairman Jeff Ackermann and Commissioner Wendy Moser. | © RTO Insider

“The SPP transmission system is managed and operated for the same purpose as an individual system — to maintain reliability across the footprint and to dispatch generation,” she said. “There are no pancaked rates. Energy that flows from the northern end to the southern end pays one rate, no matter how many systems it touches.”

Jennifer Gardner, a staff attorney for Western Resource Advocates, praised SPP’s security constrained economic dispatch and its ability to create more renewable energy.

“By automatically dispatching resources where they’re needed, that allows us to deal with the variability of resources,” she said. “We see the immense potential for getting new renewable energy to the market” with SPP membership.

But Kelly also shared reasons for not joining an RTO.

“Why don’t we have one in the West?” she asked. “A lot of reasons, but to me, the most important, after being in California in 2000 when the California market imploded, is because the market imploded. We said, ‘Wait a minute, whatever they did, we don’t want to do.’”

Colorado PUC

Abby Briggerman, of counsel with Holland & Hart who generally speaks for large industrial ratepayers in the Rocky Mountains, and speaking on behalf of the ratepayer interests, said she was concerned about the risks of joining an RTO.

“We’ve come a long way since 2001, but we need to look no further than California. We remember the rolling blackouts,” she said. “The ratepayer must have a seat at the table in the decision-making process over whether to join an RTO.”

Briggerman also warned that SPP could be a “Hotel California,” referring to the Eagles’ song in which “you can check out any time you like, but you can never leave.”

“We need to make sure there are no barriers to exit,” she said.

Consumers’ Voice

Other attendees also questioned whether consumer interests would be lost in SPP.

SPP representatives, members and stakeholders countered by praising the RTO’s stakeholder engagement, and Monroe emphasized the diversity of is 94-entity strong membership. “We provide a lot of transparency into SPP,” he said. “Our meetings are open, even up to board level. We had 150 people at our last board meeting. Anybody that has ideas that will help SPP make good business decisions will be listened to.”

SPP General Counsel Paul Suskie brought up Steve Gaw, a former Missouri commissioner and legislator who represents The Wind Coalition at meetings although the coalition is not a member.

SPP COO Carl Monroe makes his point alongside General Counsel Paul Suskie (left). | © RTO Insider

“He’s not a member, but he gets just as much input as members,” Suskie said.

SPP and Mountain West have developed a steering committee and working groups focused on governance, rate design and cost allocation, transmission planning, reliability coordination and SPP’s Regional State Committee. Composed of regulators from 10 different states, the RSC will be a key player in the membership negotiations.

Mountain West members said they expect to decide on whether to proceed with SPP membership in the second or third quarter of 2017. Rate cases would be filed shortly thereafter, with a final recommendation presented to SPP’s board in January 2018.

“I would be bold to call [the timeline] aggressive, but it keeps us on track. It keeps us focused on what we’re trying to accomplish,” said Mary Ann Zehr, senior manager of transmission contracts, rates and policy for the Tri-State Generation and Transmission Association.

Mary Ann Zehr (Tri-State), Dan Kline (Black Hills) and Steve Beuning (Xcel Energy) discuss Mountain West’s potential SPP membership. | © RTO Insider

Zehr said she anticipates numerous meetings over the next few months devoted to writing a tariff, governance and membership agreements and bylaw changes.

“We’re attempting to answer those questions at the front end,” she said.

CAISO, BPA Ink Agreement to Ease Northwest EIM Transfers

By Robert Mullin

CAISO has signed an agreement with the Bonneville Power Administration designed to facilitate Energy Imbalance Market (EIM) transfers in the Pacific Northwest while ensuring that the agency can continue to reliably serve its own transmission customers.

The Coordinated Transmission Agreement (CTA) could provide a model for future joint efforts between the two agencies that operate most of the transmission network along the West Coast, according to Todd Miller, a senior project manager with BPA.

“This agreement kind of seems like a no-brainer,” Miller said during a March 27 call hosted by the EIM Body of State Regulators (BOSR), an informal network of Western utility commissioners that convenes regularly to discuss market issues. “We need to have an operating agreement … so everybody understands the rules of the road.”

The agreement also represents a “milestone” in cooperation between BPA and CAISO, Miller said. “I think it’s really a first step in being able to coordinate seams issues.”

The CTA largely formalizes procedures already put in place before the EIM was launched in November 2014. At the time, BPA worked with PacifiCorp — the EIM’s first member — and the ISO to define practices around exchanging transfer data and setting limits on the use of dynamic transfers on the BPA system.

Since its rollout, the market has expanded farther into the Northwest to include Puget Sound Energy, with Portland General Electric slated to join later this year, followed by Idaho Power in early 2018. All three utilities rely to some extent on BPA, which controls about 70% of the transmission in the region.

“Some of [the original practices were] captured in operating procedures, but until the CTA, there was no contractual obligations regarding these requirements,” BPA said.

The agreement spells out an obligation for both parties to share transmission system data: CAISO must share total market dispatch for EIM resources during a market interval and load forecasts for EIM balancing authority areas, while BPA must convey real-time managed limits and actual flows on its facilities. The agreement clarifies the processes by which that data will be made available, including frequency and granularity.

Bonneville Power Administration caiso eim rate of change limit
The agreement between CAISO and Bonneville Power Administration is intended to facilitate Energy Imbalance Market transfers on Bonneville’s system, which accounts for about 70% of transmission capacity in the Northwest. | BPA

“It also includes a confidentiality provision,” Miller said. “Everybody is doing what they’re supposed to be doing, but now there’s something in the contract that makes the lawyers feel better about things.”

The agreement also codifies BPA’s right to place limits on the upward and downward rate of change in usage that EIM dynamic transfers would impose on its transmission network — making explicit an already existing practice.

“Bonneville will set the upper rate of change limit and lower rate of change limit at its discretion and notify the CAISO of such limits for each Bonneville-managed facility before each market interval,” the agreement states.

The agreement gives BPA the ability to manage system operating limits on its paths at its own discretion, but requires it to alert the ISO to any changes ahead of an interval.

It also provides for the development of “flow-relief tools” related to the EIM. Among those tools: a procedure that, in a curtailment situation, will allow BPA to transmit to CAISO the EIM’s prorated share of curtailed flows on an affected transmission flowgate between the two balancing areas.

New Groups

The CTA additionally calls for CAISO and BPA to convene a Coordinating Committee every quarter to address operational issues related to the agreement, resolve disputes and offer up potential revisions.

The agreement also establishes a working group — consisting of Pacific Northwest EIM members, a select group of BPA transmission customers and the Coordinating Committee — charged with discussing implementation, data exchange and transmission operations under the agreement.

“As far as the selected Bonneville customers, we haven’t decided how we’re going to do that yet, but we want to select customers that are representative of our various classes of transmission customers,” Miller said.

Ann Rendahl, a Washington Utilities and Transportation commissioner and chair of the BOSR, noted that the “whereas” clause at the beginning of the CTA specifies that the Coordinating Committee will discuss seams issues.

“I assume that the working group is also to discuss seams issues, but to get at them from a more granular level,” Rendahl said.

Miller agreed and said the group could also be the body that initiates other “major” types of coordination and constraint relief along the interties.

CAISO and BPA plan to file the agreement with FERC in April. “Hopefully we’ll have another FERC commissioner at some point so it can actually be approved,” Miller said.

MISO to Amend Alternative Dispute Resolution Process

By Amanda Durish Cook

NEW ORLEANS — MISO will soon make a filing to add more confidentiality and legal definitions to its alternative dispute resolution process, stakeholders learned at the March 22 Advisory Committee meeting.

With the changes, data exchanged during alternative dispute resolution meetings covered by nondisclosure agreements will be treated by the RTO as confidential or as Critical Energy Infrastructure Information.

MISO will invite other entities to participate in resolution meetings if their “participation is indispensable to resolution of the dispute.” The RTO will also be allowed to dismiss the dispute or “discontinue the informal dispute resolution process if such entity declines to participate in the dispute.”

MISO to Amend Alternative Dispute Resolution Process
Stephens | © RTO Insider

MISO Deputy General Counsel Eric Stephens said the RTO already uses the concept of indispensable parties but is looking to codify it.

The revisions also clarify MISO’s ability to grant relief such as damages, which is “subject to the potential need for a waiver from FERC,” the RTO said.

MISO will also pass its responsibilities to recommend sanctions and give referrals for investigations to its Independent Market Monitor. Stephens said the RTO did not think it was appropriate to recommend sanctions or instigate investigations as a result of the resolution process. The new language also clarifies that MISO will not facilitate dispute procedures for contracts that are not service agreements or rate schedules under its Tariff.

MISO will also extend the initial timeframe for final resolution of an informal dispute from 90 to 180 days. “Our experience over the last two years has taught us that these take on average about 180 days,” Stephens said. He added that the timeframe could be extended by another 90 days before the RTO ends attempts to facilitate discussions, and the dispute is either dropped or escalated into a court proceeding.

The changes will be made to Tariff Attachment HH. (See “MISO Stakeholders to Hear Changes to Alternative Dispute Resolution,” MISO Steering Committee Briefs.)

Stephens said MISO will accept stakeholder input through April 12 and plans to file the new procedures for FERC approval by May 1.

MISO Advisory Committee Briefs

NEW ORLEANS — In its first-ever current events discussion, the MISO Advisory Committee focused on moving on after the RTO’s failed capacity auction redesign.

MISO Executive Director of Market Design Jeff Bladen told the committee on March 22 that the RTO is open to revisiting discussion on another capacity auction solution only if stakeholders want it.

On Feb. 2, FERC rejected MISO’s proposed Competitive Retail Solution, which would have applied a sloped demand curve and three-year forward capacity auction to the RTO’s retail-choice areas.

The commission said bifurcating the RTO’s capacity market by holding a forward capacity auction for competitive load three years prior to the current Planning Resource Auction would create too much price volatility and uncertainty. A market-wide clearing process that operates within a single set of transmission capability constraints and supply offers is more efficient than a bifurcated market, FERC said. (See MISO Won’t Seek Rehearing on Auction Redesign.)

Entergy Vice President Matt Brown and other stakeholders said MISO should abandon its search for a solution to resource adequacy concerns in the competitive areas and focus on other ways to improve the PRA, including creating external resource zones and adding a seasonal aspect.

“I think our stakeholders have been very clear — and FERC has been very clear — that an Eastern-style capacity market is not right for MISO,” Brown said. “From our perspective … it’s time to let this go.”

MISO advisory committee forward capacity auction
Schuerger | © RTO Insider

NRG Energy’s Tia Elliott said Illinois’ legislation subsidizing nuclear plants and a Michigan law increasing the state’s renewable portfolio standard should not be considered a fix for climate warming concerns. Although the Trump administration hopes to kill EPA’s Clean Power Plan, MISO could be faced with similar environmental regulations in the future, she said. “The political landscape could swing again, and we could be back in the same situation.”

Minnesota Public Utilities Commissioner Matt Schuerger reminded stakeholders that ensuring adequate capacity is the responsibility of individual states.

OMS-MISO Survey Dispute Revisited

The committee also returned to stakeholders’ accusations that MISO and the Organization of MISO States have overstated a possible capacity shortfall through their joint resource adequacy survey. (See Differences Persist over OMS-MISO Survey Improvements.)

MISO advisory committee forward capacity auction
Thomas | © RTO Insider

After a stakeholder pointed out that ERCOT was sued last year in an ongoing fraud case over misleading capacity reports, OMS member and Arkansas Public Service Commission Chairman Ted Thomas defended the survey.

“There isn’t a perfect way to do it. It’s a survey; it’s not a utility planning document,” Thomas said, adding that the survey was meant to help states understand their neighbors’ actions as they develop their own integrated resource plans.

Thomas said that if a utility is “dumb enough” to use the survey as a planning document, the utility deserves to get sued, not the producers of the survey. He also blamed local media for promoting a sky-is-falling narrative, saying reporters often don’t understand the survey results.

“Try explaining this stuff to a newspaper reporter,” he griped.

— Amanda Durish Cook

Stakeholder Soapbox: Replacing Indian Point A Tough Challenge

By Rob DiFrancesco

The economic and environmental challenges of replacing Indian Point are formidable. So are the grid reliability challenges.

Any attempt to minimize these impacts is a disservice to New Yorkers who face, at best, an uncertain energy future due to rising prices, higher carbon and other toxic emissions, and lower grid reliability.

For more than 40 years, Indian Point has been the backbone of New York’s electricity system. It generates 2,069 MW of power, providing 25% of the electricity for New York City and the surrounding region. In fact, the plant generates enough power for 2 million New York homes and the same amount typically produced by four or five natural gas natural plants.

nyiso indian point nuclear plant
Indian Point

Except for scheduled refueling outages, it generates baseload power 90% of the time, with no emissions. Even though we have up to four years to replace Indian Point’s power, it is very difficult to get anything approved and built in New York, including renewable energy facilities, in such a relatively short period of time.

Price Pressures

Replacing the supply of Indian Point’s power to meet the growing demand for electricity in New York will not be easy. But it is not only the resulting supply gap that puts upward pressure on electric power prices.

Improvements in the transmission grid necessary to bring new power to New Yorkers will be enormously expensive. Such infrastructure investments are particularly necessary and costly if the power must be transported over long distances, or if there is greater reliance on intermittent renewable power sources.

Other power sources are also subject to sharp price fluctuations. During the hottest days of the summer and the coldest of the winter, it is difficult for New York to get sufficient amounts of out-of-state natural gas, which also drives up prices at these critical times.

Also, the massive amount of renewable energy power needed to replace Indian Point is daunting and simply not practical. Replacing 1,000 MW, less than half of Indian Point’s generation, with solar power requires 45 to 75 square miles of land and 260 to 360 square miles for wind power.[1] For perspective, Manhattan is only 22.8 square miles of land.

Emissions

Indian Point also generates tremendous amounts of electricity with nearly zero carbon or other toxic emissions. The other critical question is not if toxic emissions will increase when Indian Point closes, but by how much.

California, Florida, Wisconsin and Vermont have all experienced greater reliance on fossil fuels and very significant increases in pollution after closing nuclear power plants.[2]

In fact, when advocating for New York’s upstate nuclear plants, Chairman of Energy and Finance for New York Richard Kauffman said, “Without our upstate nuclear fleet, 31 million tons of CO2 would be released in just two years, the equivalent of adding 6 million cars to the road — resulting in an additional $1.4 billion in public health and other societal costs. New York would have to rely on more expensive and dirtier power.”[3]

Grid Reliability

New York is fortunate that Indian Point will be operating until 2021. In fact, were the plant to close today, the state’s grid would not be reliable, according to NYISO.[4]

The costs of blackouts are enormous. The New York City comptroller found that the 2003 blackout cost the city more than $1 billion in lost wages, spoiled food and other costs.[5]

Blackouts are also a danger to public health. Researchers from Johns Hopkins University also studied the 2003 blackout and documented that it resulted in 90 deaths.[6]

Looking beyond the societal and economic costs of daylong blackouts, having an unreliable grid will make New York a very unattractive place to do business, especially for companies that are high-intensity users of electricity, such as manufacturers and high-tech companies.

Looking Ahead

Plans by state policymakers to address the issues resulting from the early shutdown of Indian Point should be transparent and thoughtful. Input from affected communities and organized labor are a must. We must address both environmental and economic issues to minimize adverse impacts on the regional economy and the ecology. Believing that Indian Point’s power can simply be replaced by energy efficiency or an enormous increase in renewables is not realistic.

New York consumers and businesses need to brace for the impact that Indian Point’s closing will have and be fully and clearly informed of what the impact will be in terms of monthly electric utility bills, air quality, and grid reliability.

Rob DiFrancesco is the executive director of the New York Affordable Reliable Electricity Alliance (New York AREA), a diverse organization of major business, labor, and community groups including Entergy, the owner-operator of Indian Point. Founded in 2003, New York AREA’s mission is to ensure that New York has an ample and reliable electricity supply, and economic prosperity for years to come.

[1] Nuclear Energy Institute, “Land Requirements for Carbon-Free Technologies,” Analysis, June 2015. Information appears in a chart at the beginning of the document and is discussed throughout. Retrieved on March 14, 2017 https://www.nei.org/CorporateSite/media/filefolder/Policy/Papers/Land_Use_Carbon_Free_Technologies.pdf?ext=.pdf

[2] Nuclear Energy Institute, “Can California Cut Its Carbon Without Nuclear? Doubtful.” Analysis, June 30, 2016. Items appear in charts and are discussed throughout the text. Retrieved on March 13, 2017 https://www.nei.org/News-Media/News/News-Archives/Can-California-Cut-Its-Carbon-Without-Nuclear-Doub

[3] NY State of Politics, “Cuomo Energy Czar Blasts Anti-Nuke Subsidy Campaign,” News story with accompanying link to the letter from Richard Kauffman, October 5, 2016. Information appears in the fifth paragraph of the letter. Retrieved on March 10, 2017 http://www.nystateofpolitics.com/2016/10/cuomo-energy-czar-blasts-anti-nuke-subsidy-campaign/

[4] NYISO, “2016 Reliability Needs Assessment,” October 18, 2016. Page 11, “Indian Point Center Plant Retirement – Resource Adequacy”. Retrieved on March 27, 2017, http://www.nyiso.com/public/webdocs/markets_operations/services/planning/Planning_Studies/Reliability_Planning_Studies/Reliability_Assessment_Documents/2016RNA_Final_Oct18_2016.pdf

[5] USA Today/Associated Press, “Blackout cost estimated at up to $6 billion,” August 10, 2003. Information appears in the 13th paragraph. Retrieved on March 10, 2017 http://usatoday30.usatoday.com/news/nation/2003-08-19-blackout-cost_x.htm

[6] Reuters, “Spike in deaths blamed on 2003 New York blackout,” January 27, 2012. Information is summarized in the eighth paragraph and discussed throughout the article. Retrieved on March 13, 2017 http://www.reuters.com/article/us-blackout-newyork-idUSTRE80Q07G20120127

NYISO Board Member Resigns After Less Than a Year

By Peter Key

Bernard W. Dan resigned unexpectedly from NYISO’s Board of Directors last week, less than a year after joining.

NYISO board member resigns board of directors
Dan

Dan announced his resignation at the board’s March 21 meeting. NYISO Chairman Michael Bemis relayed the news to stakeholders at the board’s Liaison Committee meeting afterward.

“Mr. Dan was interested in pursuing other opportunities,” NYISO spokesman Dave Flanagan confirmed. “He felt it was best to leave the board to avoid any potential conflicts.”

Flanagan declined to provide any details about Dan’s plans. Asked about plans to replace Dan on the 10-member board, Flanagan said, “Stakeholders will work that out through their normal process.”

Dan did not respond to an email asking for comment.

Turnaround Exec

Dan’s LinkedIn page describes him as a “Board Advisor, CEO and Turnaround Executive.”

He has been a senior advisor to the board of directors of OneChronos Group since 2015. The company, a startup that has gone through Y Combinator’s accelerator program, says it is building a new type of financial exchange that will make trading cheaper.

Dan was the CEO of Sun Holdings, which trades in stocks, currencies, futures and bonds, for five years ending in July 2015.

Dan also had a nearly two-year stint at MF Global, a broker of exchange-traded futures and options. After joining in June 2008 as the chief operating officer for North America, he rose to become CEO. He resigned in March 2010 and was replaced by former New Jersey Gov. Jon Corzine. The company, which filed for bankruptcy protection in October 2011, settled a lawsuit with its auditors, PricewaterhouseCoopers, on March 23.

Before joining MF Global, Dan was CEO of the Chicago Board of Trade, taking part in its initial public offering in 2005 and its sale to the Chicago Mercantile Exchange in 2007.

ERCOT Technical Advisory Committee Briefs

AUSTIN, Texas — The ERCOT Technical Advisory Committee agreed last week not to pursue a change in how ISO operators commit and dispatch resources, agreeing with a Wholesale Market Subcommittee study that the software changes required would not produce sufficient production cost savings.

The TAC then asked the subcommittee to begin working on real-time co-optimization of reserves.

The ISO developed an in-house software platform to perform multi-interval real-time market (MIRTM) simulations for selected operating days from 2015 and 2016. The study found MIRTM is feasible for both fast-responding generation resources and load resources with temporal constraints. But the feasibility study concluded that “the estimated cost[s] are in excess of the measured benefits and therefore insufficient to support [moving] forward with MIRTM at this time.”

ERCOT’s real-time market dispatches and prices energy in single five-minute intervals and does not consider potential changes in system conditions more than five minutes into the future. As a result, it is unable to coordinate the commitment of combustion turbines and demand response resources that are available within 10 to 30 minutes but unable to respond within five minutes.

The study was ordered to determine whether the ISO could improve the efficiency of its short-term commitment decisions by analyzing multiple consecutive five-minute intervals to determine the most economical commitment and dispatch.

ERCOT will share the study with the Board of Directors during its April 4 meeting. If approved, the study will be filed with the Public Utility Commission of Texas.

public utility commission of texas ERCOT Technical Advisory Committee
March TAC Meeting underway | © RTO Insider

The WMS now finds itself freed up to take on real-time co-optimization, which shifts the responsibility for providing reserve services to online generation resources with the lowest incremental energy cost. Co-optimization has been the subject of discussion at the PUC, most recently during its last open meeting. (See Texas PUC Wary of Using ERS to Avoid Local Blackouts.)

“We’ve been waiting for [MIRTM] to clear the decks, and the decks have been cleared,” Morgan Stanley’s Clayton Greer said.

“We have an obligation at this point to explore this,” Citigroup’s Eric Goff said. “[The PUC] has given various hints that they’d like additional information. As a stakeholder body, I believe we have the obligation to make those hints and wishes reality.”

TAC Vice Chair Bob Helton, of Dynegy, agreed. With members raising concern over ERCOT’s estimate of $20 million for software changes, he directed the WMS to define a study scope and what components of co-optimization should be analyzed.

Staff Shares Draft Principles for Market Continuity

ERCOT staff shared with the TAC a draft of principles to address the ISO’s lack of guidelines on restarting its markets following outages. The principles do not change existing black start procedures.

Staff raised the issue last year with the board and conducted a workshop in May to frame the discussion around gaps in the processes.

The principles include:

  • Prioritizing the real-time market’s restart before other markets or activities;
  • Starting congestion revenue rights auctions and other functions only after the real-time and day-ahead markets are restored;
  • Expecting limited settlements functionality during market restoration;
  • Payments being made in “as timely a manner as possible;”
  • Relaxing credit requirements and releasing cash or other collateral to provide short-term liquidity to market participants;
  • Seeking emergency funding to pay resources before other alternatives are considered; and
  • Uplifting market restart costs on a load-ratio share basis after market recovery.

ERCOT staff is expected to build on the principles with more formal procedures.

“This is a good start. ERCOT didn’t have transparent principles before,” Direct Energy’s Read Comstock said.

Committee Approves 16 Revision Requests

The TAC also approved nine other NPRRs, three revisions to the Planning Guide (PGRRs), two revisions to the Load Profiling Guide (LPGRRs) and revisions to the Retail Market Guide (RMGRR) and Nodal Operating Guide (NOGRR).

  • NPRR776: Aligns protocol language with currently used verbal communication practices between transmission service providers (TSPs), qualified scheduling entities (QSEs) and generation resources. Also identifies new requirements for data TSPs provide to ERCOT, QSEs and the generators. The committee tabled NOGRR167, which aligns the Nodal Operating Guide with NPRR776.
  • NPRR799: Requires that TSPs and resource entities — generation and load that can reduce electricity usage or provide ancillary services — submit updates to the outage scheduler within one hour of the facility’s outage start or completion.
  • NPRR802: Clarifies current settlement practices and protocol language, including how reliability unit commitment resources opting out of settlement are treated in calculating real-time online reserve capacity.
  • NPRR804: Clarifies that ERCOT should post both a systemwide network model and a set of station one-line diagrams, and that the model posting does not disclose data about private-use networks.
  • NPRR808: Extends the CRR auction process into the third year forward, revises the percentages sold in the auction’s long-term sequence and aligns modifying load zones to the timetable.
  • NPRR809: Defines the terms “initial energization” and “initial synchronization;” adds a reference to a quarterly stability assessment for interconnecting generation resources when evaluating the need for a generic transmission constraint; and clarifies a resource’s requirements prior to initial synchronization.
  • NPRR810: Removes the applicability of a reliability-must-run agreement’s incentive factor to reservation and transportation costs associated with firm fuel supplies, and accordingly separates costs in the RMR standby payment equation.
  • NPRR812: Clarifies short-term system adequacy report language; aligns protocol language with current ERCOT practices and Public Utility Commission of Texas rules for posting resource and load information; and modifies the requirement for posting a RUC initial-conditions report to only include the process as originally intended in NPRR314.
  • NPRR813: Requires references to service organization controls for the annual ERCOT market settlement audits.
  • NOGRR166: Eliminates a redundant report of daily operational information that can be found elsewhere on the Market Information System.
  • PGRR052: Ensures a new generating unit’s operating limits are established by setting a timeline for stability studies following a full interconnection study (FIS), incorporating model data or transmission system changes, not known during the FIS, before a new unit is brought online.
  • PGRR054: Clarifies the content, review period and process for posting an FIS’ results, and establishes a process for identifying, proposing and implementing solutions to stability issues identified during the FIS.
  • PGRR055: Defines the process for revising the Planning Guide to first consider PGRRs at the subcommittee level.
  • RMGRR144: Eliminates the requirement for transmission and/or distribution service providers to maintain a secure list of retail electric provider data numbering systems for all electric service identifiers (ESI IDs) with “switch-holds” — measures to prevent customers with unpaid bills from changing retail electricity providers.
  • LPGRR060: Provides additional clarification to the load-profiling guide by removing “orphaned language” not captured in LPGRR057, which was approved by the TAC in October.
  • LPGRR061: Modifies the annual validation timelines for residential and business ESI IDs by starting the validation activities on March 30 and concluding them on Sept. 30 of each calendar year.

— Tom Kleckner

MISO Board of Directors Briefs

Though one director is reaching his term limit, MISO’s nine-member Board of Directors could look the same going into 2018.

Directors Thomas Rainwater’s, Paul Bonavia’s and Baljit Dail’s terms expire at the end of 2017. Rainwater and Bonavia have not reached MISO’s limit of three three-year terms, and both agreed to seek re-election by MISO membership for another term.

capital spending miso board of directors
MISO Board of Directors meeting in New Orleans | © RTO Insider

Dail has reached the term limit, but Board Chairman Michael Curran said at the March 23 board meeting that Dail has agreed to seek re-election for an additional term if a waiver is recommended by the Nominating Committee and approved by the board.

MISO’s Principles of Corporate Governance state that the term limit can be waived if the board determines “that a director’s continued service is necessary to retain his or her skills or expertise, to maintain geographic or other diversity of the board, or is otherwise in the best interests of” the RTO.

Currie | © RTO Insider

MISO’s board has seen considerable turnover in the past two years, with two directors — Phyllis Currie and Mark Johnson — added in late 2015 to replace former Director Eugene Zeltmann, and three directors — H.B. “Trip” Doggett, Barbara Krumsiek and Todd Raba — brought on in late 2016 to replace former Directors Judy Walsh, Michael Evans and Paul Feldman.

This year, stakeholders elected Arkansas Public Service Commission Chairman Ted Thomas to serve on the Nominating Committee. The vote for the second stakeholder seat ended in a tie between Madison Gas and Electric’s Megan Wisersky and Entergy’s Matt Brown. Stakeholder relations staffer Alison Lane said the vote for the second seat will be redone, with ballots sent out again this week. She said if all seven voting-eligible sectors participate, the vote cannot end in a tie.

MISO Market Software Adequate for Another 5-7 Years

MISO will be able to squeeze an extra couple of years out of its aging market system, said Dail, chair of the Technology Committee.

Late last year, MISO Executive Director of Market Design Jeff Bladen said officials expected to replace the system in two to three years, announcing that the RTO had hired consultants to study system improvements. (See MISO to Study Aging Software; Market Improvements Planned for 2017.)

But Dail said the system can take on more complexity and remain usable for five to seven years.

capital spending miso board of directors
Bear | © RTO Insider

The RTO’s staff said the Clean Power Plan’s likely rejection by the Trump administration defers the need for new system technology, because intermittent and behind-the-meter generation is not expected to be added at such a rapid pace. Currie asked how much money MISO could expect to save because of the IT deferral. MISO CEO John Bear said the savings would be reported in future budget projections.

“That’s a welcome, but somewhat dramatic, change in timeframe,” Krumsiek said.

Dail also said that an internal technology audit again ranked MISO low when it comes to removing employee access to MISO systems after they are transferred or leave the RTO’s workforce. MISO had a self-imposed goal of 24 hours to remove both critical system access and perform an administrative cleanup. NERC standards allow 24 hours to remove an employee’s system access and 31 days to scrub employee information from the system. Dail said MISO has since allowed itself a more doable seven days to perform an administrative cleanup, separating it from the 24-hour access deadline.

MISO Operations Under Budget; Project Timing Nudges Capital Spending Over

MISO’s $37.7 million in spending so far in 2017 is under budget by $100,000, or 0.3%, newly hired Chief Financial Officer Melissa Brown said. She said the savings can be attributed to a slower hiring rate and MISO delaying some travel and the hiring of consultants.

capital spending miso board of directors
Actual expenses of $37.7M resulted in YTD being under budget by $0.1M or 0.3% | MISO as of February 28, 2017

However, MISO’s capital spending is over budget by 2.4%. Tony Guisinger, strategic development and operations executive, said capital spending is higher than planned because of some later-than-planned equipment purchases and related installation fees.

Guisinger, who assumed financial duties after former Vice President of Finance Jo Biggers left unexpectedly last year, is still assisting Brown, who joined MISO in late January. (See MISO Appoints Melissa Brown as New CFO.)

Board May Conduct Long-Term Incentive Review

Human Resources Committee Chair Todd Raba said MISO is planning a review of its long-term executive incentive plan.

The long-term bonus plan, which gauges and rewards performance for longer than one year, has not been changed in 15 years. Raba said his committee would complete a review of the current plan in June and act on proposed changes by October.

MISO made changes to its short-term incentive plan, doled out annually, last year. (See MISO Directors to Decide Yearly Executive Bonuses.)

MISO Adds 2 New Members

The board unanimously voted to grant RTO membership to two non-transmission-owning companies.

Clean energy project developer and operator ALLETE Clean Energy joined the Independent Power Producers sector, and transmission developer Verdant Plains Electric joined the Competitive Transmission Developers sector.

— Amanda Durish