Search
January 24, 2025

Posted on

Chelan PUD Commits to SPP Markets+ Phase 2 Funding

SPP’s Markets+ notched another in a string of successes Jan. 22 when the Chelan County Public Utility District in Washington said it will pay its $1 million to $2 million share of funding for the market’s Phase 2 implementation stage.

The announcement by the Wenatchee-based publicly owned utility (POU) came just a day after the biggest Markets+ funder, Powerex, committed to joining the market and providing its funding share, estimated to be about $34.8 million. (See Powerex Commits to Funding, Joining SPP’s Markets+.)

Powerex’s move followed FERC’s Jan. 16 approval of the Markets+ tariff, which opens the door for other such moves by backers of the market. (See SPP Markets+ Tariff Wins FERC Approval.)

Chelan spokesperson Rachel Hansen said the PUD’s announcement covered only funding for Phase 2 and did not constitute a commitment to participating in the market.

“Joining the market will be a separate decision,” Hansen told RTO Insider in an email.

In a statement accompanying the announcement, Chelan General Manager Kirk Hudson echoed a point the Bonneville Power Administration has made in defending its intention to contribute its own $25 million share of Markets+ funding before a participation commitment: that the investment is necessary to ensure that Western utilities have a viable alternative to CAISO’s Extended Day-Ahead Market (EDAM).

“It’s in our customer-owners’ interest to ensure that a day-ahead and real-time market option exists that features independent governance, encourages investment in resource adequacy and appropriately values hydropower,” Hudson said.

And like BPA, Hudson referred to the fact that Northwest utilities inevitably will face a need to participate in an organized day-ahead market.

“The success of wholesale power markets is critical to keeping rates low for Chelan PUD’s customer-owners. All around us, we see changes to the region’s electric system that will affect how utilities buy and sell power, including a shift to organized electricity markets,” he said.

Chelan is not a participant in CAISO’s real-time Western Energy Imbalance Market.

According to a spreadsheet posted on SPP’s website Oct. 24, 2024, Chelan would be responsible for funding 0.7% of the estimated $150 million cost for Phase 2, based on the most likely Markets+ footprint scenario. SPP has told RTO Insider that it’s using a funding mechanism similar to that of Phase 1 to calculate each participant’s share of the Phase 2 implementation costs.

As competition between Markets+ and EDAM has ramped up over the past year and a half, Chelan has been solidly aligned with the majority of BPA’s base of POU “preference” customers who have urged the agency to join Markets+ and asked federal officials to respect its independence in making a day-ahead market decision. (See Public Utilities Urge DOE to Respect BPA’s Day-ahead Decision Process.)

And along with Powerex and a handful of other utilities in the Northwest and Southwest, Chelan has been a consistent contributor to the series of “issue alerts” published by Markets+ backers that have favorably compared features of the SPP market with those of the EDAM.

Despite its status as a BPA preference customer, Chelan manages its own balancing authority area in Central Washington, operates 300 miles of transmission and controls a combined nameplate capacity of 2,037 MW from the Rocky Reach, Rock Island and Lake Chelan hydroelectric dams.

The utility serves about 49,000 customers in a territory covering nearly 3,000 square miles.

Posted on

Cold Weather Standard Set for Posting

NERC’s Standards Committee is on track to post a revised cold weather standard for formal comment slightly ahead of schedule Jan. 27, the ERO’s director of standards development, Jamie Calderon, said during the group’s monthly conference call. 

The Board of Trustees directed the committee to develop a revision to EOP-012-2 (Extreme cold weather preparedness and operations) at a special meeting Jan. 10, invoking Section 321 of NERC’s Rules of Procedure to bypass the ERO’s normal stakeholder approval process for the second time. The revised standard must be submitted to FERC by March 27, according to a deadline set by the commission last year. (See NERC Board Invokes Section 321 Authority for Cold Weather Standard.) 

Committee Chair Todd Bennett, of Associated Electric Cooperative Inc., told attendees that a small group of volunteers from the SC, industry and NERC staff has been working on the new standard since the board’s decision. Under the rules invoked by the board, the SC itself must work with stakeholders and NERC staff to prepare a standard that satisfies FERC’s order and post it for a 45-day public comment period no later than Jan. 29. 

Calderon said the drafting team is finished with its revisions; at this point, the standard is undergoing a final legal and administrative review. She emphasized that NERC is “committed to reviewing all comments” received during the comment period, which will end around March 13. After the comments have been reviewed, the board plans to hold a special call to review the standard and any comments that the team considers relevant before FERC’s deadline. 

In response to a question from Sean Bodkin of Dominion Energy, Calderon confirmed NERC will not hold another formal ballot for the standard. The ERO already has held two formal ballot rounds for EOP-012-3, but each time the standard failed to receive more than a 45% segment-weighted favorable vote — far below the two-thirds majority needed for approval. 

Trustee Sue Kelly, the board’s liaison to the SC, praised the team for taking their time to work on the standard. 

“I was reminded of Shakespeare’s [quote] … ‘We few, we happy few, we band of brothers’ — and sisters — who spent all the time working on this together,” Kelly said. “And we on the board just wanted to say thank you very much for all your efforts.” 

GO/GOP Definitions Project Approved

The only standards action taken by the committee on the conference call, other than the update on the cold weather standard, was to approve a proposal to authorize drafting new definitions for generator owners and operators. 

The proposal was in a standard authorization request (SAR) submitted by the team for Project 2024-01 (Rules of Procedure Definitions Alignment — Generator owner and generator operator). NERC Manager of Standards Development Alison Oswald explained the projected is intended “to align the NERC Glossary of Terms’ definitions for [GO] and [GOP] with those that are contained in the Rules of Procedure registry criteria.”  

Oswald explained the SAR already has been posted for a 45-day formal comment period and received “supportive” comments from industry stakeholders. SC members unanimously approved the SAR, which now will be assigned to the Project 2024-01 team. 

Posted on

FERC Approves CAISO’s SWIP-North Development Agreement

FERC on Jan. 21 approved an agreement between CAISO and LS Power to develop a transmission line that would deliver Idaho wind power into California and could help secure Idaho Power’s participation in the ISO’s Extended Day-Ahead-Market.

The commission’s order covers the Southwest Intertie Project-North (SWIP-North), a 285-mile, 500-kV line being developed by LS Power subsidiary Great Basin Transmission at an estimated cost of $1 billion (ER25-543).

The project, which will be jointly funded by CAISO and Idaho Power, will span northern Nevada and southern Idaho and link up with NV Energy’s One Nevada (ON) line to the south, providing 2,070 MW of transfer capacity southbound and 1,920 MW northbound.

The development agreement memorializes CAISO’s previous agreement to fund about 77% of the project, equal to Great Basin’s ownership share, in exchange for operational control of the company’s entitlements on the line, which will equate to 1,117.5 MW of southbound capacity and 1,072.5 MW of northbound capacity, with the balance in both directions being allocated to NV Energy.

In addition to facilitating transfers into California, the line offers Idaho wind power resources access to wholesale electricity markets in the Desert Southwest through the Desert Link line connected to the southern end of the ON line.

CAISO’s Board of Governors approved the development agreement during an October 2024 meeting despite opposition from some Idaho residents concerned about the path of the line. (See CAISO Board Approves Moving Forward with SWIP-N Transmission Line.)

In its filing with FERC, CAISO said it needed to pursue SWIP-North to support the California Public Utilities Commission’s resource planning portfolio calling for California load-serving entities to procure 1,000 MW of wind generation from Idaho. The ISO noted the proposed line is the only active project that would help fulfill that objective, making it the most timely and cost effective option. The project is expected to commence operation in 2028.

CAISO also said SWIP-North would provide additional economic benefits, such as improving California’s resource diversity and increasing the ability to reduce congestion costs on the parallel California-Oregon Intertie. The line also will assist California in reducing renewable energy curtailments and exporting its solar surpluses.

CAISO’s pursuit of the line likely has played a key role in Idaho Power’s leaning in favor of joining CAISO’s Extended Day-Ahead Market (EDAM) rather than SPP’s Markets+. (See CAISO’s EDAM Scores Key Wins in Contested Northwest.)

And last year, Ryan Atkins, NV Energy’s vice president of resource optimization and resource planning, pointed to SWIP-North and the EDAM’s growing transmission footprint when explaining the utility’s reason for choosing the CAISO market in comments to the Public Utility Commission of Nevada. (See Market Footprint Critical for EDAM Decision, NV Energy Says.)

Posted on

Santee Cooper Seeks Buyer for Unfinished Nuclear Project

Spurred by the recent wave of interest in new nuclear generation, Santee Cooper is seeking a buyer to take over an expansion project halted in 2017 amid extensive cost overruns and delays. 

The South Carolina public power and water utility on Jan. 22 announced the request for proposals for the two unfinished generating units at the V.C. Summer Nuclear Station. A buyer could propose to complete one or both units or propose alternatives. 

New nuclear generating facilities are a tantalizing prospect in an era in which demand for electricity — and for zero-emissions electricity — is expected to soar. But U.S. projects using traditional nuclear technology have been slow and expensive to complete, and the first advanced-technology projects still are a few years in the future, at best. 

Santee Cooper is pitching V.C. Summer Unit 2 and to a lesser extent Unit 3 as an outlier, with some of the time-consuming work already complete. 

Santee Cooper CEO Jimmy Staton said in a news release: “Considering the long timelines required to bring new nuclear units online, Santee Cooper has a unique opportunity to explore options for Summer Units 2 and 3 and their related assets that could allow someone to generate reliable, carbon emissions-free electricity on a meaningfully shortened timeline.” 

Staton alluded to state officials’ interest in moving the halted project into its next chapter and said: “Although Santee Cooper has no plans to own or operate those units, this process could help identify another entity with a viable alternative that would produce benefits for our customers, support economic development and provide value to the state of South Carolina.” 

It is the only site in the United States that could deliver 2.2 GW of nuclear capacity on an accelerated timeline, Santee Cooper said. It sits within the security envelope of the V.C. Summer site, where Dominion Energy South Carolina operates Unit 1, and there are sufficient land, water and transmission assets on site to accommodate Units 2 and 3. 

Santee Cooper also noted that Units 2 and 3 would use the same AP1000 reactor technology used by Southern Co. at its Plant Vogtle expansion project, about 85 miles away in Georgia. 

Plant Vogtle Units 3 and 4 have become a frequent talking point for nuclear opponents, far behind schedule and stunningly over budget. 

They came online in 2023 and 2024 with a final price tag north of $30 billion, making their combined 2.43 GW of nameplate capacity some of the most expensive power generation ever built. 

V.C. Summer Units 2 and 3 were heading down the same path — South Carolina Electric & Gas (SCE&G) spent more than $9 billion on the project before formally ending construction Aug. 17, 2017. 

The fallout continued long after cancellation. Four years later, The Associated Press reported on the third guilty plea to federal criminal charges by executives connected to the project, and on the multiple civil lawsuits filed by ratepayers and others left to foot the bill. 

Like the Vogtle expansion, the V.C. Summer expansion suffered extensive and costly delays and the bankruptcy of lead contractor Westinghouse Electric Co. 

In 2018, SCE&G transferred its majority interest in Units 2 and 3 to minority owner Santee Cooper and Dominion Energy acquired SCE&G parent company SCANA. (See Dominion to Buy Distressed SCANA for $8B.) 

The Nuclear Regulatory Commission first licensed V.C. Summer’s 977-MW Unit 1 to operate in 1982, and in 2004 relicensed it to operate into 2042. 

Posted on

SPP Markets+ Tariff a ‘Home run’, Staff Says

FERC approved SPP’s tariff for Markets+ with minor modifications in what the RTO’s staff described as a “home run” during the Markets+ Participant Executive Committee’s meeting Jan. 21.  

FERC conditionally approved Southwest Power Pool’s tariff for Markets+ on Jan. 16, marking a significant milestone likely to ramp up competition with CAISO’s Extended Day-Ahead Market.  

The order came with two conditions, including a requirement that SPP make a compliance filing within 30 days.  

Paul Suskie, SPP’s executive vice president of regulatory policy and general counsel, noted during the executive committee’s meeting that the compliance filing requires SPP to add six sentences to the tariff and delete one. 

“I’m going to repeat that: addition of six sentences and the deletion of one, out of a 650-page tariff,” Suskie said. “Pretty significant accomplishment.” 

Specifically, FERC asked for modifications to sections in the tariff dealing with transmission availability and transmission opt-out mechanism, duration and communication of opt-outs, Markets+ transmission contributor and mitigation methodology for resource aggregation, according to Suskie. 

“Then last was a deletion of a duplicate that we acknowledged was an unintended duplicate in the filing,” Suskie said. 

SPP and the SPP Market Monitor also must file informational progress reports to FERC every six months to provide updates on market developments. 

This map shows the balancing authority areas that participated in Phase 1 of developing SPP’s Markets+. NV Energy in Nevada has committed to joining CAISO’s EDAM and will not be participating in Phase 2. | SPP

Suskie said after reading and rereading the order, “I give it a home run with 10 feet to spare. So, a great success.” 

Steve Wright, SPP strategic planning committee member, said the FERC approval is “a really big moment” and that consumers will be better off as a result. 

“Because what has happened here is choice has been created, and when there is choice, there is competition,” Wright said. “And we’ve already seen the impacts of the competitive element that Markets+ has offered in the West just over the course of the last 18 months.” 

The commission said it expects Markets+ will provide its participants with “important economic and reliability benefits” and help them manage the impact of “increasing levels of variable energy resources, load growth and extreme weather events in the region.” 

The order comes nearly six months after the commission issued the RTO a deficiency letter outlining 16 problems it needed to address in the tariff, which it filed last March after an intensive stakeholder process. 

The decision indicates that SPP sufficiently addressed most of those deficiencies, with FERC asking the RTO to provide clarity where the tariff “lacks specificity on key points,” as Commissioner Judy Chang noted in a concurrence, such as in protocols covering “market and resource dispatch mechanics to account for state greenhouse gas programs and the ability for resources to be aggregated when participating” in the market. 

SPP anticipates executing Phase 2 funding agreements soon. FERC must approve the agreements, after which SPP can go to the bank and obtain the financing necessary to fund Phase 2. The process may take up to two months, SPP staff said. 

Posted on

NEPOOL Reliability Committee Briefs: Jan. 22, 2025

The NEPOOL Reliability Committee (RC) voted to support changes in ISO-NE Planning Procedure 7 (PP7) to comply with FERC Order 881. That order is intended to improve transmission line ratings by requiring ambient adjusted ratings for near-term transmission service requests and seasonal ratings for longer-term transmission requests. (See FERC Orders End to Static Transmission Line Ratings and FERC Denies Rehearing, Clarifies Order 881 on Line Ratings.)

PP7 details ISO-NE’s procedures for determining and implementing transmission line ratings.

“The proposed PP7 revisions focus primarily on increasing the number of seasonal ratings from 2 to 12 and providing general guiding principles and requirements in calculating ratings for transmission lines, while allowing each Market Participant to establish their own rating methodology,” wrote Michael Drzewianowski, principal engineer of transmission planning for ISO-NE, in a memo before the meeting.

He added that the proposal “is designed to advance the order’s objective to account for the natural cooling and heating effects of weather when determining available transmission capacity and to promote and enhance sharing of rating methodologies and ratings data.”

New England Clean Energy Connect

The RC voted to support two operating agreements related to the New England Clean Energy Connect (NECEC) transmission project:

    • A transmission operating agreement between ISO-NE and NECEC Transmission giving ISO-NE authority for operational control over the NECEC line
    • An interconnection operating agreement between ISO-NE and Hydro-Québec enabling “the coordinated operation of the Québec-to-New England interconnection”

Data and Information Publication

ISO-NE also outlined a series of updates to its reporting of operational data and information on capacity scarcity conditions, responding to a series of stakeholder requests.

The RTO implemented several changes in late 2024, including “enhanced notifications of real-time contract curtailments” and a new Next Day Operational Capacity Report.

ISO-NE also is working to create a new “public prospective monthly report” containing total capacity supply obligation data and intends to expand its capacity reporting to include hourly data on capacity surplus. It’s considering informational enhancements related to aggregate storage capabilities and real-time tracking of reserves and outages.

Generator Availability Data Collection

The RC also supported a proposal for a new planning procedure to govern data collection for the RTO’s Generating Availability Data System.

“This procedure will describe the data submission timelines, reporting requirements and validation processes for the required data,” said Steven Judd, manager of resource adequacy and accreditation for ISO-NE. He noted that ISO-NE relies on the data to calculate each resource’s outage rate and the region’s installed capacity requirement.

He clarified methodology used to calculate when wind and solar generators must report events, which differs from the methodology used for conventional generators and is “based on the difference of the plant’s [Network Resource] Capability and their Real Time High Operating Limit.”

Operating Procedures

Jaren Lutenegger, director of operational performance, training and integration at ISO-NE, detailed some minor proposed updates to ISO-NE Operating Procedure (OP) 14, which contains technical requirements for generators.

ISO-NE proposes to clarify its language regarding do-not-exceed dispatch limits for solar and wind generators, and to add fuel types to enable reporting to meet U.S. Energy Information Administration requirements.

Mike Knowland, manager of operations forecast and scheduling for ISO-NE, presented proposed changes to OP-21, which governs operational surveys, energy forecasting and energy emergency actions. The proposal is intended to “streamline the surveys and associated processes,” and includes updated survey questions and clarifying language regarding energy alerts and emergencies.

The RC voted to support both proposals, along with clarifying changes to an OP-23 appendix concerning audits of reactive resources.

Posted on

PJM Sets Record Winter Peak Load

PJM set a record winter peak load of 145 GW around 8:15 a.m. Jan. 22, surpassing its previous seasonal peak of 143.7 GW, set in February 2015. 

In an announcement of the record peak, Senior Vice President of Operations Mike Bryson said actions the RTO and its members took ahead of the cold snap got the system through strained conditions the night of Jan. 21 and the following morning. That includes maximum generation and low voltage alerts, a load management alert, a maintenance outage recall, conservative operations and a cold weather alert. 

“We also worked closely with member companies to help resolve any cold-weather issues before the deep freeze set in,” Bryson said. “All of those steps served to help PJM and our members get ready for the cold weather. They have performed remarkably thus far, and I am grateful for their efforts.” 

Exports added an additional 8 GW on top of the Jan. 22 peak and were as high as 9 GW during other times. The maximum generation alert put neighboring regions on alert that exports may need to be curtailed, PJM said. Bryson added that interchange is bidirectional, and PJM has relied on its neighbors in the past. 

The preliminary load data PJM shared should be considered approximate figures calculated from raw telemetry data, PJM cautioned in the release.  

“Verified metered loads are provided by electric distribution companies and represent the best-quality level of load within their zones, with adjustments to data occurring up to 90 days after the actual date,” it said. 

High demand is expected to continue as long as temperatures remain unusually cold.  

In an announcement of the alerts Jan. 21, PJM noted that the conservative operations declaration had been established in the wake of the December 2022 Winter Storm Elliott to provide operators with more flexibility in committing reserves or reducing power flows on certain facilities. It said PJM was working with gas generators to ensure their resources were dispatchable ahead of the onset of cold weather and the MLK Jr. Day holiday weekend. 

The RTO also lauded the performance of its generation fleet during a cold weather alert issued between Jan. 8 and 10. PJM’s Kevin Hatch told the Operating Committee that generation owners started their units early to ensure they could be dispatched if needed and maintenance was rescheduled to ensure availability. Forced outages increased by 2 GW as the temperatures fell, which Hatch said was an improvement over the 7 GW increase in outages seen during the January 2024 Winter Storm Gerri. (See “System Performing Well During Cold Weather Advisory,” PJM OC Briefs: Jan. 9, 2025.) 

Winter storms have become an increasing focus in PJM’s risk modeling, with the season holding 87.8% of the expected unserved energy (EUE) risk according to figures the RTO will present to the Markets and Reliability Committee on Jan. 23. Accelerating demand is noted in the preliminary 2025 Load Forecast, which estimates winter peaks will increase by 2.4% annually, up from 1.8% the year prior. Most of that increase is associated with large load additions (LLAs), such as data centers and chip manufacturing facilities, which make up 11.8% of the increase in winter loads between the 2024 and preliminary 2025 forecasts for the 2030/31 delivery year. 

Posted on

What is and isn’t in Trump’s National Energy Emergency Order

President Donald Trump’s executive order declaring a National Energy Emergency talks a lot about energy and energy resources ― referring to different fuels, fossil and otherwise ― but relatively little about generation, defined as the use of those fuels to produce electricity, according to Keith Martin, co-head of projects for Norton Rose Fulbright.

Electricity is “not the operative part of the executive order,” despite the fact that an alleged shortage of electric power across the U.S. is the ostensible reason for its issuance, Martin said in an interview Jan. 21. The order is inconsistent in that respect, he said, “promoting energy defined to exclude electricity. … A more careful draftsman would have connected all the dots.”

Signed just after Trump’s inauguration on Jan. 20, the emergency declaration and some of the other energy-related orders are essentially policy statements aimed at “messaging,” Martin said. “They are press releases on fancier paper … directions to the agencies, but they’re not specific legal actions.”

What’s left out of the order is as significant as what’s included. While calling for “a reliable, diversified and affordable supply of energy,” it omits any mention of solar, wind or storage and makes only passing reference to transmission as part of its definition of generation.

So, what impact, if any, might the declaration and Trump’s other energy-related executive orders have? It varies, Martin said.

Trump’s order on “Unleashing American Energy” calls for an immediate pause on “the disbursement of funds appropriated through the Inflation Reduction Act of 2022 … or the Infrastructure Investment and Jobs Act.”

The wording calls for agencies to “review their processes, policies and programs for issuing grants, loans, contracts or other financial disbursements of such appropriated funds for consistency with the law” and Trump’s own fossil fuel-leaning energy policies spelled out in the order.

“The Biden administration had been rushing to get to legal commitments for these types of things,” Martin said, referring to the Department of Energy’s efforts to finalize contracts with a range of grant and loan recipients in the first weeks of January.

According to a final report from the White House, 90% of IRA and IIJA funds available through the end of 2024 have finalized contracts. But, Martin said, “the choice of words ― pausing disbursements ― suggests that Trump intends to ignore the legal commitments and just block any further disbursements.”

Industry analysts ClearView Energy Partners agreed, saying the wording could be interpreted “expansively so that it applies to obligated undisbursed monies as well as those which have yet to be obligated.”

The emergency declaration, on the other hand, calls on department and agency heads to “identify and exercise any lawful emergency authorities available to them, as well as all other lawful authorities they may possess to facilitate the identification, leasing, siting, production, transportation, refining and generation of domestic energy sources.”

DOE’s emergency powers are limited, under the Federal Power Act Section 202(c), to temporary actions in response to emergency-related power shortages. For example, DOE issued an emergency order on Oct. 9, 2024, for Duke Energy Florida to operate some generating plants at low output because of the impacts of Hurricane Milton.

Other sections of the order call for streamlining and accelerating the Fish and Wildlife Service’s emergency consultations on projects that might raise concerns about endangered species or critical habitat “in order to ensure an initial determination within 20 days of receipt” and to get to a final decision within 140 days.

Tom Falcone, president of the Large Public Power Council, does not expect immediate changes. “It’s early days on a lot of these things,” he said, noting that the energy emergency order calls for reviews, assessments and recommendations, as do some of the provisions of the “Unleashing” order. “We read them as general direction with an awful lot of process to come, because each one of those things calls for administrative processes and other processes that are still to come.”

‘A Period of Power Politics’

Karen Wayland, CEO of the GridWise Alliance, is similarly skeptical of Trump’s claims of an energy emergency. “I think managing our energy system requires constant attention, but I don’t see anything that constitutes an emergency,” she said.

Wayland framed Trump’s rhetoric as overreach. “We know where infrastructure constraints are. We know both on the transmission [side] and the pipelines. We know where they are. There’s nothing in the presidential authorities that allows him to just say, ‘OK, everything has been approved. You can go ahead and go build that.’”

ClearView Energy Partners took a broader view of the current political context for Trump and his executive orders and how they might be implemented. The U.S. and other countries “have entered a period of power politics” in which American presidents first “learn from, and build upon, their predecessors’ actions” and appear “increasingly willing to test the outer peripheries of regular order, established norms and American political traditions.”

ClearView anticipates legal challenges to Trump’s more controversial orders, but should federal courts overturn an order, Trump “might iteratively pursue new tactics to achieve his original objectives.”

Like Martin, ClearView sees the emergency declaration as setting direction; “however, it does not appear to immediately change policies that might directly impact supply, demand or price.”

Lisa Jacobson, president of the Business Council for Sustainable Energy, sees Trump’s orders as an opportunity for bipartisan action in support of clean energy.

The U.S. may not have an energy emergency, “but we clearly have challenges,” Jacobson said. “We need to understand and respect them, and if this creates an opportunity to really amplify the urgency of moving us into a better position to modernize and expand our energy infrastructure, I’m going to take that moment.”

But Jacobson also argued that the way forward requires “durable” bipartisan legislative action, especially on permitting. “We know there’s an appetite for that. Hopefully raising it to the level that the president has done on Day 1 will yet again underscore the fact that for our economy, for our security, for the environment, we need to be able to move much faster with energy infrastructure, and energy infrastructure of all kinds.”

Posted on

Powerex Commits to Funding, Joining SPP’s Markets+

Powerex said Jan. 21 that it will fund the next phase of SPP’s Markets+ and “re-affirmed” its commitment to joining the Western real-time and day-ahead offering, a move the company signaled as early as November 2023 — before the start of the extensive stakeholder process to develop the market. 

The announcement by Powerex, the marketing and trading arm of Vancouver, British Columbia-based BC Hydro, comes on the heels of another positive development for SPP in its competition for participants with CAISO’s Extended Day-Ahead Market (EDAM)/Western Energy Imbalance Market (WEIM): FERC’s approval of the Markets+ tariff. (See SPP Markets+ Tariff Wins FERC Approval.) 

“Powerex has greatly appreciated the collaboration of a diverse group of stakeholders who have invested countless hours over multiple years, with SPP providing facilitation and market expertise to aid in this effort,” Powerex CEO Tom Bechard said in a statement. “The end result is a fair, robust and durable initial market design built upon an inclusive and independent governance structure from the outset.” 

The announcement also follows by two months the first formal commitments to Markets+ by Arizona’s four largest utilities, including Arizona Public Service, Salt River Project, Tucson Electric Power and UniSource Energy Services. (See 4 Arizona Utilities Commit to Joining Markets.) 

“We are pleased to hear of Powerex’s commitment to join Markets+ phase two, and we look forward to continued collaboration with Powerex and other entities as we work together to build a Western market that will reduce costs for members, improve reliability and help members reach their renewable integration goals,” Antoine Lucas, SPP vice president of markets and incoming COO, said in an email to RTO Insider. 

FERC’s Jan. 16 decision approving the tariff opened the door for Markets+ backers to begin making formal participation commitments and provide the $150 million investment needed to fund the market’s Phase 2 implementation stage. 

According to an SPP spreadsheet posted to the RTO’s site Oct. 24, 2024, Powerex will be the single largest funder of Phase 2, responsible for 23.2% under the most likely market footprint scenario, equating to around $34.8 million.  

“Our share of Phase 2 is not yet finalized and will depend on who ultimately signs on,” Jeff Spires, director of power at Powerex, said in an email, adding that 23.2% “seems like a reasonable estimate based on participation in Phase 1.” 

“SPP is using a funding mechanism for Phase 2 similar to Phase 1 for determining each participant’s share of the Phase 2 implementation costs,” Lucas said. 

The Bonneville Power Administration, which has not finalized its funding commitment, would be the second-largest contributor, at about $25 million, or 17.4%. The federal power agency recently said it “is actively working with SPP and all other Markets+ participants on finalizing Phase 2 funding agreements.” 

In its statement, Powerex noted that a market footprint that includes much of the Northwest (BPA was not explicitly mentioned), the Arizona utilities and — likely — Xcel Energy-Colorado “will have substantial resource and load diversity, enhancing the benefits for all participants.” 

“This expected diversity includes an extensive hydro fleet in the Northwest, growing solar supply in the Southwest as well as expanding wind resources in the Northwest, Southwest and Rockies western subregions,” the company said. “The Markets+ footprint will also have both winter-peaking and summer-peaking utilities, further enhancing the opportunities for mutually beneficial trade.” 

Powerex said it also is “actively pursuing investments in transmission expansion efforts” to help support connectivity across Markets+. 

Markets+ Supporter, EDAM Critic

In nearly equal measure, Powerex has been one of Markets+’s most ardent supporters and one of CAISO’s harshest critics, having previously stated it had no intention of joining EDAM under any circumstances. 

The company has been a consistent critic of CAISO’s state-backed governance structure and an outspoken skeptic of the ISO’s dual roles as operator of and participant in the EDAM/WEIM, contending that CAISO market practices don’t provide equal treatment to non-California participants — all complaints CAISO and EDAM supporters in the Northwest have contested.  

In that capacity, Powerex has been a key contributor to the series of “issue alerts” Markets+ backers have been publishing since summer 2024 to compare key features of Markets+ and EDAM, covering such issues as governance, market operations, market design and market seams. 

In its Jan. 21 statement, Powerex said it “evaluated its decision to fund and join Markets+ based on three equally important pillars: independent governance, an impartial market operator and sound market design. These three pillars are critical to ensure equitable outcomes for all participants and ratepayers across the market’s footprint.”  

Powerex was one of the first entities to weigh in on the debate over CAISO’s response as WEIM operator during the January 2024 cold snap in the Northwest, which pushed a handful of the region’s balancing authority areas to the brink of rolling blackouts in the face of power supply shortages. 

The company criticized how CAISO distributed the high transmission congestion revenue rents resulting from the event, questioned California’s role in supplying its northern neighbors and even offered a recommendation that the Northwest use existing transmission to increase import capability directly from the Southwest and Rocky Mountain regions to circumvent flowing power through CAISO’s territory. (See Powerex Report Expands NW Cold Snap Debate.) 

The persistent debate around the cold snap prompted CAISO to respond eventually with its own rebuttal. (See CAISO Seeks to Dispel CRR ‘Myths’ Around January Cold Snap.) 

More recently, Powerex published its own analysis questioning the soundness of a Brattle Group comparative study that found Northwest utilities as a whole would financially benefit more from participating in EDAM than in Markets+, which elicited a response from Brattle. (See Powerex Contests Brattle’s EDAM/Markets+ Comparative Study.) 

In June 2024, clean energy industry group Renewable Northwest released a study contending that Powerex was backing Markets+ because the company would benefit more financially from a West divided into multiple markets than a single market that included California. The study was conducted by Grid Strategies. (See Group Claims Powerex Backing Markets+ to Benefit from Divided West.)  

At the time, Spires told RTO Insider the intent of the study “appears to be to distract from the essential governance and market design elements that differentiate the two day-ahead market options.” 

With Powerex’s announcement, the attention of participants in Western electricity market developments will return to BPA, which says it will issue a draft day-ahead market decision in March and a final decision in May. 

Posted on

Trump Will Need More than Executive Orders for US to Meet Rising Power Demand

President Donald Trump’s wave of executive orders issued just after he took office already have generated plenty of headlines, but on their own, they will not solve the biggest issue facing the power industry — the need to meet rising demand — sources told RTO Insider on Jan. 21.

“If we truly want to win the AI race against China, I think that merits a declaration of national emergency, but we can’t possibly build enough oil and gas infrastructure in the next couple of years to do it with fossil fuels alone,” former FERC Chair Neil Chatterjee (R) said in an interview. “What we should be focusing on is making it easier through this emergency declaration to get every available electron.”

In addition to expanding fossil generation, that would include renewable energy, storage and the transmission needed to connect new supplies and loads to the grid, he said.

Electric transmission was not mentioned in the “Unleashing American Energy” executive order, and it only came up in the “Declaring a National Energy Emergency” order as part of generation. It could benefit from Trump’s executive action, Grid Strategies President Rob Gramlich said.

The major tech firms backing AI, many of whose CEOs were in the Capitol rotunda when Trump took office Jan. 20, are going to want to expedite transmission buildout to help meet that demand, Gramlich said in an interview.

Part of the reason transmission was largely absent from the executive orders is that it became politicized in the past few years, as Democrats came to support its expansion as necessary to deliver on the goals of the Inflation Reduction Act.

“That has created this notion that transmission policy is having red states subsidize blue state policy, and it is going to take some education and experience to overcome that,” Chatterjee said.

Republicans will tackle many of their policy preferences on their own because they control the White House and both houses of Congress, Gramlich said. He expects they will push energy policy through budget reconciliation, a legislative procedure tying bills to budget measures in order to avoid the Senate filibuster. Democrats used this to pass the IRA itself without Republican support in 2022. (See Senate Passes Inflation Reduction Act.)

“I think most permitting reform will need to go through Congress, and I think only a tiny bit could be done through reconciliation, leaving most of it for what would need to be a bipartisan bill,” Gramlich said.

He warned not to expect negotiations on permitting reform to pick up immediately where they left off last session because Republicans will need time to push through whatever policies they can without Democrats’ votes. Either later this year or next year, momentum could pick up for another attempt at a bipartisan permitting bill. (See Lame Duck Permitting Push Fails; Manchin Blames House GOP Leaders.)

The big issue facing infrastructure advancement is bipartisan: Americans of all political persuasions can exhibit “NIMBYism” when it comes to infrastructure, whether it is a pipeline for natural gas or a transmission line for clean energy, Chatterjee said. But the country will need all the electrons possible to meet the rising demand and maintain reliability.

Neither party has wrapped its mind around the surge in demand the electric industry is facing and how important serving it is to win the AI race, which is a national security issue, he said.

“When everyone gets situated, and we start to recognize that electric power is essential to winning the AI race, some of the political obstacles of the last decade and a half, in my view, will start to wear away,” Chatterjee said. “And you’ll see Democrats recognizing we cannot possibly win the AI race without fossil fuels. And you’ll see Republicans recognizing that we cannot possibly win the AI race with fossil fuels alone.”

Gramlich agreed with that assessment, adding that many policymakers are stuck on where the grid was a few years ago when the expansion of renewables was the main driver for its expansion.

“But now there’s a lot of other generation, and there’s a lot of different types of loads, including manufacturing and data centers that are also trying to connect to the grid,” Gramlich said. “So, the interests in support of grid expansion have expanded dramatically, and I think we’ll see, over the course of this year, the politics come around and incorporate that fact.”

Mark Brownstein, the Environmental Defense Fund’s senior vice president for the energy transition, took issue with the idea of an “energy emergency” altogether, saying in a statement that the U.S. is already the largest oil and gas producer, with export capacity on pace to double.

“The first-day wave of executive orders does nothing to lower energy costs or improve reliability,” Brownstein said. “Instead of rolling back cost-effective, common-sense safeguards that have broad public support, a forward-looking administration would be focused on modernizing our aging electricity grid to meet the growing demand from AI data centers and an increasingly digital economy, prioritizing efficiency and clean electricity.”

Erasing Biden’s EV Targets

While the industry deals with the growth of data center demand now, Trump’s executive orders will have some impact on longer-term demand trends, such as for electric vehicles.

Trump’s “Unleashing” order states that “it is the policy of the United States … to eliminate the ‘electric vehicle mandate’ and promote true consumer choice.” There is not any law or rule requiring consumers to purchase EVs, but Republicans branded former President Joe Biden’s policies to encourage EV adoption as such.

The order lists several “regulatory barriers” to be removed, such as state emissions waivers and “unfair subsidies and other ill-conceived government-imposed market distortions that favor EVs over other technologies and effectively mandate their purchase by individuals, private businesses and government entities alike by rendering other types of vehicles unaffordable.”

R Street Resident Senior Fellow Josiah Neeley said that the order could wind up being a blessing in disguise for the industry.

“It seemed unlikely based on the ability of the [Biden] administration to build out necessary accompanying infrastructure, like charging stations,” that getting EVs to 50% of national sales by 2030 “was going to be feasible,” Neeley said in an interview. “And, so, I think realistically, the administration had set itself on a collision course where it was going to have to do something to alter” its goal.

EVs are going to make up a growing share of new vehicles going forward, but it will be driven by customer demand and that will help turn down the political back and forth around them.

“I think unfortunately in America, everything tends to get very easily politicized, where if one party tries to push EVs, that makes EVs seem uncool,” Neeley said. “By contrast, you have [Tesla CEO] Elon [Musk] endorse Trump, and suddenly a bunch of people who used to like Tesla don’t like Tesla anymore.”