The addition of new resources and broader support from the Western Energy Imbalance Market (WEIM) led to an “uneventful” summer for the Western grid, industry experts said — despite record peak loads and July being the hottest month ever recorded across the region.
A key factor in that success: more batteries.
“A big benefit that we found from this summer was the growth of battery energy storage within the California ISO,” Scott Olson, director of policy, regulatory and markets at Avangrid Renewables, said during a Sept. 25 Western Energy Markets (WEM) Governing Body panel discussion. “Having 10 gigawatts of batteries … helped us to the uneventful outcome that we actually appreciated.”
Battery storage is playing an increasingly important role as the industry continues to replace conventional resources with intermittent renewables. California will need around 50 GW of batteries to meet its 2045 greenhouse gas reduction goals, according to a CAISOspecial report, and it’s well on its way. Battery storage capacity in the ISO has grown from 500 MW in 2020 to 11,200 MW as of June 2024, and the WEIM includes an additional 3,500 MW.
“Our growing battery fleet was instrumental in balancing supply and demand throughout the heat wave,” CAISO spokesperson Anne Gonzales told RTO Insider in an email.
Pam Syrjala, senior director of supply and trading at Salt River Project, agreed that while summer was challenging due to extreme heat, conditions were better than the prior summer, largely thanks to battery storage.
“Last summer, we were trying to implement a large number of battery resources into our system, so we were bringing on almost 450 MW of batteries” Syrjala said during the panel discussion. “This summer, we brought on probably over 650 MW of batteries, and it was a night-and-day difference.”
Temperature variation also contributed to more manageable grid conditions, with certain parts of the West, like Southern California, experiencing above-normal but not historically high heat, compared with the central part of the state, which broke temperature records.
“That variation, while small, was enough to tamp down demand and maintain grid reliability,” Gonzales said.
Assistance Energy Transfers
Relying on the transfer capability of the WEIM and on the market as a whole also contributed to smooth summer operations. In a Sept. 25 market update discussing second-quarter performance, Guillermo Bautista Alderete, CAISO director of market performance and advanced analytics, highlighted that WEIM transfers were substantial, and that expansion of the market “unlocked increasing volumes of economic transfers.”
The assistance energy transfer (AET) program, which allows WEIM areas to receive energy transfers when they don’t meet the market’s resource sufficiency requirements ahead of a delivery interval, played an important role this summer. Six WEIM balancing areas opted into the AET program in June, followed by 10 more in July and August, and nine in September. The total surcharges assessed were about $72,000 for all the balancing authorities involved.
WEM Governing Body Chair Rob Kondziolka said that while the ISO discourages BAs from leaning on the AET program too heavily, it helped a lot.
“Assistance energy transfers has been a great benefit, we think, to the market design,” Olson said. “We only use it in small amounts, but, boy, when it’s there relative to the alternative in the real-time market … it’s absolutely a huge benefit to us.”
Kelsey Martinez, manager of system operations at PNM Resources, backed up Olson’s view.
“It just allows you that peace of mind that you’re not going to have to change your operating process in the midst of an energy crisis,” Martinez said.
The AET program was pushed by NV Energy and heavily debated in its beginning stages, said Kondziolka, who expressed satisfaction with its benefits, despite the associated costs.
‘We Can’t Let Our Guard Down’
Even with record peaks and high temperatures, CAISO issued no energy emergency or flex alerts. And while wildfire danger was high, there were no disruptions to the bulk electric system, Gonzales said.
California energy officials — including those at CAISO — entered summer ‘cautiously optimistic’ about grid conditions, and the ISO is approaching fall with a similar mindset, she said. (See Calif. Officials ‘Cautiously Optimistic’ on Summer Reliability.)
“We need to be cautious about the successes of the grid this summer. We can’t let our guard down,” Gonzales said. “We were closely monitoring equipment fatigue and ambient de-rate (reduced output) from the prolonged heat waves. When generators are running at high rates of output for multiple consecutive days, we start to get concerned about equipment failure and outages. And we continue to closely track wildfire activity extending into October.”
ERCOT staff and CPS Energy continue to work “very closely” in negotiating reliability must-run contracts (RMR) for three aging coal-fired units that the grid operator says are necessary for reliability in the San Antonio area.
General Counsel Chad Seely told ERCOT’s Board of Directors on Oct. 10 that the ISO is positioning itself to come before the board during its December meeting for a “full evaluation” of whether the directors want to select one or more of the RMR units.
“This is a big decision for the board to evaluate the local reliability impacts that we have identified as a result of these resources going away and making sure that you have a complete set of information to evaluate the cost/benefits of what your decision may be,” Seely said.
San Antonio’s municipal utility told ERCOT this year that it planned to retire the three coal units, which date back to the 1960s, in March 2025. However, ERCOT said the Braunig Power Station units, with a combined summer seasonal net maximum sustainable rating of 859 MW, were needed for reliability reasons and issued a request for reliability must-run proposals in July. (See ERCOT Evaluating RMR, MRA Options for CPS Plant.)
Complicating matters is that CPS Energy has said each unit must be inspected and repaired — consecutively, not concurrently — if it is to operate beyond its retirement date.
Rick Urrutia, the utility’s vice president of generation operations, said the inspection outage for Braunig Unit 3, the largest (412-MW maximum summer rating) and most desirable RMR resource, will take at least 60 days. That could be delayed by long lead times for needed parts for repairs, he said.
“That schedule can change if we find any major ‘discovery work,’ in which some of that equipment or systems has to have extensive repairs,” Urrutia said.
Negotiations between the two parties have focused on the lost opportunity cost if Unit 3’s outage begins before any RMR service; the outage, inspection and repair processes for all three units; and the costs of any potential RMR service.
CPS Energy agreed to move Unit 3’s suspension date up to March 2 under what ERCOT is characterizing as a pre-RMR agreement. That would improve the odds for its availability and potentially one of the other units for next summer, should the board choose that path, Seely said.
ERCOT says the RMR units will be important in addressing the South Texas export interconnection reliability operating limits (IROLs) staff established this year. Their analysis revealed that under certain conditions, such as when high system demand coincides with an outage of a major transmission line or one or more generation units, lines that deliver power from South Texas into San Antonio could be overloaded and possibly lead to cascading outages.
Potential RMR or must-run alternative service would reduce the loading on the 345-kV lines subject to the IROLs.
An ERCOT solicitation for must-run alternatives (MRA) to the Braunig units resulted in one response. A 200-MW multi-hour energy storage resource responded within minutes of an Oct. 7 deadline, proposing to start in the summer of 2026 and end March 1, 2027.
“That’s a little disappointing that we weren’t able to get more interest from the industry because ultimately, the consumers of Texas will have to pay for any type of solution the board deems appropriate,” Seely said.
The grid operator says the ESR would provide a positive shift factor for the IROL in that it’s north of the South Texas constraint and would reduce loading. Staff will conduct eligibility and qualification analysis of the proposed MRA.
VALLEY FORGE, Pa. — The Market Implementation Committee rejected a PJMissue charge that envisioned adding notice that Base Residual Auction (BRA) rules are subject to change, with two-thirds of stakeholders opposed.
PJM Associate General Counsel Chen Lu said the issue charge was borne of a 3rd U.S. Circuit Court of Appeals March opinion. Allowing PJM to revise the reliability requirement for the DPL South locational deliverability area (LDA) after the parameter had been posted would violate the filed rate doctrine, the court ruled. (See 3rd Circuit Rejects PJM’s Post-auction Change as Retroactive Ratemaking.)
The issue charge deliverables include notice that PJM may “correct capacity auction rules, provided FERC has approved such rules,” and that such rules are known in advance of the auction “to allow those submitting offers to do so in reliance on conclusive rules and the orderly administration of the capacity market. Market sellers would be permitted to revise any pre-auction elections that occurred prior to FERC approval of any auction rule changes.”
The scope includes adding language that there are no legal consequences associated with the posting of the planning parameters, which Lu said was intended to address the court opinion that once a posting is made, it is binding unless there was prior notice of the potential for changes. The issue charge states that member recommendation would be required for changes to the installed reserve margin (IRM) or forecast pool requirement (FPR).
Prior to the vote, Lu said the issue charge would seek proposals allowing PJM to ask FERC to change any relevant deadlines for pre-auction activities or the commencement of the auction. If the commission granted changes to auction rules or parameters that already had been set, the issue charge called for proposals to allow market participants to revise their elections.
Several stakeholders argued that granting PJM the change would undermine market certainty by allowing PJM to set dates certain for auction parameters and the rules defining them, only to change them after the fact. There also were questions of how much review stakeholders would have before PJM files possible changes with FERC.
Independent Market Monitor Joe Bowring said allowing such changes to the conduct of capacity auctions would be a drastic change that would undermine market certainty and might limit the time available for the PJM and Monitor to review offers into the auction. He argued the issue charge would be an “overreaction” to the court decision.
“PJM explicitly created a period of 60 days at the end of the offer submission process to permit anyone to take issues with market offers to FERC prior to an auction. PJM’s proposed approach could eliminate that period that was designed to reduce the probability of any party challenging auction results,” he said.
Calpine’s David “Scarp” Scarpignato said PJM already makes changes to auction postings and parameters and questioned what additional changes would be in scope.
Lu responded that PJM’s reading of the court opinion is that changes can be made only within the existing rules governing the auction, while the proposal would allow petitioning FERC to change those rules.
Scarp also said the language allowing relevant deadlines and auction elections to be changed was vague, stating that modifying a parameter could change the viability of bilateral transactions or make it worthwhile for a generation owner to seek an exemption from the requirement that resources offer into the capacity market.
Vistra’s Erik Heinle said the revisions made to the issue charge would improve market certainty and parameters occasionally may need revising when new data comes in or if it’s determined that posted data is incorrect. He added that it’s important that stakeholders are involved in the process.
Lu pointed to FERC Chair Willie Phillips’ concurrence in the commission’s order reversing its authorization of the reliability requirement change, in which Phillips called for changes to allow for corrections of errors in auction design. (See Following Court Ruling, FERC Reluctantly Reverses PJM Post-BRA Change.)
“This proceeding should lead all stakeholders, including both PJM and the generators that will reap the more than $100 million windfall due to the court’s decision, to take all necessary steps to ensure that we never find ourselves in this position again,” Phillips wrote. “That includes putting in place controls to ensure that a similar error does not reoccur and, should it somehow happen again, that PJM or the commission has the authority to correct that error and protect customers from such a manifestly inequitable result. Basic equity, and the public interest, demand nothing less.”
VALLEY FORGE, Pa. — The Planning Committee narrowly endorsed a coalition proposal to rework how generation owners can transfer capacity interconnection rights (CIRs) from a deactivating unit to a new resource. (See “Voting on CIR Transfer Proposals Deferred to October,” PJM PC/TEAC Briefs: Sept. 12-13, 2024.)
The coalition proposal received 51.8% support during the Oct. 8 vote, beating out a PJM proposal that received 40.6% support and a package from the Independent Market Monitor that received 11.1%.
The coalition proposal would create a technology agnostic process for new resources to replace gas generation being forced to deactivate in states with strong clean energy requirements. It has a nine-month timeline for applications to be reviewed, a replacement impact study identifying any potential network effects and the drafting of an interconnection agreement. The proposal was modified based on feedback at the Sept. 12 PC meeting to include thermal alongside the voltage and short circuit analyses in the replacement impact study.
Unlike PJM’s proposal, replacement resources would be permitted to proceed with the expedited process if minor network upgrades are identified and all resource types would be eligible. PJM’s proposal would bar storage from participating on the basis that the original generator’s deliverability analysis did not envision charging.
The coalition proposal also was revised since September to add a three-year requirement on the commercial operation date, although development milestones may be extended for delays outside the developer’s control or resources that have “industry-recognized elongated construction timelines.”
The PJM proposal would have had a longer study timeline of about 13 months and tighter requirements, not allowing any projects with “material adverse impacts,” such as requiring network upgrades or consuming transmission headroom above the deactivating generator. Any proposals with such impacts would be required to go through the full interconnection process.
Several stakeholders argued shifting projects to the queue if there are adverse impacts would be overly onerous and they instead should be given an opportunity to revise the scope of the project to fit PJM’s requirements. The coalition proposal would allow such changes to projects.
The Monitor’s proposal would have created a CIR transfer process administered by PJM where any generation project in the queue that could resolve transmission violations prompted by a deactivation would be studied in an expedited process. Generation developers also would be permitted to propose new resources or alterations of existing queue projects to resolve the violations.
When selecting projects, PJM would consider their cost, reliability contribution and construction risks such as permitting.
The Monitor’s proposal was modified since September to abide by the scope of the issue charge, which allows only proposals that focus on replacement resources interconnecting at the same substation as the deactivating resource. The Monitor’s package previously would have allowed replacement resources to be considered regardless of point of interconnection, so long as they addressed reliability issues associated with a deactivation.
VALLEY FORGE, Pa. — PJMpresented to the Planning Committee on Oct. 8 an overview of a concept it is developing to allow high-capacity factor resources to be accelerated into the Phase 1 study period of Transmission Cycle 2 (TC2). If approved by the PJM Board of Managers and FERC, a new application window would be opened for generation developers to propose new projects.
The Dec. 17 application window for TC2 would not be changed with the goal of having little to no impact on the milestones for projects that already have been sorted into that cycle. A special session of the PC has been scheduled for Oct. 18 to discuss the proposal in more detail.
“We’ve been having a lot of internal discussions on what we can do and address the potential resource adequacy concern that we have,” PJM Vice President of Planning Paul McGlynn said, adding that the RTO sees the concept as a one-time opportunity to use TC2 to allow more resources to enter the study process to get interconnected more quickly.
Director of Interconnection Planning Donnie Bielak said staff have looked at every technical approach to getting significant quantities of capacity online soon enough, and this was the only one that met the reliability needs projected toward the end of the decade. (See “PJM Models Suggest Capacity Shortfall Possible in 2029/30 Delivery Year,” PJM PC/TEAC Briefs: Aug. 6, 2024.)
Bielak said there would be strict reliability criteria to determine which projects are eligible, with it likely that only a “very, very select few” would qualify. More specific details about eligibility will be presented Oct. 18.
Vitol’s Jason Barker said he’s concerned about the precedent this would set and the possibility PJM may seek similar modifications to the queue structure in the future.
Barker asked if developers who are offered accelerated queue positions will be required to post security to assure timely commercial operation or if an accelerated project fails to meet the promised commercial operation dates, it will be liable for damages to prior queue participants for cost shifts caused by the discriminatory acceleration of the so-called reliability projects.
Even with expediting, he said there are supply chain issues affecting the entire industry that could affect the preferred projects.
MISO wants FERC to reconsider its decision to let a jointly managed flowgate with SPP stand, with the RTO arguing the North Dakota cryptomining facility burdening the line is SPP’s responsibility alone.
FERC in September denied MISO and Montana-Dakota Utilities Co.’s separate complaints over the Charlie Creek flowgate. The two wanted market-to-market (M2M) coordination lifted after the Atlas Power Data Center opened and brought a 200-MW load to SPP’s transmission-constrained northwestern North Dakota load pocket. MISO and MDU maintain the congestion management the data center is instigating shouldn’t extend beyond SPP. (See FERC Refuses MISO, MDU Complaints Regarding Crypto-strained MISO-SPP Flowgate.)
In an Oct. 10 rehearing request, MISO continued to insist SPP is misapplying the two’s interregional coordination process in the joint operating agreement by insisting on interregional help for a provincial issue it is powerless to resolve (EL24-61).
“By summarily rejecting the complaints, and by refusing to properly examine the evidence submitted by MISO and MDU, the Sept. 10 order failed to engage in reasoned decision-making, thereby allowing SPP’s unjust and unreasonable rate practice to continue unabated in violation of the FPA,” MISO said.
MISO said its members have made more than $40 million in undue payments to SPP because of congestion on the flowgate. It pointed out the flowgate consists of two SPP transmission lines owned by the Western Area Power Administration in “a load pocket where the RTO has no regional flows and is unable to relieve congestion due to the lack of available generation.”
MISO said it offered “extensive evidence demonstrating the local nature of congestion” in its original complaint and said SPP’s insistence on using M2M coordination to manage it is counter to good utility practice.
MISO said FERC was wrong to read M2M coordination requirements as strictly those laid out in the joint operating agreement and not consider that the interregional coordination process dictates that M2M coordination should be reserved for issues that are regional, not local.
“It is well-established that tariff and contract provisions should not be interpreted in isolation from each other,” the RTO argued.
CARMEL, Ind. — Clean Grid Alliance is asking MISO to incorporate rules for HVDC into MISO’s energy and ancillary services markets.
“We think working out market participation rules for HVDC is timely and warranted,” Clean Grid Alliance Vice President of Transmission and Markets David Sapper told stakeholders at an Oct. 10 Market Subcommittee meeting.
Sapper said many expect that the companion portfolio to MISO’s second long-range transmission plan will include HVDC lines, necessitating MISO to think about market-dispatchable HVDC.
“The lack of rules is a hindrance to HVDC development, in particular MISO long-range transmission planning,” he said.
The Market Subcommittee adopted the issue through general consent at the meeting.
Sapper said HVDC lines can help quell system volatility, help deliver new resource types and improve efficiency across seams. He said HVDC-enabled resources shared between MISO zones versus from different grid operators could warrant unique rules.
“This could get complicated, but at least the HVDC technologies are well understood,” Sapper said, adding that MISO could create a task team or force to recommend participation plans in markets. He said the work might borrow from MISO’s existing participation plan on asynchronous resources.
Clean Grid Alliance’s ask continues a trend of MISO stakeholders asking the RTO to anticipate the contributions HVDC can make and how they could alter markets.
The Southern Renewable Energy Association approached MISO and stakeholders at the July Resource Adequacy Subcommittee, asking them to consider that HVDC lines can be a source of external capacity. The nonprofit said lines are capable of infusing faraway generation into MISO’s local resource zones and could alter auction clearing. (See Renewable Group Asks MISO Community to Consider HVDC Capacity.)
The subcommittee also ultimately took up the issue.
Although Texas recorded its sixth-hottest summer on record, ERCOT failed to set a new mark for peak demand despite loads similar to last year’s record. The grid operator came close when it registered a preliminary peak of 85.56 GW on Aug. 20, but it was later reduced to 85.12 GW.
Dan Woodfin, vice president of system operations, told the ERCOT board that wholesale energy storage charging was included in the initial figure. ERCOT treats the charging as negative generation from a settlements perspective, he said.
The ISO’s all-time demand mark remains 85.51 GW, set during August 2023. The ERCOT grid recorded 22 days of demand exceeding 80 GW through August, compared to 43 days of 80 GW last year.
Natural gas prices and renewable energy helped keep prices low during the summer. Wind (27.85 GW), solar (20.83GW) and energy storage (3.93 GW) resources all set highs through August, according to Grid Status.
More renewables are on the way. Solar and storage (155 GW each) and wind (34 GW) account for the bulk of capacity in ERCOT’s interconnection queue. The queue contains 25 GW of gas-fired capacity.
2025 AS Methodology OK’d
The board approved several measures previously endorsed by its Reliability & Markets (R&M) Committee and the Technical Advisory Committee (TAC).
A real-time market price correction resulting from an incorrect recall of ERCOT contingency reserve service. Affected counterparties will receive more than $3.5 million in settlements.
A real-time price correction after a resource was identified incorrectly as not being qualified for security-constrained economic dispatch. It will result in more than $323,000 in settlements to counterparties.
The Public Utility Commission must approve all three actions.
ERCOT CEO Pablo Vegas | ERCOT
The directors agreed with R&M and remanded back to TAC a protocol change (NPRR1190) that would recover demonstrable financial loss arising from a manual high dispatch limit override to reduce real power output, should the output be used to meet qualified scheduling entity load obligations.
The board asked TAC to gather more information on the initial market policy framework and reassess the need for the compensation mechanism introduced by NPRR649 in 2017 and whether it’s still needed in today’s market.
TAC’s consumer segment opposes the change in its current form, saying it would reward overscheduling power that cannot be delivered. That will force consumers to subsidize insufficient hedging by other market participants in the face of changing grid conditions.
New CFO; Board Vacancies
The directors ratified Richard Scheel as an officer following his promotion as ERCOT’s new CFO and chief risk officer. Formerly the ISO’s controller, Scheel has more than 20 years of finance experience. He replaces Sean Taylor, who announced his retirement in August.
The board also designated Scheel to join Chad Seely and Leslie Wiley as managers and officers of the two debt-financing mechanisms paying back $2.9 billion in market costs from the disastrous 2021 winter storm.
The meeting may have been the last for independent director Bob Flexon, who says he will step down from the board when his term expires Dec. 1. That will leave the board with three vacancies. A selection committee has yet to name a replacement for former Chair Paul Foster, who left the board this year, and the Office of Public Utility Counsel (OPUC) does not have a CEO to fill its seat.
The grid operator’s board consists of eight independent directors, two members from the Public Utility Commission, and single seats for the OPUC and ISO CEOs. Members are required by law to not have fiduciary duty or assets in the ERCOT market and to be Texas residents.
ERCOT Now on Instagram
ERCOT continues to expand its social media presence by joining Instagram, adding to its existence on X (formerly Twitter), Facebook and LinkedIn.
“Please come and follow us,” CEO Pablo Vegas said. “That’s how you know you’re cool, if you’ve got a lot of followers.”
Board Approves 11 Revisions
The board unanimously approved a consent agenda with seven NPRRs, two changes to the Nodal Operating Guide (NOGRR), an Other Binding Document Request (OBDRR) and a single revision to the Retail Market Guide (RMGRR) that will:
NPRR1188, OBDRR046: Modify the dispatch and pricing of controllable load resources (CLRs) in response to the PUC’s directive to increase the use of “load resources for grid reliability.” The NPRR revises the market-participation model of CLRs that are not aggregate load resources so they are dispatched at a nodal shift factor and settled for their energy consumption at a nodal price.
NPRR1215: Clarify that the day-ahead market’s energy-only offer credit exposure calculation zeroes out negative values, with any zeroed-out values being included in the calculation of the depth percentile difference.
NPRR1221, NOGRR262: Align manual and automatic firm load shed provisions; clarify the proper use and interplay of under-voltage load shed, under-frequency load shed and manual load shed; and address reliability concerns over the extent of transmission operators’ manual load-shed capabilities.
NPRR1227, RMGRR181: Align defined protocol terms and add five definitions (“acquisition transfer,” “decision,” “effective date,” “gaining competitive retailer” and “losing competitive retailer”) that previously were in the Retail Market Guide (Acquisition and Transfer of Customers from one Retail Electric Provider to Another). The NPRR replaces the broadly titled terms “decision” and “effective date” with the specific terms “mass transition decision,” “acquisition transfer decision,” “mass transition effective date” and “acquisition transfer effective date” to provide clarity. The change also expands the “gaining competitive retailer” and “losing competitive retailer” definitions to apply beyond the mass transition and acquisition transfer processes.
NPRR1236: Reflect Real-Time Co-optimization Plus Batteries (RTC+B) Task Force’s modifications to the reliability unit commitment capacity-short calculations and address limits in the current calculations by considering ancillary service sub-types. It changes the calculation process involving regulation down service and addresses changes required to align protocol language with recently approved NPRR1204 (Considerations of State of Charge with Real-Time Co-Optimization Implementation).
NPRR1237: Document the scenarios in which market participants are required to successfully complete retail qualification testing, regardless of whether the market participant previously received a qualification letter from ERCOT from prior retail flight testing.
NPRR1244: Align eligibility provisions for CLRs not providing primary frequency response (PFR) to provide ECRS. It also would include in physical responsive capability’s calculation only the capacity of CLRs when they are qualified to provide regulation service and/or regulation reserve service that requires the CLR to be capable of providing PFR.
NOGRR263: Clarify that a CLR is required only to provide PFR when it is providing an AS that requires that resource to be able to provide PFR.
ISO-NE’s work in 2025 will focus on capacity auction revisions, establishing a regional energy shortfall threshold (REST), complying with FERC orders 1920 and 2023, and implementing market and technology improvements, COO Vamsi Chadalavada told the NEPOOL Participants Committee (PC) Oct. 10.
The capacity auction changes are focused on improving how the capacity market assigns value to different resources and altering the timing of capacity auctions and capacity commitment periods (CCPs). The scope of work for the project is extensive, and ISO-NE expects the project to extend into 2027, in preparation for the 2028/2029 CCP. (See ISO-NE Responds to Feedback on Capacity Auction Reforms Scope.)
Regional Energy Shortfall Threshold
The REST is an effort to quantify how much shortfall risk from extreme weather events the region is willing to accept during a given season.
Chadalavada said the RTO will start working on the REST project in the fourth quarter of this year, continuing into the first or second quarter of 2025. ISO-NE is planning to conduct the first REST assessment for the winter of 2025/26.
“Results of the first assessment will provide more data on the risk trends to guide the timing and nature of the next phase, which is to evaluate whether the possibility of exceeding the REST requires development of specific regional solutions to mitigate risks,” Chadalavada said.
He emphasized the need for stakeholder input — especially from the states — to determine an acceptable threshold.
Transmission Planning
Chadalavada said ISO-NE is planning to initiate a request for proposals process in 2025 for its newly approved longer-term transmission planning framework, “in anticipation of a request from the states for a competitively selected transmission solution to address the future, clean energy needs in connection with the Transmission 2050 Study.” (See FERC Approves New Pathway for New England Transmission Projects.)
The RFP process will likely take about 18 months “from initiation through final recommendation,” Chadalavada said.
He noted that ISO-NE will continue to work with stakeholders on “the assimilation” of the LTTP process with FERC Order 1920, with compliance on the order due in summer 2025. (See With FERC Inaction, ISO-NE Delays Order 2023 Implementation.)
ISO-NE is also planning to work with the states in the coming year on an approach to “right-sizing” transmission upgrades “to support integration of renewables and higher load levels over the life of the transmission asset.”
The discussions will include a focus on “methods for distinguishing right-sizing costs from asset condition project costs so that they can be evaluated accordingly,” Chadalavada said, adding that the discussions will likely begin when the states and transmission owners have completed their work on improving the asset condition project review process.
In response to a request from the New England States Committee on Electricity (NESCOE), Chadalavada said ISO-NE will begin discussions at the Planning Advisory Committee about how advanced transmission technologies should be incorporated into transmission planning processes.
“To the extent that ISO-NE considers such technologies currently, bringing greater visibility to that would be informative,” NESCOE wrote in August. “An effective planning process should result in the deployment of these technologies when they provide a net benefit to consumers.”
Budget Increase
The PC also approved a 13.6% increase in its annual budget, driven by new investments in personnel and technology focused on clean energy, the impact of inflation on current operations, and a $7.8 million true up. The increases bring the projected 2025 ISO-NE budget up to about $314 million.
ISO-NE has emphasized that the budget increase is needed to meet the growing complexity of managing the grid during the clean energy transition. The increase follows a 21.5% budget increase in 2024. (See ISO-NE Proposes 21.5% Budget Increase for 2024.)
The budget is intended to support the addition of about 50 new full-time equivalent positions in 2025, along with improved cyber security and software capabilities.
One stakeholder stressed that increased resources should come with increased expectations regarding the workload ISO-NE is able to take on in the future and expressed hope that the RTO will be able to accommodate more stakeholder requests.
Operations Report
Overall energy market value was down nearly 8% in September compared to September 2023, Chadalavada told the PC, presenting his monthly operations report. Average locational marginal prices were down by about 18% from August of this year.
While ISO-NE hit its annual peak load of more than 24,000 MW in September 2023, the September peak for this year topped out at just 16,853 MW.
Annual power system carbon emissions continue to track higher in 2024 relative to 2023, driven by an increase in natural gas emissions.
CARMEL, Ind. — Demand response in MISO is poised to be subject to more rigorous standards as the Independent Market Monitor warns of more potential bad actors.
Carrie Milton, of the IMM staff, appeared before an Oct. 11 Market Subcommittee to put MISO and stakeholders on alert that MISO’s market likely contains more deceptive demand response players. It’s a warning IMM David Patton has delivered before. (See “IMM Demands Tougher Demand Response Requirements,” MISO: Hurricanes, Heat Wave Noteworthy Against Relatively Peaceful Summer.)
Milton said a review of Demand Response Resource Type I performance from 2023 to 2024 showed that those resources fall short of the amounts they promise. She said of 213 spinning reserve deployments across 22 event days in 2023-2024, more than 40% of the DRR Type I resources did not perform adequately. About 200 MW of DRR Type I participates regularly in energy and ancillary services.
FERC recently uncovered three companies manipulating MISO’s demand response market and collecting unwarranted payments. The commission found that an air separation facility in Indiana accepted payments for fabricated load reductions, an Arkansas steel mill for years made faux use reductions, and an obscure, Texas-based LLC formed to sell in-car ketchup holders fraudulently enrolled customers and made sham DR offers in three capacity auctions.
Milton said demand response that fails to respond to MISO’s calls for spinning reserve deployments faces only small penalties and, in some cases, still receives make-whole payments, “eliminating any incentive to curtail.”
“We have a lot of concerns about this. MISO’s rules, penalties and participant conduct all raise concerns for us,” Milton said.
She also said the Batch-Load Demand Response category, introduced by MISO in 2020, contains the worst performers.
“This class of DR is cycling load that agrees not to increase rather than to curtail,” Milton said.
Milton also said MISO’s practice of accepting mock tests instead of actual performance testing “presents serious opportunities” for misrepresenting a resource’s abilities. She said up to 25% of DR resources submit mock tests for accreditation.
“Since 2019, our demand response has received over $800 million in capacity payments. That’s a lot of money,” Milton said.
Milton repeated Patton’s asks that MISO eliminate mock testing and the batch-load demand response category, intensify penalties and automate validation of end-use registrations so end-use customers can’t contract with multiple market participants. She also asked MISO to require utility-grade meters and five-minute data for DR providing reserves.
Stakeholders warned that the IMM’s recommendations might make DR participation in the MISO markets unattractive.
Louisiana Public Service Commission staffer Robert Vosberg said he wanted the IMM to quantify the impacts of its recommendations on ratepayers’ bills.
Jim Dauphinais, an attorney representing multiple industrial customers in MISO, asked for a “less intrusive” list of recommendations.
“If we make this too difficult for customers, they will exit the program,” WEC Energy Group’s Chris Plante warned. He added that if “even half” of the 7 GW seasonal average of demand response that cleared the MISO capacity auction this year fails to participate, MISO will be in hot water.
“We just want it to be reliable,” Milton said of demand response. “It needs to be reliable, and MISO needs to be able to count on it. That’s the crux of this. … We need to make sure that these are legitimate resources that exist and are capable of curtailing load when called upon.”
MISO adviser Michael Robinson remarked that demand response has been getting more attention lately.
“It’s almost like we should have a joint Resource Adequacy Subcommittee and Market Subcommittee meeting on demand response,” he joked.
Robinson said while MISO already has rules to discourage demand response frauds, the recent instances mean it wouldn’t hurt to do more to discourage artificially inflated baselines, fraudulent registrations and artificial curtailments.
Robinson prefaced his comments by invoking a recent trip to a western Michigan orchard. He said when storing apples for the winter, one periodically should go through the bushels to look for bad apples.
“We are responding to essentially three bad apples that FERC has identified. And if you listened to the Market Monitor this morning, there are probably a few more,” Robinson said.
In August, Robinson jokingly invoked Dire Straits 1985 rock song “Money for Nothing” to describe the three recent schemes.
The rules will impel market participants to prove their legitimacy annually by sharing their contractual agreements with MISO. They also will require regularly updated meter data alongside attestation of baseline use. MISO will screen offer parameters and stop allowing whole event days to be precluded from the baseline calculation and instead use just the hours where LMRs responded.
MISO’s IMM also would assess demand response for withholding and create reference level calculations for demand response resources.
New LMR Accreditation Looks Certain
A more exacting accreditation remains on the way for MISO’s load-modifying resources over members’ objections.
MISO said staff will make a final presentation in November before filing the new LMR accreditation with FERC.
MISO’s LMR Type II category would have a maximum response time of 30 minutes and presumed availability for all of MISO’s maximum generation emergency step two events.
Conversely, an LMR Type I class would carry a maximum response time of six hours and be called up earlier, when MISO declares a maximum generation alert. MISO has long said it needs to be able to access LMRs outside of actual emergency declarations.
MISO plans to use a similar accreditation with its availability-based method for its more traditional generation resources. However, to measure demand response, MISO said it will use backward-looking meter data from hours when capacity advisory declarations are in place to accredit resources. The RTO plans to draw on data from a minimum of 65 historical hours per season over the past year and will give more weight in accreditation to performance during hours where capacity advisories escalated into maximum generation events, alerts or warnings.
MISO said it will cap accreditation at an LMR’s maximum stated capability during registration. The RTO also said it will reduce accreditation when LMR owners submit inaccurate availability information. Currently, MISO doesn’t tie the accuracy of LMR availability data to accreditation values.
The new accreditation model will put an end to demand resources being free to dual register as both LMRs that collect capacity payments and demand response resource types, which receive energy payments.
Joshua Schabla, a MISO market design economist, said MISO’s proposed accreditation design appropriately allows for “diversity of performance and diversity of characteristics.”
At an Oct. 9 Resource Adequacy Subcommittee meeting, Schabla said in addition to the usual large factories and mills, MISO’s LMRs also include about 250 resources that are 1 MW or smaller. He said the availability-based accreditation will keep smaller LMRs participating alongside the sites capable of significant load reductions.
“We do think that our overall design captures as much of this as reasonable,” Schabla said. He added that it’s difficult to keep the design simple because of the array of MISO’s LMR types.
Schabla said MISO remains convinced it needs to call on its longest-lead LMRs during maximum generation alerts rather than when actual emergencies arrive.
“We’re trying to incentivize more rapid response time. For longer lead resources to be effectively utilized, MISO needs the capability to deploy them earlier. … If you have a six-hour lead time, we need to deploy you earlier to effectively use you,” he said.
Plante said most of WEC Energy Group’s large industrial customers aren’t comfortable with a 30-minute lead time, citing safety concerns with powering down so quickly. On the other hand, Plante said WEC’s slower-moving LMRs are uneasy with the risk exposure of being called up six hours ahead of when they’re needed. Plante said a two- or even five-hour notification might be more suitable.
“What I’m hearing is neither option is really viable,” Plante said.
MISO and stakeholders sparred over the RTO’s goal to discontinue use of LMRs being able to use a firm service level option to participate. MISO’s firm service level option currently allows LMRs to select a prespecified baseline when registering, agreeing not to use more than that during emergencies. Unlike other LMRs, those using firm service level must curtail all nonfirm load from the system, rather than deducting a megawatt amount from a baseline demand.
Several stakeholders said MISO should preserve the firm service level option, calling it a cornerstone of LMR use in MISO. Dauphinais, the attorney representing multiple industrial customers in MISO, said it would be a “fatal flaw” to cut the participation option.
“We don’t see stated availability moving as fast as we see these loads moving,” Schabla explained. He said MISO needs a more accurate measurement of LMR capability.
Schabla said MISO expects there to be a “tolerance band” around the actual reductions LMRs can make, using the fluctuating draw of air conditioning programs as an example.
“By no means are we expecting you to know exactly what you can provide. We expect you to tell us, within a margin, of what you can give us,” Schabla said.
Multiple MISO stakeholders derided MISO’s reliance on its Demand Side Resource Interface tool for availability data. They complained that the DSRI, which recently replaced the MISO Communication System for communicating LMR availability, is not well understood and that members could use training sessions.
Schabla said he agreed MISO should provide member training on the system sooner rather than later.
