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November 2, 2024

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Entergy Strengthens its Emissions-Reduction Goals

Entergy has fleshed out its interim goal of emission reductions by adding interim benchmarks and a definitive goal for 2050.

According to the company’s latest climate report released last month, Entergy plans to reach net-zero greenhouse gas emissions from all electric and natural gas operations across its businesses by 2050. It aims to reduce owned and purchased emissions 50% from 2000 levels by 2030 and to have 50% carbon-free power generation capacity by 2030.

The utility’s 2030 goals did not previously include a carbon-free capacity component and power purchases in its 50% utility-only, carbon-reduction goal. Entergy said it added the provisos because its planning models showed that it was on track to outperform its current goal.

It said it now expects to reach the current 2030 interim goal of reducing its CO2 emission rate by 50% from its 2000 baseline several years early. “[We] are evolving this goal to include purchased power,” Entergy said in the report.

The New Orleans-based company had only said it would strive for net-zero emissions in an addendum to its first climate report in 2019.

Entergy’s goal is to reduce “emissions as low as possible and minimize our need to neutralize any residual emissions while still maintaining the reliability and affordability of our products, even as our customer base and demand for clean energy grows.”

Pathway to net-zero (Entergy) Content.jpgEntergy’s illustrative pathway to net-zero compared to other climate warming scenarios | Entergy

 

The utility said 2030’s carbon-free capacity will be supplied by nuclear, solar, wind, hydropower and energy storage. It did not specify a definitive supply plan for 2050, saying its assumptions and risks will change over time.

Entergy completed the report’s modeling before passage of the Infrastructure Investment and Jobs Act and the Inflation Reduction Act. It said the modeling doesn’t account for the laws’ potential acceleration of technological advancements and emissions goals.

However, Entergy noted that the laws are “expected to help us define our path to net-zero with more certainty, as well as enabling new and innovative solutions.”

Rick Johnson, the company’s director of sustainability, discussed the updated plan Monday during an Entergy Regional State Committee Working Group meeting.

He said while an uptick in demand might slow Entergy’s emissions reductions, the utility is poised under several scenarios to limit its greenhouse gases in line with either a 2-degree or 1.5-degree Celsius total warming.

“We’re going to continue to compare our path … to climate science to avoid the worst impacts,” Johnson said. Entergy foresees “substantial growth in demand from electrification” that could lead to up to 60% more energy production by 2050, Johnson said, noting load growth could “put upward pressure on our absolute emissions.”

“Some stakeholders might not be happy with individual company progress,” he said. But he added that Entergy’s subsidiaries are a linchpin in its region’s decarbonization efforts.

Johnson said Entergy is discussing whether to purchase carbon offsets but will likely only use them if it becomes necessary to counteract its remaining emissions.

“If we got to 2050, and we’re short, yes, we’ll look for high-quality, permanent instruments to neutralize those residuals,” he said.

Johnson said he doesn’t know when Entergy might next revise or update its climate goals, expressing hope that “this will go down to a lower number, but that’s difficult to guarantee 28 years out.”

Entergy needs clean, dispatchable generation including small modular nuclear reactors, advanced nuclear options, clean hydrogen, and long-duration storage to reach its overall emissions commitment, he said. Entergy believes some of those technologies may become commercially viable before 2035.

Going forward, any newly built Entergy gas facility will be hydrogen-capable and able to be retrofitted to exclusively burn hydrogen, Johnson said. He said Entergy’s two newest natural gas plants, the St. Charles and Montgomery power stations can co-fire up to 30% hydrogen.

Johnson added that Entergy Louisiana and Entergy New Orleans recently signed a memorandum of understanding with Diamond Offshore Wind to explore the feasibility of connecting offshore wind generation in the Gulf of Mexico to the grid. He also pointed to Entergy’s recent agreement with Holtec International to evaluate installing small modular reactors in the Entergy service area.

Entergy will need some long-term transmission projects to prop up a clean energy future, Johnson said. He said Entergy “supports MISO’s efforts to develop its initial proposal” for long-range transmission projects (LRTPs) and added that it will need to be confident that the projects have “demonstrable benefits that exceed the costs” and that costs are allocated in a fair manner.

MISO has mounted a series of four LRTP planning cycles but doesn’t anticipate assessing Entergy’s needs in MISO South until the third iteration. (See MISO Staff Preview New LRTP Projects with Board.)

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MISO, SPP Unable to Find Smaller Joint Tx Projects

MISO and SPP officially announced this week that they will not pursue any small, congestion-relieving interregional projects from their first Targeted Market Efficiency Project (TMEP) study.

The two grid operators have been hinting that they likely weren’t going to land on any beneficial projects. (See Search for Small SPP-MISO Interregional Projects May be Fruitless.)

SPP’s Neil Robertson said the constrained flowgates under study either already had a solution from SPP’s regional planning, resulted in projects with one-sided benefits, or the proposed projects were too costly for one RTO when compared to continued congestion payments.

Robertson said during an Interregional Planning Stakeholder Advisory Committee (IPSAC) teleconference Wednesday that the RTOs’ Joint Targeted Interconnection Queue (JTIQ) study stands to ease congestion on some of the TMEP candidate constraints. He said staffs assumed that the approximately $1 billion of JTIQ projects took precedence over potential TMEP projects. (See Stakeholders Not Sold on JTIQ Projects’ Cost-Sharing Plan.)

Robertson said the TMEP study contained multiple constraints where “other study processes got there first.”

“In this particular case, we’re a victim of timing and circumstance to some extent,” he said.

As an example, Robertson said a possible $37.7 million rebuild of a 50-mile ,161-kV line near the Oklahoma-Arkansas border would nearly double the TMEP cost cap of $20 million.

The grid operators screened for possible TMEPs when a market-to-market flowgate amassed $1 million or more in congestion costs over a two-year period. The two catalogued seven permanent flowgates that racked up between $10 million and $43 million worth of congestion. (See MISO, SPP Hunt for Small Interregional Tx Projects.)

This is the fifth straight time MISO and SPP have returned empty-handed after an interregional study.

Despite coming up empty, the RTOs are memorializing their TMEP process in their joint operating agreement and will launch another study in the future. They will also create separate regional cost-allocation methods to use when they find a beneficial project.

“I think [with] the fact that TMEPs will be a tool in the future, I think it’s inevitable that we will have multiple projects in the coming years,” Robertson predicted.

Advanced Power Alliance’s Steve Gaw said he was frustrated with the results. He said it seemed that MISO and SPP are hamstrung by siloed joint planning processes, perpetually promising projects “on the horizon” that never materialize.  

“We’re still missing the mark here in terms of our interregional planning processes,” Clean Grid Alliance’s Natalie McIntire said.

The RTOs have proposed that TMEPs must cost $20 million or less, must not be greenfield projects, be in service by the third summer peak from their approval, and completely cover their installed capital cost within four years of service through avoided congestion.

They borrowed many of their standards from MISO and PJM’s TMEP criteria. Stakeholders on both sides of the seam have said the cost threshold should be increased, given today’s high inflation environment and tight labor market.

They asked how the RTOs settled on the TMEPs’ cost threshold. Some said the $20 million limit established by PJM and MISO in 2017 amounts to $30 million in 2022 dollars. Their staffs responded that the $20 million cap ensures that projects are low-risk, relatively easy to complete and don’t impede on other more intensive interregional planning.

During a November common seams initiative meeting between the two grid operators, McIntire said it would be a “tragedy” if they emerged from another interregional study without a single project recommendation.

MISO and SPP are continuing to determine how a transmission owner in one footprint can finance and construct lines in the neighboring RTO without benefits to the region where the transmission would be located.

Currently, the MISO-SPP operating agreement doesn’t contemplate construction of a cross-border project unless at least 5% of the project investment stands to benefit the neighboring region. The RTOs are attempting to chart a path where a TO can construct a project that solely benefits the RTO across the border.  

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Will Glick’s Departure Mean More On-time FERC Meetings?

There’s a ritual most third Thursdays of the month among the FERC watchers on #energytwitter.

When 10 a.m. comes and goes without the commissioners taking their seats around their semicircular dais, the stakeholders who attend the monthly open meetings in person continue their schmoozing. But for those watching via the commission’s webcast, it provokes critiques of the hold music and sarcastic comments about how the commission is late — again.

FERC meetings have often started after the advertised 10 a.m., but they reached new tardiness levels during the two years of Richard Glick’s chairmanship, inspiring one civic-minded FERC watcher to launch a Twitter account earlier this year, FERCStartTime. (“Solely dedicated to announcing the ACTUAL start time of FERC’s monthly open meeting. I listen to the looped hold music so you don’t have to.”)

According to an RTO Insider analysis of FERC meetings since January 2010, FERC meetings began an average of almost 42 minutes late during the two years of Glick’s chairmanship — by far the longest of the seven FERC chairs during that period. Glick may be chairing his final meeting Thursday after failing to win a hearing on his renomination. (See Glick’s FERC Tenure in Peril as Manchin Balks at Renomination Hearing.)

Former Chairs Norman Bay, Cheryl LaFleur and Kevin McIntyre were relatively prompt, starting their meetings on average within six minutes or less of the scheduled start. Neil Chatterjee, Jon Wellinghoff and James Danly were on average 12 to 29 minutes late.

Glick and Danly also hold the top spots when ranked by median tardiness (33 and 30 minutes, respectively). Wellinghoff’s tardiness drops from an average of 18.9 minutes to a median of 5, while Bay’s drops from an average of 6.3 to a median of 1 and Chatterjee from an average of 11.8 to a median of 8.

RTO Insider’s analysis is based on transcripts of 133 meetings since January 2010. Seven meetings were canceled during that period, one because of the COVID-19 pandemic in March 2020 and six because of a lack of quorum in 2017. Transcripts were not posted for three meetings and could not be located. The analysis reflected rescheduled start times on a few occasions when meetings were delayed because of inclement weather and protester disruptions.

In interviews, former FERC staffers cited increased partisanship, the challenges of remote work during the pandemic, and the increasing public profile of the commission and the issues facing it for the increased delays.

Wellinghoff said “a chairman should make every reasonable effort to start meetings on time,” and lamented that one nearly three-hour delay had inflated his average. He said he could not recall the reason for the delay.

Glick, Bay and LaFleur declined to comment this week. Danly did not respond to requests for comment. McIntyre died in 2019.

Chatterjee, now a senior adviser at law firm Hogan Lovells, said the delays have increased in part because the meetings “have become really scripted affairs.”

“This is a conversation that I’ve actually had with a number of former chairs and commissioners that in the 80s, and 90s, in particular, and even in the early 2000s, the open meetings were kind of freewheeling debates,” Chatterjee said.

“What is happening now is — quite frankly, for strategic purposes — dissenting commissioners are withholding their separate opinions until the very last moment, and then … the chair and the majority has to then amend the order to account for some of the arguments being made in the dissenting opinions, and then amend their statements.”

Glick ‘Embarrassed’

At a press conference following the commission’s May 19 meeting, which started only 19 minutes late, Glick acknowledged he’s “sometimes … embarrassed when we don’t start on time.”

“I would love to sit here and tell you that [the May 19 start] means that we’re always going to be on time or at least close to on time,” said Glick. “But every commission meeting is different. Every set of orders that we have to consider are different. Sometimes there’s late negotiations between offices; [sometimes] we have difficult decisions we have to talk through with other offices. … The items that were on the agenda today [lent] themselves towards enabling us to start earlier.”

FERCStartTime, which began tracking the meetings in May, now has more than 150 followers, a who’s who of #energytwitter, including LaFleur; former Commissioner Phil Moeller; Glick’s chief of staff, Pamela Quinlan; analyst Christine Tezak, Harvard Law School’s Ari Peskoe; former Montana Public Service Commissioner Travis Kavulla; and Todd Snitchler, CEO of the Electric Power Supply Association.

It is “the most passive aggressive account on all of #energytwitter,” tweeted Joe Daniel, a manager in RMI’s Carbon-Free Electricity Practice.

What Goes On

So what’s happening on the 11th floor of FERC headquarters while we’re listening to “Man in the Mirror” for the third time?

Jeffrey Dennis, who recently left Advanced Energy Economy for the Department of Energy’s Grid Deployment Office, saw the process first-hand between 2010 and 2015, when he headed the Office of Policy Development and served as an aide to Commissioner John Norris.

“I think that what’s going on is that there are continued efforts to try to reach compromises [and] ensure that the language that the commission is voting on is ultimately what folks have agreed to — whatever compromises they’ve made — or that they’re giving the commissioners sufficient time to know what’s [included in] a vote … so that when they make their comments at the open meeting, they’re well informed, and they’re not making comments on something that perhaps was struck out of an order,” Dennis said.

“It did happen less often [in the past]. And I think that speaks to [the fact that] we certainly are seeing more separate statements, more orders that don’t have unanimity than we did … 15 years ago. That in some ways is a recognition of how much more difficult and controversial a lot of the issues the commission has before it are and the work it takes really to tackle these big issues,” Dennis continued. “The issues before FERC were always significant, but they are increasingly in the public eye. There does seem to be a bit more partisanship than there was before; I don’t want to [say on] every issue, but many.”

Grid Strategies President Rob Gramlich, who served as economic adviser to FERC Chair Pat Wood III from 2001 to 2005, said the remote work caused by the COVID-19 pandemic has contributed to the delays.

“It was always the case [that] we were negotiating orders right up to the last minute, so that’s not new,” he said. “You can get a lot more done when you’re physically there in person than when you’re all working off site. So I’m going to give the commission a pass for the last couple of years on that, because no previous commission ever had to negotiate final orders across five different offices and multiple staff offices from their homes all over the place.”

Larry Gasteiger, who worked 19 years at the commission (1997-2016) — including stints as legal adviser to Chair Joseph T. Kelliher and chief of staff to Chair Bay — said he sees a lack of discipline in the increasingly late starts.

“There was a lot of emphasis put on trying to resolve issues well in advance of the commission meeting so that we could essentially put it to bed … if not the evening before, certainly the morning of the commission meeting,” said Gasteiger, now executive director of the trade group WIRES. “And it’s a lot of work. I don’t want to suggest that it’s easy to accomplish that. It’s not. It’s really hard.

“Frankly, though, it does depend on the cooperation of all of the commissioners. I think we were lucky in the sense that the commissioners, at the time I was there, were really focused on trying to get the items ready so that the commission meeting could start on time,” he added. “It shows a level of respect for all of the … stakeholders who are interested in watching the meetings. … Once it starts to run into one or two hours later, that’s a lot of people sitting around waiting for commission meeting to start.”

Gasteiger acknowledged the commission’s tardiness has become a running joke on Twitter.

“But the joke’s getting kind of tired, frankly. And I just think the commission needs to get its act together. And I don’t point to the chairman only on this. All the commissioners need to be working on getting the meeting started promptly and on time. It can be done. It was done regularly for many, many years.”

It remains to be seen whether a new chairman will have any more success at on-time meetings. But one thing is certain: Since FERC moved its webcasts to YouTube, remote viewers can no longer hear playlists compiled by commissioners or commission offices while waiting for the meetings to start because of royalty issues.

“YouTube is very strict on that,” said FERC spokeswoman Mary O’Driscoll. “You have to be in the commission meeting room to hear the hold music.”

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Renewable Group Asks FERC for Interconnection Cost Changes in NE

RENEW Northeast is asking FERC to shift the burden of network upgrade operations and maintenance costs in ISO-NE off of interconnection customers.

In a complaint filed this week, the organization argued that the policy, contained in schedules 11 and 21 of Part II of ISO-NE’s tariff, is unjust and unreasonable.

“ISO-NE is the only region in the United States in which interconnection customers are directly assigned all capital cost and all ongoing O&M costs for network upgrades, regardless of who causes the network upgrades or who benefits from the network upgrades,” RENEW wrote in its complaint.

Since Order 2003 nearly 20 years ago, FERC’s policy has been to require interconnection customers to initially fund the cost of network upgrades that would not have been required without that specific interconnection, but not to let transmission owners assign customers ongoing O&M costs.

“There was never any rationale behind this exemption from the commission’s O&M policy other than it having been a transitional measure included in New England Power Pool’s transition to an ISO and its Order No. 2003 compliance filing,” RENEW wrote. “Continued direct assignment of O&M costs to interconnection customers is not just and reasonable and should be rejected.”

RENEW sees it as an issue especially for its members — renewable generators — because the process of interconnection can be especially unwieldy for new generation projects, and the direct assignment of O&M costs adds another burden and barrier to entry.

It’s one of the factors that could cause projects to withdraw late in the interconnection process, according to RENEW.

“Since network upgrades provide a systemwide benefit, expenses associated with owning, maintaining, repairing and replacing them should be recovered from all transmission customers rather than being directly assigned to the generator,” said Francis Pullaro, the group’s executive director.

RENEW tried to bring a change to address the problem through the NEPOOL process, but it missed the two-thirds vote required to advance through the Transmission Committee. In the complaint, it’s asking for FERC to issue an expedited order finding those portions of the tariff unjust and unreasonable.

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White House Summit Kicks off Push for Home Electrification

Arati Prabhakar (The White House) Content.jpgArati Prabhakar, White House Office of Science and Technology Policy Director | The White House

Arati Prabhakar, director of the White House Office of Science and Technology Policy, opened the Biden administration’s Electrification Summit on Wednesday with a daunting but essentially hopeful vision.

Reaching President Biden’s goal of net-zero emissions economy-wide by 2050 will require a threefold increase in the rate of expanding the grid and electrifying transportation and buildings, she said. “On the one hand, we’re scaling deployment faster than we have ever done before in ways that, it almost scrapes the skin off your teeth,” she said. “At the same time … we’re going to have to scale much farther and much faster over an extended period of time. …

“That is a task that is going to require not just new innovation, but actually new forms of innovation because the kinds of challenges that are ahead of us are deeply systematic challenges … [requiring] systems innovation,” she said.

“It’s going to [require] a grid that can grow at triple the rate we’ve been growing at and handle … very rapidly changing sources and loads.”

With the home electrification tax credits and rebates in the Inflation Reduction Act scheduled to go into effect on Jan. 1, the summit was clearly the administration’s kick-off for a cross-agency, cross-industry push to promote the benefits of electrification and raise awareness of the financial support available to homeowners in the IRA.

The administration will be putting out “detailed guidance to help Americans understand how to take advantage of these new tax credits and rebates and loan programs” in a few days, said John Podesta, Biden’s senior adviser for green energy innovation and implementation.   

John Podesta (The White House) Content.jpgJohn Podesta, special adviser for green energy innovation and implementation | The White House

The administration will also be enlisting the help of labor and industry, Podesta said. “We need every American hearing from the person selling them a car or their electrician or their home contractor or their favorite employee at their local retailer about the opportunity to save money and get money back on clean technologies,” he said.

Energy Secretary Jennifer Granholm announced a trio of new initiatives aimed at building momentum, improving technologies and cutting costs for home and industrial building electrification.

The new Buildings Energy Efficiency Frontiers and Innovation Technologies program will provide $45 million in funding to “research and develop high-impact, cost-effective technologies and building retrofit practices that will reduce carbon emissions, improve flexibility and resilience, and lower energy costs,” according to a press release from the Department of Energy. The initiative is targeting innovations in air conditioning; space heating; water heating; thermal and battery storage; plug loads and lighting; and the building envelope, DOE said.

Granholm also announced the launch of the American-made Equitable and Affordable Solutions to Electrification Prize, which will offer “$2.4 million in cash prizes and technical assistance vouchers to innovators who can help simplify the electrification processes for contractors and implementers. The prize aims to make the process faster and more affordable for homeowners across diverse communities and all housing types,” the DOE said.

The third initiative, the Onsite Energy Technical Assistance Partnership program, will help “industrial facilities add more clean energy onsite to get them closer to electrification,” Granholm said.

With an anticipated $23 million in funding, the program will create “a regional network of technical assistance providers to help facilities across the nation integrate the latest onsite energy technologies, including battery storage, combined heat and power, district energy, geothermal, industrial heat pumps, renewable fuels, solar photovoltaics, solar thermal, thermal storage and wind power,” a DOE announcement said.

‘Friction Points’

Electrification of housing is critical to reducing greenhouse gas emissions. For example, according to figures from the University of California, Davis, residential energy use accounts for 20% of U.S. GHG emissions.

The IRA contains a range of rebates and credits for home electrification and energy efficiency. Rebates for heat pumps range from $2,000 to $8,000, depending on household incomes. The law also contains a 30% tax credit — up to $1,200 per taxpayer — for home efficiency upgrades, such as installing insulation or more efficient windows and doors.

The Infrastructure Investment and Jobs Act also provides increased funding for the DOE’s Weatherization Assistance program — $25 million per year through 2025 — which targets low-income homeowners.

But in many cases, states will be administering these funds, and state officials have been waiting for guidelines from the administration to help them set up their programs. Older homes in low-income neighborhoods may also need basic home repairs before they can qualify for energy efficiency funds, according to state officials and community advocates. (See PNNL: ‘Households Do Not Make Rational Decisions’ on EE Upgrades.)

Brenda Mallory (The White House) Content.jpgBrenda Mallory, Council on Environmental Quality | The White House

Brenda Mallory, chair of the Council on Environmental Quality, cautioned that electrification plans must protect and include “everyone, from workers to students to seniors who have been exposed to environmental hazards for decades.”

“That means not only dealing with people who currently have electricity and we’re making it better, but also giving access to people who don’t have electricity,” Mallory said. “The voices of communities who have the most to lose but the most to gain [must be] at the center of the conversation in designing the implementation strategy” for electrification.

Sen. Martin Heinrich (D-N.M.), who helped start an Electrification Caucus in Congress, agreed that one of the challenges ahead will be getting “the friction points out of implementation,” so that people can access the home electrification opportunities “quickly and seamlessly.”

Martin Heinrich (The White House) Content.jpgSen. Martin Heinrich (D-N.M.) | The White House

Citing his own experience with installing an air source heat pump water heater in his home, Heinrich recalled that his plumber had never seen the equipment before. “He showed up and was like, ‘I don’t know what to do with this,” Heinrich said. “But now he does,” and he and other contractors are installing heat pumps “one after the other.”

Such experiences could be “an enormous game changer for how a lot of this country is going to view this transition,” Heinrich said.

National Climate Adviser Ali Zaidi closed the conference by coming back to the deep changes that electrification will trigger in the U.S. energy system and the question of “who is going to benefit” from electrification.

“When we talk about climate change and climate action, I think it’s a conversation about power,” Zaidi said. “I don’t mean electricity. I mean, who will literally have the power in this moment of transformation in our economy? Who will own the substation assets? Will our utilities step up in a way that returns power to consumers who want to save energy, who want to generate energy and sell that energy onto the grid?”

While recognizing the role of utilities in cutting power sector emissions, Zaidi said, “Now we have to embrace the power of distributed technologies, and we got to do it in a way, again, that reinforces the workforce that we’re going to need to go the distance.”

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SERC Board of Directors Briefs: Dec. 14, 2022

CHARLOTTE, N.C. — SERC Reliability’s Board of Directors meeting on Thursday at times resembled an impromptu farewell party, as multiple attendees took time from their presentations to say goodbye to departing chair Todd Hillman.

But the gathering was a serious affair too, with stakeholders reflecting on the many challenges facing the bulk power system as the year ends. In his opening remarks, CEO Jason Blake reflected on the Dec. 10 shootings that severely damaged two Duke Energy substations in Moore County, North Carolina, and plunged around 45,000 customers into darkness. Duke worked around the clock following the shootings and had restored all affected customers by last Wednesday. (See Duke Completes Power Restoration After NC Substation Attack.)

“Sometimes you have these moments that occur, that really bring home the impact that we all have, and … especially for those of you that [have your hands] directly … on the controls, the importance of that work,” Blake said. “These things are always sobering reminders of how hard we work to stay ahead of the game and how we constantly have to understand and also digest these events to see how we can improve.”

SERC BoD 2022-12-13 (RTO Insider LLC) Alt FI.jpgAttendees at SERC Reliability’s Board of Directors meeting in Charlotte, N.C. | © RTO Insider LLC

 

Investigators have not identified any suspects or motivation for the attacks and have dismissed connections to a later incident in which gunshots were heard outside a Duke hydroelectric station in South Carolina. Blake noted that, while power failures are nothing to celebrate, the fact that the outages remained limited to Moore County with no cascading impacts on the broader electric grid was a marker of how quickly and effectively Duke responded to the crisis.

“The system, as designed, performed. But that said, we still always want to take note of these occurrences and see what we can learn, and are there opportunities to better ourselves,” Blake said.

Risk Report Approved

Looking ahead to the new year, board members approved SERC’s 2023 corporate strategic initiatives and key performance objectives, along with a supplemental contribution to employees’ 401k accounts for 2022. The board also voted to accept the regional entity’s 2022-23 Regional Risk Report.

Compiled by SERC’s Risk Committee, the Regional Risk Report aims to identify the top 10 risks facing the region’s power grid, grouped into “managed” risks, for which mitigation plans need to be developed and implemented, and “monitored” risks, where mitigation plans and guidance already exist.

The group in which a risk is placed does not necessarily reflect its priority level. Next year’s “monitor” list includes extreme weather, which is ranked fifth on the overall list, along with variable energy resource integration and parallel/loop flow issues, ranked ninth and 10th respectively. Risks on the “manage” list include supply chain vulnerabilities, shortage of required skillsets, resource uncertainty, and deliberate disruptions such as sabotage and attack — respectively ranked first, second, third, and seventh.

NGC Describes Leadership Shuffle

Sunflower Electric Power Corp. chose Hillman — who was also MISO’s senior vice president and chief customer officer — as its new CEO earlier this year. (See Sunflower’s New CEO Hillman Looks Back on MISO Tenure.) Hillman will take his post on Jan. 16, succeeding Stuart Lowry, and will depart SERC on Jan. 3, two years and two days after taking his seat as chair.

Because of Hillman’s early departure, Vice Chair Lee Xanthakos of Dominion Energy agreed to the Nominating and Governance Committee’s (NGC) request that he step up to chair early, with the board assenting. Under ordinary circumstances his term would have begun next May; instead, he will take office Jan. 4, with his term ending May 31, 2025.

With Xanthakos moving up to chair, the NGC nominated Lisa Johnson of Seminole Electric Cooperative to succeed him as vice chair. Directors approved the choice unanimously, along with the proposal to nominate Lonni Dieck to another term as lead independent director, concurrent with Xanthakos and Johnson.

To replace Director Arnold Singleton, who left the board in September, the committee suggested former director Bob Dalrymple of the Tennessee Valley Authority, which the board also approved. Upon confirmation by SERC’s membership at their March 29 meeting in Fort Lauderdale, Fla., Dalrymple will serve out the remainder of Singleton’s term, ending May 31, 2023. Dalrymple will serve as the federal-state sector representative and will also join the NGC.

Committee Chair Tim Lyons also informed directors that the NGC has opted not to conduct a search for additional independent directors beyond Dieck, Shirley Bloomfield, and Deborah Wheeler, who joined the board as its first independent members in 2021. Lyons had floated the possibility of more independent directors at the board’s last meeting in September but said Thursday that the committee does “not believe we are in a position to move forward with another independent director search at this time.” (See “More Independent Directors a Possibility,” SERC Board of Directors Briefs: Sept. 22, 2022.)

Board Honors Hillman

The board voted through a resolution thanking Hillman for his 14 years both as board chair and as a director.

Hillman presided over SERC’s transition to a new organizational arrangement in 2021, with the RE adopting a membership structure and welcoming its first set of independent directors. Reflecting on the changes during his tenure, Hillman praised the organization for its performance under the new structure and said it had “really stood out as a leader in the ERO space.”

Todd Hillman Award 2022-12-13 (RTO Insider LLC) Alt FI.jpgHillman, second from right, poses with a plaque and “Top Banana” award honoring his service as chair. | © RTO Insider LLC

 

“I look at the SERC of today, [and] I see servant leaders. I see SERC at the center; I see people really trying to move that forward,” Hillman said. “But I think the full measure of the experience is the value of the relationships and the friendships created. So I want to thank you all for those.”

Blake also presented Hillman with a plaque in honor of his years as chair, along with the organization’s recently inaugurated “Top Banana” award, first given to Dalrymple upon his departure at SERC’s March board meeting. Dalrymple joked on Thursday that one of his conditions for returning to the board was that he not be required to return his award.

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NERC Standards Committee Briefs: Dec. 13, 2022

2023-25 Strategic Work Plan Approved

The NERC Standards Committee on Tuesday approved its 2023-25 Strategic Work Plan, which it says reflects “the transition of the standard development process to primarily address a small number of FERC directives, emerging risks and process improvements.”

The plan has three “focus areas.”

  • Process Improvement: The committee will conduct periodic reviews of existing processes to promote continuous improvement. The chair and vice chair will lead an initiative to implement the Board of Trustees’ recommendations to improve the standards development process in conjunction with NERC staff, other standing committees and the Standing Committee Coordinating Group (SCCG). In addition, the SC and the Compliance and Certification Committee (CCC) will convene a joint task force in early 2023 to evaluate the existing standards grading process and identify opportunities for improvement. The review will be in lieu of the annual standards grading exercise.
  • Risk Mitigation: The SC will work with NERC staff and the SCCG to prioritize standards development projects based on reliability risk. It will continue participating in “feedback loops.”
  • Standards Quality: The work plan says reliability standards “should be clearly written, effective in mitigating risk to the [bulk power system] and not unnecessarily administratively burdensome.” The SC will seek to resolve an outstanding FERC directive through Project 2020-04 (Modifications to CIP-012 regarding the availability of communication links and data communicated between bulk electric system (BES) control centers) and a FERC requirement to submit project schedules for one ongoing Critical Infrastructure Protection (CIP) project. The Project Management and Oversight Subcommittee (PMOS) and NERC staff will identify and schedule periodic reviews for SC endorsement. The PMOS will use the most recent standards grading results to prioritize and schedule by the end of the first quarter of 2023. The SC will continue to review guidelines and technical basis documents for transition to technical rationale documents while moving compliance examples to implementation guidance.

Committee Discusses Proposals to Increase ‘Agility’

The committee received a briefing on recommendations by the newly formed Standards Process Stakeholder Engagement Group (SPSEG). The group was created in May in response to a directive from the NERC board that the ERO find ways to improve its ability to address urgent reliability needs with “agility” while continuing to provide reasonable notice and opportunities for public comment, due process and balancing of interests.

The group submitted its unanimous recommendations for standards process changes to the NERC board on Oct. 10. They include changes to section 300 and Appendix 3A of the Rules of Procedure, as well as recommendations for the standing committees to improve the administration and coordination of standards development.

At the board’s Nov. 16 meeting, it approved resolutions to enact the recommendations. It directed NERC staff to review the Registered Ballot Body for “continued fairness, openness, inclusivity and balance in standards voting” and provide a report on its findings at the board’s February 2023 meeting.

The SPSEG developed several recommendations for the SC on administering the standards development process, saying the committee should:

  • appoint a single drafting team to address both the standards authorization request (SAR) and standard development phases of a project;
  • provide guidance to drafting teams on the role of the SAR in the standards development process;
  • increase the efficiency of how it administers the SAR phase for projects eligible to be posted for informal comment or those that must be posted for formal comment;
  • revise its charter and make other changes to improve efficiency; and
  • revise its guidance to drafting teams regarding the development of implementation guidance and compliance elements.

The SPSEG also recommended changes to the SCCG to take advantage of cross-functional expertise and provide feedback loops. It called for revising the SAR form to provide greater clarity on the need for new projects; aiding in project prioritization; and expanding participation in the standards quality review process.

Finally, it recommended that the Reliability and Security Technical Committee increase the transparency and stakeholder awareness of its process for endorsing draft SARs.

Philip Winston, who is retired from Southern Co., questioned how the SC should respond to the recommendation that it provide drafting teams with guidance on the role of the SAR.

“In the past … we’ve been clearly told that our role is not to address any kind of technical issues,” he said. “It’s hard to provide … guidance to a drafting team having to do with what’s in a SAR to accomplish the reliability goals without getting into some technical discussion.”

NERC attorney Marisa Hecht responded that the recommendation “is less about the technical components and more about the purpose, [such as] don’t include specific language; leave possibilities open … ensuring that the SAR is a scoping document versus providing” solutions.

Hecht said the recommendations also seek to help in instances in which SAR drafting teams (SDTs) “aren’t quite sure what each section means [and] sometimes come up with different language within the same documents.”

“So I think these are all envisioned to be very procedural and not technical recommendations.”

NERC Vice President of Engineering and Standards Howard Gugel added: “There was a recognition of this group that a lot of the more recent SARs have gotten into the details about how to fix a problem and have not gone into as much: What is the issue for reliability? And why is it an issue?”

Marty Hostler, reliability compliance manager for Northern California Power Agency, questioned why SARs don’t include any cost estimates. “This is a tremendous expense to industry,” he said. “Every entity that operates a utility has to develop budgets. … They have to recover their costs.”

Gugel said the cost estimates come later.

“The SAR lays out problem; it’s not a solution space. So because of that, you don’t really have an idea about what the cost would be until you actually begin drafting the standard,” Gugel said. “That’s why during the comment period for the standard, [NERC asks], ‘Is there a more cost-effective solution than the one that’s being proposed in this language that would still meet the reliability objective?’”

Outgoing PMOS Chief Worries About ‘Churn’

Outgoing PMOS Chair Charles Yeung, famous for his multicolored spreadsheets tracking in detail every project before the ERO, shared his concerns about NERC’s growing workload as he prepared to step down from the post he has held since 2018. He will remain on the subcommittee as vice chair and be replaced by current Vice Chair Michael Brytowski of Great River Energy.

“The volume, the pace, is going to be probably one or two of the biggest concerns going forward,” Yeung said. “There’s a lot of churn — meaning postings and registrations and ballots and comments.

“The workload has grown. And the importance of the work is growing as well … things like cold weather, energy assurance, [inverter-based resources] — those are all new horizons of reliability.”

Yeung project status report (NERC) Content.jpgCharles Yeung, who has headed NERC’s Project Management and Oversight Subcommittee since 2018, uses a multicolored spreadsheet to keep track of ongoing projects. | NERC

Yeung said he asked other PMOS representatives whether keeping pact was causing stress on their resources. “There was a resounding ‘yes.’”

He added, “Most PMOS reps feel like their companies are keeping pace, but there is concern about the quality of the feedback that’s going back to the Standards Committees because of the workload.”

Project 2022-04 SDT

The committee voted to endorse NERC staff’s recommendation to appoint 13 members to the SDT for Project 2022-04 (EMT Modeling). NERC received 34 nominations; two of the candidates later withdrew.

Supplemental Nominations to Project 2020-04 SDT

The committee voted to solicit additional SDT members for Project 2020-04 (Modifications to CIP-012), whose membership dropped from nine to five following four resignations.

2023 Executive Committee Nominations

The committee invited those interested in serving on the SC’s five-member Executive Committee (SCEC) to submit their biography via email to the committee secretary; Chair Amy Casuscelli, of Xcel Energy; and Vice Chair Todd Bennett, of Associated Electric Cooperative Inc., by Jan.  9.

The committee will select members for one-year terms at its Jan. 25 meeting.

2023 Standards Committee Meeting Schedule

The committee will hold eight conference call meetings in 2023 in addition to four in-person gatherings:

  • March 22 in Little Rock, Ark. (SPP), 10 a.m. to 3 p.m. ET;
  • July 19 in St. Paul, Minn. (MRO), 10 a.m. to 1 p.m. MT (followed by a joint meeting with the CCC at 1-4 p.m.);
  • Sept. 20 in D.C. (NERC), 10 a.m. to 3 p.m. ET; and
  • Dec. 13 in Atlanta (NERC), 10 a.m. to 3 p.m. ET.

Standards Committee Process Subcommittee Elects Leaders

SPP attorney Matt Harward, who assumed the chairmanship of the Standards Committee Process Subcommittee after the resignation of the previous chair in July, was elected by the committee last month to continue leading the group for 2023-24.

Troy Brumfield, regulatory compliance manager for American Transmission Co., was elected vice chair, also for a two-year term.

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NECA Panelists Talk Capacity Market, DERs

A panel of energy experts took ISO-NE’s capacity market to task last week, lambasting the region’s Forward Capacity Market and offering ideas about how to improve it.

The panel at the Northeast Energy and Commerce Association’s Power Markets Conference, held Dec. 5, was titled “Can Markets Get Us More Reliable?”

And while the answer from the group wasn’t an unconditional “no,” it involved heavy criticism for the way the capacity market is currently set up.

“I’ve always viewed forward capacity markets as the original sin of market design,” said William Hogan, a professor of global energy policy at Harvard University.

“I know it’s politically embedded in the system … but I don’t think they’re a solution to any real problem other than mailing checks to people,” Hogan said.

When it comes to ISO-NE’s markets specifically, Sheila Keane, director of analysis at the New England States Committee on Electricity, said that there’s a lack of a “clear measurement or goalpost” for energy adequacy.

“If we’re thinking about changes to the capacity market, that’s something the states are always open to having discussions [about],” she said.

David Patton, president of Potomac Economics, ISO-NE’s External Market Monitor, said the FCM isn’t a viable solution to most of the problems that New England’s grid faces.

“It’s not a very good solution for resource adequacy to begin with, but when you start to look at some of the challenges we’re facing with reliability and the introduction of intermittents, it becomes less and less reliable,” he said.

And Ben Griffiths, regulatory policy director at LS Power, rounded out the critique with an academic bent.

“On the capacity market side, there is not enough liberal arts thinking,” he said. “It’s not clear to people what they’re actually buying, or what [the 1-day-in-10-year loss of load standard] is actually doing.”

DERs and Blurred Lines

On a later panel, titled “Blurring of Wholesale and Retail Lines,” experts laid out the importance of distributed resources for the energy future, and of markets and pricing that help incentivize them.

Greg Geller, head of regulatory affairs at Enel North America, laid out a bevy of benefits from greater DER utilization in New England, including reduced transmission costs, better price signals for emissions reduction, help with winter reliability issues and more.

But to do that, the region needs strong and flexible retail programs, the panelists said.

Part of the challenge is that different entities regulate overlapping spaces, said Caitlin Marquis, director of Advanced Energy Economy.

That’s been demonstrated by the compliance process for FERC Order 2222, which requires RTOs and ISOs to provide DERs access to wholesale electricity markets.

“The compliance directive was on the ISO, not on the states or retail regulators — but they have an important role in implementing pieces of Order 2222,” Marquis said.

ISO-NE is thinking carefully about how to integrate demand resources in the region, said Henry Yoshimura, the grid operator’s director of demand resource strategy.

“What do we need? Retail rates that reflect time-varying costs,” he said.

“Retail prices should be high when marginal costs are high and should be low when they’re low,” Yoshimura added.

Without the right rate design, he said, “you’re never going to get the right demand flexibility” from DERs and other such resources.

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NYISO Over-crediting Poorly Performing Units’ Capacity, Monitor Says

NYISO is qualifying generation units for meeting their reserve requirements even though they fail to provide adequate reserves during normal market operations, the ISO’s Market Monitoring Unit told stakeholders Tuesday.

Speaking to the Installed Capacity/Market Issues Working Group, Potomac Economics’ Pallas LeeVanSchaick said NYISO is using capacity accreditation rules that may be awarding excessive accreditation to several gas generators. The ISO should re-evaluate its reserve auditing procedures for gas turbines to be more responsive to normal market operations and improve capacity accreditation test requirements to account for peak summer conditions, he said.

The Monitor’s third-quarter report on the NYISO markets, released last month, found that the ISO is conducting more 10- and 30-minute non-synchronous reserve pick-up (RPU) audits but has failed to disqualify gas turbines that performed poorly.

Gas Turbine Audits (Potomac Economics) Content.jpgGas turbine audits show inability to accommodate normal reserve requirements. | Potomac Economics

 

Potomac studied the 13 worst performing gas turbines; despite many of them being consistently used by the ISO, they regularly fail to achieve performance levels even close to the 89% average of all other gas turbines.

Kevin Lang, partner at Couch White, asked why Potomac believed the ISO was not acting on generators that had performed poorly in audits.

LeeVanSchaick responded that “NYISO has the authority to do that … but it is not clear to us why they have not been disqualified.” Potomac will “monitor this because there’s inefficiency in continuing to compensate resources for providing reserves when they cannot perform.”

According to the report, on days when peak load surpasses 28 GW, an average of about 1,060 MW of installed capacity from fossil fuel and nuclear generators was functionally unavailable during the quarter because of above-average temperatures.

Functionally Unavailable Capacity (Potomac Economics) Content.jpgFunctionally unavailable capacity from generators during peak conditions | Potomac Economics

 

Emergency generators dispatched by NYISO during peak load may overestimate their available capacity and receive improper accreditation because these units’ dependable maximum net capability (DMNC) tests, which calculate the gross sustained net output of a generator, fail to capture ambient water temperatures, LeeVanSchaick said.

The audit results suggest “that there is a tendency to over-credit resources that are impacted by ambient conditions,” he said. On peak summer days, “there is capacity that, although qualified, is not as effective as other capacity in terms of providing reliability,” meaning “some units are going to be less available at peak times.”

Howard Fromer, who represents the Bayonne Energy Center, asked whether Potomac had begun discussions with NYISO to adjust capacity accreditation procedures or rules for the impacted resources.

LeeVanSchaick said that Potomac “certainty recommends NYISO looks at these categories in the context of capacity accreditation efforts.” (See “Capacity Accreditation,” NYISO Justifies Unpopular 10-kW DER Aggregation Min. Requirement.)

NYISO energy markets were competitive throughout the quarter, according to the report. Energy prices increased across all zones because of both higher congestion in the Central-East interface and emissions costs, and capacity prices fell because of lower installed reserve margins and peak load forecasts, which helped offset increased spot prices.