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November 2, 2024

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NE States, ISO-NE Start to Wrestle with Next Steps on Pathways

With the high-profile Pathways Study complete, New England’s states and grid operator are starting to wrestle with the political, logistical and practical realities of implementing any of the regional policy options for decarbonization analyzed in the paper.

At the New England Electricity Restructuring Roundtable last week, ISO-NE CEO Gordon van Welie and top Connecticut energy official Katie Dykes lobbed ideas back and forth, but they made clear that solutions are still far away.

“The Pathways analysis has given the states a lot to dialogue about,” Dykes said during a panel moderated by energy consultant Jonathan Raab “We’re reserving judgment about the preferred way forward and that continues to be where the states are.”

But she said she remains interested in a hybrid approach, combining net carbon pricing with a Forward Clean Energy Market (FCEM), a solution that the states have been asking ISO-NE to study.

“I think the hybrid has that Goldilocks appeal to it,” Dykes said, because the study found that it could achieve states’ decarbonization goals at a lower cost to ratepayers than other solutions.

But van Welie, whose organization could be tasked with designing a potential FCEM, offered warnings about the viability of the hybrid proposal.

“The hybrid is complex both from a market design and implementation point of view, but it’s also the most complex from a governance point of view,” he said. The states could likely remain in control of the carbon pricing portion, but the FCEM is “more problematic” from the RTO’s perspective, he said.

“We have serious concerns about whether you would want to tee up a hybrid package to the FERC. The FCEM and hybrid are by definition discriminatory,” he said. “It would make it very hard for FERC to approve that, and you would invite lots of litigation [in] Washington, D.C.”

Carbon pricing has its own political complications that state leaders have expressed wariness about. (See State Regulators Weigh in on New England Pathways Study.)

“It’s impossible to have the conversation around the insights of an economic analysis without putting it into a context of what’s politically feasible,” Dykes cautioned.

Analysis to Action

Now that the study is complete, the broader question for stakeholders is whether the region’s leaders can put together the coordination and political will required to make a decision and start implementing it.

“I think where we are today is not thinking about what more analysis we can do. The challenge for us today is how do we take the next step,” said Pete Fuller, an energy consultant who works with NRG Energy. The company has suggested a hybrid approach because it sees that proposal as a potentially better route to consensus, and it’s “time to really get moving,” he said.

“It’s not necessarily useful to be doctrinaire or dogmatic about the economic principles. The goal really is about what’s practically workable in a political context,” he said.

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PJM Responds to Market Monitor Recommendations

PJM last week issued its response to the Independent Market Monitor’s latest recommendations, noting that many of the issues are in the scope of current stakeholder discussions.

The Monitor issued 20 new recommendations in its 2021 State of the Market (SOM) report in March: seven concerning the energy market; eight concerning the capacity market; two on demand response; and one each on environmental regulations, ancillary services and financial transmission rights. (See PJM Monitor: Prices, Coal Power Bounced Back in 2021.)

Energy Market Recommendations

PJM said that two of the energy market recommendations — regarding the capping of the system marginal price in real-time security constrained economic dispatch, and implementing an extended downward sloping operating reserve demand curve (ORDC) — were “superseded” by a December 2021 FERC order on voluntary remand from the D.C. Circuit Court of Appeals. (See FERC Reverses Itself on PJM Reserve Market Changes.)

The RTO said it responded to the order with a proposal to retain the existing reserve market and energy market price capping framework “largely consistent” with the SOM recommendation. But it said it has no plans to implement downward sloping demand curves for operating reserves because the commission rejected it.

PJM said it addressed another Monitor recommendation — requiring generators that violate their approved turn-down ratio to demonstrate that their actions are based on an actual physical constraint — in its response to a June 2021 FERC order to show cause. The commission ruled that PJM’s tariff appeared to allow market sellers to circumvent being subject to parameter-limited offers. (See FERC Issues Show-cause Order on PJM Parameter-limited Offers.)

The RTO responded to FERC by instituting an interim rule restricting the use of real-time values to actual physical limitations that occurred during the real-time market. “PJM believes these interim limitations sufficiently address concerns that market sellers could submit real-time values to inappropriately limit their flexibility, since economic reasons for adjusting parameter limits are no longer acceptable reasons to override unit-specific parameters,” PJM said.

However, the RTO disagreed with the Monitor’s proposal to require that capacity resources be required to use flexible parameters in all energy offers at all times to mitigate market power.

“PJM disagrees that capacity resources have broad ‘obligations to be flexible’ under the current capacity market construct,” the RTO said, adding that “flexibility is not an explicit requirement for the qualification for capacity resources [and] is largely not accounted for in the accreditation of capacity resources.”

It also rejected the IMM’s call for adjusting ORDCs during spin events to reduce the reserve requirement for synchronized and primary reserves by the amount of reserves deployed.

“PJM views this recommendation to be inconsistent with the NERC standard that obligates PJM to procure contingency reserves and also with PJM’s policy for maintaining adequate reserves,” it said. “PJM’s current policy regarding reserves is intended to restore reserves as quickly as possible following their deployment. The purpose of this is to make sure that the PJM system can respond to successive contingencies should they occur.”

Capacity Market Recommendations

PJM said the Resource Adequacy Senior Task Force, which began work in December, is discussing a range of potential rule changes that could address several of the Monitor’s capacity market proposals.

Among them:

  • that the value of capacity transfer rights be defined by the total megawatts cleared in the capacity market, the internal megawatts cleared and the imported megawatts cleared, and not redefined later prior to the delivery year;
  • that the market clearing results be used in settlements rather than the reallocation process currently used, or that the process of modifying the obligations to pay for capacity be reviewed;
  • that PJM improve the clarity and transparency of its capacity emergency transfer limit (CETL) calculations and that the CETL for capacity imports be based on the ability to import capacity only where PJM capacity exists and where that capacity has a must-offer requirement;
  • using the lower of the cost- or price-based energy market offer to determine energy costs in the calculation of the historical net revenues;
  • that any combined seasonal resources be required to be in the same locational deliverability area to ensure the energy and capacity markets remain synchronized and reliability metrics correctly calculated.

Some other recommendations are under discussion in other venues, PJM said.

The Monitor’s call to bar storage and other intermittent resources from offering capacity megawatts based on energy delivery that exceeds their capacity interconnection rights (CIRs) is among the issues being discussed at the Planning Committee’s special sessions on CIRs for effective load-carrying capability resources, PJM said.

The IMM’s call for PJM to re-evaluate the shape of the variable resource requirement curve will be considered as part of the Market Implementation Committee’s current Quadrennial Review, the RTO said.

Demand Response, FTRs

PJM rejected the Monitor’s proposal that electric distribution companies (EDCs) not be allowed to participate in markets as distributed energy resource aggregators in addition to their EDC role.

“This recommendation is inconsistent with FERC Order No. 2222, in which the commission affirmed that ‘market participation agreements for distributed energy resource aggregators should not preclude distribution utilities, cooperatives or municipalities from aggregating distributed energy resources on their systems,” PJM said. “Accordingly, PJM’s DER Aggregator Participation Model, proposed as a component of PJM’s Order 2222 compliance filing, does not prohibit a distribution utility from forming its own DER aggregation resources. This is consistent with current practice today, where certain distribution utilities participate in the PJM demand response program with their own load reduction resources.”

The RTO acknowledged, however, that the DER Aggregator Participation Model, which will “require a greater level of distribution utility coordination to ensure safety and reliability … sets up a scenario in which a distribution utility — the entity responsible for physically operating its distribution facilities and overriding PJM dispatch of other DER aggregators — may also be competing against other DER aggregators connected to those same distribution facilities.”

“PJM acknowledges concerns regarding this potential conflict of interest and anticipates continued dialogue with states and stakeholders on how state and local law may address this issue,” it said.

The RTO’s report renewed its disagreement with the Monitor over the proper confidence interval when calculating initial margin requirements for FTR market participants.

Although the Monitor recommended the use of a 99% confidence interval, PJM proposed 97%, which was rejected by FERC as unsupported by the record. (See Stakeholders Encourage PJM to Defend FTR Filing.)

The RTO maintains that the 97% option is “the most cost beneficial proposal” and that the increased collateral costs at 99% is greater than the benefit in reduced defaults.

“Based on this and other additional analysis, PJM believes it can supplement the December [Federal Power Act Section] 205 filing with additional evidence to support use of the 97% confidence interval to address most of FERC’s concerns,” it said.

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Status of Corporate Net-zero Pledges is ‘Bleak,’ Researcher Says

A new Net Zero Tracker report shows that net-zero pledges among the Forbes Global 2000 has increased 15% since last spring, but the overall picture for corporate pledges is “quite bleak,” Takeshi Kuramochi, a senior climate policy researcher at NewClimate Institute, said Monday.

The companies are concentrated in high-income countries in Europe, North America and East Asia, and the “robustness” of their targets “remains low overall,” Kuramochi said at a press conference in Bonn, Germany, for the release of Net Zero Stocktake 2022.

An assessment of the corporate pledges found that only 35% adhere to the basic pledge criteria set by the U.N.’s Race to Zero initiative. The criteria include specifying a target, taking immediate action, and publishing a plan and progress reports.

In addition, 60% of the pledges do not cover companies’ value chains, while 40% will rely on offsets to achieve the targets.

The findings are “somewhat worrying,” Kuramochi said.

Net Zero Tracker’s report is the first global stock-take released by the team behind the platform since completing a baseline quantitative analysis in March 2021. The platform, which launched in 2019, is a partnership of the Energy and Climate Intelligence Unit (ECIU), NewClimate Institute, Data-Driven EnviroLab and the research initiative Oxford Net Zero at Oxford University.

The tracker is more than a database of net-zero pledges, according to Richard Black, senior associate at ECIU.

Coverage of Greenhouse Gases (Net Zero Stocktake 2022) Content.jpgCoverage of greenhouse gases by net zero targets across 128 countries, 235 cities and 115 states and regions worldwide as of June 1, 2022, tracked in terms of GHGs and population covered. | Net Zero Stocktake 2022

“The days when [the pledge] was the most important metric are long gone; it’s about the integrity of those targets,” he said during the press conference.

To understand the global status of pledges, the database follows 4,000 entities, including all countries; states and regions in the 25 biggest emitting countries; cities with populations over 500,000; and companies on the Forbes 2000. Most of the entities in the database, however, do not have net-zero targets.

For those that do, the research team tracks what entities say publicly about the targets from sources such as speeches, laws, policy documents and sustainability reports.

“We don’t translate this information into temperature projections … or assess compatibility with a 1.5 Celsius global directory,” Black said.

To date, the team has identified 1,180 net-zero targets by countries, subnational regions, cities and companies, up from 769 identified for the baseline report last year.

Kuramochi attributed the increase to new pledges made in the leadup to the U.N.’s 26th Climate Change Conference of the Parties in Glasgow and enhanced data collection methodologies.

Subnationals

The report found that the number of large cities with net-zero targets doubled from 115 in the baseline report to 235, and state and province targets increased from 73 to 115.

While the increase is “encouraging,” the research team wants to see more information available about how those governments will achieve their targets, said Angel Hsu, principal investigator at EnviroLab and an assistant professor at the University of North Carolina-Chapel Hill.

“One of the indicators that we look at is whether or not the subnational governments have set an interim target — a midpoint target in route to a longer-term net-zero target — that indicates that they’re thinking about short-term to midterm action and that lends credibility to their implementation plans,” Hsu said.

Of the targets tracked in the database, 40% of cities and 27% of regions do not include interim targets, and about half of the cities and regions have published net-zero plans.

“We also observe a divide in net-zero target setting between Global North and Global South subnational governments,” Hsu said. “The majority of the targets that we were able to record are coming from high-income countries, more than 80% for regions and more than 60% for cities.”

Net-zero Outlook

With the growth of pledges across all segments in the database, the researchers see voluntary pledges changing the regulatory landscape in major economies.

That trend is playing out in several ways, according to Thomas Hale, associate professor of global public policy at the University of Oxford Blavatnik School of Government.

Many voluntary initiatives and pledges, such as the Race to Zero campaign or the Asset Owners Alliance, are working with government leaders to set targets, which Hale said creates the necessary “scrutiny” to ensure governments deliver on climate promises.

High-level climate champions, such as the U.N., are working to set standards and best practices to ensure that there is integrity in the pledges entities make. For example, Hale said that the U.N. secretary-general’s expert group on net-zero commitments will publish a report before the next Conference of the Parties in Egypt in November to “call out the bad, highlighting the good.”

In addition, international standard-setting organizations are working to define net-zero, Hale said. Their efforts will “create mainstream, widely adopted rules for global economic engagement.”

All the momentum around voluntary pledges will build pressure for regulatory changes, where net-zero becomes a baseline for economies, according to Hale. Regulatory progress for net zero is likely to mirror the growth of regulations for how companies disclose climate-related risks, which are in place in the U.K., pending in the EU and Japan, and proposed in the U.S. and China.

“By increasing the quantity, but also critically the quality, of net-zero targets, we’re paving the way for a real realignment of the economy around the goals of the Paris Agreement,” Hale said. The report, he said, “gives us some indicators of who is leading that race and who needs to catch up.”

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Washington Hires Epidemiologist to Study Climate Health Impacts

Washington’s first full-time climate change epidemiologist will go on duty starting July 1.

That epidemiologist will work for the Washington Tracking Network, a state health department program that aims to make public health data more accessible to the public, agencies and governments.

Rad Cunningham, senior epidemiologist and manager of the Climate and Health program under the Washington Department of Health, declined to name the new full-time climate change epidemiologist, saying she has not agreed to have her name released until July 1. Actually, Washington is hiring 1.25 full-time equivalent climate change epidemiologists. A quarter-time staffer will begin work for the tracking network on June 16.

The tracking network examines climate change data with an eye to predicting future health effects caused by global warming. The state program would provide this information to city and county governments and health departments as they prepare for the future. The two new epidemiologists are expected to analyze about 20 to 30 years of data and have a good grasp of what to tell various governments and agencies in about two years. Several states have this type of post, although it is not common, Cunningham said.

Washington’s leaders have blamed global warming for increased wildfires, problems with the state’s shellfish industry, a lack of water for farming and numerous health problems and other troubles.

Cunningham noted that an abnormally high heat wave last year was linked to the deaths of 157 Washington residents.

The state Health Department examines the climate change impacts to health with respect to air quality and wildfires, drinking water, extreme heat, pollen, agriculture and ocean acidification.

Global warming is linked to rising acidity levels in Washington’s warming sea waters, causing tiny oyster shells in Washington’s Dabob and Willipa bays to crumble faster than they can grow back. The problem has cut sharply into the state’s oyster harvests, which is a $270 million/year industry.

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ERCOT Sets New Record for Peak Demand

Sweltering heat — even by Texas standards — led to ERCOT finally setting a new all-time peak demand mark Sunday after several close calls last week.

Demand reached 74.9 GW at 5:10 p.m. CT, breaking the previous record of 74.8 GW set in August 2019. The record could be short-lived, as ERCOT was projecting demand to peak at 76.8 GW on Monday, threatening staff’s peak demand forecast of 77.3 GW for the summer.

That the record came on a weekend, when offices are empty, and during June is an indication of how unusually hot the weather has been in Texas. The state’s major cities have set daily records for high temperatures since Friday as an oppressive weather pattern settled over the south central U.S. The National Weather Service issued an excessive heat warning for North Texas on Sunday in anticipation of temperatures above 105 degrees Fahrenheit and heat indexes above 110.

Houston Heat Index (Daniel Cohan via Twitter) Content.jpgThe heat index in Houston reached 120 degrees at one point Sunday. | Daniel Cohan via Twitter

The heat index was as high as 120 F on Sunday afternoon in Houston, where city officials activated the city’s emergency heat plan and opened cooling centers late last week. Austin also declared a heat emergency and opened cooling centers, where 100-degree temperatures are expected through next week.

“Welcome to the final days of spring in Austin,” tweeted University of Texas energy professor Michael Webber, sharing an image of triple-digit Austin-area temperatures (save for a 99-degree forecast for Wednesday).

Suddenly, ERCOT’s “extreme” maximum demand of 81.6 GW this summer doesn’t seem so improbable.

ERCOT has yet to issue a formal conservation alert. The grid operator still had nearly 5 GW in operator reserves during Sunday’s peak demand. Thermal outages were up slightly to 6.4 GW on Sunday, according to Stoic Energy President Doug Lewin.

The Texas grid was operating during the weekend under its third operating condition notice (OCN) since April. The OCN, intended to alert market participants of a possible need for more resources, was to expire Monday.

ERCOT officials have said they expect “sufficient generation to meet forecasted demand.” Indeed, the grid held up, despite scattered distribution outages in North Texas, lending a measure of comfort to Texans down on ERCOT since the disastrous February 2021 winter storm.

“Making it through this early heat wave should give some confidence in ERCOT for the rest of the summer,” said Joshua Daniels, an energy researcher at UT. “The bleeding has stopped; it’s time for rehab.”

ERCOT again set records for June when demand averaged 73.9 GW and 74.4 GW during afternoon intervals on Friday and Saturday, respectively. Demand exceeded 70 GW at 12:45 p.m. Monday.

ERCOT has benefited from wind and solar energy, though both at times have been curtailed by transmission congestion. The renewable resources were supplying about 28 GW of energy Sunday afternoon, some 3 GW below staff’s forecast. The cheap energy helped keep prices under $100/MWh Sunday, with the exception of the Houston load center.

According to a demand and energy report posted last week, wind (32.4%) and solar (6.2%) accounted for 38.6% of ERCOT’s fuel mix in May. Gas resources provided 32.1% and coal 13.3% of the energy mix.

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Plans Advance for $2B Oregon Renewable Diesel Plant

The developer of a renewable diesel fuel plant in Oregon is tackling its final two bureaucratic hurdles before beginning construction on the $2 billion facility.

If no hiccups occur, NEXT Renewable Fuels of Portland predicts a best-case scenario of opening a plant capable of producing 50,000 barrels of renewable diesel daily by 2025 at the earliest. The site is at the Port Westward Industrial Park in Clatskanie, which is about 60 miles downstream of Portland on the Columbia River.

NEXT is awaiting approval of an air quality permit from the Oregon Department of Environmental Quality and completion of a federal environmental review.

The project is supposed to produce around 2.1 million gallons of renewable diesel a day from various types of greases, plus cooking and fish processing oils imported from around the world. There is a distinction between “renewable diesel” and “biodiesel” in that renewable diesel fuel does not need modifications in the engines that it serves, NEXT spokesperson Michael Hinrichs told NetZero Insider.

Production of 50,000 barrels of day could provide the diesel needs for all of Oregon, he said.

The Clatskanie project is one of several renewable fuel proposals in the works for the West Coast. Hinrichs said there is a market for several renewable fuel suppliers in California, Oregon and Washington. “The demand is high enough on the West Coast that it can handle a number of these facilities,” he said.

This demand comes from a major push among the coastal states to replace petroleum-based diesel for trucks, ships and heavy equipment with renewable fuels that produce fewer carbon emissions.

Port Westward in Clatskanie was selected because it has a deepwater port to handle ships containing the raw materials, plus rail lines and truck routes linking it to the rest of the West Coast. “It’s an ideal location to build. … We kind of blend in with this industrial area,” Hinrichs said.

NEXT hopes to have its permitting completed in 2023 and expects to take two years to build the massive complex filled with storages tanks and processing equipment.  The company has an agreement with local unions to use union labor in both construction and operation of the plant. It expects to hire about 3,500 people for construction and to have a permanent staff of about 240.

The company has a contract with BP North America plus some other sources — who have not yet agreed to be publicly identified — to provide raw material for the plant. NEXT is in contact with several fuel companies as potential customers.

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PJM PC/TEAC Briefs: June 7, 2022

Planning Committee

Reserve Requirement Study Assumptions Approved

The PJM Planning Committee last week unanimously endorsed study assumptions developed in the Resource Adequacy Analysis Subcommittee (RAAS) for the RTO’s 2022 Reserve Requirement Study (RRS).

The assumptions, which are similar to those used in the 2021 RRS study, will be used to reset the installed reserve margin (IRM) and forecast pool requirement (FPR) for delivery years 2023/24, 2024/25 and 2025/26, as well as to set the initial IRM and FPR for 2026/27, PJM’s Jason Quevada told the committee.

PJM uses each generating unit’s capacity, forced outage rate and planned maintenance outages to develop a cumulative capacity outage probability table for each week of the year, except the winter peak week. For the winter peak, PJM uses historical RTO-aggregate outage data from delivery years 2007/08 through 2021/22.

The new assumptions reflect FERC’s approval in August of PJM’s effective load-carrying capability (ELCC) method for determining capacity values for variable, limited-duration and combination resources (ER21-2043). (See FERC Accepts PJM ELCC Tariff Revisions.)

PJM told FERC that the ELCC construct recognized the “diminishing returns associated with greater levels of deployment for most ELCC resource types,” ensuring that the RTO doesn’t become overdependent on a single resource with “inherent limitations.”

Wind, solar, hydro and landfill gas variable resources and storage resources will be excluded from the 2022 calculations.

PJM will present the final RRS report to the RAAS and PC in September and will seek members’ approval in October. Posting of the final values is expected in February.

Interconnection Process Subcommittee Charter OK’d

Members unanimously approved the draft charter of the Interconnection Process Subcommittee, which is being formed to continue work on interconnection process improvements following the sunsetting of the Interconnection Process Reform Task Force (IPRTF).

Stakeholders approved a new interconnection queue process and a related transition plan developed by the task force in April. (See PJM Stakeholders Endorse New Interconnection Process.) The proposed rules will be filed with FERC by June 16.

Also at the PC meeting, Jason Shoemaker, manager of interconnection projects, provided an update on the RTO’s efforts to reduce the interconnection queue backlog.

Shoemaker said queues AG2 and AH1 will continue to be delayed, and AH2 and AI1 are also expected to be delayed.  As a result, PJM is deferring project modification requests in those queues. PJM’s backlog priorities are AD2 and prior queues (65 studies); backlogged system impact studies (about 190); and queues AE1 through AG1 (about 800), he said.

Response to DOE Notice of Inquiry

PJM’s Pauline Foley briefed the committee on the RTO’s plan to respond to the Department of Energy Grid Deployment Office’s May Notice of Inquiry and request for information on how it should implement the “anchor tenant” and revolving loan programs under its Transmission Facilitation Program (TFP). The TFP is intended to aid the construction of grid infrastructure that improves reliability and resilience or increases interregional transfers. (See DOE Seeks Input on Tx Loan, ‘Anchor Tenant’ Programs.)

The program, authorized under the Infrastructure Investment and Jobs Act (IIJA), allows DOE to purchase up to 50% of the proposed transmission capacity of an eligible transmission line for up to 40 years. It can also make loans for the costs of carrying out an eligible project: new lines of at least 1,000 MW (500 MW for projects in an existing transmission corridor).

The IIJA also authorized DOE to enter into public-private partnerships to advance an eligible project in a National Interest Electric Transmission corridor or that is necessary to accommodate an increase in transmission demand across more than one state or transmission planning region. DOE is authorized to borrow up to $2.5 billion from the U.S. Treasury at any one time.

Responses to DOE were due Monday.

Transmission Expansion Advisory Committee

Generation Deactivation Update

PJM reported that it completed reliability analyses and identified no violations for the following generation deactivations:

  • Morgantown combustion turbines 1 and 2 (32 MW) in the PEPCO transmission zone (Oct. 1);
  • Carbon Limestone landfill (19.3 MW) in the American Transmission Systems Inc. (ATSI) zone (July 31); and
  • Cape May County landfill (0.6 MW) in the Atlantic City Electric zone (Aug. 5).

Members also heard second reads on proposed solutions to:

  • an N-1 thermal violation on the 345-kV Beaver-Hayes line resulting from the planned retirement of Sammis 5, 6 and 7 (1,504 MW) in the ATSI zone on June 1, 2023. The recommended solution includes replacing four 345-kV disconnect switches with 3000A disconnect switches; replacement of substation conductors; upgrades of transformer protection relays; and relay settings changes. The estimated cost is $2.1 million.
  • the March 31 deactivation of Avon Lake 9 and 10 (648 MW) in ATSI. The plan includes removing five 138-kV bus tie lines and one 345-kV bus tie line from the Avon Lake Substation; adjusting relay settings; and installing new fiber between the 345-kV and 138-kV yards to re-establish relay protection. The project, expected to be completed by April 28, 2023, has an estimated cost of $2.5 million.

Supplemental Projects

Members heard presentations on the following supplemental projects:

  • FirstEnergy outlined a 230-kV service request for a 30-MW load near the 230-kV line Doubs-Monocacy, with a requested in-service date of November 2022 (Need # APS-2020-012).
  • Dominion Energy presented more than a dozen supplemental requests, including new substations and additional distribution transformers to serve data centers and other sources of load growth.

NJ Offshore Wind SAA

Remaining reliability studies will be completed in July and August for selected scenarios in the 2021 State Agreement Approach proposal window to support New Jersey’s offshore wind projects, PJM’s Jonathan Kern told members. Scenario development and initial reliability studies are expected to be completed this month.

PJM is considering about 26 point-of-interconnection scenarios.

The New Jersey Board of Public Utilities is reviewing comments that were submitted in its OSW transmission docket (QO20100630), including responses to questions posted following four stakeholder meetings the agency held to collect feedback on the evaluation of the transmission proposals. (See NJ Seeks Efficiency, Savings in OSW Transmission Process.)

60-day Proposal Window Opened

PJM opened a 60-day window June 7 to receive proposals to address reliability and market efficiency needs on the 345-kV Crete-St. John, Crete-E. Frankfort, University Park N-Olive and Stillwell-Dumont lines.

Multi-Driver Proposal Window 1 will reflect the removal of queue project U3-021/AB2-096 and the inclusion of project AB1-089, PJM’s Sami Abdulsalam told members. PJM will evaluate the proposals in coordination with MISO. The window closes Aug. 8.

PJM noted an overlap in flowgates from the new window and 2021 Proposal Window 2 and said entities wanting to modify their 2021 proposals should submit new entries in the new window. Entities wanting to withdraw proposals from consideration must notify PJM to avoid future billing.

Abdulsalam said PJM is planning to open a proposal window for the 2022 Regional Transmission Expansion Plan between the last week of June and first week of July. PJM posted the latest preliminary models on May 23 and is reviewing FERC Form 715 analysis results from transmission owners while working on N-1-1 and load deliverability analyses.

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CARB Tuning up Advanced Clean Cars II Rules

California regulators are fine-tuning a set of draft rules that would transition the state to 100% light-duty ZEV sales by 2035, with a final round of proposed changes expected to be released for public comment this month.

The California Air Resources Board (CARB) held the first of two public hearings on the proposed Advanced Clean Cars II regulation on Thursday. Board members expect to cast a final vote on the rules in August.

Advanced Clean Cars II (ACC II) is a proposed follow-up to CARB’s current Advanced Clean Cars I rule. The ACC II regulation would apply to vehicles sold in the state starting with model year 2026.

Advanced Clean Cars includes a ZEV program, which requires an increasing percentage of light-duty car and truck sales in the state to be zero-emission each year, plus a low-emission vehicle, or LEV, program that sets tailpipe emission standards for internal combustion vehicles.

Banked Credit Proposal

During Thursday’s hearing, CARB staff rolled out several proposed modifications to a previously released draft regulation based on stakeholder feedback. Some of the changes relate to the ACC system of credits awarded to automakers for providing ZEVs for sale in the state.

A draft regulation released in April proposed reducing an automaker’s number of banked ZEV credits remaining at the end of ACC I by dividing the total by four. Credits for plug-in hybrids, which are calculated differently, would not be affected.

Under the new proposal, ZEV credits and PHEV credits would both be reduced at the end of ACC I by dividing the total by two.

Anna Wong, CARB’s lead staff on the ZEV regulation, said the proposal is intended to allow automakers to benefit from overcompliance with ZEV requirements in previous years. But it’s designed so “they couldn’t just run over the program with just credits and not make any more vehicles,” she said.

“In California, there are a lot of ACC I credits that will be amassed — a lot,” Wong said.

The percentage of credits an automaker could use to meet ZEV requirements would be capped. But manufacturers could decide how to apply their allotment of credits over the first five years of ACC II, Wong said. For example, they could use all their credits in the first year, the fifth year, or spread them out over multiple years.

Durability Requirements

Other changes to the ACC II draft regulation would soften durability requirements for ZEVs.

The earlier proposal would have required ZEVs to retain 80% of their initial range after 10 years of driving by a typical customer. Under the new proposal, the 10-year requirement would be reduced to 75% in the first five years of ACC II.

In addition, enforcement of the requirement would initially be looser, without consequences for manufacturers that miss the mark by “just a trivial tiny amount,” Mike McCarthy, chief technology officer in the ZEV program, told the CARB board.

McCarthy said most automakers are on track to meet the 80% range requirement. Some industry leaders are even saying that their ZEVs will retain more than 90% of the original range after 10 years, he added.

But some ZEV makers are less experienced and don’t have 10-year-old cars on the road yet, he said.

“We do have to take into account that this is new for them and they are gaining experience,” McCarthy said.

The Advanced Clean Cars ZEV program applies to light-duty vehicles, and questions have come up regarding the light-duty classification.

Wong said that a large pickup truck with an internal combustion engine might weigh less than 8,500 pounds, a size that’s considered a light-duty vehicle. But when internal-combustion components are replaced with a ZEV battery, “It might cease to be a light-duty truck and become a medium-duty vehicle,” she said.

In that case, manufacturers currently have the flexibility to decide whether to count the vehicle as a light-duty vehicle in the Advanced Clean Cars program or as a medium-duty vehicle under CARB’s Advanced Clean Trucks program. Wong said CARB wants to retain that flexibility in ACC II.

100% ZEV Sales

In September 2020, Gov. Gavin Newsom issued an executive order requiring sales of all new passenger vehicles to be zero-emission by 2035. The proposed ACC II regulation sets out a legally binding and enforceable pathway for getting to 100% ZEV sales.

An earlier version of the ACC II proposal featured a more gradual route to increased ZEV sales in the state. But in April, CARB released a revised draft that ramped up ZEV sales more rapidly in the early years of the rule. (See New Draft of Advanced Clean Cars II Would Speed ZEV Sales.)

The agency is aiming to finalize the ACC II by the end of the summer so that the rules can take effect for model year 2026. The federal Clean Air Act allows California to adopt its own vehicle emissions program rather than following federal standards. But a two-year waiting period is required between adoption of the regulation and the model year to which it will apply.

Approving the regulation this summer will also give states that have adopted California’s ACC program a chance to update their own rules in time for model year 2026.

CARB expects to release a formal version of its latest revisions to ACC II in the next few weeks. That will be followed by a 15-day public comment period.

More information on ACC II may be found here.

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PJM Operating Committee Briefs: June 9, 2022

Internal NITS Process

PJM’s Susan McGill last week reviewed a proposed issue charge and problem statement to improve processes for scheduling internal network integration transmission service (NITS).

The RTO said its current tariff makes little distinction between internal and external service requests, requiring all requests be studied to ensure sufficient headroom or need for system upgrades. Internal requests are for internal generation serving internal load; external/cross-border requests refer to external generation serving internal load or internal generation serving external load, respectively.

The initiative seeks to revise the tariff and manual language to differentiate between the two types of requests and reduce administrative burdens on entities using internal service.

The problem statement says the current tariff sets out the process for renewing cross-border service but is “not applicable to internal service requests because the internal generation and load served through internal service are already evaluated and maintained in the existing models used for studies under the Regional Transmission Expansion Process (RTEP).”

The current tariff “requires start and end date durations, creating additional administration burdens to ensure timely rollover rights for internal NITS.”

The issue charge proposes to make the following issues out of scope: border service processes associated with NITS; the RTEP process; the pseudo-tie request process; transmission service rates; and the process to integrate new service territory into PJM.

The committee will be asked to approve the issue charge at its next meeting.

‘Maximum Emergency’ Generation

Members heard a first read of PJM’s Package A, a collection of proposed manual changes addressing maximum generation status.

In response to concerns over fuel and emissions, PJM made a change last year to section 6.4 of Manual 13 to temporarily modify the remaining hours under which a resource may be offered as “maximum emergency generation.” The change, which members endorsed in October, allowed PJM to request resource owners move fuel- or emissions-limited steam units into the “maximum emergency” category if the resource’s remaining run hours fall below 240 hours (10 days), an increase from the manual’s original remaining run time of 32 hours. Unless required to meet local or regional reliability needs, the units would be restricted from operating during that status, unless their inventory rose above 21 days (504 hours).

The change set out similar rules for combustion turbines, except that they could be moved into maximum emergency status when their remaining run hours on all fuel types fall, or are expected to fall, below 24 hours, versus 16 hours in the original language.

The modifications had an expiration date of April 1, 2022, but the Markets and Reliability Committee eliminated the deadline in March to allow work on a permanent solution. The MRC also approved a problem statement and issue charge. (See “Max Emergency Changes Endorsed,” PJM MRC/MC Briefs: March 23, 2022.)

Changes to Deactivation Notification Requirements

PJM reviewed “quick fix” changes to Manual 14D: Generator Operational Requirements regarding the deactivation analysis timeline.

Current rules require notification of PJM at least 90 days in advance of the planned deactivation.

Under the changes, desired deactivation date would be no earlier than:

  • July 1 of the current calendar year for notices received between Jan. 1 and March 31;
  • Oct. 1 of the current calendar year for notices received between April 1 and June 30;
  • Jan. 1 of the following calendar year for notices received between July 1 and Sept. 30; and
  • April 1 of the following calendar year for notices received between Oct. 1 and Dec. 31.

PJM will study deactivations four times per year for all notices received prior to the study commencement dates (Jan. 1, April 1, July 1 and Oct. 1).

Deactivation notifications would only require good-faith estimates for a time period if the generation owner requests to mothball the unit.

PJM will notify generation owners by the end of February, May, August and September, respectively, on the results of their reliability analyses.

The committee will be asked to endorse these changes at its next meeting.

Operating Metrics for May

PJM reported an average load forecast error of 1.82% in May, with a peak hours error of 2.03%, both above the 25-month average, according to the RTO’s operating metrics.

The RTO continued its unblemished record in 2022 of exceeding its 99% balancing authority area control error limit (BAAL) goal, scoring a 99.8% in May, with 55 excursions totaling 88 minutes outside of limits.

There were four spinning events, three reserve sharing events with the Northeast Power Coordinating Council, 24 post-contingency local load relief warnings and four hot weather alerts.

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PJM Market Implementation Committee Briefs: June 8, 2022

Variable Environmental Costs and Credits

PJM gave a second first read of a proposal to update rules governing variable environmental charges and credits and their inclusion in cost-based energy offers. Generation units receiving production tax credits or renewable energy credits must reflect them in their fuel-cost policies when submitting non-zero cost-based offers into the energy market.

The committee will be asked to endorse the package, which includes changes to Manual 15 and Schedule 2 of the Operating Agreement, at its next meeting.

Market Suspension

PJM’s Stefan Starkov gave a second first read of the revised PJM/Independent Market Monitor package of changes to the treatment of long-term market suspensions. The package, which is intended to address a gap in tariff language regarding how to settle the real-time market if prices can’t be determined, was revised to reflect feedback received at the May MIC meeting.

In September, the Markets and Reliability Committee delayed a vote on rule changes after representatives from Calpine and Vistra made a motion to defer pending further discussions at the MIC. (See “Market Suspension Vote Delayed,” PJM MRC Briefs: Sept. 29, 2021.)

Calpine said the proposal did not adequately address market suspensions lasting a week or longer, and that it was concerned with compensating generators for an extended period based only on their cost‐based offers, which are computed solely on short‐run marginal costs.

The original proposal would have had different rules for outages of more and less than six hours. Outages less than or equal to six hours would substitute the missing hours with available day-ahead or real-time LMPs or the average of adjacent hours. For outages of more than six hours, LMPs would be set at $0/MWh, with make-whole payments at the lesser of dispatched megawatts or actual megawatts using cost-based offers.

The revised proposal would use available DA or RT LMPs or the average of adjacent hours for all outages less than or equal to 24 hours. Pricing for outages longer than 24 hours would be set using a long-term market clearing mechanism incorporating the aggregate supply curve.

The curve would be based on hourly supply-demand intersections constructed from available offers (including available resources not running) and actual generation megawatts as a proxy for demand. Constraints would be ignored. Energy and ancillary services would continue to be calculated at five-minute intervals.

The committee will be asked to endorse the package at its next meeting.

DR/PRD Compliance for Weather-sensitive Load

Sharon Midgley, representing Exelon (NASDAQ:EXC) and Baltimore Gas and Electric (BGE), presented a first read of a problem statement and issue charge to consider an alternative demand response/price-responsive demand (PRD) compliance construct for weather-sensitive load, such as residential demand impacted by summer air conditioning.

Midgley said the current rules compare metered load under prevailing weather conditions to the peak load contribution (PLC) based on weather-normalized peak weather conditions.

Capacity compliance for DR and PRD is currently based on the firm service level (FSL), calculated as the PLC minus the amount of installed capacity the DR/PRD resource cleared in the capacity auction. Compliance is achieved if metered load is at or below the FSL.

Over the summers of 2018-2021, the actual peak load for BGE’s weather-sensitive residential customers averaged 13% higher than the weather-normalized peak load. The disparity was the largest in 2019, with weather-normalized load 22% lower than actual load.

The discrepancy means DR and PRD providers may not be able to offer the full capability of their programs into the capacity market because of unachievable FSL, Midgley said.

BGE proposed the issue be considered by the Demand Response Subcommittee, but some stakeholders suggested it would be better referred to the Resource Adequacy Senior Task Force.

The committee will be asked to approve the issue charge at its next meeting.

Capacity Offer Opportunities for Generation with Co-located Load

PJM’s Lisa Morelli led a discussion on solution options for capacity offer opportunities for generation with co-located load. (See “Co-located Load Issue Charge Endorsed,” PJM MIC Briefs: Jan. 12, 2022.)

Enel X North America, which serves load customers with on-site generation, said capacity accreditation for such customers “is a ripe area for review, particularly given technological innovation and direction from FERC Order 2222 to fully value injections from generation sited with load as distributed energy resources.

“Load that is not station power [should be treated] as any other load,” Enel said. “Absent a transmission cost being allocated to the co-located load, these costs would be unfairly and unnecessarily passed on to all other ratepayers.”

Operating Reserve, Quadrennial Review

Members also continued work on an initiative to clarify operating reserve rules for resources operating as requested by PJM (See “Operating Reserve Clarification,” PJM MIC Briefs: Feb. 9, 2022) and the Quadrennial Review, which determines the shape of the variable resource requirement curve, the cost of new entry for each locational deliverability area, and the methodology for determining the net energy and ancillary services revenue offset for the PJM region and each zone.