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November 6, 2024

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Glick Denies Taking Directions from Biden Admin

WASHINGTON — FERC Chairman Richard Glick (D) on Thursday categorically denied taking directives or feedback from Biden administration officials on commission actions.

The remarks to reporters after the commission’s monthly open meeting came in response to questions about records of Glick’s meetings released under the Freedom of Information Act. They showed that Glick had met 13 times with Deputy National Climate Adviser Ali Zaidi between September of last year and the end of March and nine times with Energy Secretary Jennifer Granholm between last July and the end of March.

The Wall Street Journal’s Editorial Board published an op-ed Sunday suggesting that the meetings indicate Glick had lied before the Senate Energy and Natural Resources Committee when he denied slow-walking natural gas pipeline approvals because of administration orders. (See Glick: No Regrets over Gas Policy Statements.)

“It’s impossible to know what Messrs. Glick and Zaidi were discussing,” the board wrote. “But it’s hard to believe the two never talked about pipelines.”

Glick called the Journal’s piece “complete bull,” joking that he wanted to quote former Attorney General Bill Barr, whom he said was “more colorful.” He was alluding to Barr’s statement in a deposition that former President Donald Trump’s claims of election fraud were “bullshit.”

“I take FERC’s independence very seriously,” he told reporters. “I would never allow [anyone in the administration] to tell me what to do, and the good news is that in this particular administration, they don’t do that.”

James Danly Richard Glick 2022-06-16 (RTO Insider LLC) Alt FI.jpgFERC Commissioner James Danly (left) and Chairman Richard Glick chat before the commission’s meeting begins. | © RTO Insider LLC

 

Glick was likely alluding to the Trump administration’s proposed Grid Resiliency Pricing Rule, which FERC unanimously rejected in 2018. (See FERC Rejects DOE Rule, Opens RTO ‘Resilience’ Inquiry.) He also said that in his first meeting with Granholm, she pledged that the Department of Energy would “never tell [us] what to do. And she’s lived up to that, and I really respect that.”

He also said he “would never, ever talk about anything we can’t talk about, meaning ex parte.”

Under the commission’s ex parte rules, FERC commissioners and staff can only discuss issues pending before them among themselves; they cannot even consider opinions about those issues unless they are officially filed with the commission as comments.

Instead, Glick said, the meetings were for him to brief the administration about what was going on: “‘What’s the status of grid reliability? Where do we think the grid is headed? Is there enough fuel in New England for the winter? What’s happening in Texas during [last year’s] winter storm? Was there market manipulation?’ … It’s never, ‘you need to do this,’ or ‘you should do this,’ or ‘this is our policy.’ That just doesn’t happen.”

Glick was also asked whether he received feedback from Zaidi or Granholm about two controversial policy statements the commission issued earlier this year that were later converted to drafts, with the majority citing feedback from stakeholders who said the policies were confusing. (See FERC Backtracks on Gas Policy Updates.)

The policies were not even discussed, Glick said. “No one provided any feedback whatsoever.”

The FOIA request was submitted by the Institute for Energy Research, which describes itself as a nonprofit that “conducts intensive research and analysis on the functions, operations and government regulation of global energy markets.” It advocates for free-market energy policy and fossil fuel use.

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MISO Board Meets Amid RA Concerns, Emergency Alerts

INDIANAPOLIS, Ind. — MISO’s Board of Directors discussed concerns over dropping capacity reserves during its board sessions this week as heat blistered the footprint and forced emergency preparations.

As the board gathered this week, MISO operators managed the first serious heat wave of the 2022/23 planning year. The RTO issued a maximum generation alert Monday for MISO South and a footprint-wide alert on Wednesday; both were to expire Wednesday night.

The alerts followed earlier capacity advisories for MISO South on Sunday and the entire footprint Wednesday. MISO also called for conservative operations by all members through 10 p.m. ET Thursday.

The advisories come after MISO’s 2022-23 planning resource auction (PRA) in April unveiled a 1.2-GW capacity shortage across MISO Midwest and triggered a $236.66/MW-day cost-of-new generation entry clearing price for the entire subregion. Though members approached the auction with more capacity year-over-year, the RTO said the resource additions were mostly intermittent and generally less available than retiring thermal generators. (See MISO’s 2022/23 Capacity Auction Lays Bare Shortfalls in Midwest.)

During Tuesday’s Markets Committee meeting, MISO Executive Director of Market Operations J.T. Smith said the capacity deficit doesn’t necessarily mean MISO must revert to controlled load shedding. The RTO can access imports and its load-modifying resources during tight conditions, he said.

“There is some risk sitting out there, but to date … there hasn’t been a summer situation where MISO had to go through all of its emergency operating procedures,” Smith told board members.

He said staff forecasted a 122-GW peak for Wednesday, 2 GW shy of its overall summer peak prediction. Smith said while MISO appeared to have enough firm generation on hand beforehand, units tripping offline in real time make the difference.

“The interesting factor will be generator performance,” he said.

The grid operator’s and the Organization of MISO States’ 2022 resource adequacy survey has painted an increasingly dark supply picture. According to the survey, capacity deficits could reach 2.6 GW next year and as much as 11 GW by the 2027/28 planning year. (See OMS-MISO RA Survey Says Supply Deficits Could Top 10 GW by 2027.)

MISO Director Nancy Lange asked whether the RTO needs a better “picture of generation retirements and their time frame.”

Nancy Lange 2022-06-13 (RTO Insider LLC) FI.jpgMISO Director Nancy Lange | © RTO Insider LLC

“Do we need additional insights or is there something I’m missing?” she asked. Lange said MISO could have withstood the uncertainty “in the good old days” but that now, it’s crucial it knows which units it stands to lose.

Smith acknowledged that the OMS-MISO survey results have recently been “rosier” than the capacity auction results. He said that this year’s survey could influence some generation owners’ decisions to keep or bring more capacity online.

MISO currently has about 124 GW of capacity at various stages of study in its interconnection queue. Historically, about 20% of the generation that enters the queue reaches commercial operation.

President Clair Moeller said MISO is currently holding conversations with OMS on how it can achieve a “deeper level of collaboration” with its states on resource adequacy.

“They have the majority of the authority,” Moeller reminded the board. “We don’t have the authority in the regulatory process to make anybody do anything. Our big weapon here is transparency.

Clair Moeller 2022-06-13 (RTO Insider LLC) FI.jpgMISO President Clair Moeller | © RTO Insider LLC

“They’re suffering through this same problem of needing more information,” he said. Moeller pointed out that jurisdictional utilities usually complete integrated resource planning once every three years and regulators can be caught off guard on how utilities’ plans evolve.

Lange called the media’s emphasis on possible rolling blackouts unhelpful and potentially sensationalist. She asked whether MISO could pin a number on its chances of entering controlled load shed.

“Could there be a heat dome event that sits over PJM and MISO? It’s unlikely, but it could happen. I can’t quite put a probability on that, but if it does happen, we will have a difficult time,” said Renuka Chatterjee, executive vice president of system operations. “We try to keep the lights on. Sometimes we can’t keep all the lights on, and we have to make some choices.”

Independent Market Monitor David Patton estimated that about 5 GW of MISO’s generation has retired prematurely, some due to the footprint’s uneconomic capacity market conditions. He reiterated that the grid operator should have used a sloped rather than vertical demand curve in its capacity auction.

“If we ignore economics, we expect that we’ll get bad outcomes, and this is a bad outcome … If we value reliability, we have to fix this market,” he said.

Patton said he now thinks “there’s a lot of interest among states on reforming the demand side of the market.” He met privately with state regulators after the Markets Committee meeting to discuss potential capacity market adjustments.

OMS Calls for Regroup on RA

Some OMS members sent a letter to MISO leadership last week, calling for greater visibility into and a reexamination of how the grid operator optimizes its members’ resource fleet. (See OMS Drafting Letter over MISO Resource Adequacy Concerns.)

“As evidenced by the recent PRA results, it is time to review … market signals and reliability requirements, and to enhance the collaboration between MISO, the states, and other entities responsible for resource adequacy,” most OMS members wrote. “Put simply, MISO must ensure it has the markets and planning processes in place that can deliver the reliability and economic efficiencies its members expect.”

State regulators said they need more transparency into how load is planned to be served within MISO so they can “fully understand the landscape of risks associated with decisions that are not subject to their oversight.”

The regulators said the capacity auction shortfall is “further impetus for our ongoing efforts to work together to provide transparency, reduce uncertainty, and ensure roles and responsibilities for resource adequacy are crystal clear so we are not reduced to pointing fingers or disclaiming these responsibilities.”

OMS said MISO must immediately act to reduce barriers on both the transmission and distribution system to gain access to new generation. It said the RTO should “ensure resource retirements are properly and holistically studied before states finalize their decisions.”

“The region should not wait for the large number of distributed resources — as MISO has recently proposed in its [FERC] Order 2222 implementation timeline — that can often be deployed much more rapidly than grid-scale resources,” the organization said. “Likewise, MISO must move with haste to re-examine its study process for retiring resources so states can fully consider the impact retirements have on the region’s and the respective states’ electric reliability.”  

The grid operator has proposed more frequent steady-state analyses and more attention to transmission system reliability when analyzing retiring generation but does not plan to consider resource adequacy in the studies. (See MISO Bolstering Generation Retirement Studies Amid Capacity Shortage.)

OMS finished by saying it believes in the MISO system’s various planning activities and interconnectedness. However, it also said that the region is “best served when decisionmakers at all levels engage in transparent, cooperative and respectful communication.”

The letter was signed by 11 of OMS’ 17 members. Regulators from Louisiana, Mississippi, Texas, Montana, the New Orleans City Council and the Canadian province of Manitoba did not add their signatures. Because the letter was not taken up under normal OMS board meeting prcedures, OMS does not consider the letter an official position.

Spring Brings High Prices

Load has returned to normal in the spring as the pandemic winds down, averaging about 70 GW per day with a seasonal 104-GW peak demand. Real-time prices shot up to $57/MWh on inflated fuel costs from $26/MWh last spring and $18/MWh in two years ago, when the pandemic began in earnest.

“This was a very high-cost quarter,” Patton said. He said natural gas prices rose 140% over last spring, with prices routinely going above $8/MMBtu in the quarter.

Patton said coal unit operators are beginning to conserve their stockpiles again as they did during the winter, holding out for the high-priced and hottest summer days.

He also said transmission congestion was “unbelievably high,” with real-time congestion costs surpassing $1 billion during the spring.

MISO Sees Members’ Savings Increase

Against this backdrop, MISO debuted a forecasted value proposition that bets market participants will more than double their savings by 2040 through membership. The forward-looking estimate foresees members enjoying a benefit-to-cost ratio of about 26:1 by 2040, up dramatically from its current 11:1 ratio.

MISO last year said it saves its membership about $3.4 billion annually on average and approximately $36.3 billion in total since 2007. (See MISO: 2021 Member Savings Exceeded $3B.)

The value proposition study normally quantifies the annual savings it generates for its membership against utilities going it alone. MISO included the usual savings measures of more efficient generation dispatch, its diverse geographic footprint, a diminished need for new generation, and the sturdier reliability that comes with a resource sharing pool. Staff pointed out in its projections the benefits of being able to access carbon-free energy from other regions and to more flexibly incorporate renewable energy into the resource stack.

MISO CEO John Bear called the new value proposition a “significant increase in value delivery to MISO membership.”

“In the future, MISO will continue to play a significant role in ensuring reliability and optimizing flexibility in our large and diverse footprint as it transitions towards a more decarbonized system,” he said in a press release.

“[T]he accelerated transition to a low-carbon future will create challenges, which can be more reliably and efficiently solved using the region’s scope and diverse resources, creating even more value for customers in the future,” said Wayne Schug, MISO’s vice president of corporate strategy and business development.

The grid operator said it assumed a 4.9% increase in membership costs per year to gauge the savings, noting the increase is “well above recent levels of inflation and historical MISO costs.”

MISO said it will continue to conduct an annual value proposition study but said, “given the magnitude of change the industry is undergoing, it is important to provide indications for the future value range MISO may bring to the region.”

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AEP Under Fire as Load Sheds Persist in Ohio

American Electric Power (NASDAQ:AEP) customers in Ohio accused the company of racism Wednesday for cutting power to poor areas of Columbus while continuing service to richer suburbs in the wake of a severe windstorm.

AEP said it lost more than 100 poles during the storm Monday night, which saw wind gusts as high as 95 mph, and had downed power lines across its service territory Tuesday morning. The National Weather Service said the storm was a derecho, a windstorm driven by large, explosive thunderstorms.

Dozens of customers vented on Facebook and Twitter, questioning why the utility cut power to poorer, urban areas of Columbus, while richer suburban areas, and AEP’s headquarters building, had power.

Of the 135,000 customers lacking power at one point Wednesday afternoon, about 85,000 were in the Greater Columbus area — even though the city’s power lines were not damaged — The Columbus Dispatch reported. By 5:30 p.m., the outages had dropped to less than 127,0000.

AEP building remains lit (summertime fun stevie via Twitter) Content.jpgAEP Ohio was under attack on social media from those who questioned why the utility cut power to poor areas of Columbus while the richer suburbs and the AEP headquarters building had power. | summertime fun stevie via Twitter

A peak of 230,000 customers lost power Tuesday as PJM ordered load sheds on three 138-kV lines to prevent overloads and cascading outages. (See related story, PJM Orders Load Sheds in AEP Following Storms.)

PJM ordered another load shed at 11:40 a.m. Wednesday to mitigate an N-5 cascade analysis on the 138-kV Kenney-Roberts line. Earlier in the day, PJM extended its Hot Weather Alert for its Western region, including AEP, through the end of Thursday.

AEP restored power over Tuesday night to some customers in central Ohio but turned it off again Wednesday as demand rose, saying customers previously affected might see additional outages through Thursday. It asked customers to reduce their electric usage between the peak hours of noon and 7 p.m.

In an update at 7:30 p.m., AEP said its crews had made significant progress repairing damage to the transmission lines serving Columbus and that it expected to begin restoring power to substations and customers in the early morning hours.

“All customers who were impacted by the emergency outage will have their power restored by 5 a.m. on Thursday, June 16,” AEP said. “We expect that these repairs will allow the power grid in the Columbus area to operate as it normally would, even as temperatures rise.”

The forecast for Thursday calls for temperatures in the mid-90s.

“I’ve been with AEP 41 years, and I don’t remember anything like this,” Jon Williams, AEP Ohio’s managing director of customer experience, told the Dispatch. “This is a very, very unusual occurrence.”

Outrage

AEP said the outages in Columbus were necessary because the storm damaged transmission lines in eastern and southeastern Ohio that serve the city.

“This is criminal. You intentionally cut power in low-income areas. How obvious is your prejudice?” wrote one woman on AEP Ohio’s Facebook page. “Good ole fashion redlining practices determined whose power was cut. No way they will last two days in that kind of heat.”

At least 11 cooling centers were opened in central Ohio as temperatures hit the mid-90s and the heat index hit 105.

Ohio Outage Map (AEP Ohio) Content.jpgColumbus, Ohio, areas affected by outages Wednesday afternoon. | AEP Ohio

“Shout out to AEP Ohio for purposely cutting power to, almost exclusively, the poorest parts of Columbus during today’s extremely hot weather,” wrote one resident on Twitter.

“Apparently AEP is intentionally cutting power to Columbus area residents in 90-degree weather to protect the grid’s integrity,” tweeted a woman who said she had been without power for a few hours. “Funny enough, power hasn’t been cut to anyone in Dublin, Bexley or the like. Hmm … wonder why?”

Williams and other AEP officials insisted the outages were dictated by where lines were overloaded, not by any favoritism.

“There’s no tie whatsoever to customers, or what type of customers,” Williams told the Dispatch. ‘We’re not picking and choosing locations.”

The utility said it was working to maintain power for critical facilities like hospitals and emergency services.

It said it had to react “within seconds” to protect the system. “Unfortunately, there simply was not enough time to notify customers before taking the necessary actions to protect the grid,” AEP said in a statement on its website.

It said it was unable to use rolling blackouts to reduce stress on the system. “In this case, the affected transmission lines cannot be brought back online until other lines that feed into the area are repaired from storm damage and returned to service,” it said.

The Columbus branch of the NAACP released a statement demanding more information from AEP about its load-shed process.

Once power is restored, the Public Utilities Commission of Ohio will conduct an “after-action report to understand what it is that happened,” said PUCO spokesman Matt Schilling.

Schilling said all six of the state’s electric distribution utilities had significant outages from the storm. “Many [of the utilities] are getting close to being fully restored,” he said in an interview Wednesday. “By and large, the central Ohio area was hit hardest, which is AEP service territory.”

Merrilee Embs, spokesperson for the Ohio Consumers’ Counsel, said the office hopes “for the safety of the many central Ohio consumers losing electricity in the extreme heat and for the AEP workers restoring electricity.

“Job-one is to restore power safely and ASAP for thousands of Ohio families,” Embs said in a statement. “… The PUCO should investigate to learn what happened and why — and for lessons learned. Importantly, the PUCO should allow the public to be heard in the process, given that so many Ohioans have been at risk.”

 

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SARs Sail Through NERC Standards Committee

At an abbreviated meeting on Wednesday, members of NERC’s Standards Committee approved four standard authorization requests (SARs) and the teams to work on them.

Two of the SARs that came before the committee at Wednesday’s meeting were coming off of industry comment periods after having been accepted at prior meetings. First up was Project 2022-01 (Reporting area control error (ACE) definition and associated terms), which first came before the committee at its January meeting; the committee approved the SAR drafting team in April. (See NERC Standards Committee Moves Projects Forward.)

Amy Casuscelli (NERC) Content.jpgAmy Casuscelli, Xcel Energy | NERC

The goal of the project is to revise the definition of reporting ACE, which in its current form conflicts with the Western Interconnection’s automatic time error correction (ATEC) process and does not allow other interconnections to develop ATEC at all, according to the Reliability and Security Technical Committee’s (RSTC) Resources Subcommittee. By redefining the term, NERC hopes to “improve long-term average frequency performance” and to help other interconnections “pursue automatic correction approaches.” The committee approved the SAR and agreed to appoint the SAR drafting team as the standard drafting team (SDT).

Also before the committee was Project 2021-02 (Modifications to VAR-002), which was proposed by NERC’s Inverter-based Resource Performance Task Force in 2020 and endorsed by the RSTC the same year. The Standards Committee accepted it in January 2021 and appointed the SAR drafting team that July. (See Standards Committee Approves Drafting Team Additions.) The Project 2021-02 SAR has gone through two industry comment periods since then; the most recent ended in April.

In addition to approving the SAR, members also agreed to a 30-day solicitation period for additional members of the SDT. Latrice Harkness, NERC’s manager of standards development, said the organization is seeking transmission operators with expertise in “receiving and applying information to [their] real-time assessment and real-time monitoring activities” because the project proposes to add a requirement to VAR-002-4.1 for generator operators to notify their TOPs of status changes in voltage-controlling devices.

ERATF SARs Approved After RSTC Endorsement

The committee also approved two SARs submitted by the Energy Reliability Assessment Task Force (ERATF) and endorsed by the RSTC at its meeting last week. (See “SARs Move to Standards Committee,” NERC RSTC Briefs: June 8-9, 2022.) The SARs are grouped under a single project, intended to update NERC’s reliability standards to require utilities to perform energy reliability assessments in order to evaluate energy assurance.

The item did not face any serious opposition, though Linn Oelker of LG&E and KU asked to clarify why two SARs were needed, pointing out that their scope seemed to be identical. Harkness acknowledged the similarity between the two proposals and explained the ERATF thought they ought to be separate because one applies to the operations time horizon and the other applies to the planning horizon. She added that this assessment is subject to change as the drafting team’s work continues.

“Moving forward, if the SAR drafting team did decide that they wanted to combine these [or] to reword them, that’s an option that the … team will have,” Harkness said.

July Meeting to be Held in Person

Chair Amy Casuscelli, of Xcel Energy, reminded committee members that their next meeting July 20 will be held in person, for the first time since the beginning of the COVID-19 pandemic, at Xcel’s offices in Denver from 10 a.m. to 1 p.m. MT. The gathering will be followed by a joint meeting with NERC’s Compliance and Certification Committee, from 1 to 4 p.m.

Howard Gugel, NERC’s vice president of engineering and standards, noted that the Institute of Electrical and Electronics Engineers’ Power and Energy Society is also holding its 2022 general meeting in Denver, July 17-21, and encouraged attendees to line up their hotel reservations early “because there’ll be a lot of folks in town that week.”

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NYISO Management Committee Briefs: June 14, 2022

FERC Update

FERC is learning from technical conferences that it’s important to be clear about what the emerging system needs will be with the energy transition, Robert Fares, a wholesale electricity markets analyst at the commission, told NYISO’s Management Committee on Tuesday.

The MC received from Fares an update of the commission’s recent areas of interest, including changes to capacity, energy and ancillary services markets.

“And it’s important to be clear about whether and why the existing products are not meeting those needs and then finding the product that addresses those needs in a very targeted way just in order to balance the tradeoff between minimizing consumer costs and also meeting the needs of the system,” Fares said.

Fares referred to NYISO’s recently completed changes to both its buyer-side mitigation (BSM) and capacity accreditation. The commission earlier this month accepted NYISO’s proposal to implement its revised BSM rules for the current class year.

Capacity accreditation is going to be a hot topic going forward, and “I think you all know that that’s become a bit of a trend across the eastern RTOs, where PJM took the first bite of the apple, and NYISO has taken the second one, and now I am assuming everybody will shortly be taking a bite at the apple,” Fares said. “I personally expect that’s going to be continually refined over the coming decades as the transition continues, so that’s certainly a big area of interest.” (See PJM Responds to Market Monitor Recommendations.)

FERC has also been very interested in transmission because there’s a wide consensus that it is going to be an extremely challenging area over the coming years in terms of enabling the energy transition, he said.

Another area of interest across all the RTOs concerns the rapid pace of new development of generation. “The interconnection queues are totally flooded right now, and making those queues work quickly and efficiently is really an important part of FERC’s mission,” Fares said. “Part of the commission’s underlying mission is promoting competition, and promoting efficient entry and exit is a big part of promoting electric competition.”

RS1 Cost-of-service Study

NYISO staff recommended that a new Rate Schedule 1 cost-of-service study be conducted in 2022-2023 in order to consider the impact of the significant market design changes to be implemented, though several stakeholders seemed reluctant to commit the ISO’s limited resources to such a study.

The last study was done in 2011, and the MC will vote on conducting a new study at its July 27 meeting.

Market changes include the integration of distributed energy resources, large-scale solar and co-located storage resources, which “will result in an increase in the number of market participants and resource types that may not be prevalent in our markets today, so conducting a cost-of-service study in the coming year would be appropriate to provide rate certainty for those new entrants, as well as NYISO cost recovery and budget planning,” said Chris Russell, manager of customer settlements.

CSR Injection Limits (NYISO) Content.jpgThe MC discussed whether a Rate Schedule 1 Cost of Service Study is necessary due to current and future market changes. | NYISO

 

Some market participants said that the penetration of renewables in NYISO markets has yet to cause big changes and expressed concern the ISO could stretch its resources too thin dedicating up to $300,000 for a new RS1 study while trying to manage some major projects.

“We want to be ahead of these things rather than reacting to them, and that’s part of the reason why we look at doing a study now rather than later, even with limited market penetration for a lot of these kinds of resources,” Russell said.

Another stakeholder recommended that the ISO consider asking the MC to approve two RS1 studies — one in 2025 and another in 2030 — which would lock down some dates while also giving staff time to prepare for the study.

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Beyond Nuclear Leads Protest of Palisades’ Potential Reopening

Nearly 100 organizations and several hundred individuals have asked Michigan Gov. Gretchen Whitmer to abandon a strategy that would re-open the closed Palisades Nuclear Power Plant.

Led by the Beyond Nuclear campaign, the 94 groups and individuals sent a letter June 9 urging Whitmer to keep the nuclear plant shuttered. The plant was shut down in May, as promised in 2017 by Entergy (NYSE:ETR), its owner, and still has nine years remaining on its operating license.

Earlier this spring, Whitmer included Palisades for consideration in the Department of Energy’s $6 billion Civil Nuclear Credit (CNC) program to prevent nuclear generators’ early closure. The program originally had a mid-May deadline, but the DOE extended it to July 5. (See DOE Launches $6B Nuke Credit Program.)

“The bailout and restart scheme ignores Palisades’ severe, high-risk, age-related degradation, including multiple worsening pathways to catastrophic reactor core meltdown; the worst pressure vessel embrittlement in the country; severely degraded steam generators and reactor lid, exceedingly long overdue for replacement; a half-century worth of problem-plagued control rod drive mechanism seal failures, etc.,” Kevin Kamps, radioactive waste specialist at Beyond Nuclear, said in a press release.

Palisades’ reactor was removed from service in late May several days before Entergy’s official closure date. The utility said it was forced to shut the plant early because of performance issues with a control rod drive seal.

Entergy is in the process of selling the plant to Holtec International, which will dismantle the plant and remove spent fuel rods for long-term storage. The transaction is expected to take place next month and has already been approved by the U.S. Nuclear Regulatory Commission.

The closure coincides with a refueling deadline and the expiration of a 15-year power purchase agreement with Michigan utility Consumers Energy. Entergy has said it would entertain other potential buyers.

“Palisades produces more than 800 megawatts of reliable, clean, carbon-free power. Keeping Palisades open is a top priority,” Whitmer wrote in an April letter asking Palisades to be considered for the CNC program. “Doing so will allow us to make Michigan more competitive for economic development projects bringing billions in investment, protect hundreds of good-paying jobs for Michigan workers, and shore up Michigan’s clean energy supply and provide reliable lower energy costs for working families and small businesses.”

Whitmer said that over the last several years, Michigan’s government has worked to try to keep Palisades open “and voiced concern over the economic and energy impacts of losing the plant.” She said the Michigan Public Service Commission’s 2019 Statewide Energy Assessment showed that the plant strengthens reliability, helps temper commodity price risks, provides carbon-free energy, and offers fleet diversity.   

Kamps called Palisades a “zombie reactor.” He said it’s not worth the risk to the public to resurrect the plant for another nine years of “ever more high-risk operations.”

He argued that it’s now time to secure the radioactive waste stored on-site and clean up contamination at the plant, which borders Lake Michigan.

“Our analysis indicates that Palisades does not even qualify for such a bailout under the U.S. Department of Energy’s own rules,” said Diane D’Arrigo, radioactive waste project director at Nuclear Information and Resource Service. “For starters, the governor is not allowed to apply. The owner must do so, but Entergy has made clear it is not interested. In fact, Entergy closed Palisades 11 days earlier than scheduled, to transfer the site to another company to dismantle and decommission.”

The CNC program allows owners of commercial nuclear reactors facing closure to competitively bid on credits to keep them in operation. Applicants must prove their reactor will close for economic reasons and that the closure will result in increased air pollution. Credits would be allocated over a four-year period.

The DOE does not comment on reactors’ eligibility for the program.

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FERC Proposes Interconnection Process Overhaul

FERC on Thursday proposed long-awaited rule changes that it said would clear clogged interconnection queues and give generators more certainty on upgrade costs while ensuring fair treatment of new technologies.

The commission unanimously approved the Notice of Proposed Rulemaking (NOPR), which would replace the serial “first-come, first-served” study procedure with “first-ready, first-served” cluster studies (RM22-14).

The new approach “is a more efficient way of processing a large interconnection queue because it allows transmission providers to study numerous proposed generating facilities at the same time,” FERC staff said in a presentation at the commission’s monthly open meeting. “Additionally, conducting a single cluster study and cluster restudy each year can minimize delays that can arise from proposed generating facility interdependencies and minimize the risk of cascading restudies when a higher-queued interconnection customer withdraws.”

Delays caused by the inefficiency of the current process and the increasing volume of wind, solar and storage projects have been a major source of frustration for generation developers — and a threat to reliability, FERC said.

At the end of 2021, there were more than 1,000 GW of generation and 400 GW of storage pending in interconnection queues nationwide, more than triple the total of five years ago, officials said. Chairman Richard Glick (D) said projects now take an average of 3.7 years to complete the interconnection gauntlet, with less than a quarter of projects surviving to the end.

The NOPR would impose more stringent financial commitments and readiness requirements for interconnection customers, which FERC said would discourage speculative interconnection requests and allow transmission providers to concentrate on processing those with a greater chance of reaching commercial operation.

It also would impose tougher rules on transmission providers, replacing the current “reasonable efforts” standard for completing interconnection studies and subjecting those who fail to meet study deadlines to potential penalties.

Other provisions of the rule would:

  • require transmission providers to allocate network upgrade costs among interconnection customers in a cluster based on the degree to which each generating facility contributes to the need for the upgrade. Under current rules, an interconnection customer that triggers a network upgrade can be saddled with its entire cost even though subsequent interconnection customers benefit from it.
  • require transmission providers to use a standardized, transparent process for affected-systems studies, with specified modeling and pro forma study agreements.
  • simplify the process of studying interconnection requests that are related to the same state-authorized or ‑mandated resource solicitation. Transmission providers would be required to offer an optional process allowing resource planning entities to determine the costs of different combinations of projects that may be selected in a solicitation.
  • require transmission providers to allow more than one resource to co-locate on a shared site behind a single point of interconnection and using a single interconnection request. A generating facility could be added to an existing interconnection request without losing its place in the queue as long as it did not change the originally requested  service level.
  • require transmission providers to consider “alternative transmission solutions” if requested by an interconnection customer.
  • require interconnection studies to use assumptions that reflect the proposed operation of a generating facility.
  • require non-synchronous generating facilities to be able to ride-through disturbances and continue providing power and voltage support, addressing the reliability problem of momentary cessation. (See NERC, WECC Repeat Solar Performance Warnings.)

In calling for a switch to a “first-ready, first-served” study process, the commission endorsed rules it has already approved for MISO and SPP, and which PJM proposed in a filing Tuesday. (See related story, PJM Files Interconnection Proposal with FERC.)

“There are RTOs and other transmission providers that are engaged in queue reform … and we said [in the NOPR] that we obviously want to take them into account. … We have to take each of those proposals on a case-by-case basis,” Glick said.

The commission proposed a transition process allowing late-stage customers to complete their interconnections under the existing process. Comments on the NOPR will be due 100 days after publication in the Federal Register, with reply comments due 30 days after that.

The current procedures resulted from Orders 2003 and 2006, which standardized interconnection procedures for large and small generating facilities, and Order 845, a 2018 attempt to streamline the process. (See FERC Order Seeks to Reduce Time, Uncertainty on Interconnections.)

Glick acknowledged FERC has done “queue reform” before, with Order 845. “But this is far and away the most aggressive [effort], and I believe it will finally help move the needle,” he said.

‘Second Track’

Notably, Commissioner James Danly (R), who frequently dissents from the commission’s actions, supported the majority Thursday. He opposed the commission’s April NOPR on transmission planning, saying he did not think the commission had sufficient evidence that the existing planning rules were unjust and unreasonable. (See FERC Issues 1st Proposal out of Transmission Proceeding.)

“That’s not the case here,” Danly said. “I think the problems of the interconnection queue are widespread and they’re manifest. … I always prefer it when the utilities grapple with their own problems rather than have their problems fixed by us, especially under widespread legislative fiat through rulemakings. But in this case, there were a number of meritorious proposals that are worthy of the commission’s and the public’s consideration. And while some of the proposals, I think, represent typical bureaucratic overreach and unnecessary nitpicking detail, others are truly worth us looking into. So I am looking forward to seeing the record developed.”

Glick said the April NOPR, which required transmission planners to make their planning processes more proactive, was the “first track” of the commission’s efforts to eliminate barriers to the connection of more renewables. “This is the second track … which is just as important, if not more important,” he said. “For the first time, we have real deadlines that [transmission providers] have to meet.”

At the same time, new rules on study deposits, demonstration of site control, commercial readiness milestones and withdrawal penalties will make it “much more difficult for” generators to make speculative interconnection requests, he said in a press conference after the meeting. “To me, both of those are significant.”

The two NOPRs arose from the commission’s Advance Notice of Proposed Rulemaking (ANOPR) on regional transmission planning, cost allocation and generator interconnection in July 2021. (See FERC Goes Back to the Drawing Board on Tx Planning, Cost Allocation.)

They won’t be the last actions resulting from the initiative, said Glick, who promised action on how to fund transmission upgrades and interregional transmission planning, among other issues. “I can’t give you a timetable, but I’m hoping sooner rather than later,” he said.

Reaction

The Solar Energy Industries Association expressed support for FERC’s “bold action,” saying the commission had adopted many of the recommendations the group made in an interconnection white paper issued earlier this week.

“The most significant part of these reforms is the built-in accountability for utilities,” said Ben Norris, SEIA’s senior director of regulatory affairs. “For years, utilities have been dragging their feet on interconnection, and this rulemaking would implement deadlines for completing interconnection studies and create penalties for utility inaction. … We also believe that the cluster studies, affected-system study changes and a more realistic look at operating conditions for renewable energy generators will significantly improve the interconnection process.”

Rob Gramlich, executive director of Americans for a Clean Energy Grid, also praised the commission’s action but said it must go further.

“The real root cause of the logjams is insufficient transmission capacity, which requires reform to transmission planning and cost allocation,” he said in a statement. “Problems with transmission planning are blocking economic development and job creation, especially in rural areas, and are leading to increasing electricity costs for consumers.”

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EV Charging Standards Leave Some Obstacles Untouched

WASHINGTON — Electric vehicle stakeholders have largely praised the Biden administration’s standards for a national network of EV fast chargers that Transportation Secretary Pete Buttigieg promises would make “finding a charge as easy as filling up at a gas station.”

But high demand charges, limited electric distribution capacity and a lack of charging sites in rural areas raise barriers to EV adoption that standards alone may not be able to address, some say. Others question how the standards will be enforced.

The standards proposed by the Federal Highway Administration June 9 would cover EV chargers funded through $5 billion in state grants from the Infrastructure Investment and Jobs Act (IIJA). The administration wants to install 500,000 chargers, with sites every 50 miles on U.S. highways. They would be 150-kW DC fast chargers that can power up any EV make or model, are publicly available 24-7, accept any debit or credit card, and are operating 97% of the time. (See Biden Administration to Order EV Charging Standards.)

Mike Calise, president of the Americas for Australia-based Tritium Charging, which is opening a new plant in Tennessee later this year, said standards are critical “because everyone has to be working to the standards in order for this widespread [EV] adoption to occur.

“It doesn’t matter whether they are perfect, what matters is that they’re adoptable by the masses,” he said.

Rural Challenges

Meeting the 50-mile goal could be a challenge for electric cooperatives, said Brian Sloboda, consumer solutions director at the National Rural Electric Cooperative Association (NRECA).

Co-ops often serve remote and rural areas with “major stretches of highway that actually don’t have suitable site hosts — no restaurants, no gas stations,” Sloboda said. “You can go more than 50 miles in parts of the country and not see anything along these highways.”

Joel Levin, executive director of Plug In America, a nonprofit focused on consumer issues, said fast chargers in remote areas could rack up high utility demand charges, creating yet another barrier.

Based on peak usage, demand charges for DC fast chargers “can be really significant,” Levin said. “Let’s say you’ve got four chargers and four people pull in, use them [simultaneously], and then no one uses them again for a week. Your demand charges are going to be really high, and you’re going to have practically no revenue to support it.”

Gas vs. Charging

For Anthony Castro, a sales consultant at Euro Motorcars, a Mercedes Benz dealership in Bethesda, Md., even fast chargers required by the standards may not close the gap between the time it takes to pump gas and the time it takes to charge an EV.

With a 200-kW fast charger, Mercedes’ new luxury EV, the EQS, can go from being 10% to 80% charged in 30 minutes, Castro said.

“So, a 150 [-kW charger] will take a little bit longer,” he said. “Maybe like 35 minutes.”

Tritium’s Calise believes the comparison between gas stations and EV charging stations needs to be reframed. For some consumers, fast charging stations will offer a “convenience lifestyle,” he said.

Tritium’s fast chargers can provide 100 miles of added range in about 10 minutes, Calise said. “The benefit is you’re in your car versus outside pumping. You sit back, relax in air conditioning and text your kids.”

Castro and Calise were among the electric automakers and EV charging providers showing off their wares at the Department of Transportation headquarters as part of the rollout of the new standards. U.S. sales of all-electric and plug-in hybrids grew from 308,000 in 2020 to 608,000 in 2021, according to figures from the Department of Energy.

The range of vehicles on display at the DOT reflected this growth and the expansion of consumer choices, from the high-end EQS (350-mile range, $102,310 sticker price) to the wallet-friendly Chevrolet Bolt (259-mile range; 2023 sticker price $26,595).

The fast chargers on display were not all compliant with the proposed standards — company executives said they had to bring smaller models for ease of shipping — but most said they had 150-kW models and expected they would be able to meet the administration’s benchmarks for convenience and reliability.

Reliability Complaints

But consumer advocates remain skeptical.

Carleen Cullen, executive director of nonprofit Cool the Earth, says the 97% reliability requirement, which includes extensive data collection and quarterly reports, has no teeth.

“There are no enforcement mechanisms, no penalties for failure and no third-party testing of charging reliability,” she said. “We simply will not achieve the essential transition to EVs without enforcement, penalties and verification of uptime reliability at publicly funded EV charging.”

Recent studies from Plug In America and Cool the Earth suggest that companies’ reliability claims are not always matched by consumers’ experiences. Plug In America’s survey of more than 5,500 EV owners found that broken or otherwise nonfunctioning chargers were a top complaint.

“The public charging network is kind of frustrating,” Levin said. “It’s a patchwork of different networks. Some of them take credit cards; a lot of them don’t. Some of them tell you how much you are paying up front; a lot of them don’t. … If you drive a gas car, you never have that experience.”

He believes the standards’ requirement that each federally funded public charging station have at least four ports could provide a higher level of reliability. Even if one charger is down, others may be available, he said.

Cool the Earth tested several hundred public fast chargers in California — in some cases, visiting twice — and found that almost 23% were not functional.

“The findings suggest a need for shared, precise definitions of and calculations for reliability, uptime, downtime and excluded time, as applied to open public [DC fast chargers], with verification by third-party evaluation,” the group’s report said.

Phil Jones, executive director of the Alliance for Transportation Electrification (ATE), said the standards may be setting the reliability bar too low. While “97% sounds high, it’s really not that high” Jones said. “When you think of a consumer, an EV owner who goes to [a fast-charging] station, they expect it to be on all the time. Having two hours a month or five hours a month for a certain charger to be out of service, some people would say is not acceptable.”

Demand Charges

ATE raised a second concern in a recent report arguing that high demand charges could “stymie the deployment of the new commercial fast charging stations.

“Since EVs come with many benefits to utilities, their customers and society at large, and because public policy considerations are part and parcel of the rate design process, the Alliance supports demand charge relief as the market develops,” the report says.

The issues are complex, Jones said, and utilities across the country are experimenting with different approaches to demand charge mitigation. Examples include traditional commercial rates with a short-term waiver of demand charges to offset low utilization rates in remote areas or nascent markets. Under subscription rates, by contrast, low or growing demand can be incorporated into a monthly charge included in the rate base.

As more EVs are on the road, and public charging stations see more vehicles, the report sees a cross-over point where mitigation measures could be more expensive than demand charges, the report says.

With waivers, Jones said, “It’s basically saying for six years, eight years, 10 years, the demand charge is going to be mitigated way down to either zero or 10%. And then when utilization of the charging station picks up, probably the demand charge is better … and kicks back in.”

Interconnection

Interconnecting fast chargers on utility distribution systems is yet another challenge, especially in locations where fast chargers add demand to already congested lines.

EV charging stations could run into the delays that have plagued commercial and community solar in some regions as individual feeders may not have the capacity required for four or more 150-kW chargers, Jones said. Further, the hosting capacity maps some utilities offer to help developers site their projects may be out of date or inadequate, he said.

“They’ll get a certain answer there, but when they actually go and talk to the [utility] program managers and the distribution engineers, it’s different. So, we have a lot of work to do there,” he said.

“We don’t have the distribution network to support these ultrafast charging loads on retail sites where you and I need to go to charge our vehicle,” said Arcady Sosinov, CEO of charging provider FreeWire Technologies, which has developed a fast charger with a built-in battery pack. “We’re not looking to charge next to utility substations; we’re looking to charge at Starbucks, at Whole Foods, at the quick-service restaurants. And these sites simply don’t have the power available today.

“You’re looking at total utility infrastructure buildout,” Sosinov said. “That means bringing new power to these sites, new transformers, new switchgears, new substations. That’s where the problem lies.”

Sosinov says fast chargers with built-in batteries, like FreeWire’s models, can address both interconnection challenges and demand charges. The battery can smooth out the spikes caused by fast charging, which in turn drive both interconnection and demand charge issues.

NRECA and the Edison Electric Institute (EEI) acknowledge that not all distribution lines are ready for the new load that DC fast chargers will bring. But they maintain that the way forward begins with good planning and communication with the state departments of transportation (DOTs) that are developing EV charging deployment plans governing how they will spend the IIJA funds.

Still another requirement is that charging stations be located no more than one mile off major highways or other key traffic corridors — another effort to replicate a gas station-like experience. If such locations do not have enough capacity, utilities can plan ahead to make the necessary system upgrades, Sloboda said. “The charger won’t be installed today. It’s going to take a while for that charger to show up, and what you do not want is to have that charger installed and not connected to the grid.”

“We would prefer states not submit a plan and say, ‘Okay now, electric companies, what can you do for me?’” said Kellen Schefter, EEI’s senior director of electric transportation. Early communication allows for “iterative conversations,” he said, so utilities can identify the locations where EV chargers can be deployed quickly and others where “a longer time horizon” is needed for system upgrades.

‘Different Vocabularies’

Both Sloboda and Schefter said planning for these fast-charging networks has opened new lines of communication between utilities and the state DOTs, which may lack expertise on utility distribution systems.

At the same time, energy officials may not know transport, said Jim McDonnell, director of engineering for the American Association of State Highway and Transportation Officials (AASHTO). His organization is planning sessions for state transportation and energy officials “to try to bridge the learning curve that needs to take place. The two industries have different vocabularies and different ways of doing things.”

He, Sloboda and Schefter all gave high marks to the Biden administration’s Joint Office of Energy and Transportation, set up earlier this year to help states develop their EV charging plans, which must be submitted by Aug. 1.

A 60-day comment period on the new standards will still be open at that time, but Susan Howard, AASHTO’s director of policy and government relations, said, such overlap is not uncommon.

“The state plans are really focused on where the charging is going to be, the requirements for the distance from the interstate, looking at the alternative fuel corridors,” she said. The standards are “really focused on the what.”

McDonnell said the Aug. 1 filings won’t be the last word. “The state plans are intended to be living documents that will be refined and updated and modified appropriately over the coming five-year period of the entire infrastructure bill,” he said. The standards “will come into play when they are actually putting RFPs out on the street for companies to help them build out their charging systems.”

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FERC Approves Extreme Weather Assessment NOPRs

Citing the “challenges that are growing every day” from climate change-induced severe weather, FERC on Thursday approved two draft Notices of Proposed Rulemaking intended to improve the long-term reliability of the bulk power system.

Because both measures relate to severe weather risks, FERC staff presented the NOPRs together at the commission’s open meeting. One proposes to direct NERC to modify reliability standard TPL-001-5.1 (Transmission system planning performance requirements) to set expectations for long-term planning by utilities (RM22-10).

Under the proposal, responsible entities would be required to:

  • develop benchmark planning cases based on historical extreme heat and cold weather events and future meteorological projections;
  • use steady state and transient stability analyses, covering a range of factors such as the grid’s changing resource mix and its performance during extreme weather, to plan for future extreme events; and
  • create a corrective action plan to mitigate any occasions where performance requirements for severe weather have not been met.

Tech Conference Spurs Standards Effort

The proposal grew out of a technical conference FERC held last year on climate change and severe weather and their impacts on the electric grid, according to Milena Yordanova from FERC’s office of the general counsel, who presented the NOPR during FERC’s open meeting on Thursday. (See FERC Tackles Grid Planning for an Unpredictable Climate.)

“Since 2011, the country has experienced at least seven major extreme heat and cold weather events, all of which stressed the bulk power system and resulted in some degree of load shed. In some cases, these events nearly caused system collapse and uncontrolled blackouts, which were only avoided by the actions of system operators,” Yordanova said. In particular, she pointed to the winter storms of February 2021, when the Texas power grid came close to total collapse amid record cold temperatures. (See ERCOT: Grid was ‘Seconds and Minutes’ from Total Collapse.)

Yordanova said the NOPR focused on TPL-001 because it already establishes requirements for utilities to plan to operate the grid under “a broad spectrum of system conditions and following a wide range of probable contingencies”; however, the standard does not currently include any specific measures relating to extreme weather. It also does not have any provisions requiring the development of corrective action plans, although it does provide for utilities to “evaluate possible actions to reduce the likelihood or mitigate the consequences of extreme events.”

Transmission Providers Need Climate Plans

The other NOPR introduced on Thursday, also inspired by last year’s technical conference, proposes to solicit one-time reports from transmission providers detailing their “current or planned policies and processes for conducting extreme weather vulnerability assessments and mitigating identified extreme weather risks” (RM22-16, AD21-13).

Presenting the NOPR, Alyssa Meyer of FERC’s Office of Energy Policy and Innovation said participants in the conference expressed “widespread agreement” that utilities and other bulk power system stakeholders should assess their vulnerability to extreme weather risks. However, while some transmission providers do conduct such assessments voluntarily, there is no industry-wide requirement that they do so.

Meyer emphasized that the NOPR is not meant to impose any new requirements on utilities that already conduct their own assessments, and that transmission providers that do not will only be required to do so once. The proposal does require transmission providers to submit a one-time report to FERC detailing how they:

  • establish the scope of their vulnerability assessments;
  • develop inputs;
  • identify vulnerabilities and determine exposure to extreme weather hazards;
  • estimate the cost of weather impacts; and
  • develop mitigation measures to address extreme weather risks.

While both items passed without objection, the discussion at Thursday’s meeting once more brought to light some philosophical differences between the commissioners. Notably, Commissioner James Danly warned that the commission should focus not only on the growing climate risks, but also on policies at the state and local level that he believes push the BES into a more vulnerable position.

“My belief is that there is a growing narrative that places the weather itself at the center of the reliability problems we’re facing, and when we look at the dire warnings we have of thinning capacity, margins and shortfalls, those are not driven by the weather,” Danly said. “When you reduce the amount of capacity you have, when you have market systems that create bad price signals that fail to properly incentivize the correct entry, exit and retention of the resources needed to keep the system running … then you are more vulnerable to any disruption, weather included.”

Asked about Danly’s comments in a press conference after the meeting, FERC Chair Richard Glick expressed strong disagreement, saying the commission can only act within the framework established by the Federal Power Act and has no legitimate role to play in influencing government policy decisions.

“FERC’s role is to take the situation as it is, react to it and ensure, to the greatest extent possible, that rules are in place to ensure grid reliability,” Glick said. “I think that this whole notion that we should sit here from FERC and tell the states they got it wrong is ridiculous. That’s not our role, and if you’re a strict constructionist, you would agree with that. Commissioner Danly calls himself a strict constructionist quite frequently, but if you look at the Federal Power Act, it’s very clear.”

Comments on both NOPRs are due 60 days after their publication in the Federal Register.

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California PUC Gets Feedback on Net Metering Alternatives

The California Public Utilities Commission received 30 sets of comments last week on possible changes to its controversial net metering plan, including an alternate way to compensate homeowners who export surplus solar power to the grid.

A CPUC administrative law judge issued the initial proposal, NEM 3.0, in December, saying the current approach, NEM 2.0, unfairly requires most utility customers to pay more for electricity to benefit those who can afford to put solar panels on their roofs.

“Our review of the current net energy metering tariff, referred to as NEM 2.0, found that the tariff negatively impacts nonparticipating customers, is not cost-effective, and disproportionately harms low-income ratepayers,” CPUC Administrative Law Judge Kelly Hymes wrote. (See California PUC Proposes New Net Metering Plan.)

After pushback from the solar industry, the CPUC put the plan on hold in January. (See CPUC Postpones Net Metering Plan.) In May, Hymes asked parties to comment on questions she posed regarding possible alternatives.

The judge’s questions focused on a “glide path” to transition rooftop solar owners from the generous benefits they now receive, and non-bypassable charges (NBCs) for solar owners based on their gross energy consumption, including use of the solar energy they generate.

The voluminous response to the judge’s questions came from industry groups and environmental advocates, among others.

The Solar Energy Industries Association (SEIA) contended that reducing solar subsidies “would place the future of the solar industry in California in jeopardy, and thereby not fulfill the Commission’s statutory obligation that customer-sited renewable distributed generation continues to grow sustainably.”

Most of the environmental groups that weighed in echoed the argument.

In their joint comments, the state’s three largest investor-owned utilities, which have pushed for net metering reform, supported the December proposed decision while urging the CPUC to “adopt a new successor tariff as expeditiously as possible.”

“Reform of the net-energy metering program is necessary to address its growing outsized subsidy and remedy the inequity between participating and non-participating customers created by the program,” Pacific Gas and Electric, Southern California Edison and San Diego Gas & Electric argued.

The utilities said $4 billion in costs would be shifted this year from ratepayers with rooftop solar to those without it. NEM 2.0’s subsidy for solar owners raised electric rates by 10-21% for other ratepayers last year and will increase their bills as much as 31% by 2030, they said.

“Each additional adoption of rooftop solar increases rates for non-participants because a smaller pool of remaining customers must pay for fixed infrastructure and policy costs, including the NEM subsidy,” the utilities said. “Without reform, this unsustainable cycle will continue ad infinitum.”

ACC Plus and NBCs

The December decision proposed reducing compensation for customers with rooftop solar from the full retail rate, which is now much higher than the cost of utility-scale solar, to an avoided-cost rate that would consider the value of behind-the-meter generation for resource adequacy and grid reliability. That could cut the reimbursement rate by more than half.

The proposed decision would charge solar owners — who currently pay only small amounts for interconnection and grid maintenance — a grid participation charge (GPC) of about $40 per month on average. The decision proposes partly offsetting the charge with a market transition credit (MTC) of up to $5.25/kW per month, depending on the utility.

It would also establish a rebate program for customers who add storage to solar under what’s colloquially called NEM 3.0, but which the CPUC calls the net billing tariff.

In her May ruling, Hymes asked commenters to address possible alternatives. In place of the MTC, she asked parties to comment on another approach called “ACC Plus,” which would pay customers an export adder on top of the avoided-cost rate. (ACC stands for avoided cost calculator.)

The utilities said they preferred the MTC plan, in part because ACC Plus would incentivize exports to the grid instead of boosting behind-the-meter storage capacity.

SEIA and others said ACC Plus would be better than MTC because it would compensate ratepayers for exporting more to the grid, similar to the current setup under NEM 2.0.

The non-bypassable charges (NBCs) based on gross consumption were proposed by the Sierra Club, the judge said. Under the proposal, homeowners would be charged for using the behind-the-meter resources they generate as well as imports from the grid. Those with rooftop solar now only pay extra charges for imports.

The utilities supported the change. “Recovering fixed policy and infrastructure costs through mechanisms such as the grid participation charge or the Sierra Club gross-consumption mechanism for recovering NBCs are not only legal, but also are required to eliminate the burden of the NEM subsidy on non-participants.”

SEIA disagreed, saying the charges would be illegal.

“The Commission should not assess NBCs on any [behind-the-meter] consumption. The energy produced and consumed [behind-the-meter] does not originate nor travel on the systems of the Commission regulated investor-owned utilities,” the trade group said.

“The Commission does not have regulatory authority over individual NEM customers as generators,” it added. “These generators are not electrical corporations (and thus public utilities) over which the Commission has broad sweeping regulatory authority. Indeed, the definition of electrical corporation specifically excludes ‘independent solar energy producers.’”

Reply comments are due by June 24, and a revised proposed decision could be issued as early as mid-July.