Page 463 – RTO Insider

June 12, 2022June 14, 2023

Inflation Dampens Possible Memphis Exit from TVA

The Memphis city utility’s hopes of leaving the Tennessee Valley Authority for MISO could be dashed by inflation and high interest rates that could slash potential savings, a consulting firm said last week.

GDS Associates compared the top two bids of the 27 proposals Memphis Light, Gas and Water (MLGW) received in response to its search for alternative energy suppliers as the utility met Thursday with its Board of Commissioners and the Memphis City Council. GDS evaluated the bids against MLGW’s long-term partnership option with TVA, scoring the proposals on pricing, performance guarantees, proven experience, and technical capability.

The consulting firm estimated the utility could save almost $31 million annually with the higher-scoring bid and $9.4 million annually under the second bid over a 25-year period that included the utility’s transition from TVA. The analysis assumed higher natural gas prices, higher capacity prices and higher interest rates than MLGW’s 2020 integrated resource plan, which predicted the city could save between $100 and $120 million if the utility left the federal agency for a power mix of natural gas and solar power.

Potential Losses in New Environment

However, GDS Power Supply Principal Chris Dawson warned that the savings could quickly nosedive and turn into losses if inflation, gas and capacity prices, and interest rates all increase by 2028. He said the lower-scored portfolio could saddle MLGW with about $100 million dollars of additional annual costs; the higher-scored bid could lead to $25 million in annual losses.

Dawson’s comments were met with audible rumblings in the conference room.

GDS Associates’ Chris Dawson | MLGW

“This is just a reminder about how the world can change. I’m not trying to be a harbinger of doom and suggest it will be like this in 2028 … but it could be like this,” Dawson said.

He said consumer demand and geopolitical events have quadrupled natural gas prices, increasing the risk involved in constructing a gas plant. He also pointed out that MISO’s April capacity auction cleared the highest-ever prices for its Midwest region.

Dawson said he believed MLGW would call for less emphasis on natural gas fired generation were MLGW’s IRP developed today.

A non-TVA arrangement will subject the utility to new risks, including regulatory permitting, a likely credit ratings downgrade, and construction delays, he said.

“Under your current situation with TVA, most of these things you don’t even think about. It’s an afterthought,” Dawson said. “I’m not suggesting MLGW can’t build out that infrastructure, but it’s not cheap, it’s not easy, and you don’t do it overnight.”

Concerned about its power costs, the utility began seriously considering a break with TVA in 2020 when it produced an integrated resource plan. It later issued an RFP based on the plan. (See Memphis Muni Mulls Move to MISO.)

MLGW is at a crossroads. It can select one of the bids and depart TVA for MISO’s energy markets, maintain its current arrangement with TVA, or sign a long-term partnership agreement (LTPA) that will lower costs but tie the utility to TVA for at least two decades.

The federal agency’s LTPA option will result in an immediate 3.1% reduction in base rate charges, keeping them steady through 2029 and allow MLGW to acquire up to 5% of its energy needs from renewable sources. However, the contract includes a stranded-cost obligation that will make the utility responsible for a percentage of TVA’s future investments and follow MLGW if it decides to later leave TVA. The LTPA also requires a 20-year termination notice; MLGW’s current agreement has a five-year exit notice.

“It’s not easy just to say, ‘Hey, let’s sign up for the LTPA and figure this out later,’” Dawson said. “I’m not even familiar with agreements that have 20-year termination notices.”

IRP Resource Portfolios (GDS Associates) Content.jpg

Options explored under MLGW’s IRP include connections to MISO to access renewables and building combined cycle plants and solar near Memphis | GDS Associates

MLGW is TVA’s largest wholesale customer, spending about $1 billion per year on electricity.

“It’s not lost on anybody that unlike pretty much any other one of TVA’s wholesale customers, MLGW does have a real opportunity to do something different,” Dawson said. “No wholesale customers have successfully left TVA. They have a certain type of protection, a certain type of legacy that revolves around their transmission system. That means if you leave TVA, you have to do a lot of work, I mean a lot of work and invest billions of dollars.”

GDS estimated that under the LTPA, MLGW will pay $78.77/MWh for energy from 2028 to 2047. If the utility leaves TVA for MISO and constructs its own transmission, it can expect to spend $78.20/MWh for energy in the same timeframe based on the best bids, Dawson said. He added he wasn’t surprised by those numbers and said that under the more independent MISO option, MLGW will own its transmission links and be able to control its destiny.

$1B in Tx Upgrades

A Siemens analysis prepared for MLGW concluded the utility will require 2,400 MW of new firm import capacity to MISO South should it leave TVA. The technology company said that would entail two 500-kV lines spanning the Mississippi River into Entergy Arkansas’ territory and a 230-kV line terminating in Entergy Mississippi’s footprint. Siemens said it would take seven to eight years to build the lines at a cost of about $1.2 billion.

GDS included the new transmission facilities in considering all the potential costs of leaving TVA.

“As a utility, you just don’t turn on a dime,” Dawson said.

MLGW Board Chair Mitch Graves said things have changed since the utility began exploring bids. He said supply chains have become strained, inflation is squeezing customers and energy prices have climbed sharply.

“All of that has to come in our decision-making process,” he said.

City council member Dr. Jeff Warren said MLGW might consider waiting for economic tensions to settle before proceeding.

“It seems that moving quickly on this may not be very prudent, but getting our ducks in a row for a longer transition may be something that we should be doing as a system,” he said.

GDS said it will finalize its evaluation of the bids and conduct negotiations with a short list of bidders.

MLGW CEO J.T. Young said utility executives will recommend a supplier to its board in August, opening a 30-day public comment period. The commissioners could vote on the issue in September.

The bids, currently confidential, will be made public for the August meeting.

The utility is accepting public comment on the masked bid data at PowerSupply@MLGW.org.

June 12, 2022November 12, 2023

Seattle-area Communities Auction Carbon Credits to Preserve Forests

In what backers believe is the biggest deal of its kind, three owners of urban forests in King County, Washington, this month sold more than $1 million in carbon credits to Regen Network Development, a Delaware-based blockchain software company.

Regen’s $1 million purchase of carbon credits ensures that the two of the owners — King County and the city of Issaquah — won’t harvest the carbon-absorbing trees on a 46-acre piece of land. Issaquah is an outer suburb of Seattle in the foothills of the Cascade Mountains. Credits on the Mountains to Sound Greenway Trust land cover an additional 2.6 acres in the northern Seattle suburb of Shoreline.

Regen is collecting carbon credits from King County to offset its contributions to greenhouse gas pollution elsewhere when its overall carbon footprint is calculated.

“Our region is now part of the largest sale of urban forest carbon credits in U.S. history,” King County Executive Dow Constantine said in statement June 3. “We will steward the newly protected urban forests so they can continue to absorb carbon, contribute to cleaner air and water, and create more greenspace where people, families and communities can gather.”

This sale comes in the wake of Washington launching a first-of-its-kind program to auction off carbon offset credits to preserve some of the Washington Department of Natural Resources’ forest land.

DNR duties include managing the state’s trust lands with the mission of producing revenue from property for various programs such as education. The agency routinely auctions off trees on its lands to be harvested for timber.

The new DNR program will set aside 10,000 acres of forests — with trees that began growing prior to 1900 — that have the potential to be harvested. Offset buyers will bid on carbon credits to keep those carbon-absorbing forests intact. This enables the DNR to achieve its mission of producing revenue from its older forests without having to harvest them for timber.

The new state program has identified 2,500 acres on DNR trust lands to be set aside this year in Whatcom, King, Thurston and Grays Harbor counties, stretching from northern to southern Puget Sound. Another 7,500 acres are scheduled to be identified next year.

Many details must still be worked out, including when the credits will be auctioned, what the minimum acceptable bids would be and the overall fundraising targets. The state plans to auction off 917,000 carbon credits in the first 10 years of the program.

June 12, 2022June 14, 2023

Stakeholder Soapbox: Coherence over Chaos: Choosing the Right Path for Energy Decarbonization

By Paul Segal and Reid Capalino, LS Power

LS Power CEO Paul Segal | LS Power

As the U.S. and other countries seek urgently to reduce greenhouse gas emissions amid a backdrop of global energy market volatility, we are confronted with a fork in the road: the “chaotic” path for decarbonization, which at times appears to be the market’s current trajectory, versus the “coherent” path — the path we strive to follow.

What, though, will make the energy transition chaotic versus coherent, and why does it matter? The chaotic path is characterized by opposing extremes that reflect the current polarization around energy discourse — those ignoring the imperative to decarbonize, and those seeking a fossil-free end-state on an unrealistic timeline in terms of cost and risks to system reliability.

The coherent path involves embracing both rapid deployment of low-carbon energy resources and maintenance of sufficient fossil-fuel infrastructure to ensure continued energy security, affordability and reliability as our economy transitions toward net-zero GHG emissions.

Reid Capalino, SVP business development for LS Power | LS Power

According to the International Energy Agency’s (IEA) modeling, a long-term net-zero trajectory will see U.S. fossil-fuel consumption decline by more than half in the next 20 years, caused by enhanced energy efficiency and increased focus on renewables such as wind and solar. Yet in this scenario, fossil-fuels in 2040 will still serve nearly 40% of total energy demand, including oil for transportation and natural gas for power plants, industrial facilities and buildings. The expected decline in conventional gas-fired power generation is even more dramatic: an 89% reduction from 2020 levels.

As one of the largest owners of gas-fired assets in the U.S. focused on a sustainable energy transition, we fully appreciate and understand the long-term need to reduce unabated gas-fired generation to meet our climate goals. Simply emphasizing an end-state of 2040, however, glosses over several complexities in this transition, as reflected in the IEA’s modeling of a low-carbon future:

Much of the gas-fired generation decline would occur after 2030.
This decline would occur, in part, by aggressive deployments of emissions-reducing technologies, such as battery storage and those capturing and sequestering CO₂ emissions from power and industrial facilities, which will require new policies to overcome economic and technical obstacles.
Throughout this transition, standby gas-fired generation will remain necessary to ensure energy reliability during peak weather events (e.g., extremely cold or hot temperatures) when renewable energy sources alone may be insufficient to balance supply and demand. Even as gas-fired generation shifts from providing energy (megawatt-hours) to providing capacity (megawatts), hundreds of power plants with some nexus to the natural gas system will likely need to remain in operation.

Unfortunately, states such as Illinois are mandating the retirement of gas-fired generators without adequately planning to replace the flexible capacity that such generators provide or analyzing the net impact that these retirements will have on GHG emissions.

Shortsighted retirement mandates will lead to a chaotic energy transition, thereby eroding the political support needed for the transition to progress. We should instead consider how maintained and repurposed fossil-fuel infrastructure can preserve reliability as we rapidly increase use of renewable energy — understanding that maintenance/repurposing of existing infrastructure and development of new low-carbon energy sources both require significant investments now.

So, what can we do to support a more coherent path for decarbonization?

Support long-term federal tax credits and state-level incentives for low-carbon energy sources, and advocate for policies that value the flexibility of gas-fired generators.
Advocate for tighter environmental standards to reduce fugitive methane emissions through the natural gas value chain, and support judicious investment in natural gas infrastructure, such as pipelines and associated compression/storage facilities to deliver gas when needed, liquefied natural gas terminals to help balance domestic gas markets, and upstream natural gas production to ensure a continued robust domestic supply.
Support efforts to deploy new zero-carbon technologies and repurpose existing fossil-fuel infrastructure, such as retrofitting carbon capture onto existing power plants and industrial facilities.

We urge everyone to understand where our energy system currently stands, where we want to be and what we need to do to get there. This process will require greater collaboration among companies, policymakers, activists and other stakeholders.

More coherence, not more chaos, is what we need to power our homes and businesses today while protecting the planet and strengthening the resilience of our energy system for tomorrow.

Paul Segal, who has been CEO of LS Power since 2011, is also a member of LS Power’s Management Committee, overseeing one of the largest independent power and transmission developers in the U.S.

Reid Capalino is senior vice president of business development at LS Power, leading the firm’s business development efforts with a focus on growing existing business lines and launching new ones.

June 12, 2022

Calif., Canada Seek to Increase Cooperation on Climate Issues

California Gov. Gavin Newsom and Canada Prime Minister Justin Trudeau last week signed an agreement committing their governments to cooperate on a range of climate-related issues, including clean vehicles and technology, species conservation, use of plastics, and climate change adaptation.

“Canada and California have much to offer each other, in sharing information and best practices, collaborating on policy and regulation, and pursuing mutually beneficial joint initiatives,” the two leaders said in a joint statement Thursday announcing the Canada-California Climate Action and Nature Protection Partnership. “From clean technology and biodiversity conservation, to zero-emission transportation and a circular economy, the partnership will deliver for our citizens and deepen our economic partnership.”

Newsom and Trudeau signed the memorandum of cooperation (MOC) Thursday at the Summit of the Americas in Los Angeles. The agreement illustrates California’s continued push to drive climate policy on the international stage and ensure the state’s position as a technological leader. Last month, the state entered a similar agreement with New Zealand. (See Calif., New Zealand Forge Climate Pact.)

“We can’t fight the climate crisis on our own; we need to work together with partners all across the globe to achieve humanity’s most important task: saving our planet,” Newsom said at the summit. “This partnership with Canada is a vital step on California’s path to a cleaner, greener future and is the latest expression of our shared values.”

“Canadians and Californians share a commitment to building a clean, strong future,” Trudeau said. “Today, as we launch a new partnership on climate action and nature protection, we’re teaming up to deliver the clean air, healthy environment and good jobs our citizens deserve.”

In 2019, California and Canada signed a cooperation agreement that committed both governments to collaborate on developing regulations to cut greenhouse gas emissions from light-duty vehicles and accelerate the adoption of zero-emissions vehicles.

“Since then, our jurisdictions have both committed to mandate that zero-emissions vehicles represent 100% of new light-duty vehicle sales by 2035 and are taking decisive steps to transition the medium and heavy-duty sectors to zero emissions as well. This new partnership builds on these successes,” Thursday’s joint statement said.

The MOC stipulates that the two governments can cooperate on an array of issues, including collaboration and sharing of information or best practices related to:

developing regulations, policies and programs around emissions and ZEV targets for light-, medium- and heavy-duty vehicles and off-road equipment;
“advancing innovation, investment, adoption and scale-up of clean technologies,” including measures that reduce emissions by 2030 and achieve net-zero emissions by midcentury, and exploring opportunities to collaborate with academia and the private sector; and
assisting biodiversity conservation efforts “in the face of climate crisis,” including protecting areas important for biodiversity, conserving 30% of lands and waters by 2030, and developing “robust monitoring and evaluation programs” to track progress on conservation goals.

The MOC also seeks to encourage sharing of information around “circular economy” initiatives and approaches that move beyond traditional recycling, with a focus on reducing plastics pollution.

The agreement dictates that California’s Environmental Protection Agency and Canada’s Environment and Climate Change department will establish a work plan to achieve the objectives set out in the MOC and report on their progress annually.

In addition to the MOC, Newsom and Trudeau also committed their governments to co-host an Expert Roundtable on Wildfires and Forest Resilience at U.N. Climate Week, to be hosted in New York City in September.

“This event will bring together officials, academics, industry and civil society to chart our next steps forward on this common goal,” the joint statement said.

June 12, 2022December 14, 2023

California Coastal Commission Approves OSW Lease Plans

The California Coastal Commission took an important step last week to allow the West Coast’s first offshore wind lease auctions to proceed later this year, voting to back the federal Bureau of Ocean Energy Management’s assessment that lease activities off the coast of Central California are consistent with state and federal laws.

“I’m so excited we’ve finished this phase and will be moving forward,” commission Chair Donne Brownsey said after the unanimous vote Wednesday.

The commission had already approved leasing activities in April for the Humboldt Wind Energy Area (WEA) in Northern California. The latest vote concerned the Morro Bay Wind Energy Area — near the village of Cambria — the second of two WEAs that BOEM plans to auction this fall. Together the areas could generate 4.6 GW, a significant contribution to the state’s effort to rely on 100% clean energy by 2045.

While the lease areas in the Morro Bay area are 20 miles offshore in federal waters, the Coastal Commission has broad authority to govern activities within 3 miles of the coast and generally within about 1,000 yards of the high-tide mark on land. Following the auction, BOEM’s issuance of leases allows successful bidders to conduct studies in their lease areas, including installing buoys with data collection equipment and geophysical, biological, archaeological and ocean-use surveys. BOEM expects lessees to make up to 873 vessel trips to complete their surveys and site assessments over a three-year period.

“Lease activities have the potential to adversely affect marine resources through seafloor habitat disturbance and increasing turbidity, elevated levels of underwater sound during surveys, increased risk of ship strikes due to increased vessel traffic and incrementally increased entanglement risk due to the placement of buoys,” the Coastal Commission said in a staff report.

BOEM issued a proposed sale notice for the WEAs last month. (See BOEM Issues Proposed Sale Notice for Calif. Offshore Wind Areas.)

The Morro Bay leases will cover about 241,000 acres of ocean in an area home to whales, dolphins, deep-sea corals and sponges, among other species.

The leases do not permit the installation of wind turbines or other infrastructure. Development of the areas will fall under future proceedings by BOEM and the Coastal Commission, requiring approval by both. When development does occur, it will likely include some of the largest floating wind turbines ever built, capable of generating 15 MW each.

“A 15-MW turbine would be expected to have the following approximate dimensions: a hub height of 486 feet, a rotor diameter of 807 feet and a maximum height at the blade tip of 889 feet,” the staff report said. “If turbines of this size were installed in the Morro Bay WEA, they would likely have a distance between turbines of 0.917 to 1.22 miles.”

Mooring cables, undersea transmission lines and onshore port facilities would be part of the development plans.

“Approximately every 10 years, the entire system would need to be disconnected and towed to shore for repairs, followed by reinstallation,” the report said.

The Coastal Commission’s decision came with some conditions, including that the lessees’ surveys and site assessments minimize impacts to coastal resources, comply with marine wildlife protection measures and avoid contact with rocky outcroppings, seamounts, or deep-sea coral and sponge habitat. Another condition restricts vessel speeds to 10 knots, including during travel from harbors to the survey sites.

Public commenters at the hearing — which was surprisingly uncontentious, several of them noted — tended to support commission approval of the lease activities.

“Speaking on behalf of 45 companies, including offshore wind developers and technology firms, we are unified in our support of the Coastal Commission’s staff report and its conditions for federal leasing activities in the Morro Bay Wind Energy Area,” said Adam Stern, executive director of trade group Offshore Wind California. “Your endorsement of the staff report — similar to your unanimous action on the Humboldt Wind Energy Area in April — would reaffirm the commission’s historic commitment to protect California’s coastal resources and heritage, while also advancing the state’s clean energy and climate goals.”

The California Energy Commission is currently re-evaluating its goals for offshore wind development — 3 GW by 2030, and 10 to 15 GW by 2045 — after critics said they were too modest given the state’s clean energy needs and should be as high as 18 to 50 GW by 2045. (See CEC Postpones Vote on Offshore Wind Goals.)

June 10, 2022November 2, 2023

PG&E Vows to Reach Net Zero by 2040

Pacific Gas and Electric said Wednesday it plans to achieve carbon neutrality by 2040 and become “climate positive” by 2050, taking in as much carbon as it produces through carbon capture and other means while continuing to supply natural gas to customers.

“As recent events have made clear, California is not just on the front line for taking action on climate change, we’re also at the front line of its destructive effects,” CEO Patti Poppe said in a video announcement. “We cannot accept that. We can’t be content with simply adapting to those harms. We have to slow them down. We need to put that climate machine in reverse and begin undoing the damage.”

With its plan, PG&E joins the ranks of large investor-owned utilities that have made climate pledges, including Xcel Energy, which committed in December 2018 to provide its customers with 100% carbon-free energy by 2050, and Arizona Public Service, which did the same in January 2020.

Publicly owned utilities that have made similar commitments include the Sacramento Municipal Utility District, which promised to eliminate all greenhouse gas emissions from its electric generation by 2030. The Los Angeles Department of Water and Power is seeking to rely on 100% renewable power by 2045.

Under Senate Bill 100, California utilities must supply retail customers with 100% carbon-free resources by 2045. Other measures require the state to reduce its greenhouse gas emissions to 40% below 1990 levels by 2030 and 80% below 1990 levels by 2050.

PG&E’s ambitious plan is short on many details but lays out a broad strategy for meeting its goals.

By 2030, the company said, its generation mix will consist of 70% renewable resources such as wind and solar.

Promoting adoption of electric vehicles is a cornerstone of its carbon-reduction efforts.

“PG&E plans to be the industry’s global model by fueling at least 3 million electric vehicles in its service area by 2030 — leading to a cumulative reduction of at least 58 million metric tons of carbon emissions,” it said in a news release. The company also wants 2 million EVs to be able to send electricity back to the grid, “allowing EVs to be a cornerstone of energy reliability and resilience efforts.” It has begun vehicle-to-grid pilot programs with approval from the California Public Utilities Commission.

Another 48 MMTs of carbon reduction could come from building electrification and replacement of gas appliances, it said.

By 2030, PG&E expects renewable natural gas to make up 15% of its gas supply serving residential and commercial customers, and it said it is launching a pilot program to “maximize readiness for hydrogen blending.” Converting large industrial and commercial users to a cleaner natural gas supply will cut 2.5 MMT, it said.

“PG&E’s vision is to evolve the gas system to be an affordable, safe and reliable net zero energy delivery platform,” the utility’s news release said. “To make the transition, PG&E expects a diverse mix of resources to be available — from broad electrification to cleaner fuels such as renewable natural gas and hydrogen to nature-based solutions and carbon capture, storage and utilization.”

Direct-air carbon capture and underground sequestration will offset greenhouse gas emissions from thermal generation and other sources, PG&E said in its plan.

“With increasing electricity demand from buildings and transportation, California must also substantially invest in thermal generation with clean fuels and/or carbon capture and storage to maintain reliability,” it said.

The California Public Utilities Commission would have to approve the programs, including the ratepayer costs at a time of soaring utility bills. PG&E also has announced ambitious plans to bury 10,000 miles of power lines to avoid wildfire ignitions, the massive cost of which must still be determined.

PG&E is planning to close its Diablo Canyon nuclear power plant by 2025, but the utility said it expects to be able to meet its clean energy goals without the plant. The office of Gov. Gavin Newsom recently petitioned the Biden administration to make funds available to keep the plant open to maintain grid reliability while providing a large portion of the state’s carbon-free energy.

June 10, 2022June 14, 2023

OMS-MISO RA Survey Says Supply Deficits Could Top 10 GW by 2027

MISO and the Organization of MISO States’ 2022 resource adequacy survey again sounded the supply alarm that the RTO rang in early April when it published its 2022/23 capacity auction results.

The survey projects the footprint will have a 2.6-GW capacity deficit below the 2023 planning reserve margin requirement. The shortage would more than double up the 1.2-GW shortfall unearthed in the 2022/23 Planning Resource Auction. (See MISO’s 2022/23 Capacity Auction Lays Bare Shortfalls in Midwest.) As with the auction results, the survey foresees the shortfalls confined to MISO Midwest.

“Our efforts must be accelerated and reinforced to reliably manage the portfolio transition,” MISO Executive Director of Resource Planning Scott Wright said during a special teleconference Friday to discuss the results.

The five-year OMS-MISO survey foresees more bad news on the horizon, as well, with possible capacity deficits that are expected to deepen through 2027. The survey showed MISO could be short 4.4 GW in the 2024/25 planning year, 6.5 GW in 2025/26, 7.4 GW in 2026/27 and nearly 11 GW by 2027/28.

MISO’s Local Resource Zone 6, in Indiana and a portion of Kentucky, stands to have the widest capacity deficit in 2023. By the 2027/28 planning year, Zone 7 in Michigan’s Lower Peninsula and Zone 8 in Arkansas are the only zones that appear to have a comfortable padding of committed capacity.

However, MISO and OMS said much depends on how market resources respond to this year’s capacity auction results. If resources act, MISO Midwest could have a 2.4-GW capacity surplus in 2023, they said.

“We think there are a lot of things that could help mitigate the risk and even have a surplus in 2023,” Wright said.

2022 OMS-MISO Survey results | MISO and OMS

The survey put MISO’s 2023 demand growth at 1 GW (a 0.8% increase year-over year) as the pandemic recovery finishes. It predicted “modest growth thereafter” at 0.2% per year through 2027. The survey didn’t contemplate MISO’s new seasonal capacity design and availability-based resource accreditation pending before FERC.

Last year’s survey anticipated the grid operator would have anywhere from 3.4 to 13.9 GW of extra unforced capacity beyond its summer peak planning reserve margin requirement. That supply estimate didn’t pan out in the 2022/23 auction, which left MISO Midwest short of its 101.2-GW requirement. The 2021 survey also predicted anywhere from a 3.3-GW shortage to a 13.3-GW surplus through 2025. (See 2021 OMS-MISO Resource Adequacy Survey Shows Less Cause for Concern.)

MISO predicted it will be increasingly reliant on emergency and non-firm imports going forward. The grid operator said that while those resources are not reflected in the survey, they “have historically been important and available to MISO.”

However, if new generation can interconnect, MISO could have a few gigawatts to spare in 2024-2027. MISO and OMS said the impending threat “can be meaningfully mitigated” depending on the tempo of new generation and retirements.

“We have a very active queue process,” Wright reminded stakeholders. “I feel like we’ve had a good track record of adding about 2.5 GW of [unforced capacity] every year.”

OMS President and Indiana Utility Regulatory Commissioner Sarah Freeman noted that there are “tons of generation in the queue” waiting to replace retiring resources.

Freeman also said the results are a “very static glimpse” in time, and that MISO’s and states’ planning processes are dynamic.

But Clean Grid Alliance’s Natalie McIntire pointed out that the new transmission capacity MISO is planning under its long-range transmission portfolio is still years away. She said the new lines are needed in order to interconnect new generation.

Freeman opened the floor to suggestions on how to improve next year’s survey structure.

“It’s only as accurate as the questions we have on it,” she said.

June 9, 2022January 30, 2024

DOE Initiative Aims to Make Interconnection ‘Simpler, Faster, Fairer’

The message from the Tuesday launch of the Department of Energy’s Interconnection Innovation eXchange (I2X) initiative was clear: To reach President Biden’s goal of a U.S. electricity system powered 100% by clean power by 2035, interconnecting solar, wind and other clean energy projects to the grid must be made simpler, faster and fairer.

The latest figures from the Lawrence Berkeley National Laboratory (LBNL) show that more than 1,400 GW of mostly zero-carbon generation and storage projects are sitting in transmission interconnection queues across the country, with solar making up about half the total.

“This is mind-blowing to me,” Energy Secretary Jennifer Granholm said in opening remarks at the virtual launch. “That 1,400 GW is about what we need to reach a critical milestone of 80% clean electricity by 2030. If we could get all that capacity online, imagine how much faster we could reach our climate goals.”

Granholm acknowledged the challenges ahead are complex, if not daunting. LBNL also found that interconnection wait times are trending up, while project completion rates are falling. From 2000 to 2016, completion rates sat at 20% for solar projects and 16% for wind projects. In 2021, wait times had climbed to 3.7 years, up from 2.1 years a decade earlier.

Further, according to Alejandro Moreno, DOE deputy assistant secretary for renewable power, the time and cost of interconnection processes “tend to favor incumbents who have the resources and know-how to add new generation to the grid. [But they] can disadvantage new generation, particularly community-scale generation,” he said.

“Because [these] projects tend to be smaller in scale, they’re more sensitive to cost and become quickly too expensive to build,” Moreno said.

Funded with $3 million from the Infrastructure Investment and Jobs Act, I2X hopes to untangle such issues by pulling in a broad range of stakeholders, setting up collaborative working groups, collecting and analyzing massive amounts of data and developing a five-year interconnection roadmap, Granholm said. The initiative will look at both transmission- and distribution-level interconnection.

About 200 companies and organizations have already signed up to participate, including CAISO, PJM, SPP and NERC, as well as major utilities such as National Grid, Xcel Energy and the Los Angeles Department of Water and Power.

With stakeholder engagement a core pillar of the initiative, Naomi Davis, founder and CEO of Chicago nonprofit Blacks in Green, said a commitment to ensuring communities are at the table will be essential. The need is real, she said, “but the practice requires a budget line item, and it requires metrics, concrete metrics for achieving equitable, meaningful engagement.”

Speaking on the first of two stakeholder panels at the launch, Davis pointed to weatherization as a “threshold issue” for communities of color. “We have many seniors, homeowners who are entitled … to have the comfort, the security, the reliability of the new renewable energy that everyone is so excited about but which too few of our homes in the Black and brown community are prepared to receive. The deferred maintenance issue must be addressed,” she said.

Danielle Sass Byrnett, director of the Center for Partnerships and Innovation at the National Association of Regulatory Utility Commissioners, spoke of the intensive stakeholder engagement processes now underway in several states as they roll out interconnection standards under IEEE 1547-2108. Implementing the standards for interconnecting distributed energy resources has taken multiple years of “learning about the standard, understanding the implications of different decision-making within the standard … and looking at the processes and speed of interconnection once you have the new standards in place,” Byrnett said.

To help utilities and DER developers navigate the new rules, some states are experimenting with “interconnection ombudsmen or adjudicators,” she said.

Models Don’t Match Reality

Beyond simpler, faster and fairer, I2X has some ambitious goals, according to Tom McDermott, solar subsector manager at the Pacific Northwest National Laboratory, one of three National Laboratories working on the initiative with DOE. The other two are LBNL and the National Renewable Energy Laboratory.

By the end of the year, I2X will have defined and simulated interconnection process improvements, McDermott said. The first draft of the roadmap and an accompanying interconnection studies guide geared toward engineers are due March 31, 2023.

“We also need to define achievable metrics for improvement over the five-year horizon, for example to reduce the cost and time of interconnection by 50%,” he said. “The right number may vary by state, region or operating entity.”

The roadmap will include separate sections for the bulk power and distribution systems and for large- and small-scale generation, McDermott said. “There may be different approaches for regulated and unregulated jurisdictions … and finally the roadmap will suggest mitigations for any costs, delays or uncertainties encountered in the transition from existing practice to a better set of practices.”

Drilling into key interconnection issues on the second stakeholder panel, Ryan Quint, a senior manager at NERC, argued for I2X to have a strong focus on reliability.

“The current interconnection requirements and interconnection study processes are not equipped to handle the new resource base” of renewable energy, Quint said. “Some of the issues include component modifications and rework throughout the process, which adds complexity and slows down the process.”

“We end up with models that are used in reliability studies … and these models don’t match reality” and can ultimately create “a huge liability risk,” he said.

“We need to recognize that reliability and speed of interconnection don’t have to be conflicting objectives here,” Quint said. “We need to develop measures of success that assess the root cause issues we face, not the symptoms.”

For example, instead of measuring project dropout rates, Quint said, researchers should be looking at the number of studies “that are necessary because equipment changes were made at the last minute” or the disparities between interconnection requirements and processes.

Automation is Coming

Charlie Smith, executive director of Energy Systems Integration Group, boiled the metrics down to three main benchmarks. For faster interconnection, he wants the time from application to interconnection agreement cut to “two years or even months.” To measure fairness, he said, the question will be, “[Are] our developers being saddled with unreasonable network upgrade costs, yes or no?”

To make the process simpler, he called for “a publicly transparent generator connection study process that allows developers to do their own analysis and have a sense of cost before submitting their project in order to reduce speculative projects.”

Smith also pointed to “connect and manage” interconnection practices in Ireland, the U.K. and Germany. In these countries, he said, generation projects may be allowed to connect to a transmission system before completion of a wider set of system upgrades.

Brian Fitzsimons, CEO of GridUnity, sees interconnection as “a large, integrated data capture, data sharing and analysis problem that needs to be brought into the real-time, information-sharing world.” He talked up his company’s cloud platform for aggregating and validating data and automating engineering analysis.

“Automation of engineering analysis will reduce study times and can be applied to reduce the number of stages in the process and the number of complex decision points,” he said. “As study cost and time come down, there won’t be as much need for multiple go-no-go points in the interconnection process.”

June 9, 2022

ERCOT Issues Low-level Alert as Heat Builds

ERCOT on Wednesday issued its third operating condition notice (OCN) since April, warning of extreme heat in several of its weather zones this weekend.

The Texas gird operator distributed the OCN, its lowest-level communication of a possible emergency condition, because it expects forecasted temperatures to exceed 103 degrees Fahrenheit in its North Central and South Central weather zones from Friday through Monday. Emergency conditions are issued when staff determine the system’s safety or reliability is compromised or threatened.

The first OCN was issued on May 3 and extended several times through May 20. A second OCN was issued for May 28-30.

AccuWeather said Wednesday Texans can expect the sweltering heat that has hung over the state since early June will stick around into next week. The weather pattern has been stuck in place for more than a week, the weather service said, allowing heat to build across the south-central U.S.

Daily temperatures have been 5-15 degrees above normal in many cities, with San Antonio setting records with consecutive 104-degree days Monday and Tuesday. Temperatures in the Dallas area are expected to reach triple digits Friday for the first time this year; the average date for Dallas’ first 100-degree day is July 1, according to an AccuWeather meteorologist.

ERCOT this week expected to break its all-time peak demand record of 74.8 GW, set in August 2019. (See ERCOT Expecting Record Demand this Week.) Demand fell short of that mark but did set June highs of 72.4 GW and 72.8 GW Monday and Tuesday, respectively. Demand Tuesday stayed above 72 GW for the three intervals ending 4-6 p.m.

The day-ahead forecast for Thursday projects a demand peak of 75.6 GW.

The ISO’s conservative operations posture had as much as 84 GW of committed capacity available Wednesday, when demand was expected to barely reach 70 GW. ERCOT apparently reduced demand by 649 MW after an explosion shut down an LNG plant near Houston.

In a blast email response to a Dallas television station that was sent to ERCOT’s media distribution list Wednesday, the grid operator said it “projects sufficient generation to meet forecasted demand.”

ERCOT expects peak demand to hit a record 77.3 GW this summer, it said in its seasonal assessment of resource adequacy released last month.

TAC Briefed on Recent Frequency Event

Staff gave ERCOT’s Technical Advisory Committee an early update on a frequency event last weekend in West Texas that momentarily knocked 2.5 GW of capacity offline.

Woody Rickerson, the ISO’s vice president of system planning and weatherization, told the committee during a Tuesday webinar that a lightning arrestor on a 345-kV line near Odessa faulted. Voltage briefly fell to 59.706 Hz before being restored to 60 Hz within two minutes.

The outage took 1.7 GW from 14 solar sites offline. Eight of the 14 solar sites also tripped offline last year in what is now called the “Odessa disturbance.” More than 1.1 GW of solar PV resources, up to 200 miles away, were affected.

Rickerson said staff has only just begun to collect data on the event as part of a full analysis required by NERC. He said preliminary results indicate a possible problem with the solar facilities’ inverter settings. Rickerson will discuss the event Friday with a task force addressing the growing dominance of inverter-based resources and also plans to bring a more detailed report to TAC’s June 27 meeting.

The committee also discussed its final comments to ERCOT’s proposed methodology for approving and denying planned generation maintenance outages in advance of the Board of Directors’ June 21 meeting. TAC Chair Clif Lange said he will share with directors the committee’s the “full range” of concerns with the methodology and why they exist.

Members and staff shared their respective comments on the maximum daily resource planned outage capacity calculation, the key feature in ERCOT’s plan to evaluate outage requests. TAC believes the calculation limits outages when compared to history and that a 10% growth rate for renewable resources is too low. Staff have said they want as much capacity and flexibility as possible for planned outages while maintaining reliability.

The board in April granted staff’s appeal of a revised nodal protocol revision request (NPRR1108) that gives the grid operator the authority to review, coordinate and approve or deny all planned generation maintenance outages. Stakeholders earlier rejected staff’s version of the measure, unanimously approving an NPRR as amended by several joint commenters. (See ERCOT Board of Directors Briefs: April 28, 2022.)

June 9, 2022December 13, 2023

NERC RSTC Briefs: June 8-9, 2022

Committee to Meet Face-to-face in September

NERC’s Reliability and Security Technical Committee (RSTC) plans to hold its next meeting in person in Atlanta, though the venue has not been chosen yet, committee leaders told attendees at its June meeting held via conference call on Wednesday and Thursday.

RSTC members have not met face-to-face since the committee’s first meeting, a short gathering in Atlanta in March 2020 at which attendees mainly discussed how to take over the business of the now defunct Planning, Operating and Critical Infrastructure Protection committees. (See RSTC Tackles Organization Issues in First Meeting.) The committee had planned to hold its first meeting of 2022 in person, but it was converted to a virtual gathering before the December conference call.

In that meeting, Secretary Stephen Crutchfield did not mention the change specifically but said the September gathering was “the only one [for which] we had a hotel booked currently.” On Thursday, Crutchfield said the meeting has changed from that location, the Grand Hyatt Atlanta in Buckhead, for unspecified reasons; however, he said NERC staff are “working on getting a new location” and that the committee does not intend to convert it to a conference call again.

December’s meeting is still being envisioned as virtual, but on Thursday, Edison Elizeh of the Bonneville Power Administration suggested that this gathering be held in person too, in light of the decision to cancel the physical meeting in April. Crutchfield said the RSTC executive committee plans to consider this at its upcoming meeting next Tuesday; NERC staff asked that attendees advise as to their ability to travel that month in light of “end-of-year responsibilities and the holiday.”

SARs Move to Standards Committee

Committee members endorsed two standard authorization requests (SARs) authored by NERC’s Energy Reliability Assessment Task Force on Wednesday. The goal of the project is to update NERC’s reliability standards (either by creating new standards or modifying existing ones) to require registered entities to perform energy reliability assessments in order to evaluate energy assurance and to develop corrective action plans to address any identified risks. The SARs will now be submitted to NERC’s Standards Committee for approval.

However, another SAR — proposed by the Inverter-based Resource Performance Working Group (IRPWG) to modify standard EOP-004-4 (Event reporting) to address a flaw identified in a report on the July 2020 San Fernando Disturbance — was rejected by the committee.

The incident involved a widespread reduction of active power from solar facilities across a large geographic area; the report’s authors said that EOP-004-4’s event-reporting requirements are intended for large synchronous generating resources and don’t address scenarios in which generation losses at a number of small facilities add up to a large loss.

Presenting the SAR to the committee, the IRPWG’s Julia Matevosyan said the goal is to “ensure that future events that are similar to already-experienced [solar] events … would be captured by this [new] generation loss criteria.”

Attendees expressed discomfort at the SAR’s proposal to make reliability coordinators responsible for reporting the relevant generation loss data. The SAR justified this suggestion on the grounds that RCs “are best suited for identifying widespread events … involving solar PV and wind resources [and] are also able to coordinate with [neighbors] to identify if the loss of resources spans across multiple footprints.” But Duke Energy’s Greg Stone, in comments that were echoed by other speakers, said this idea would put the burden on the wrong stakeholders.

“The RCs … are reliability coordinators, not reporting coordinators,” Stone said. “Given the commentary that we got in [Matevosyan’s] presentation that the collection and submission of this data is already problematic, we don’t need to be putting the RCs in the middle of that and especially create a compliance burden for the RCs to go hunt this down after the fact. … Put the burden of reporting the data on the people who have the data, and don’t put another function in the middle of that.”

While 17 of the 30 RSTC members in attendance voted to endorse the SAR, with 11 voting against it, the committee’s rules require a two-thirds majority for an item to be considered approved. As a result, the proposal failed. Receiving the RSTC’s endorsement is not technically required to proceed with a standards development project, but Matevosyan agreed to take the SAR back to the IRPWG and modify it based on committee members’ feedback.

Procedural Confusion on EMT SAR

The RSTC’s rules created some confusion around another SAR intended to ensure that transmission planners and planning coordinators “have accurate models necessary to adequately conduct reliability assessments under increasing levels of inverter-based resources” by requiring TPs and PCs to conduct electromagnetic transient (EMT) studies during the interconnection study process and annual planning assessments.

The vote on endorsement initially appeared to fail to meet the two-thirds threshold, with 19 votes in support out of 30 recorded. But committee staff pointed out that under RSTC rules, abstentions are not counted as votes cast — therefore, the three abstentions should be left out of the total. After this subtraction, the eight votes against endorsement were not sufficient to carry the field.

This decision led to several minutes of discussion over the procedural implications of the rule; while no members disputed the result of the vote, several said that the existence of an “abstain” option in Slido, the voting software used by the committee, was at least an implication that votes other than yes or no were possible. Staff agreed to change the options in Slido, renaming “abstain” to “present,” in hopes of preventing further misunderstandings.