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November 17, 2024

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MISO Delays $13B Long-range Portfolio’s Recommendation

MEMPHIS, Tenn. — MISO has delayed by a month a recommendation to the Board of Directors of a $13 billion package of long-range transmission projects.

During a Tuesday meeting of the board’s System Planning Committee, senior staff said they will seek board approval for the Midwestern 345-kV transmission lines in July instead of June.

Jennifer Curran, vice president of system planning, said the extra month will be used for an additional stakeholder workshop to discuss the projects. MISO had originally targeted a March approval for the first long-range projects.

“We do think it’s appropriate to act with deliberate speed, so we meet the reliability imperative,” Curran said of the remaining stakeholder discussions.

The stakeholder-led Planning Advisory Committee (PAC) will now consider whether to endorse the long-range portfolio May 27 instead of May 11. (See MISO Long-range Tx Plan Overlaps with SPP Study.)

Curran said staff are finalizing the first cycle of long-range plans “in earnest.” She said reliability analyses are complete and planners continue to work on business cases.

She reassured the board that benefits will be “well in excess” of the $13 billion portfolio MISO will recommend. The PAC meeting was the first time the RTO disclosed a cost estimate for the portfolio.  

MISO has cut one long-range project, dropping one of two 345-kV lines in southern Minnesota.

Curran said MISO considers the first cycle of projects final, with no more project proposals accepted for consideration. She said additional projects “are best reserved” for the second tranche of proposals.

The first cycle of long-range projects nearly quadruples early spending estimates for the 2022 MISO Transmission Expansion Plan. (See Initial MTEP22 Portfolio has $3.3B in Costs.)

Curran said the projects’ business cases will account for bolstered reliability, reduced resource adequacy requirements, avoided transmission and generation projects, decarbonization goals, avoided load shed events, and savings stemming from decreased congestion.

Barbara Krumsiek 2022-03-21 (RTO Insider LLC) FI.jpgMISO Director Barbara Krumsiek listens to updates during Board Week in Memphis, Tenn. | ©RTO Insider LLC

MISO Director Barbara Krumsiek said the benefits being hashed out in the business cases are “priceless.” “We don’t want to see the lights go out,” she said. “We don’t want to see load loss.”

Director Mark Johnson thanked MISO for naming and analyzing the first projects.  

“If you had asked me a year ago if we’d be where we are today, I wouldn’t have laid money on it,” he said. “But we have to move … I don’t think we can afford to wait. The decisions we’re making today will have an impact for decades.”

Johnson reminded stakeholders in the room that MISO and its members have a responsibility to ensure the grid’s continued reliability for “generations to come.”

“This is really a milestone getting to this day,” Clean Grid Alliance’s Beth Soholt said in agreement. However, she pointed out that the projects must go through challenging permitting and siting processes at state commissions.  

Soholt invoked the Cardinal-Hickory Creek project, a stalled line from MISO’s 2011 long-term portfolio that’s been held up in lawsuits over its siting through a protected area. (See Federal Judge: Tx Line Can’t Cross Wildlife Refuge.)

“I just don’t want to have multiple Cardinal-Hickory Creeks,” Soholt said. “We really don’t have anything until we have these lines in the ground.”

She asked MISO to build a coalition of support around the long-range lines and spread awareness of their necessity.

Board Addresses Long-range, JTIQ Overlap

MISO board members also touched on a two-project overlap between the long-range plan and the Joint Targeted Interconnection Queue (JTIQ) study with SPP.

Two proposed projects in the Dakotas and Minnesota are included in both the JTIQ study results and MISO’s long-range transmission portfolio. The RTO said it will likely build the two projects on its own dime since long-range planning takes precedence over the JTIQ study and SPP’s benefits are small. Both projects are located within MISO’s footprint. (See MISO, SPP Finalize JTIQ Results with MISO Tx Duplicates.)

Some directors seemed torn on the decision not to seek projects costs from SPP.

“I don’t want to be parochial about it, but if there’s a cost to SPP …” Krumsiek said before trailing off.

“Do you want to wait, or do you want to proceed?” asked MISO President Clair Moeller, pointing out that it could take some time for the RTOs to agree on cost allocation for JTIQ projects. MISO has already filed for FERC approval of a postage stamp allocation for its long-range projects.

“I want to proceed,” Krumsiek answered quickly.

Aubrey Johnson, executive director of system planning, said should the two projects proceed under MISO’s long-range planning, they would become part of its base case modeling. He said staff would then re-run its analyses to update adjusted production cost savings estimates for the remaining JTIQ projects.

The grid operator plans to seek board approval of the JTIQ projects early next year.

The RTO also said it envisions working with SPP to make a joint filing of the JTIQ projects’ proposed cost-allocation methodology at FERC by the end of the year.

Johnson said the RTOs’ staff are under pressure to agree on a cost-allocation process, but he said both grid operators have found value in working together.

“We’ve got a relationship out of it,” he said. “And I think we’re better off for it.”

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Shell CEO: Sector-based Mandates Critical for Global Energy Transition

Government mandates are the best policy lever for supporting the world’s energy companies in what Shell CEO Ben van Beurden sees as an uphill climb to net-zero emissions.

“We cannot outperform 100 years of innovation in petroleum-based products in a few years’ time,” van Beurden said Wednesday at the 2022 International Energy Agency Ministerial in Paris.

Shell’s (NYSE:SHEL) biggest challenge in reaching net zero is addressing emissions at the point of energy use, and the only way to do that is “by offering different products,” he said. “If we are going to change the nature of the products that we sell, we need to have different policies encouraging the use of those products.”

The fastest pathway to product innovation and affordability is to mandate product use within target sectors, according to van Beurden.

“Sustainable aviation fuels are three times as expensive as petroleum-based aviation fuels, so we cannot make them economically relevant for airlines,” he said. “If you have a mandate to put 5% in the mix, then it doesn’t really matter what it costs, it just needs to be delivered.”

Customers are most often focused on the lowest cost of energy, but as more sustainable fuels are delivered, he said, the cost of supply will decrease.

Every sector of the economy “will have a slightly different recipe to reduce their carbon intensity and to figure out the best set of policies to drive that decarbonization,” van Beurden said.

Kevin Gallagher, CEO of Australian oil and gas producer Santos, agreed with van Beurden during the IEA panel discussion on international cooperation, saying that energy companies can produce hydrogen, for example, but market demand must exist for it.

There is a “thirst and demand for fossil fuels” that is not decreasing, Gallagher said.

Even more critical, he said, is that energy companies have access to the significant capital investments needed for decarbonization. Government policies, such as carbon credits and tax incentives, can create a stable energy environment that encourages investment.

Australia’s focus on carbon credits, for example, has allowed Santos to enter the design phase of what Gallagher says could be one of the largest carbon capture and storage (CCS) projects in the world.

“We worked very hard with government over the last few years to get to the point where [CCS] projects can qualify to generate Australian carbon credit units,” he said. But international cooperation with Timor-Leste, he added, has been equally important in moving the project in the Timor Sea forward.

“It’s critically important for governments … to operationalize Article 6.2 of the Paris agreement so that we can get more of these investments,” he said. The article sets out the foundation for international cooperation on decarbonization policies, such as emissions trading schemes, and allows for the transfer of carbon credits between countries.

International Stage

Energy Secretary Jennifer Granholm, serving as Ministerial chair, highlighted the panel session as a platform for countries to share ideas.

“My hope is that we can … illuminate ideas and spread the word on practical, actionable efforts that any one of us could take on to learn from one another,” she said.

Yaroslav Demchenkov (2022 International Energy Agency Ministerial) FI.jpgYaroslav Demchenkov, Deputy Minister of Energy for European Integration for Ukraine, in Paris Wednesday | 2022 International Energy Agency

The panel paused to welcome Yaroslav Demchenkov, Ukrainian deputy minister of energy for European integration, who asked countries in attendance to “work together to integrate energy markets” and reduce dependence on Russian energy resources.

Russia’s war on Ukraine, he said, should be a catalyst to stop using Russian energy resources “as soon as possible, wherever possible.”

He also asked governments to restrict energy resources that are not easy to replace, substitute pipeline gas with other sources, such as hydrogen, and invest in balancing capacities, including storage.

“Commercialization of other types of green technology in the long run will guarantee energy independence and effectively contribute to the goal of the Paris agreement,” he said.

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NEPOOL Transmission Committee Briefs: March 23, 2022

DER Interconnection Process

ISO-NE is proposing a change to its rules that would always send distributed energy resources through state interconnection processes.

In a presentation to the NEPOOL Transmission Committee on Wednesday, Al McBride, ISO-NE’s director of transmission strategy and services, said doing so would get rid of a complex decision on whether new DER projects should be under the jurisdiction of state interconnection rules or FERC’s.

McBride said that tracking the jurisdiction status of thousands of DERs in the region is “extremely challenging and time-consuming.” And some developers, he said, are being forced to complete both state and RTO processes for no reliability purpose.

Under the proposed change, all distribution-connected generation would go through state interconnection processes, although it would still be reviewed by the RTO because of the rules laid out in section I.3.9 of the tariff.

The RTO is planning to present redlines at next month’s TC meeting.

Update on Ambient-adjusted Ratings Compliance

ISO-NE is also working on a compliance filing for FERC Order 881, which requires the incorporation of ambient-adjusted transmission line ratings. Such ratings take air temperature into account when determining how much electricity can move through the lines.

Graham Jesmer, ISO-NE regulatory counsel, told the committee that the RTO is moving to have the filing ready by a July 12 deadline.

The order requires RTOs and ISOs to “allow transmission owners to electronically update transmission line ratings at least hourly.”

The compliance filing will consist of a new attachment to the tariff, which the RTO will be writing over the next few weeks.

After it finalizes the filing, ISO-NE will have to move to implementation, which has a deadline of July 2025, Jesmer said. That will involve changes to the RTO’s governing documents and systems and software, as well as conversations with transmission owners and providers, which Jesmer said are already underway.

676-J Compliance

The committee also voted to recommend that the Participants Committee approve the RTO’s revisions to Schedule 18 and Schedule 24 of the tariff. The revisions would address FERC’s directive in Order 676-J to incorporate by reference cybersecurity standards and Parallel Flow Visualization standards from the latest version of the Standards for Business Practices and Communication Protocols for Public Utilities adopted by the Wholesale Electric Quadrant of the North American Energy Standards Board.

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ReliabilityFirst Plugs SBOMs as Essential Cyber Tools

At ReliabilityFirst’s monthly Technical Talk with RF on Monday, cybersecurity consultant Tom Alrich said a software bill of materials (SBOM) can be a useful tool for utilities to meet their obligations under NERC’s reliability standards, particularly CIP-013-2 (Cybersecurity — supply chain risk management).

Introducing the topic, Alrich noted that the SBOM idea has been gaining traction after being included in President Biden’s Executive Order 14028 last May. (See Biden Directs Federal Cybersecurity Overhaul.) But while the concept has gained some recognition in the public sphere, Alrich said many outside the cybersecurity industry don’t fully understand what it is, joking that he was “sure your children have all asked you that question at one time or another.”

“You might tell them that if they had a software bill of materials for each of the video games that they run, they might know which games contain Log4j,” Alrich said, referring to the vulnerability in an Apache open-source software library that was discovered last year and is thought to impact millions of devices and applications worldwide. (See DHS Launches Cyber Review Board.) “If a game does contain Log4j, they might not want to use it until the developer provides a patch.”

Hacked Software Can Spread Quickly

SBOMs are intended to address potential vulnerabilities associated with the reality of modern software development: applications increasingly are not individually coded from the ground up, but largely built from bits of code available in public or private repositories like Github. Log4j, for example, is a freely available component that programmers can insert into their code; the resulting app can log errors and normal system processes, a vital feature for software in a wide range of industries.

These components are often copied and pasted with few changes: Alrich estimated that “in some software products, more than 90% of the code is components,” and 90% of those components are open source, with most of a modern programmer’s work being to “tie components together.” This means that if an attacker manages to slip malicious code into the source, it can spread quickly to myriad platforms, similar to the 2020 hack of the SolarWinds Orion network management software (though that incident involved compromising a company’s official update channel rather than public code repositories).

An SBOM helps to mitigate this issue by providing customers a machine-readable list of software components in a particular product. Under Biden’s executive order, all software developers working for federal agencies will be required to produce SBOMs starting in August; Alrich predicted that the lists will “become a quasi-requirement for all software” as more organizations become aware of the risks of open-source components.

Providing an SBOM does not mitigate any vulnerabilities in a software product by itself, but because it is machine-readable, it can greatly speed up the hunt for compromised components. Alrich provided a diagram showing one way to use an SBOM, in which automated software checks each component against the National Vulnerability Database or other lists of potentially dangerous software.

The resulting list is then checked against a vulnerability exploitability exchange (VEX) to determine which flaws are actually exploitable. As Alrich explained, most vulnerabilities cannot actually be exploited in a finished piece of software, so this step can greatly cut down on a cybersecurity team’s time and effort.

Where the SBOM helps with CIP-013 compliance is in allowing utilities to independently “identify, assess and mitigate” supply chain risks as the standard requires. Without an SBOM, utilities must rely on their suppliers to monitor for potential risks and give them timely information; with the list a utility can do this itself.

“SBOMs are a tool; they don’t mitigate risk themselves, but they’re the indispensable tool for doing that,” Alrich said.

More Changes to Align Release Schedule

Also in Monday’s webinar, ReliabilityFirst’s manager for risk analysis and mitigation Anthony Jablonski provided an update on the status of the ERO Enterprise’s Align software platform and Secure Evidence Locker.

Align project timeline (ReliabilityFirst) Content.jpgThe remaining steps in the most recent version of the Align project timeline | ReliabilityFirst

Currently NERC and the regional entities are still rolling out Release 3 of the platform, which began in December with a staggered schedule. SERC and ReliabilityFirst began their implementation in February and March, respectively; all other entities will start their adoption in April.

Release 3 was originally planned to be the last stage in the platform’s introduction, but NERC decided to split the final release in two to reduce the complexity of the task. Jablonski said on Monday that the new Release 4, originally set to roll out in the fourth quarter, has been split again. The first part will now roll out in the second quarter, comprising audit and scheduling functionality; the second, which the organization has dubbed “Release 4.5,” will be introduced in the fourth quarter, covering inherent risk assessments and compliance oversight plans.

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National Grid Proposes 100% Fossil-free Gas System in Mass.

National Grid (NYSE:NGG) is proposing to transition its natural gas service in Massachusetts to 100% fossil-free gas by 2050 to help the state meet its decarbonization goals.

The utility filed a Net-zero Enablement Plan Friday with the Massachusetts Department of Public Utilities for the regulator’s investigation into the role of gas distribution companies in reducing greenhouse gas emissions.

Eliminating fossil fuels from National Grid’s gas supply would require pursuing delivery of renewable natural gas (RNG) and renewable hydrogen to all customer classes, the utility said in the plan. National Grid’s proposal builds on recommendations in an Energy & Environmental Economics (E3) report filed Friday in the “Future of Gas” docket (20-80) that identified eight decarbonization pathways for the state.

Each pathway achieves net-zero GHGs by 2050 compared with 1990 levels at varying costs, and they offer options ranging from ongoing use of the gas distribution network to complete network decommissioning across the state. Key components of National’s Grid net-zero proposal align with the consultant report’s Hybrid Electrification pathway, according to the plan.

A hybrid pathway balances benefits and challenges of electrification and decarbonized fuels by limiting renewable fuel use and mitigating issues related to electric infrastructure expansion, the consultant’s report said. Of the eight pathways, the hybrid approach had the least cumulative cost, $64-$92 billion. Scenarios that included high levels of electrification for buildings and 100% gas network decommissioning had the highest cumulative cost, $87-$135 billion.

While the hybrid pathway is based on 100% renewable gas for residential and commercial customers only, National Grid proposed extending that transition to industrial customers as well. The utility also would expand on the pathway through networked geothermal system deployment and deep energy efficiency measures that address building envelopes and appliances. (See National Grid Wins Approval for $15.6M Geothermal Demo.)

In a separate report filed Friday on regulatory considerations related to the eight pathways, E3 determined that a gas utility transition to renewable fuels is limited by supply and the state’s regulatory structure. Based on E3’s findings, National Grid said the state must authorize gas utilities to develop an RNG procurement program that offers competitive solicitations.

In addition, the utility called for the state to implement a Renewable Heating Fuel Standard that directs natural gas providers to procure an increasing portion of supply from clean fuels, such as RNG or hydrogen.

Eversource Energy (NYSE:ES), the second largest gas distribution utility in Massachusetts behind National Grid, made minor commitments to fossil-fuel alternatives in its decarbonization plan filed Friday. The utility submitted an operational plan covering 2023-2025 with proposed initiatives to:

  • conduct market assessments for in-state and out-of-state RNG;
  • procure RNG from a locally sourced project;
  • develop a small-scale demonstration project for RNG storage at a liquified natural gas site;
  • assess hydrogen blended into its gas network by up to 2% by volume; and
  • develop hydrogen pilots to examine re-purposing the gas network to transport hydrogen.

Eversource also wants to develop a pilot for hybrid air-source heat pump systems that link to auxiliary natural gas furnaces. The pilot would test demand response and fuel switching of customers using the hybrid heat-pumps during winter peaks. Eversource also plans to expand a networked geothermal pilot it launched last year into a comprehensive utility-scale program.

Liberty Utilities, Unitil (NYSE:UTL) and Berkshire Gas filed their net-zero plans with the DPU Friday, each identifying some level of commitment to decarbonized gas supply.

Berkshire plans to offer biomethane from landfill gases in the near-term, while hydrogen and RNG, the utility said, could be long-term resources in some sectors, such as buildings and heavy-duty transportation. Liberty said it plans to offer increasing proportions of RNG to customers over time, and Unitil expects to establish targets for biomethane that would be capped at a certain cost threshold.

In a joint filing, the state’s five gas utilities asked the DPU to approve their net-zero plans along with a proposal to update them on a three-year cycle aligned with energy efficiency program planning. 

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SEC Seeks Standard Disclosures for Climate-related Business Risks

The Securities and Exchange Commission voted Monday 3-1 in favor of a proposed rule that would expand and standardize how public companies disclose business risks related to the climate and greenhouse gas emissions.

“Investors representing literally tens of trillions of dollars support climate-related disclosures because they recognize that climate risks can pose significant financial risks to companies, and investors need reliable information about climate risks to make informed investment decisions,” SEC Chair Gary Gensler said in a statement.

Under the proposal, SEC registrants would have to provide information in filings about, among other things, oversight of climate risks, impact of those risks on business and financial statements, and any climate-related targets or goals. Climate-related risks, as defined in the proposal, are the negative effects of climate events on business operations or activities within the company’s value chain.

In addition, the SEC is seeking GHG emissions data related to direct business operations and energy use, and in some cases, value-chain operations. Standardizing how and when companies provide emissions data would remove uncertainty associated with voluntary reporting, according to the proposed rule.

GHG disclosures expressed as metric tons of carbon dioxide-equivalent per unit of revenue, for example, would give investors a basis for comparison across industries and companies, the commission said.

Jack Lienke, regulatory policy director at the Institute for Policy Integrity, supported the SEC’s proposed rule in a statement Monday, saying the commission “no longer has the luxury of ignoring climate change.” The SEC, he said, must protect investors by demanding the same transparency on climate risk as other financial risks.

The SEC based the proposed rule on the 2017 disclosure recommendations of the Task Force on Climate-related Financial Disclosures created in 2015 under the direction of the Group of 20 finance ministers.

Commissioner Hester Peirce, who was appointed by President Donald Trump to fill a Republican seat, voted against the proposal, saying that it “will undermine the existing regulatory framework that for many decades has undergirded consistent, comparable and reliable company disclosures.”

The existing filing rules, Peirce said, already require companies to disclose risks, such as those related to climate. In 2010, the commission issued guidance on how its rules at the time could require disclosure of climate issues for a business. Since then, investor interest has grown for more specific climate-related details in company filings, the SEC said in its proposal.

“It is appropriate for us to consider such investor demand in exercising our authority and responsibility to design an effective and efficient disclosure regime under the federal securities laws,” the commission said.

Peirce, however, said the proposal “exceeds the commission’s statutory limits.”

“Many calls for enhanced climate disclosure are motivated not by an interest in financial returns … but by deep concerns about the climate,” she said. The commission, she added, has a responsibility to limit disclosure requirements so they do not “bury the shareholders in an avalanche of trivial information.”

Compliance with the new rules would follow a phased approach, based on filing class. Assuming an effective date in December, filers would have to be in full compliance with everything but value-chain emissions disclosures for fiscal year 2025. Full compliance with value-chain emissions data reporting would begin in fiscal year 2026.

Sen. Edward Markey (D-Mass.) said the proposed rule is an “important step,” but he called for more aggressive action from the commission.

“I urge the SEC to expand the proposal to quickly require [value-chain] emission data, and to incorporate environmental justice considerations — such as assessment of the specific risks to [Black and Brown] communities — into the reporting requirements,” he said in a statement Monday.

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White House Issues Fresh Russian Cyber Warning

The Biden administration on Monday issued another warning that Russia’s government “is exploring options for potential cyberattacks” against the U.S. and called on critical infrastructure operators to “harden your cyber defenses immediately.”

In a statement, the White House cited “evolving intelligence” that links the growing cyber risk to the “unprecedented economic costs we’ve imposed on Russia” through sanctions launched since the country began its invasion of Ukraine in February. The administration did not specify what kind of intelligence officials have observed or what sectors may be most at risk, but it noted that cyberattacks against infrastructure are “part of Russia’s playbook,” referring to attacks against Ukraine, France, Georgia, South Korea and others that U.S. officials have blamed on Russian military intelligence. (See Six Russians Charged for Ukraine Cyberattacks.)

During a media briefing on Monday, Anne Neuberger, deputy national security adviser for cyber and emerging technology, declined to say whether intelligence agencies believe Russia has already attempted a cyber operation against the U.S., instead referring to “preparatory activity” that could include “scanning websites [or] hunting for vulnerabilities.”

However, Neuberger also reminded the audience that cyberattacks have been part of Russia’s ongoing operations against Ukraine, echoing warnings from the Cybersecurity and Infrastructure Security Agency (CISA) and other U.S. agencies early in the conflict about an outbreak of “destructive malware” affecting multiple countries the region.

These attacks have fallen short of the major cyberoffensive that many observers expected would accompany Russian military action against Ukraine, but experts have warned that President Vladimir Putin may be holding his strongest cyber capabilities in reserve as a hedge against a worsening military situation. (See Experts Warn Cyberwar Still Possible.)

Neuberger avoided saying which U.S. critical infrastructure sectors are most at risk, saying that the “steps that are needed … need to be done across every sector. … Even those sectors that we do not see any specific threat intelligence for, we truly want [them] to double down and do the work that’s needed.” But she did confirm that “key entities who need to know have been provided classified briefings” in the last several weeks.

While Neuberger provided few specifics, she did say that many entities still have not performed simple steps that would help mitigate against much of the risk.

“We continue to see known vulnerabilities, for which we have patches available, used by sophisticated cyber actors to compromise American companies [and] companies around the world … and that makes it far easier for attackers than it needs to be,” Neuberger said.

A fact sheet accompanying the White House’s statement listed a number of preparatory steps for private sector organizations to complete “with urgency.” Included in its recommendations are:

  • mandate the use of multifactor authentication and deploy “modern security tools” on computers and devices;
  • have cybersecurity professionals ensure that systems are patched against known vulnerabilities;
  • change passwords across networks and encrypt data so they cannot be used if stolen;
  • back up data to secure locations;
  • keep up-to-date emergency plans and run regular drills so employees can respond to attacks quickly;
  • train employees to avoid common hacking tactics; and
  • encourage employees to report unusual behavior from their computers or devices.

“What we’re asking for is: Lock your digital doors. Make it harder for attackers; make them do more work; [and that] will make it significantly harder, even for a sophisticated actor, to compromise a network,” Neuberger said.

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Court Backs FERC over ISO-NE’s Order 1000 Compliance

The D.C. Circuit Court of Appeals issued an opinion Tuesday siding with FERC over its finding that ISO-NE adequately complied with Order 1000’s provisions on competitive bidding for transmission projects.

The three-judge panel, led by A. Raymond Randolph, rejected a petition for judicial review from LSP Transmission Holdings (20-1422).

The petition centered around ISO-NE’s compliance with Order 1000’s requirement that RTOs remove “right of first refusal” provisions for transmission planning and move to a competitive selection process.

In 2013, while approving ISO-NE’s tariff revisions, FERC agreed that the RTO wouldn’t have to use a competitive process if it was dealing with “reliability-related” transmission projects, which are classified as those needed in three years or less to fix reliability violations on the system.

FERC later expressed concerns about the high number of projects with estimated “need-by dates” occurring within that three-year window but before the projects were in line to become operational.

In the docket where FERC asked ISO-NE to demonstrate compliance, LSP asked the commission to eliminate or limit the competition exception for reliability projects. But the commission ultimately found “insufficient evidence” that ISO-NE was noncompliant with Order 1000; the court declined to review that finding.

The judges wrote that because FERC had previously found that using need-by dates is preferable to in-service dates, it can again use that reasoning to dismiss LSP’s petition.

“We see nothing irrational in the commission’s response to LSP’s general criticism of ISO New England’s use of more conservative assumptions regarding its system capacity and future management,” they said.

And ultimately, the court found, it’s up to FERC to decide.

“The appropriate balance struck — between competitive procurement and quick redress of reliability needs — is the sort of policy judgment left to the commission,” the judges wrote.

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NYISO Files BSM Compliance, Extension Request

NYISO on Monday submitted a FERC compliance filing to establish a proposed effective date for the Part A test enhancements to its buyer-side market power mitigation rules (BSM) and requested an extension of time to submit all needed tariff changes no later than Aug. 1 (ER20-1718-003).

The commission in February reversed its September 2020 decision to reject the ISO’s proposal, voting 4-1 to accept NYISO’s revisions to the rules designed to prioritize evaluating state-subsidized resources. (See FERC Reverses Itself on NYISO BSM Exemptions.)

The Part A enhancements allow for evaluation of the new, policy-driven clean energy projects before evaluation of conventional energy projects and all projects under the Part B test, which is based on forecasts of unit-specific economics, the ISO said.

NYISO said that when it files the conforming tariff changes it will also address the effective date for the Part A enhancements “such that they will apply to the Class Year that begins immediately following Class Year 2021.”

Significant progress in Class Year 2021 has already been made over the past year, with several process milestones pertaining to the Part A enhancements having long since passed, and “trying to implement the Part A enhancements at this time to Class Year 2021 could be disruptive and cause confusion,” the ISO said.

NYISO originally filed the Part A enhancements in April 2020.

Initially, the ISO intended to implement the Part A enhancements for the Class Year 2019 study and included tariff language explaining that the revisions would apply to the Class Year 2019 and all subsequent BSM evaluations of examined facilities. Class Year 2019 was completed in January 2021, and Class Year 2021 began in March 2021.

Under the Part A test, NYISO will exempt a new entrant from the offer floor if the forecast of capacity prices in the first year of a new entrant’s operation is higher than the default offer floor, which is 75% of the net cost of new entry of the hypothetical unit modeled in the most recent demand curve reset.

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FERC Upholds CAISO Wheel-through Rules

FERC last week upheld its June 2021 finding that CAISO’s temporary wheel-through restrictions do not violate open-access transmission principles and approved a two-year extension of the provisions, but it urged the ISO to find a better long-term solution quickly.

In doing so, FERC rejected a rehearing request by the Arizona Corporation Commission and a coalition of Arizona utilities, including Arizona Public Service and Salt River Project, which continued to press their case that CAISO’s rules are discriminatory (ER21-1790).

The wheeling rules were part of a CAISO package of changes meant to promote summer reliability following the rolling blackouts and energy emergencies of summer 2020.

The rules reprioritized wheel-throughs so that transfers between the Northwest and Southwest could no longer take precedence over capacity needed to serve CAISO native load. Non-CAISO entities would have to apply at least 45 days in advance to designate high-priority wheel-throughs needed for reliability, giving the wheels equal standing with CAISO native load.

Utilities in the Southwest, dependent on Pacific Northwest electricity imported through CAISO’s grid each summer, were displeased. FERC, however, found the provisions acceptable. (See FERC OKs CAISO Wheel-through Restrictions.)

It reiterated that stance in its decision March 15.

“We continue to find that the scheduling priorities implemented in the interim tariff revisions result in a just and reasonable interim solution that is consistent with open-access policies, including the native load priority principles first articulated in Order No. 888 and reconfirmed in Order No. 890,” FERC wrote.

“These interim tariff revisions were designed to enable CAISO to maintain reliability in the summer of 2021 and strike a reasonable balance between ‘the transmission provider’s need to meet its native load obligations and the need of other entities to obtain service to meet their own obligations,’” it said.

Before the revisions, wheel-through transactions could receive scheduling priority higher than CAISO’s native load requirements, FERC noted.

The provisions “adjust scheduling priorities to protect native load by giving resource adequacy imports a scheduling priority equivalent to priority wheeling-through transactions and higher than non-priority wheeling-through transactions,” it said.

FERC acknowledged, however, that stakeholders remain “deeply divided” over the changes and said the challenging parties had reconveyed their “serious concerns with CAISO’s approach to implementing a native load priority.”

“The Federal Power Act does not require the commission to determine that a proposal is the best solution, only a reasonable one,” FERC said. “Therefore, we sustain the result in [our] June 2021 order as a just and reasonable interim solution for allocating transmission capacity fairly among users when the system is constrained.

“Nevertheless, in light of the interim tariff revisions’ potential impacts on neighboring balancing authority areas and parties’ ongoing concerns, we expect CAISO to work with stakeholders to design and file a just and reasonable and not unduly discretionary or preferential long-term solution as expeditiously as possible.”

In a related order (ER22-906), the commission accepted CAISO’s decision to extend the wheeling provisions for two more years through May 2024. The rules were originally scheduled to expire June 1 of this year. (See CAISO Extends Wheel-through Rules.)

“We find that extending the interim tariff revisions is just and reasonable and will provide certainty regarding the rules for wheeling-through transactions, while CAISO and stakeholders develop a long-term solution that will clearly delineate rights across CAISO’s transmission system,” FERC said.

The commission warned CAISO, however, that its findings were based on the rule changes being “interim,” not “indefinite,” and repeated its call for a quick resolution between the ISO and affected parties.

The commission also instructed CAISO to file quarterly reports updating it on its progress.

“In these filings, CAISO must describe any long-term alternative solutions being considered in the stakeholder process, explain any potential impediments to implementing any particular solution and provide an updated schedule for finalizing a proposal,” it said.