VALLEY FORGE, Pa. — The Markets and Reliability Committee discussed a request from the PJM Board of Managers that stakeholders consider endorsing revising the RTO’s governing documents to transfer filing rights for regional transmission planning from the membership to the board. (See “TOs Considering Handing PJM Transmission Planning Filing Rights,” PJM MRC/MC Briefs: Feb. 22, 2024.)
The proposal comes as members of the Transmission Owners Agreement-Administrative Committee (TOA-AC) discuss similar revisions to the Consolidated Transmission Owners Agreement (CTOA) — moving filing rights over planning matters from the Operating Agreement (OA) to the Tariff.
Any changes to the CTOA would require the approval of the TOA-AC and the Board of Managers, which requested the Members Committee vote on the changes in an April 17 letter to the Organization of PJM States Inc. (OPSI). That vote is slated for the MC’s May 6 meeting.
PJM Director of Stakeholder Affairs Dave Anders said the board’s determination that members should weigh in on the change came after stakeholders voiced concern about how a significant change to the balance of authority between the RTO and its members is being considered, including through letters sent to the PJM board by OPSI and the Consumer Advocates of the PJM States (CAPS).
Jessica Lynch, PJM associate general counsel, said the changes would delete Schedule 6, which details the Regional Transmission Expansion Plan (RTEP) protocol, from the OA and add largely matching language to a new Schedule 19 in the Tariff.
General Counsel Chris O’Hara said if the MC endorsed the revisions and the Board of Managers opted to pursue them, the TOA-AC still would need to agree to corresponding changes to the CTOA. He said the PJM board has not ruled out making a Federal Powers Act (FPA) Section 206 filing asking FERC to grant the RTO filing rights if the MC voted against endorsing the proposed language.
Asked where PJM staff stands on the proposal, Vice President of Planning Paul McGlynn said expanding the RTO’s filing rights could allow it to make necessary planning decisions as the grid faces new realities.
“The system is changing dynamically right now. We’re seeing load growth like we have not seen in years, new generation retiring, new generation interconnecting … I do think it’s appropriate and I’m supportive of moving the protocol into the tariff,” he said.
CAPS Executive Director Gregory Poulos said advocates remain frustrated by the pacing of the changes and the lack of information about their potential impact on transmission costs, one of the largest portions of consumers’ electric bills, he said.
“I think there’s a significant amount of frustration that this is being pushed or rushed upon them,” Poulos said of consumer advocates.
Anders said the Board of Managers has asked that members vote on the changes in May to inform its thinking as the TOA-AC aims to conduct its own vote on the CTOA changes, also in May. Poulos questioned why the timeline the TOA-AC has set for itself appears to be defining the time the board and membership have to deliberate.
Adrien Ford, Constellation Energy’s director of wholesale market development, said it’s important PJM members be provided an opportunity to convey their perspectives to the Board of Managers through an endorsement vote.
Paul Sotkiewicz, president of E-cubed Policy Associates, questioned what members would have to gain by giving up filing rights and said the main difference in having the filing rights in the Tariff over the OA would be granting PJM the ability to override stakeholders with an FPA Section 205 filing.
McGlynn responded that PJM still would intend to go through the full stakeholder process to vet proposals, but that it would more appropriately complement PJM’s role as an independent planner to have filing authority.
Asim Haque, PJM senior vice president of governmental and member services, said last year’s critical issue fast path (CIFP) process focused on resource adequacy underlines how holding filing rights can allow PJM to conduct a stakeholder process to solicit proposals from membership to inform its thinking, but still have the authority to bring a filing to FERC if consensus cannot be found. That power could address goals pursued through the stakeholder process, including bringing renewable generation onto the grid, limiting the number of costly reliability-must-run contracts and reducing the backlog of resources in the interconnection queue.
Sotkiewicz argued the CIFP process is a cautionary tale for stakeholders, as the filings PJM ultimately brought to the commission varied significantly from the options the Members Committee most supported.
“To me you’re making an argument to keep everything in the OA,” he said.
MORGAN CITY, La. — With decades of experience servicing offshore oil and gas rigs, Louisiana manufacturers are finding offshore wind a natural expansion for their businesses.
Louisiana companies making the jump hosted visitors from the 2024 International Partnering Forum for a review of their work to date and a preview of their plans to come April 22.
Each has a different niche they hope to seize, but there was a common message in their presentations: We’ve got this.
Oil and gas are the polar opposite of wind power in more than one sense, but there is some commonality in both industries’ skills and tools.
A fine example is the first U.S. offshore wind farm, Block Island Wind — which Louisiana oil workers helped build.
That synergy is what marine fabricators in Louisiana and elsewhere on the Gulf Coast are looking to exploit.
The hard assets are in place; waterfront land is cheap and plentiful; the all-important human infrastructure and institutional knowledge already exist.
However, offshore wind is less an energy transition than an energy addition in their eyes. They expect oil and gas to thrive for a long time to come, regardless of how many state and national proclamations set net-zero or emissions-free targets for one year or another.
On April 25, the closing day of IPF24, a report suggesting ways for Louisiana to parlay its offshore expertise into wind power was released by the Southeastern Wind Coalition, GNO Inc., Center for Planning Excellence and The Pew Charitable Trusts.
Cindy Cutrera, economic development manager for the Port of Morgan City, said the facility is a crossroads for all forms of transportation, with a small airport; direct rail access and future interstate access to the rest of the nation; and water access to much of the nation and world via the Atchafalaya and Gulf Intracoastal waterways.
“We are at the focal point of waterborne transportation in four directions,” she said.
An assortment of marine industrial activity already is in place along those waterways, Cutrera said, and expansion is planned.
“It’s expected to be completed by the summer of 2026 and that’s going to increase our dock space [with] about 900 feet for waterfront access,” she said, “and the laydown area is going to increase from about 200,000 square feet to about 500,000.”
Offshore wind has little presence so far at the port — Oceaneering International and InterMoor are the extent of it — but there is room to grow.
“For the Port of Morgan City or South Louisiana right now, we see the fabrication side — you’re in the hub of fabrication here,” port Executive Director Raymond “Mac” Wade said.
“Louisiana is still trying to figure it out. I think we might be a little behind, but we are trying to push to get wind energy off the Louisiana coast,” he said. “But if nothing else, a lot of fabrication can be done here. I don’t care where it’s shipped, I just want it done using our waterways.”
Wade noted InterMoor recently shipped an order of suction piles from its Morgan City shop to Guyana.
Expansion Strategies
However eager Gulf Coast manufacturers and officials are to supply the offshore wind industry, the region has been slow to embrace it for electricity.
Last year’s federal auction of wind energy lease areas in the Gulf drew minimal interest, although Louisiana itself secured agreements for two wind farms in state waters in late 2023, shortly before then-Gov. John Bel Edwards (D) left office.
Wayne St. Pierre, InterMoor’s facility manager at Port Fourchon, noted the port is going to be the site of Louisiana’s first commercial-scale onshore wind turbine, and is ramping up to dredging to a 50-foot depth, which would allow the largest offshore wind installation vessels to dock.
Here again, wind energy joins fossil fuel rather than replacing it: The port also is the proposed location for a new LNG export terminal.
“Those vessels that do install windmills are really large. They need a place like this, and we are very close to the Gulf of Mexico. That puts us in a strategic spot to develop this facility,” St. Pierre said.
“It’s going to be wind-driven, obviously, but there’s also going to be a need for topside repair, stuff like that,” he added.
He noted there is not an immediate need: The large wind turbine installation vessels requiring a deepwater berth are foreign-flagged and cannot dock to pick up equipment, thanks to a 104-year-old protectionist law known as the Jones Act.
Instead, a workaround is used — load the equipment onto a barge and take the barge out to the installation vessels. But fans of the Jones Act and opponents of offshore wind are trying to stamp out such subterfuge, St. Pierre said.
“They’re already concentrating on that,” added Carrie Adams, InterMoor’s U.S. general manager. “They’re attempting to make that change to say if you take something off that barge and you put it on that vessel and you move that vessel at all to do an installation, you have violated the Jones Act.
“It is difficult for all of us, not just what the renewables industry looks like, it’s also the oil and gas industry,” she said. “It is becoming more and more of a hindrance to all of us.”
Tom Fulton, head of renewables and mooring development for Acteon, InterMoor’s parent company, said the company built its offshore expertise in oil and gas and moved to offshore wind.
Floating wind is the latest focus for Fulton and Acteon, which is using InterMoor’s experience with moorings as an entry point. It does not have any “steel in the water” for the new floating wind sector but it is close, he said.
Floating wind is more expensive and complicated than the fixed-base wind turbines being installed off the Northeast U.S., and there are few floating wind farms worldwide.
Fulton also pointed out there is no supply chain to produce certain floating wind components at scale. Yet.
“A lot of challenges, but it’s all doable with time, money and innovation,” he said.
Undersea Opportunity
Oceaneering International gave a look at its Morgan City facility, where it maintains some of its remotely operated vehicles and trains their operators.
Oceaneering designs its own hardware and software in an iterative process driven by employee and customer input, senior manager David Macnamara said.
While the machines are not terribly difficult to operate — “Even Dave Mac can fly them,” he said — they are quite expensive, and they are working on critical underwater infrastructure. So, there is little margin for error.
Oceaneering International senior manager David MacNamara shows IPF24 visitors the company’s Isurus remotely operated vehicle at its Morgan City, La., facility on April 22. | Oceaneering International
The company invests four weeks of training in new employees and gives them advanced training as they gain experience and demonstrate competency.
Two flight simulators fill a large portion of a classroom.
“You don’t need a degree to come in here to do this,” Macnamara said. “We’ve had little kids come in on tour and just blow us away with the simulators. There’s a job for you in 10 years.
“We get a lot of young people out of the military,” he added. “The Navy has fantastic A schools and C schools for electronics.”
Instructor Andrew “Putt” Bernard, a retired high school teacher who started a second career at Oceaneering two years ago, uses two once-identical cameras as teaching tools. One is normal, the other was crushed like an empty beer can when the ROV it was mounted upon was taken too deep.
The Isurus ROV is rated for 3,000 meters. “You can always fly lower — once,” Macnamara said.
Oceaneering has not worked on the earliest U.S. offshore wind projects, Macnamara said, but the emerging industry is a natural progression for the company.
“The tools are a very good common fit,” he said.
Oceaneering sees expanding into offshore wind as a growth strategy on top of oil and gas as well as a defensive strategy in case the offshore oil and gas sector does shrink, Macnamara said.
“I don’t think we as a company think we’re going to be ending fossil fuels anytime soon,” he added. “We want to be a player in those [offshore wind] markets as those markets develop.”
Building More Boats
Metal Shark Boats has been building a wide array of work, emergency and military vessels on the Gulf Coast for 36 years. Crew transfer vessels for offshore wind facilities are now taking shape in the company’s Franklin, La., boatyard.
Vice President of Commercial Sales Carl Wegener apologized in advance to the Europeans in the contingent from IPF24, then debunked some skepticism about U.S. shipbuilding capabilities.
“When I hear the Europeans say, oh there’s not enough shipyards in the United States to build all the CTVs we need, bull! I could have four more of these going here right now,” he said, pointing to a gleaming catamaran towering in one of the work bays.
Wegener cited the fleet of 32 ferries plying the East River in New York City. The offshore CTVs that Metal Shark is building are of a similar design but with heavier plating to withstand the controlled collisions they will make with monopile towers.
“We built 22 of the 32 right here in 38 months,” he said.
Wegener said his company cannot supply CTVs for some projects because of states’ efforts to steer work to local companies. He does not think those policies can continue — it would be impossible to build and staff an industrial boatyard in every state that wants one.
A welder works at Metal Shark Boats’ Franklin, La., boatyard. | Metal Shark Boats
Metal Shark has not built the offshore service vessels that are the workhorse of the Gulf oil and gas industry, but it has benefited nonetheless from that sector’s heavy presence.
“We’re really lucky that the [offshore oil and gas industry] started here,” Wegener said. “We’ve got tons of tradespeople, training programs, all the companies, the pipefitting, everything that supports oil and gas, there’s a lot of it in this area. It’s just a culture of workforce and that’s really the advantage the Gulf Coast is going to have over the Northeast.”
He added: “Is it hard for us to find labor? Yeah, but not nearly as hard as for my friends up in Massachusetts, Rhode Island and other areas.”
Additional IPF24 Coverage
Read NetZero Insider’s full coverage of the 2024 International Partnering Forum here:
WASHINGTON — The federal Government in the Sunshine Act was passed to bring decision-making into public view, but when it comes to FERC, it does the opposite, a panel of former chairs said at the Energy Bar Association’s Annual Meeting last week.
Some level of agreement is helpful when the commission acts, but it is more difficult to negotiate when the law, enacted in 1976, forbids more than two commissioners from meeting with each other outside of open meetings, said Cheryl LaFleur (2013-2015 and 2017), now chair of the ISO-NE Board of Directors. In any other job, you would gather the decision-makers together in one place and hash out a complex issue, she said.
But “you couldn’t do that; you have to meet one on one with your commissioners,” LaFleur said. “You couldn’t meet as a group. And I always say FERC is not like the Beatles, [who] grow up playing music [together]. It is like the Monkees or the Spice Girls: five individuals chosen separately, and they say, ‘Go make music.’”
FERC used to effectively work on its orders through discussion during the open meetings — and some state regulatory commissions still do that to an extent, like the Texas Public Utility Commission. But now the meetings are almost entirely choreographed, with even the questions commissioners ask staff and the answers written down ahead of time.
Whether it would be a good idea to go back to the old way split the panel.
“I’m all about it,” said James Danly (2020-2021), now a partner at Skadden. “I love deliberating at the horseshoe; it’s my favorite part of the job. … So I can’t speak to that other era; I wasn’t there for it. I think it would be helpful to have more discussion. I certainly was always happy to do so.”
“I think increasingly, as markets are focused on the commission, people are watching very closely, and we’re talking about billions of dollars in investments that the commission is deciding upon at these meetings,” said Neil Chatterjee (2017 and 2018-2020), now a senior adviser at Hogan Lovells. “And if I’m a general counsel; if I’m a CFO of a company; if I’m a lawyer in the Energy Bar, I very much prefer a boring, stable, staged commission meeting. A curveball could potentially roil markets.”
When Chatterjee was on the commission, it voted on a case involving United Airlines and master-limited partnership taxation, which caused companies’ share prices to crash in real time during an open meeting, he added.
Having a debate could work sometimes when it is an issue around reliability, or another issue where politics are not a major factor, LaFleur said.
“What I wouldn’t want to see is just an opportunity for like political grandstanding, where you weren’t really deciding at the table — you just were kind of making speeches — because I think that would be a step in the wrong direction,” she said.
Actually writing complex orders line by line during an open meeting could easily get chaotic these days, said Richard Glick (2021-2023), principal and co-founder of GQ New Energy Strategies. While the overly scripted nature of the open meetings can get tiresome, going off script has its pitfalls as well, with Glick recalling one time he asked staff an impromptu question and the results were not great.
“I feel badly about it,” he said. “But it’s important to have real give-and-take, real questions, as opposed to everything written down in front of you on a piece of paper, and you just go by a script.”
Norman Bay (2015-2017), now a partner at Willkie Farr & Gallagher, also was against the idea of going back to less scripted meetings, noting that it could give the wrong impression of FERC.
“I think members of the bar want to see a commission that is collegial, that is bipartisan and that works well together, right?” Bay said. “Recognizing that there are going to be times when there are sharp policy differences among the commissioners … I fear that if you do everything publicly, it may send the wrong signal in a way that Neil mentioned. So, I think it’s actually better that we have these very vigorous debates in the background.”
All the commissioners agreed earlier in the panel that it is generally better for FERC to act as one, with Danly saying that is especially true for its more “legislative” powers like rulemakings. But politics can sow division on the regulatory body.
When he joined the commission after being an aide to Sen. Mitch McConnell (R-Ky.), Chatterjee admitted he was still acting like a political operator, especially on the Notice of Proposed Rulemaking that the Department of Energy issued early in the Trump administration that would have paid coal plants extra money and torpedoed years of FERC’s work around markets. He wound up voting against that in the end, but some of his communications to the press were a little too political, he said. (See DOE NOPR Rejected, ‘Resilience’ Debate Turns to RTOs, States.)
But now that the rubber is hitting the road when it comes to decarbonization of the grid, the politics are heightened for reasons outside of any commissioner’s background or personality, Chatterjee said.
“I think larger factors have come into play as questions around decarbonization bump up against reliability,” he said. “It just made it harder and harder to compromise on some of these issues.”
NEW ORLEANS — New York’s latest misadventure with offshore wind was impeccably timed, going public three days before a major industry summit.
Its latest attempt to bounce back was equally well timed, announced one day before the head of the agency leading the state’s offshore wind development gave a keynote speech at the summit.
New York State Energy Research and Development Authority President Doreen Harris said at the 2024 International Partnering Forum that the state is pushing forward and so should the industry.
“I believe we need to take a pragmatic approach to how we face these challenges together, and how we find solutions together that will set us up for long-term success. Now is not the time to be complacent or wait it out, or hope these challenges will go away, or hope that someone else will find an answer.”
Every Atlantic state pursuing offshore wind development from Maryland to Massachusetts has suffered contract or project cancellations. New York, with some of the loftiest goals, arguably has had the worst of it.
Contracts totaling more than 4 GW awarded in the state’s first and second solicitations were doomed in October 2023 when the state rejected a request for higher compensation to developers facing soaring costs. (See NY Rejects Inflation Adjustment for Renewable Projects.)
Provisional contracts totaling just over 4 GW awarded in the third solicitation were canceled because General Electric opted not to bring to market the large turbines planned for those wind farms. (See NY Offshore Wind Plans Implode Again.) That was announced April 19, three days before Oceantic Network convened IPF24.
The steps in response were numerous and prompt.
In November 2023, NYSERDA announced an expedited fourth solicitation to backfill the crater left by the October decision, and that solicitation has since yielded two provisional contracts.
On April 23, NYSERDA issued a call for stakeholders to provide input on its fifth solicitation, which it plans to issue this year. Within that solicitation will be a request for proposals on how to reallocate $300 million in state funding for development of major supply chain components.
“So many of you should see yourselves in the solicitation because it’s focused on the suppliers and how to build them domestically,” Harris told the audience at IPF24’s plenary session April 24.
Meanwhile, the state is looking several years ahead, working on version 2.0 of its Offshore Wind Master Plan, and is looking farther out to sea, in deep water where floating wind turbine technology would be needed.
New York’s offshore wind target still officially is 9 GW by 2035, but that increasingly seems like a placeholder while new lease areas are designated, the supply chain develops, onshore infrastructure is built and better deepwater technology is developed.
“My friends, this is just the beginning,” Harris said.
Multiple Iterations
Each of New York’s offshore wind solicitations has been different from its predecessor. The Request For Information issued April 23 will help determine how different the fifth solicitation is, and in what ways.
The RFI suggests some significant changes. NYSERDA may:
switch to a two-step bid process, with developers submitting initial proposals stripped of any dollar figures and follow-up proposals with price tags after NYSERDA provides feedback on the initial proposals;
impose an information blackout, with no public disclosure of details of proposals or price tags all through the process until after the contract is finalized;
require an award security of $10,000 per megawatt upon contract award;
allow contract delivery term extensions for delays for reasons beyond the developer’s control, such as unavailability of key components or installation vessels;
double the contract security sums;
retain a portion of the contract security if the developer misses project milestones, rather than terminating the contract;
define interconnection cost-sharing thresholds and cost-share allocation consistently across all proposals;
make all offer pricing subject to inflation adjustment to protect ratepayers and limit attrition; and
modify the formula for calculating the inflation adjustment to make it more accurately reflect offshore wind’s levelized cost of electricity.
Harris told NetZero Insider that NYSERDA wants input from the industry on the potential framework for the fifth solicitation outlined in that RFI.
“One of our goals in taking in that feedback is how to accelerate our timeline, our procurement timeline,” she said. “And one of the proposals that we have is to run our generation solicitation separate from the $300 million supply chain solicitation. It will have the benefit of accelerating the timeline of the generation procurement, but it will also — at least as we are theorizing it in this RFI — allow more flexibility for the developers to identify and advance supply chain investments.”
New York has a continuing interest in working with other states to expand that supply chain, she said. The hope is that a region can accomplish more than one state.
“The parochialism of the states has diminished somewhat, and very much we’re seeing this integrated supply chain emerge in ways that could be quite useful,” Harris said. “So, for example, if we have a $300 million supply chain focused on primary components, it very much could be the case that an OEM uses those funds to invest in New York for components that will serve another market. And that’s a good thing.”
Harris said there is a dual role for NYSERDA in focusing on the long goal — preserving a livable state and planet — while dealing with the day-to-day bumps in the road to that goal.
“Focusing on the projects that are under construction, focusing on the jobs that are being obtained, focusing on the benefits that we see coming to our communities, those are tangible and real,” Harris said. “And to me if your eye’s on the horizon, it allows you to pay less attention to the twists and turns that are naturally part of a transition. But you know, we’ve got to respond.”
One thing she is less worried about is an increasingly frequent topic of conversation in the industry: the potential victory in the November presidential election of self-professed wind energy hater former President Donald Trump.
Offshore wind spending is infrastructure spending that enjoys bipartisan support, Harris said, and the money flows freely to red states.
“We actually launched our offshore wind goals during the Trump administration. And it has been extraordinary, actually, how much the industry has grown and changed since that time.”
But no offshore wind projects were permitted during the Trump administration, Harris is reminded.
“Permitting is a different matter,” she acknowledged. “Certainly, we need projects to advance through permitting to enter operations. Yes, we pay close attention to the federal context in that matter, because there’s a necessary intersection.”
Additional IPF24 Coverage
Read NetZero Insider’s full coverage of the 2024 International Partnering Forum here:
DENVER — Backers of the West-Wide Governance Pathways Initiative want to move quickly on the first part of their proposed plan to shift CAISO’s governance to an independent entity, leaders of the effort told Western state energy officials April 25.
The straw proposal released by the Pathways Initiative’s Launch Committee on April 10 outlines a “stepwise” approach for gradually transitioning much of the authority of the ISO’s state-run governance into an independent “regional organization” (RO). (See Western RTO Group Floats Independence Plan for EDAM, WEIM.)
Effecting that transition is the initiative’s key mission as it attempts to lay the groundwork for a single Western electricity market that includes California and builds on CAISO’s Extended Day-Ahead Market (EDAM).
“We’re not talking about market design in this group, we’re talking about governance, and that’s been the box we’ve stayed in,” CalCCA General Counsel and Director of Policy Evie Kahl, co-chair of the Launch Committee’s Functions and Scope Work Group, said at the spring joint conference of the Committee on Regional Electric Power Cooperation and Western Interconnection Regional Advisory Body (CREPC-WIRAB) in downtown Denver.
Kahl was speaking on a panel moderated by Washington Utilities and Transportation Commission member Milt Doumit — also a Launch Committee member.
“The problem we’re trying to solve is a perceived lack of independent governance in today’s CAISO Western Energy Imbalance Market [WEIM] and Extended Day-Ahead Market [EDAM],” Kahl said.
Step 1 of the proposal entails elevating the “joint” authority the WEIM’s Governing Body shares with the ISO’s Board of Governors over WEIM and EDAM matters to “primary” authority, a move that would require FERC approval but not a change to California law, according to legal analysis performed for the Launch Committee.
Launch Committee Co-Chair Pam Sporborg, director of transmission and market services at Portland General Electric (PGE), said Step 1 was built on previous work done by the WEIM’s Governance Review Committee (GRC).
“And that’s one of the reasons we’ve been able to move so quickly into a Step 1 recommendation, because so much of these challenges and discussions have taken place with the GRC,” Sporborg said.
Step 2 would establish the RO as a legal entity and, after passage of required California legislation, transition the Governing Body’s primary authority defined in Step 1 to “sole” authority seated within the RO.
Kahl told RTO Insider that Pathways backers are pushing for CAISO to this summer kick off the stakeholder process that would establish the Governing Body’s primary authority, with the hope the ISO would complete the relevant tariff revisions by late fall.
Waiting on NV Energy
According to the straw proposal, CAISO’s filing of those tariff changes with FERC wouldn’t be triggered until EDAM obtains implementation agreements from a “set of geographically diverse” WEIM participants representing load equal to or greater than 70% of CAISO balancing authority area annual load in 2022.
“Assuming all the entities who have expressed an intent to join EDAM as of April 10, 2024, execute implementation agreements, only one additional utility representing at least 10,000 GWh of load and located in the Southwest would be required to trigger the Step 1 governance transition,” the proposal says.
PacifiCorp on April 26 became the first Western utility to announce it will sign such an agreement. (See related story, PacifiCorp Fully Commits to CAISO’s EDAM.) Other entities signaling their intent to join EDAM include the Balancing Authority of Northern California, Idaho Power, Los Angeles Department of Water and Power, and PGE.
“We are not counting NV Energy in [the assumed commitments], but NV Energy could trip the trigger,” Kahl told state officials.
The Nevada-based utility is expected to decide on a market this year, multiple sources have told RTO Insider. A recent study by The Brattle Group indicated NV Energy would gain significantly more benefits from participating in EDAM than Markets+. (See NV Energy to Reap More from EDAM than Markets+, Report Shows.)
Sporborg said PGE’s decision in favor of EDAM came down to an assessment of customer value based on studies by Brattle and Environmental+Energy Economics that examined benefits based on various market footprints.
“We found that the EDAM footprint would provide benefits to PGE’s customers in all ranges of scenarios,” she said. “We also found Markets+ would provide benefits, but to a lesser extent.”
PGE also determined that unwinding its current participation in the WEIM would reduce its financial benefits by about $20 million annually.
Sporborg also noted PGE is a net purchaser in the electricity market and that “getting the right congestion protections for our load was incredibly important to us in our decision making.”
First Step for Step 2
Kahl said Pathways backers will spend the latter part of the year working with California lawmakers to craft the legislation needed to fulfill Step 2 of the straw proposal, with a bill to be taken up in the 2025 session. Still, the group expects to stand up the new RO as a legal entity by the end of this year.
“We do not need legislation to do that,” she said.
After establishing the RO, Sporborg said, Pathways could seat an independent board and begin to work through market oversight issues.
“I think that legislation helps smooth the path towards the RO’s ultimate destination, but that we can do many things and take a lot of action absent a legislative change,” Sporborg said.
Oregon Public Utility Commission Chair Megan Decker asked Sporborg and Kahl how the Pathways Initiative can sustain its efforts both “financially” and “administratively.” The group, which so far has covered its budget from money pledged by supporters, recently was rejected for an $800,000 grant by the U.S. Department of Energy. (See Pathways Initiative Rejected for $800K in DOE Funding.)
“We were disappointed not to receive a DOE grant, but we do have an opportunity to reapply, and based on the feedback we received [from the DOE], we think that we are in a much better position to have a more detailed and specific proposal,” Sporborg said.
Sporborg added the group likely will seek more contributions from supporters.
“It’s been a real challenge, honestly, to stand up a brand-new organization, without the kind of institutional budget that normally comes with a lot of these efforts,” she said. “I think that’s a unique part of this journey, and something that I’ve been really just glad about, which is the support we’ve gotten from a really diverse group of stakeholders.”
NEW ORLEANS — The headline session of the 2024 International Partnering Forum veered heavily toward celebration and optimism for the U.S. offshore wind energy sector.
There are other ways to view the industry, given its recent growing pains, but one after another, keynote speakers at the IPF24 plenary session emphasized the word “growing” while minimizing the word “pain.”
Roughly 3,400 people from 32 nations attended the four-day summit convened by the Oceantic Network, forming an appreciative audience for this positive message.
Millions of tons of averted carbon emissions and billions of dollars in capital expenditures are riding on the offshore wind industry’s progress, and most attendees at IPF24 have a keen interest in one or both.
“The days of talking about if and when are over. From this day forward, the discussion is centered on how fast and how much can we build,” Oceantic CEO Liz Burdock said. “Have you felt the shift from pilots and plans to industry and action? American offshore wind is venturing into a bold new era.”
Doreen Harris, president of the New York State Energy Research and Development Authority, spoke of both the difficulty of creating this new-to-America energy sector and the importance of succeeding. New York had seen both sides of the coin in previous weeks, with completion of the nation’s first utility-scale offshore wind farm and the collapse of contract talks for three more facilities totaling 4 GW.
“Turns out, doing hard things is hard,” Harris said. “So why in the face of unprecedented challenges should we carry on? Because deep down we know that even in the face of these hurdles, a clean energy future is possible and within reach, and we can very much do it together.”
Deputy U.S. Energy Secretary David Turk spoke of the taxpayer support poured into the renewable energy supply chain.
“This is something we’re not just doing in offshore wind, but we’re doing it in a variety of others. We actually have an industrial strategy,” he said. “Instead of just leaving things to the whim of the market we’re trying to actually influence the market, restore a lot of that capability here in the U.S.”
Turk added: “This is not a test that we can afford to fail … Let us know how we can be helpful, how we can do our part, how we can do even more as we face this absolutely, absolutely critical test.” U.S. Secretary of the Interior Deb Haaland took the stage to emphasize the need to install offshore wind generation in national waters, saying: “Our reality today is abundantly clear. Our mission to build a better, cleaner, more sustainable future has never been more urgent.”
She also made two significant announcements: Interior has set the schedule for a dozen wind energy lease sales through 2028, starting in the Central Atlantic region in August 2024, and has streamlined the regulations on renewable energy development in U.S. waters. (See Interior Announces Updated OSW Regs, Auction Schedule at IPF24.)
Addressing Challenges
But what of the challenges that have proved so stubborn in the past two years?
The problems are real, but they will be overcome, speakers said. A panel discussion at the plenary focused on the lessons learned and moving forward from them.
Bloomberg News reporter Josh Saul, moderating the panel, noted setbacks including the cancellations of three provisional offshore wind contracts in New York, announced just five days earlier. But he also noted that analysts at Bloomberg NEF project a huge buildout in U.S. waters once the sector gets past its early challenges.
He asked BP Offshore Wind Americas President Joshua Weinstein what pinch point he sees, and Weinstein offered not one but two: grid interconnection and ports.
“These are highly localized in nature, both in respect to their footprint and impacts, and it’s really something that at the end of the day, the global supply chain can’t solve for us through balancing measures and other industry opportunities,” Weinstein said.
“But we’re seeing excellent progress, we’ve seen recognition on the part of the states. The Northeast has absolutely been a leader in port development sponsored at the state level, we’ve seen that in multiple states, and also on the grid interconnection side, we’ve seen multiple initiatives over the past couple of years recognizing those limitations … really a recognition of the current and future generation needs of the coastal grid.”
Saul asked Fugro Americas President Céline Gerson how to speed up projects. Better data integration and analysis would be a big help, she said. Uncrewed surface vessels also are very useful, she said. They are operating in the North Sea and could be operating in U.S. waters.
“We’re not able to scale up those types of uncrewed vessels fast enough,” Gerson said. “So, my call to action is, what can we do together so that we can push from a regulatory standpoint the adoption of this type of technology. We’re working closely with the regulators right now.”
Amanda Lefton, an RWE vice president, noted her company holds leases in three regions — the Atlantic, Pacific and Gulf of Mexico — that are very different and therefore have very different technical needs that must be addressed. The Gulf, for example, has lower average wind speeds than either ocean, except during hurricanes.
So, turbines in the Gulf must be able to handle both wind speed extremes.
“We’re going to need to partner with OEMs and others to develop that technology,” Lefton said. “And of course in California, we know that we need to evolve offshore wind for floating technology. And importantly from RWE’s perspective, we see floating technology not as a revolution but as an evolution.
“RWE is no stranger to coming into [a] market and helping develop it from the ground floor.”
Lefton, a former director of the Bureau of Ocean Energy Management, closed on an optimistic note, challenging use of the term “reset” as it so often is applied to the U.S. offshore wind sector.
In the 39 months since President Joe Biden took office, 10 GW of capacity has been permitted in U.S. waters, the Inflation Reduction Act was enacted, promising billions of tax dollars to help build it, South Fork Wind has been completed, construction of Vineyard Wind is well underway, and construction of two more wind farms off the Rhode Island and Virgina coasts is scheduled to begin shortly.
“We’re taking a massive step forward and some steps backwards, but we’re still progressing in the right direction, made really tremendous progress along the way,” Lefton said.
Additional IPF24 Coverage
Read NetZero Insider’s full coverage of the 2024 International Partnering Forum here:
PacifiCorp said April 26 that it will sign an implementation agreement to join CAISO’s Extended Day-Ahead Market (EDAM), making it the first entity to formally commit to either of the two day-ahead markets being offered in the West.
The Portland, Ore.-based company, whose sprawling territory includes portions of six states, was the first utility to join the ISO’s Western Energy Imbalance Market in 2014 and the first to publicly announce its intent to join EDAM in December 2022.
EDAM is currently in a stiff competition for participants with SPP’s Markets+.
“We are excited to formalize our agreement to become a participant in the EDAM,” PacifiCorp CEO Cindy Crane said in a joint announcement with the ISO. “A modern, coordinated day-ahead market in the West is vital to optimizing the region’s energy resources so we can continue to provide reliable and affordable power to our 2 million electricity customers across six states.”
PacifiCorp serves electricity customers in California, Idaho, Oregon, Utah, Washington and Wyoming, owns 10,833 MW of generating capacity, and operates approximately 17,100 miles of transmission. The entity was the first to join CAISO’s Western Energy Imbalance Market in 2014.
Anticipation continues to build in the West over which day-ahead market various entities will join. While PacifiCorp’s announcement marks a major achievement for EDAM, the decision won’t surprise participants in regional market discussions.
Four other entities have indicated interest in joining EDAM. In March, Portland General Electric and Idaho Power signaled their intent to join (See CAISO’s EDAM Scores Key Wins in Contested Northwest.) The Balancing Authority of Northern California and Los Angeles Department of Water and Power have also informed the ISO of their interest in joining.
“The momentum we are seeing for participation in the EDAM is very gratifying, and PacifiCorp’s formal commitment brings better definition to the vision of a regional day-ahead electricity market,” CAISO CEO Elliot Mainzer said in the announcement. “This is a major piece of a truly collaborative effort to support reliability and affordability for electricity customers by leveraging resource diversity and transmission connectivity across the footprint of the Western grid. We now look forward to continuing working with additional valued partners in the West to take the next steps in a fully integrated regional market.”
Markets+ notched a potentially big win this month after Bonneville Power Administration staff recommended the federal power agency choose Markets+ over EDAM, though BPA won’t issue a draft decision until this summer. (SeeBPA Staff Recommends Markets+ over EDAM.)
The Biden administration on April 25 rolled out a new initiative to cut permitting times for interstate and other major transmission projects to two years and announced up to $331 million in support for a 285-mile line that could bring wind energy from Idaho to Nevada and California.
Under the new Coordinated Interagency Authorizations and Permits (CITAP) program, the Department of Energy will take the lead on permitting transmission projects and coordinate environmental and permitting processes between federal agencies, Energy Secretary Jennifer Granholm said during an April 24 press briefing.
DOE’s final rule establishing the CITAP also requires project developers to have comprehensive community participation plans in place before they start the permitting process.
Granholm called the initiative “a huge improvement from the status quo because developers routinely have to navigate several independent permitting processes throughout the federal government.”
Granholm also announced that DOE will start negotiating an offtake contract to purchase up to $331 million in electric power capacity from the Southwest Intertie Project-North (SWIP-N), a 285-mile line that will bring wind energy from Idaho to Nevada and California.
The 2-GW, 500-kV project will provide bidirectional capacity, allowing California and Nevada to send solar and geothermal energy to the Pacific Northwest, according to a DOE fact sheet. The project “will increase grid resilience, especially during wildfires,” Granholm said.
Both announcements reflect DOE’s “holistic, multifaceted approach to grid improvements and to grid expansions,” both of which will be needed to reach a new administration goal of upgrading 100,000 miles of U.S. transmission lines over the next five years, she said during the press briefing.
CITAP
The effort to streamline and speed up transmission permitting began in May 2023, when DOE and eight other federal agencies and councils signed a memorandum of understanding expediting what had become a tortuous process for transmission developers ― and a major bottleneck for interconnecting wind and solar projects to the grid.
Granholm pegged the average permitting time for transmission projects at four years, with some projects taking more than a decade. The poster project for ridiculously long permitting times, Pattern Energy’s SunZia transmission line, now under construction, took 17 years to permit. (See SunZia Project Wins Final Approval, Signs Offtakers.)
CITAP’s two-year limit on permitting is also in line with the Fiscal Responsibility Act, passed in June 2023, which mandated a two-year cap for environmental reviews required for any energy project on federal land under the National Environmental Policy Act (NEPA).
The CITAP program is targeted at “regionally or nationally significant transmission lines” of 230 kV or higher that cross state lines and are expected to require an environmental impact statement, according to DOE. Projects may also be eligible if they are approved by the director of DOE’s Grid Deployment Office, are entirely located in ERCOT or are seeking a construction permit from FERC under specific provisions of the Federal Power Act.
One of the main features of the new program is “an interagency preapplication process to ensure that developer submissions for federal authorizations are ready for review on binding two-year timelines without compromising critical [NEPA] requirements,” according to a DOE press release. The goal is for developers to collect all documentation needed for federal permitting before submitting applications.
The development of a community participation plan for each CITAP project as part of the preapplication process is intended to ensure “meaningful engagement with tribes, states, local communities and other stakeholders,” according to DOE.
The department will coordinate with all relevant federal agencies to produce a single NEPA review to reduce duplication of efforts. The CITAP program will be open to state permitting authorities, which will be able to use final NEPA reviews in their own decision-making processes.
However, CITAP will not affect state permitting authorities, according to a senior administration official speaking on background.
Coordination between agencies and developers will be handled via an online portal, where developers will be able to upload required documentation and other information. Federal agencies will then be able to review those submissions and provide feedback if changes or further information is needed.
“If you’re a grid wonk, CITAP is the coolest thing since sliced bread,” National Climate Advisor Ali Zaidi said during the press briefing. “What Secretary Granholm has done here is a very path-breaking and inventive approach to getting the grid built out at the speed and scale we need.”
Southwest Intertie
SWIP-N will be the fourth project DOE has supported through its Transmission Facilitation Program (TFP), launched in October 2023.
At the time, DOE announced it would be investing $1.5 billion in federal funds to become an anchor off-taker for three interstate transmission projects that together could add 3.5 GW of capacity to the grid. (See DOE to Sign up as Off-taker for 3 Transmission Projects.)
Authorized in the Infrastructure Investment and Jobs Act, the TFP has a revolving fund of $2.5 billion to “help overcome the financial hurdles associated with building new, large-scale transmission lines and upgrading existing transmission lines,” DOE said. Having the department as an anchor off-taker may both increase investor confidence and encourage other customers to purchase capacity from the project.
Developed by Great Basin Transmission, a subsidiary of LS Power, SWIP-N could add 2 GW of capacity to the Western grid. According to DOE’s National Transmission Needs Study, an additional 3.3 GW of transfer capacity will be needed between the Mountain and Northwest regions by 2035; SWIP-N could cover 58% of that total, the department said.
SWIP-N is the final, northern section of a larger project including both the 60-mile Desert Link line and the 231-mile One Nevada project, both of which are in operation. Construction on SWIP-N will also include an upgrade for a key Nevada substation that could add another gigawatt of capacity on the One Nevada line.
Having DOE as an off-taker for SWIP-N could provide “an anchor that will allow us to move forward more quickly with procurement activities and securing slots for long-lead equipment, thereby proceeding to construction and placing the project in service faster than otherwise possible,” said Paul Thessen, president of LS Power Development.
The company anticipates beginning construction on the project in 2025 and bringing it online in 2027.
Categorical Exclusions
In another move to streamline project permitting, DOE announced an additional final rule April 25 updating its guidelines for issuing “categorical exclusions” for environmental reviews of certain categories of clean energy projects.
A categorical exclusion is granted when DOE determines that a category or specific kind of project or action will have no significant environmental impact. Expanding the kinds of projects that qualify for exclusions will “reduce the cost and time for environmental analysis incurred by DOE, project developers and the public,” according to the announcement press release.
In a major push for the updating of transmission lines, DOE widened the categorical exclusion for such projects by lifting the existing 20-mile cap on the length of a transmission line upgrade that can qualify for an exclusion. The new rule also allows exclusions for transmission upgrades involving a relocation within an existing right-of-way or within previously disturbed or developed land.
The rule specifically refers to reconductoring projects ― installing advanced conductors to expand line capacity ― as a kind of grid upgrade that could be given categorical exclusions.
For energy storage systems, the new rule allows for categorical exclusions for the construction, operation, upgrade or decommissioning of battery or flywheel storage systems located either within or adjacent to a previously disturbed or developed area.
DOE issued a categorical exclusion for solar photovoltaic projects on previously disturbed or developed land in 2011, limiting the exclusion to projects of 10 acres or less. This rule has been updated to remove the cap on project size.
The department noted it was basing the changes on its “years of experience evaluating the environmental impacts of these types of projects” but will “continue to look closely at each proposed project while being able to complete its environmental review in a faster and less expensive manner.”
FERC this week proposed ordering utilities to adopt the latest version of the North American Energy Standards Board’s (NAESB) Standards for Business Practices and Communication Protocols for Public Utilities, soliciting feedback on the plan from stakeholders (RM05-5).
In its Notice of Proposed Rulemaking, the commission said adopting version 004 of the NAESB standards “would enhance the electric industries’ systems and software security measures and improve efficiencies of certain business processes transactions.” Stakeholders have until 60 days after the NOPR’s publication in the Federal Register to submit their comments.
NAESB published version 004 on July 31, 2023, after their development by the organization’s Wholesale Electric Quadrant (WEQ), filing them with FERC the same day. Version 004 contains a mix of newly created standards and modifications to existing standards, building on version 003.3, which FERC adopted in 2021. (See NAESB Standards Gain Final FERC Approval.)
Standards to be modified in version 004 are:
WEQ-000: Abbreviations, acronyms and definition of terms
WEQ-001: Open access same-time information system (OASIS)
WEQ-002: OASIS Standards and Communication Protocol (S&CP)
WEQ-003: OASIS data dictionary
WEQ-004: Coordinate interchange
WEQ-005: Area control error equation special cases
WEQ-010: Contracts related business practice standards
WEQ-012: Public Key Infrastructure (PKI)
WEQ-013: OASIS implementation guide
WEQ-015: Measurement and verification of wholesale electricity demand response
WEQ-021: Measurement and verification of energy efficiency products
WEQ-022: Electric industry registry
WEQ-023: Modeling
FERC’s NOPR proposed not to incorporate WEQ-010, a move the commission said is “consistent with our past practice of not incorporating … any optional model contracts and related documents because we do not require the use of these contracts.”
In addition, FERC said it plans not to include one of the two new sets of standards in the latest version. WEQ-025 (Grid services supporting wholesale electric interactions) aims “to promote greater consistency in wholesale market interactions and communication exchanges by … resources such as distributed energy resources and batteries.” A recommendation from the Department of Energy inspired these standards, joined by Lawrence Berkeley National Laboratory and Pacific Northwest National Laboratory.
The WEQ-025 standards group operations-based grid services currently used in wholesale markets into six categories: energy grid service, reserve grid service, regulation grid service, frequency response grid service, voltage management grid service and black start grid service. They also lay out which attributes system operators may use to define requirements for services within their wholesale electricity markets, establishing a technology-neutral framework to account for the varying names for similar grid services in various markets.
FERC said it recognizes the motivation for the grid services standards but said WEQ-025 could create confusion because of the use of terms that are similar to those used in FERC’s pro forma Open Access Transmission Tariff.
The other new standard family, WEQ-024 — which is proposed for adoption — “reorganizes existing NAESB cybersecurity business practice standards” in response to a recommendation from DOE and Sandia National Laboratories. FERC said the consolidation should make it easier for NAESB and the commission to revise cybersecurity standards “to help match the fast pace of changes in cybersecurity practices.”
The North American electric and natural gas systems survived this year’s Arctic storms with no major incidents, demonstrating significant progress from the performance issues in previous severe winter events, FERC and NERC staff said at the commission’s open meeting this week.
However, the presenters said there still is considerable room for improvement and both industries continue to face challenges from extreme cold weather and the impacts of climate change.
The winter storms, also known as Gerri and Heather, began on Jan. 10, according to Chanel Chasanov from FERC’s Office of the General Counsel. Gerri entered the picture first, moving through the Pacific Northwest, across the Rocky Mountains and into the Midwest, and then up through the Great Lakes region and into southern Canada on Jan. 13. That same day, Heather developed, also beginning in the Pacific Northwest but taking “a more southern route” through Texas, Oklahoma and Tennessee before sweeping into the Mid-Atlantic and ending in Canada on Jan. 17.
Both Gerri and Heather brought “frigid cold, high winds, heavy snow and in some places freezing precipitation,” Chasanov said. But while the cold weather caused some challenges to gas and electric reliability, there was no operator-initiated load shed and generators reported fewer derates and outages than in other recent cold weather events such as winter storm Uri in 2021 and 2022’s Winter Storm Elliott.
FERC, NERC and the regional entities launched a review in February of the electric grid and natural gas system’s performance during Gerri and Heather in order to determine the progress made since the “unacceptable” performance during Elliott. (See FERC-NERC Elliott Report Calls Winter Outages ‘Unacceptable’.) Chasanov said that because there were no major incidents to focus on, the team chose “a more qualitative approach” informed mainly by voluntary interviews with grid operators and staff presentations than the quantitative approach favored in previous years.
The report found that conditions during the storms generally were less severe than those seen in Uri and Elliott, which contributed to the system’s performance. For example, entities encountered less freezing precipitation than in the previous incidents and did not see wind turbine blades ice up to the extent they did in Elliott.
However, presenters noted that the hardest-hit area in January was the Pacific Northwest, where Chasanov said winters typically are mild and utilities “had limited operational experience in dealing with these … conditions” compared to their counterparts in the Eastern Interconnection. Entities in this region reported the temperatures of Gerri and Heather represented a “one-in-30-years cold event,” with record lows experienced in parts of Oregon and Washington.
Matt Lewis, NERC’s manager of event analysis, said “neighboring reliability coordinators and balancing authorities worked closely” on their winter response measures before and during the storms, holding daily conference calls beginning seven days before the onset of severe weather.
“These entities noted that this practice provided a higher level of situational awareness than they experienced during Uri and Elliott and improved their ability to make more informed reliability decisions,” Lewis said. “Additionally, based on lessons learned, one grid operator’s executive team met daily during Gerri and Heather to communicate operating plans … from staff [in] generation and transmission operations to the control center in natural gas scheduling.”
Robert Clark from FERC’s Office of Electric Reliability said the performance of the natural gas system “validates the important recommendations and lessons learned from” the reports on Uri and Elliott, as well as the joint report on black-start resource availability released last December. (See FERC Black Start Report Pushes Gas-electric Coordination.)
While the storms “triggered a rise in natural gas demand, coupled with a nearly simultaneous plummet in … production” as seen in previous events, Clark said gas entities proactively reached out to the public to communicate current operating conditions and appeal for conservation. Utilities also worked to prevent outages by increasing pipeline pressures ahead of time to ensure the presence of gas where needed, including for electric generation.
“The natural gas system experienced fewer disruptions during Gerri and Heather as compared to Uri and Elliott,” but the experience of January “demonstrated the benefit of advanced preparations, diversity of natural gas supplies, [and] natural gas storage and reinforce the need to continue implementing the recommendations from” previous reports, Clark said.
FERC Chair Willie Phillips thanked the presenters, joking that the positive news allowed him to wear his “happy face,” rather than the “determined face” he used for previous winter storm reports. He emphasized that winter preparedness “remains a priority” for the commission and called for stakeholders to continue implementing the recommendations issued after Uri and Elliott, while reiterating his support for an organization to ensure reliability in the natural gas industry.
In a statement, NERC CEO Jim Robb said the report indicated “the industry prepared and got ready for the Arctic cold” ahead of January’s storms.
“I am confident that the winter reliability requirements in [NERC’s] cold weather standards are providing clarity and the winter preparation support NERC and the regional entities are providing is making a difference in generation performance during cold weather events, but as the chairman notes, there is still much left to do,” Robb added.
