ATLANTA — The ballroom at NERC’s Human Performance Conference was pin-drop quiet Wednesday as Joseph W. Pfeifer, former chief of counterterrorism and emergency preparedness for the New York City Fire Department, gave an hourlong speech recounting his experience leading firefighters into the World Trade Center on Sept. 11, 2001.
Pfeifer’s experience was captured in brothers Gédéon and Jules Naudet’s documentary, “9/11.”
One of the filmmakers accompanied Pfeifer, then a battalion chief, as he and his men rushed to the World Trade Center after the North Tower was hit by the first highjacked airliner at 8:46 a.m. The film captured the chaos and confusion when the second plane hit the South Tower at 9:03 a.m., then the collapse of the South Tower at 9:59 a.m., which left the glass-walled lobby of the North Tower pitch black.
It was then that Pfeifer ordered his firefighters to abandon rescue efforts and evacuate the North Tower, he told the conference, which was co-hosted by the Department of Energy and the North American Transmission Forum.
“That sounds like a simple order when you look back in hindsight. I had no idea that the whole [South Tower] had collapsed. I thought the only people in trouble were us. But giving an order where you are pulling the rescuers out and leaving a thousand people behind is not an easy order at all. But it’s using that two parts of the brain — the intuitive part and the analytical part.”
Pfeifer was back out on the street when the second tower collapsed at 10:28 a.m., sending him and others running away.
Pfeifer said the event illustrated “organizational bias” — how firefighters, EMTs and police tend to stay in their own groups even when working together.
Battalion Chief Joseph W. Pfeifer at the World Trade Center on 9/11 before the collapse of the South Tower | Jules and Gédéon Naudet
After the first tower collapsed, police in a helicopter circling the North Tower reported that the building’s top 15 floors were “turning red” and the corner of the building was starting to buckle. “‘Pull everybody back three blocks,’” Pfeifer said the copter warned, fearing the second building’s collapse.
“That message never got through to the fire department, and the fire department never asked,” Pfeifer said. “Here you have two great organizations — NYPD and FDNY — and they didn’t talk to each other at the most critical time.”
Some 71 law enforcement officers and 343 firefighters — including Pfeifer’s brother — died that day, along with almost 3,000 civilians. Among those killed were the top-ranking firefighter on the scene and other command chiefs.
“We had no command staff. They were all gone. So how do you re-establish command?” Pfeifer asked.
Battalion Chief Joseph W. Pfeifer (right) and other commanders at the World Trade Center command post on 9/11 | Jules and Gédéon Naudet
After the second building toppled, Pfeifer recalled, his immediate boss, Deputy Assistant Chief Peter Hayden, got on top of a burned-out fire truck and gathered the surviving firefighters and reinforcements together.
“The chief said, ‘I want you to take off your helmets, and we’re going to have a moment of silence, because we lost a lot of people today,’” Pfeifer recalled. “And we took off our helmets.
“And then he asked us to put back on our helmets. And in the moment of putting back on the helmets, he re-established command, because there was a lot of stuff to do. There were rescues to be made, and fires to be put out. But what he did, he used what I’m calling now ‘crisis empathy.’ … He listened to what we were feeling.
“We knew it was bad, and we knew we lost a lot of people, but by him being able to recognize that and then articulate it, [it] made all the difference in the world and it re-established command. So, sometimes those small gestures mean a lot more than it sounds.”
In a case that’s grown increasingly convoluted, state regulators last week granted two of the approvals Public Service Company of New Mexico (PNM) had requested to join CAISO’s Western Energy Imbalance Market, but they denied one concession the utility deemed key (18-00261-UT).
The New Mexico Public Regulation Commission found that PNM had complied with state filing requirements and authorized the utility to create a regulatory asset that would allow it to seek cost recovery in a future rate case.
The commission had approved the same two requests for joining the EIM in December, but it vacated the order in February and reconsidered the matter, to the surprise of PNM and environmental groups that supported the move.
Public Service Company of New Mexico has sought to join the Western EIM partly because it facilitates trade in renewable power across the West. | PNM
In its latest order, issued Wednesday, the PRC balked at a third request by New Mexico’s largest utility to “find that it is reasonable to join the EIM and expend necessary funds to do so.” The commission decided PNM was asking it to approve the costs to join the market in advance, without proof of a net public benefit.
PNM estimated it would incur about $29 million in capital costs and expenses, including for 19 new staff positions and computer systems.
“No party objects to the most obvious interpretation [of the reasonableness request], i.e. that PNM seeks approval to join the EIM. But PNM states that it is not seeking commission approval to join the EIM,” Hearing Examiner Ashley Schannauer wrote in her recommended decision, which the PRC’s five commissioners unanimously adopted.
PNM contended it didn’t need the PRC’s approval to join the EIM because it wasn’t necessary for the provision of adequate service, nor was it required by any commission rule or regulatory mandate.
What the utility wanted, Schannauer wrote, amounted to a guarantee that it would get reimbursement of its expenses plus a return on its investment in the form of profits. The hearing examiner concluded PNM was trying to shift the financial risk of joining the EIM from its shareholders to ratepayers.
“PNM asks that it be allowed to recover its costs as long as they are consistent with the estimates provided in this case and as long as the specific costs it incurs are reasonable,” Schannauer wrote. “Ratepayers would be required to pay all of those costs whether the EIM actually produces savings or not.”
The commission agreed with Schannauer that it lacked legal authority to approve “ratemaking treatment in advance of a rate case.” Regulators in other states hadn’t granted their utilities such preferential treatment for joining the EIM, the PRC noted. In a 2014 filing with Oregon regulators, PacifiCorp, the EIM’s first member, asked to defer until a future general rate case the recovery of $20 million in start-up costs required to bring its six-state system into the market.
PNM issued a statement saying it was “profoundly disappointed” that the PRC hadn’t clearly acknowledged the prudency of joining the EIM.
“Membership in the EIM has resulted in cost savings exceeding a half billion dollars for utility companies’ customers since 2014,” PNM said. “In New Mexico, that would produce savings conservatively projected at $10 million annually for PNM customers, increasing to over $20 million annually in the next decade.”
Convoluted Case
The case has taken a series of unexpected turns since PNM declared its intent to join the EIM last August. (See PNM Seeks to Join Energy Imbalance Market.) Initially it seemed as if the utility were merely looking for a nod of approval from regulators, along with a mechanism for eventually recovering its upfront costs.
PNM serves more than 500,000 customers across New Mexico. | PNM
The EIM is entirely voluntary and largely noncontroversial. Proponents have credited the intra-hour, interstate market with increasing the exchange of electricity among Western states, especially power generated from wind and solar resources, and with saving its participants nearly $565 million in the past five years.
On Dec. 19, the commission approved PNM’s application to join the EIM and said the utility’s next general rate case would bear the burden of showing its costs were reasonable and consistent with the estimates presented to the PRC. (See New Mexico Regulators Say PNM Can Join EIM.)
In that decision, the PRC acknowledged staff’s recommendation “that the commission make clear that approval to create the regulatory asset is not a guarantee that the actual costs will be found to be reasonable or prudent. Staff notes that PNM will have the opportunity to support the reasonableness of those costs during its next general rate case and further notes that PNM has acknowledged that the commission will retain final ratemaking review and authority over costs in PNM’s next rate case.”
Then, in mid-January, the Albuquerque Bernalillo County Water Utility Authority, which had opposed the creation of a regulatory asset all along, asked the PRC to reconsider its December order. The commission granted that request Feb. 6 after two new commissioners were sworn in. The news had worried EIM backers that it could delay PNM’s membership in the market for another year and cost ratepayers $10 million in projected annual benefits. (See State Regulators to Re-examine PNM’s EIM Membership.)
Latest Order
The PRC dealt with the matter on an expedited schedule to meet the April 1 deadline.
In its Wednesday order, the PRC said it “does not oppose” PNM joining the EIM, and it gave PNM authority, in the form of an accounting order, to create a regulatory asset to record its expenses and to seek compensation.
However, the commission said the utility’s EIM-related costs and the reasonableness of its expenditures should be decided in the future rate case.
“Preapproval of reasonableness at this juncture in the case would be premature, given that a future determination ultimately must be made that such costs are proven to be reasonable or unreasonable,” the commission said.
It ordered PNM to file annual reports of its EIM costs and savings and CAISO’s quarterly reports on EIM benefits.
PNM did not say if still intended to move forward with joining the EIM in 2021. (See New Mexico Moves Toward Clean Energy, EIM Participation.) “We will not have any further comment until we have time to fully review and evaluate the final order,” the utility said in an email.
ATLANTA — When NERC considers a new reliability standard, it convenes drafting teams heavy on engineering expertise and system operations. But for its eighth annual Human Performance Conference last week, NERC brought in firefighters, psychologists and speakers from the airline industry to provide lessons.
“We find that all industries have people, people who actually operate the same way, whether they’re moving electrons or moving aircraft,” explained NERC Vice President and Director of Reliability Risk Management James Merlo, who served as master of ceremonies for the three-day event, co-hosted by the Department of Energy and the North American Transmission Forum (NATF).
The conference attracted more than 400 attendees from 180 organizations, including linemen, control room operators — and at least one utility billing analyst, who said he attended because his company uses root-cause analysis on billing errors.
At the beginning of the conference, NERC CEO Jim Robb signed a new memorandum of understanding with NATF, whose 7,400 subject matter experts conduct peer reviews to promote “excellence and continual improvement.”
The nearly 90 companies in NATF operate 80% of transmission of 200-kV and higher. “It’s an impactful set of members,” NATF CEO Tom Galloway said. “If we get the forum oriented on a topic, we can typically move the ball forward pretty well.”
Representatives of MISO, Arizona Public Service and Tri-State Generation and Transmission Association shared their experiences with inviting NATF to visit.
MISO’s John Rymer, who formerly worked in transmission substation operations for Duke Energy, said he asked NATF to help transfer human performance (HP) tools from the field to the RTO’s control room. “These assistance visits really help you pinpoint where you need to concentrate your efforts,” he said.
Rymer said he is looking for “low-hanging fruit” in spreading the HP message in real-time and control-room operations first. “You can move that upstream or downstream in our organization, because engineering, IT, all these groups, can utilize the same tools,” he said.
Sage Williams, manager of Tri-State’s Eastern maintenance region, agreed. “HP can affect not just field guys. It’s your entire organization: engineering, system operations,” he said.
Sharing Mistakes, Using Technology
Digger derricks — utility trucks with augers for digging holes for poles and boom-mounted hydraulic lifts for working on wires — played supporting roles in stories by several speakers who shared mistakes they made as linemen.
In a talk titled, “How strong character improves safety and reliability,” former lineman Jeff White, now an HP consultant with Applied Learning Science, recounted how his truck flipped on its side when soft ground gave way underneath its outriggers while he was installing a pole on a new golf course.
After the crew used a second truck to get the first one back on its tires and wiped off the mud, the lead lineman told White and the other crew members not to report the incident. “‘This was a nonevent. What you just witnessed, erase from your memory.’”
White initially agreed, but after a sleepless night, he told his foreman of the incident the next day, fearful that the truck might have sustained unseen damage that could result in an injury to another worker.
“What if the bolts on that turntable — half of them are broken and we can’t see them? What if there’s factures in that steel that we can’t see? I need to speak up,” White said.
In another presentation, MidAmerican Energy displayed 3D recreations of field accidents, crafted by 3DInternet.
Mike Buntz, a MidAmerican line crew foreman, narrated an animation of a near tragedy that occurred while replacing a rotten utility pole. The truck became fully energized when its boom contacted an overhead wire, setting the grass around it on fire. Luckily, no one was injured.
“It wasn’t one of my prouder moments,” Buntz said. “But I agreed [to participate in the animation] hoping that I could help somebody down the road.”
“One of the things that we learned about using these 3D animations is it helps us to have a better appreciation of what actions made sense at the time … what happened and why,” said Sam Reno, MidAmerican’s performance improvement program manager. MidAmerican also is using GoPro cameras mounted on hardhats to produce training videos.
He demonstrated a pilot program using visualization technology that turns an iPad into a situational awareness tool that shows real-time data on substation equipment’s health and other metrics.
Jackson said the tools can help utilities deal with the loss of experience as more of their aging workforce retires.
“We think that this really helps our guys build a deeper knowledge of the tasks and how to do it right,” he said. “We also think there’s an application potential for everything from troubleshooting to [simulations of] high-risk tasks.”
Michelle Miller and former colleague Monika Bay recounted their efforts to improve worker safety at Baltimore Gas and Electric after the electrocution of a worker at a substation.
“You can have the best intervention design in the world, but if you cannot convey it in a way that connects with the head and the heart of these front-line empl
oyees you will not be successful,” said Bay, who left BGE a year ago to start her own company, Safety & Operational Risk Solutions.
Bay said sustaining improvement “is by far the hardest part. This is really about line leaders keeping the language alive — keeping these concepts alive in their own workgroups.”
After her and Miller’s work, workers in the field started bringing risks to them, Bay said.
One such issue: the potentially fatal consequences of confusing a black, yellow-striped electric line with a nearly identical black, yellow-striped, three-quarters-inch, high-pressure, plastic gas pipe.
At BGE, gas lines are supposed to be buried 2 feet below ground, with electrical lines a foot below them. In practice, however, the lines can get transposed, meaning a worker expecting to cut a gas line could end up getting electrocuted by cutting the electric cable. The only apparent difference between the two: The gas pipe has four stripes; the electric cable only three.
“It’s 2 o’clock in the morning, I’m a gas mechanic, I’m 2 feet down in the hole, it’s raining and muddy, and I’m going to tell the difference?” Bay said.
“It wasn’t just this: We had 16 pairs of assets where the gas and electric looked very similar.”
Although BGE had changed to all yellow gas service pipe about 1998, the risk of confusion remained with older pipe. In response, Bay said, BGE formed a joint team of field workers, engineers and training personnel to address the risk through enhanced training, instrumentation and work practices.
“System design often puts risk into the hands of the employees,” she said. “Sometimes we don’t know some of the risk that front-line guys are dealing with because they’re just dealing with it.”
Lessons from the Airlines
Christian Vehrs of Delta Air Lines used an example of how a fuel heater valve was confused with a nearly identical engine anti-icing valve because of time pressures, insufficient paperwork, unfamiliarity with the task, and confirmation bias.
David Marx of Outcome Engenuity used dice to illustrate resilient systems. The more dice you roll, he said, the more redundancy — like setting multiple alarm clocks to prevent oversleeping.
The redundancy provided by multiple “dice” is essential in aeronautics, he said, because while Federal Aviation Administration rules require a 1 in 1 billion chance of failure, “nobody can design a part that will never fail.”
Marx used the experience of pilot Chesley “Sully” Sullenberger, who famously landed his Airbus A320 on the Hudson River when his engines failed after striking a flock of Canada geese shortly after takeoff from LaGuardia Airport in 2009.
Airline engines are expected to fail only once in every 50,000 hours. Because planes must have two engines, the chances of both failing simultaneously should be 50,0002, or 1 in 2.5 billion, Marx noted.
In Sullenberger’s case, however, LaGuardia was near a landfill that attracted birds, meaning the dice were “stuck together,” Marx said. (Airport officials increased their bird-killing programs after the incident.)
In another example, Marx cited a woman who died in 2017 after mistakenly being given a paralytic, vecuronium, instead of the mild sedative midazolam — marketed under the brand name Versed — that had been prescribed for her during a PET scan.
Hospital procedures set four “dice,” starting with an automated dispensary stocked with the drugs. A nurse mistakenly chose the wrong drug when the autocomplete function gave her options after typing the letters “V-E.”
The nurse then failed to check the drug at the dispensary or later when she delivered it to the patient. Finally, the fourth die was the nurse’s failure to remain with the patient to monitor her reaction to the drug.
“What should have been four dice became one,” he said — the active failure of choosing the wrong drug compounded by the nurse’s failure to perform the other three safeguards. The nurse is now facing reckless homicide charges.
Marx said the incident illustrated why many of us ignore speed-limit signs but slow down when we see a police car.
“We are not inherently rule followers; we are hazard and threat avoiders,” he said. “The police officer represents consequence. The sign just represents the rule.”
Lessons from the Football Field
Dave Sowers of KnowledgeVine used a video of the play known as the “Prayer at Jordan-Hare” — Auburn University quarterback Nick Marshall’s unlikely 2013 game-winning touchdown pass over the University of Georgia — in a discussion on the role of luck.
It was 4th and 18 with 36 seconds left in the fourth quarter. Auburn Head Coach Gus Malzahn called for a pass to get the first down, which would have put the team into field goal range. And the intended receiver was wide open as a second receiver went deep, drawing triple coverage. Marshall unwisely threw the ball to the deeper receiver, but two of the Georgia defenders collided, one tipping the ball into the hands of the receiver, who ran into the end zone untouched.
Marshall was lucky in that instance, but his gunslinger judgment ultimately proved his undoing, as too many of his passes ended up intercepted. “That’s why he’s not playing on Sundays” in the NFL, Sowers said. Instead, he plays for the Canadian Football League’s Saskatchewan Roughriders.
HP in the Control Room
Mohammed Alfayyoumi recounted the changes he made since becoming director of Dominion Energy’s transmission system operations center.
He spread out the workload by scheduling switching orders throughout the week rather than having them all on Mondays. He doubled the operations staff to four per shift after benchmarking Dominion’s staffing against similar-sized utilities.
He also increased simulator training, began near-miss reporting and training in root-cause analysis, and eliminated work that didn’t add value by automating 6,000 phone calls per week.
Operator hiring was improved by adding testing and screening, including more complex behavioral interviews.
“We invest a lot in steel and copper but not a lot in humans,” Alfayyoumi said. “Operator selection is vital to human performance, because you cannot fix poor selection. If you hire the wrong operator, there’s nothing you can do to make him better,” he said.
Adaptive vs. Procedural Systems
Consultant Jake Mazulewicz made the case for “adaptive” over “procedural” systems, recounting a conversation with an employee for an unnamed company who complained it had become excessively dependent on procedures.
“He said when an incident happens, even something small — someone cuts themselves with a knife, no stitches, very small stuff — everybody hears about it. And within two or three weeks you can bet your next paycheck that [the] safety and training [department] is going to say … ‘Here’s a new and updated procedure to make sure that never happens again.’
“Nobody even bothers reading the new procedures … because it doesn’t matter, because it’s going to change,” Mazulewicz continued.
Under system-based thinking, he said, “when you see an error … you don’t think who’s wrong, you think that’s a signal that my … system could use some improvement. … Almost every incident we’re talking about is triggered by human error, but it’s caused by a whole lot of other things: latent organizational weaknesses, previous decisions, things like that.
“How do you minimize errors in a system-based thinking? You improve your system. … You make it hard for people to do the wrong thing, and you make it easy for people to do the right thing.”
ST. PAUL, Minn. — The Midwest Reliability Organization is winding down transition activities after a year of expansion that doubled its territory and regulatory responsibility.
The organization’s Board of Directors voted unanimously Thursday to approve the dissolution of a special oversight committee on the transition of former SPP Regional Entity members to MRO.
Board Chair Silvia Parada Mitchell opened the meeting with an analogy related to weather in Minnesota’s Twin Cities, which were experiencing the first warm days of spring. The board last met during the snowiest February on record for St. Paul, when 9 inches of fresh snow prevented some board members from appearing in person. She likened the weather change to MRO’s recent transformation.
“For us in 2019, that’s what we’re seeing in MRO. We are thriving with the opportunities of last year, and we will continue to thrive,” Parada Mitchell said. “I think this is a great beginning.”
Parada Mitchell pointed to the “expanded and more diverse board,” which now consists of 23 members after MRO leadership added both independent and regional stakeholders to represent newly joining entities.
Board members at the Thursday meeting were arranged in a new roundtable seating format to make it “more inclusive,” Parada Mitchell said.
MRO’s annual report noted the expansion “essentially doubled MRO’s regional footprint and regulatory responsibilities.” The merger “necessitated numerous governance and policy changes” and “provided us the opportunity to rethink MRO’s structure,” Parada Mitchell said.
SPP dissolved its regional entity in late August after citing a mismatch its footprint and that of the RE. MRO took most of its members, with SERC Reliability signing on the remainder. (See SPP Closes Book on Regional Entity.) The move provided MRO with about 100 SPP registered entities and territory in Kansas and Oklahoma, along with parts of Missouri, Arkansas, Louisiana, Texas and New Mexico.
MRO began 2018 with 102 registered entities performing 326 reliability functions and closed the year with 194 registered entities performing 556 reliability functions.
MRO President and CEO Sara Patrick said the organization is currently sharing its lessons learned and transition advice as SERC prepares to absorb the dissolving Florida Reliability Coordinating Council in early summer.
“We’ve been working with SERC to share our experiences,” Patrick said.
MRO in 2018 managed two separate budgets: its usual, preapproved annual budget, and about $2.1 million in transition-related costs, which will be covered by a transfer of assessments from SPP RE. To handle the transition, MRO hired 12 additional staff members and remodeled its St. Paul offices. MRO originally budgeted $1.5 million for the transition.
The merger had impacts on MRO’s 2018 financial performance and revenues. Last year, the organization recorded $15.6 million in operating revenue and $13.5 million in operating expenses, with about $2.7 million in operating income. Baker Tilly partner Nicki Donlon, who completed a February financial audit of 2018 expenses, called the performance a “healthy balance sheet.” Expenses were in excess of MRO’s original $11.7 million budget for 2018. Taken together, the two budgets exceeded the organization’s FERC-approved budget by about 9%.
The organization also recorded about $9 million in assets and $3.7 million in liabilities. By contrast, it had $6 million in assets and roughly $3.5 million in liabilities in 2017, with $10.7 million in operating revenue and $10.8 million in operating expenses, resulting in a small loss in operating income.
MRO said this year it will focus on integrating even more new registered entities. The organization has forecasted spending about $16 million during the year.
Ron Gunderson, chair of the organization’s Reliability Advisory Council, said his group this year will also focus on “near misses” in addition to the usual focus on outright reliability violations. He said the group is interested in events that almost — but not quite — rise to reliability issues.
MRO General Counsel Miggie Cramblit said the organization will also work in 2019 to make introductions to state regulators to increase awareness of its reliability role.
“There’s some confusion that we are MISO instead of MRO,” Cramblit said.
Staff also said they’re considering hosting future workshops and conferences in more southern locations in order to accommodate new members.
CARMEL, Ind. — MISO may have to contend with security concerns, communication constraints and even the eventual phaseout of the vertically integrated utility model as it strives to manage a grid with growing amounts of distributed energy resources.
Those possible scenarios were laid out March 26 at the latest in a series of educational workshops hosted by the RTO and the Organization of MISO States. The events are a precursor to MISO bringing discussion of DER market rules to its stakeholder process.
The first workshop on DERs in late January was cut short by a dangerous cold snap that knocked out power to MISO’s Carmel headquarters. (See Cold Snap Halts DER Talk as MISO Calls Max Gen Event.) The RTO has planned two additional workshops more technical in nature for April 9-10 and April 17-18.
Located far from the coasts, the Midwest and South are typically slow to take up new energy trends. MISO has a relatively low level of DERs on its system, with a 2018 OMS survey finding about 2.6 GW (compared with about 6 GW in the geographically smaller CAISO footprint). But Bob Shively, president of training firm Enerdynamics, said MISO’s volume is “significant” and predicted that DER will grow — albeit lopsidedly — based on state politics and regulation.
MISO DER Program Manager Kristin Swenson said it’s appropriate for discussions to happen now, even if adoption is currently relatively low.
“The rate of change seems very slow until it happens all at once. … Political, regulatory changes happen quickly, and it takes a long time to prepare,” Swenson said. “Now is the time to be looking at what’s going to be five years, 10 years away.”
Shively said DERs are fast becoming economic: “There’s this distinct possibility that DER penetration is happening very quickly out there, and it will have impacts on the bulk electric system.”
T&D Communication
Shively said MISO and its members must now figure out how to improve communication at the transmission and distribution interface to increase visibility and determine what wholesale market changes are needed to include aggregated DER.
“There’s going to be a coordination and discussion that never took place in the past,” Shively said, adding that metering DERs will one day become a “necessity.” He said the distribution grid will likely become a data monitor and automated system in addition to a power delivery system. Distribution operators may soon be scheduling generation, Shively said, or form distribution-level system operators to optimize the use of DERs. He also said MISO may need to devise a special interconnection agreement for DER aggregations.
“This is not going to happen overnight, but there are some models being talked about out there,” Shively told stakeholders.
Currently, MISO has neither visibility nor situational awareness about the location or output of DERs in its footprint, and management thinks it possible that FERC will issue rules on the treatment of DERs this year. The grid operator also predicts that DERs will require “new gird management protocols” as the transmission grid, distribution grid and end users begin flowing energy between one another, deviating from the traditional pattern of one-way flows.
But Shively said changes to incorporate DERs must be made thoughtfully, with special attention on system frequency, voltage and resource adequacy.
“When we’re planning the system, the No. 1 thing is we don’t want to break the system,” he said. “So if we’re bringing DERs on … we want to make sure that we’re not doing things to damage our equipment.”
He said to maintain frequency, utilities can control generation and might someday control even load courtesy of smart devices.
Shively also pointed out that there’s no dollar value placed on reactive power to control voltage and no incentive to provide it. “Unless you want to be a good corporate citizen,” he chuckled. He added that voltage instability will likely be localized and managed on the distribution circuit and said frequency issues are the bigger threat to the grid.
‘Points of Entry’
Stakeholders pointed out that DERs open the question of what generation falls under NERC Critical Infrastructure Protection standards. Shively said DERs open new “points of entry” to the grid. He said it’s possible that hackers could access controllable home systems.
But he also pointed out benefits, saying DERs could potentially provide black start services to restore the grid from blackout.
Stakeholders asked about the difference between a DER and a more energy efficient refrigerator, when both serve to reduce load.
“It starts to get really fuzzy: What is a DER and what isn’t a DER. … So the answer is, it’s a fuzzy line, not a fine line,” Shively said. “Is a Nest thermostat that changes your temperature a DER, or is it just customer behavior?”
Shively said MISO will have to keep in mind that its DER supply mix will directly result from state processes, but it’s up to the RTO to plan the system and model load. That will prove difficult for grid operators that lack visibility of DER behavior, he said. Shively said MISO should also consider that line maintenance can take multiple DERs out of service.
Minnesota Public Utilities Commission staff member Hwikwon Ham recommended MISO differentiate its future operational concerns from its planning reserve concerns regarding DER integration. The RTO has said it may have to rethink its planning reserve margin as resource availability shifts. (See MISO, Stakeholders Debate Merits of Seasonal Auction.)
Others’ Load
WPPI Energy economist Valy Goepfrich observed that the MISO system only seems to encounter complexities when a DER owner goes from serving its own load to serving others. She asked if MISO might only have to make changes when groups of DERs enter the wholesale market en masse.
But Shively said even when customers choose to serve their own load with DERs, load modeling becomes a problem. He said under that scenario, data exchanges will still be needed between distribution and transmission.
“I think you’re right; it’s probably a spectrum” of grid preparation based on DER use, Shively said.
Shively also said that once new guidelines for visibility and control are in place, MISO members can’t assume that existing communications systems will be adequate. He pointed to rural areas that lack high-speed internet.
But he said the DER discussion is reminiscent of the fears he heard when utility-scale wind and solar were being integrated into the system. However, he allowed that the question of generation on the distribution level muddies the regulatory waters.
Vertical Integration
Stakeholders asked how increasing use of DERs would interact with the largely vertically integrated utility model in the MISO footprint.
Shively paused. “That’s a great question.” But, after a beat, he said, “I think that there’s going to be more pressure for customers to have retail choice. … I would contend you can go down the road for a while without retail choice, but the more you crack open the door…”
He trailed off, later adding that companies like Google and Amazon might lead the way on pushing for supplier choice.
At the end of day, Shively said, the difficulties of absorbing DERs into the market should prove worth the effort.
“We can come up with lots of problems with implementing DERs, but we also have to remember there’s a lot of potential,” he said. “I think, long-term, DERs can provide low-cost reliable service to customers. That’s the goal of what all this should be.”
RENSSELAER, N.Y. — Stakeholders expressed some skepticism last week as the Analysis Group revealed the outline of a new study underway to provide insights into pricing carbon in NYISO’s markets.
The ISO surprised stakeholders in February when it announced it had commissioned Analysis Group to supplement the Brattle Group’s foundational study in order to finalize a pricing scheme. (See NYISO Commissions New Social Cost of Carbon Study.)
Susan Tierney, a senior adviser with Analysis Group, allayed their concerns with poise and humor as she told the Installed Capacity/Market Issues Working Group on Thursday that she and colleague Paul Hibbard “had some ideas for additional things that we didn’t think were captured in the Brattle report, starting with macroeconomic or co-benefits, known as extra-market activities,” and second, discussing “some reasonable but less conservative assumptions.”
The firm plans to present preliminary findings and discuss with stakeholders the study approaches by the end of the month, present initial analysis results in mid-May, and prepare a white paper and companion technical report by the end of May, Tierney said.
A task force created in October 2017 by NYISO and the New York Public Service Commission worked for more than a year developing a carbon pricing proposal. In December it turned the proposal and final details over to the ISO’s stakeholder process. (See IPPTF Hands off Carbon Pricing Proposal to NYISO.)
Stakeholders Question
Stakeholders were quick to tell Tierney that it’s not easy to put together a carbon pricing report in a couple months and contribute to a policymaking process that’s been going on for nearly two years.
“Is this going to be something unbiased that looks at both sides of the issue, or just looks for benefits that Brattle might have missed?” said Couch White attorney Michael Mager, who represents Multiple Intervenors, a coalition of large industrial, commercial and institutional energy customers. “Will you not look for costs and co-damages; effects on jobs; manufacturing; emissions in other states?”
“We want to do credible analysis, so of course we look at pluses and minuses, positive and negative impacts,” Tierney said.
Couch White attorney Kevin Lang, representing New York City, reacted to a presentation slide with a photo of the city skyline in haze, and captions that said most emissions reductions will be “downstate” and that the greater metropolitan area has the 10th worst ozone air quality in the U.S.
“Your assumption that New York City will benefit from improvements in air quality is flawed, as Brattle acknowledged that carbon pricing would not reduce fossil fuel-based generation in the city, and that what Brattle termed ‘downstate’ included Zone F [the capital region and upper Hudson River Valley],” Lang said.
Tierney said she probably conflated the terms, but she insisted that they were not redoing or critiquing the Brattle report, and that they would indeed be looking at statewide co-benefits — and negative impacts.
“Co-benefits is a term used in Washington for things that are not the intended effects of a policy,” Tierney said. “When looking at employment impacts, for example, we know we can’t just count up the new jobs without considering the jobs that might be lost.”
Brattle found that a carbon charge would induce steam unit repowering downstate, which could benefit public health by improving the air quality in New York City. | NYC Department of Environmental Protection
Erin Hogan, representing the New York Department of State’s Utility Intervention Unit, said the study should allow stakeholders to understand the net employment impacts, not gross impacts.
Mark Reeder, representing the Alliance for Clean Energy New York, said the final Brattle report noted that a carbon charge would induce steam unit repowering downstate, which could benefit public health by improving the air quality in New York City.
Brattle cited analysis by the ISO’s Market Monitoring Unit, Potomac Economics, that said steam unit repowering might already be economically feasible, and Tierney said they will base their assumptions on the issue on further analysis expected from the Monitor.
Renewables and Tx
The new study also will examine employment and other macro impacts of a carbon charge on New York’s economy, including reduced imports of fossil fuels.
“It is not going to be a general equilibrium model,” Tierney said. “We want to see if we can come up with a credible list of things that would be retired, or added to the system, or would otherwise have a meaningful impact on it.
“The Brattle study examined whether there would be more or fewer zero-carbon resources as a result of carbon pricing, mostly focused on nuclear,” she said, “including the enormous cost implications of” replacing the capacity and energy of those existing zero-emissions and nuclear resources, were they to retire.
“One key assumption in the Brattle analysis was that the state would simply be able to execute on its goals of putting in thousands and thousands of renewable resources,” she said. (See IPPTF Updates Carbon Charge Analysis, Treatment of RECs.) “We want to explore the role of carbon pricing in enabling the accomplishment of those important goals.”
Reeder said it would be beneficial to measure the effect of carbon pricing on the retention of existing renewable resources, such as a wind turbine with a contract that expires in 2025, and that analysis so far has not put any dollar value on the impact of carbon pricing on the deployment of energy storage, so it also “would be great to fill that gap.”
The effect of a carbon charge on nuclear revenue under 2030 reference assumptions | Brattle Group
Mark Younger of Hudson Energy Economics said that “pricing carbon would signal incentive to build new transmission, which is important if you don’t have benefits downstate without added transmission.”
Lang said he had been talking about the need for transmission for two years, and “to understand the effect of carbon pricing on building transmission would be great.”
David Clarke, director of wholesale market policy for the Long Island Power Authority, asked about the cost-effectiveness of the Regional Greenhouse Gas Initiative as an alternative model against which to assess the cost-effectiveness of carbon pricing, which he said would be a good way to measure its impact on carbon abatement.
“We did look at the revenues question, but layering on top of that the incredibly complex question of cost-effectiveness would be … somewhat outside the scope of pricing carbon dispatch,” Hibbard said.
Analysis Group will use data from the modeling runs performed for the Brattle study to assess the impact of a carbon price on demand for natural gas, Tierney said, adding that it had no plans to pursue additional Multi Area Production Simulation (MAPS) runs.
One stakeholder suggested that one or two new MAPS runs might be reasonable and cost-effective now that some base assumptions from the Brattle study are possibly out of date, including the expected in-service date of the delayed AC Public Policy Transmission projects. (See NYISO Public Policy Tx Revisions Approved.)
“I have no objections to additional data or information,” Hibbard said.
Fuel Security Study
Analysis Group also presented the preliminary outline of a study commissioned by NYISO to assess winter fuel and energy security for the New York Control Area.
Hibbard reviewed the proposed input assumptions and sources of data that would feed into the fuel security model, along with alternative assumptions and system stress scenarios. Data used are a mix of those publicly available and internal to the ISO, with preference given, where possible, to assumptions previously vetted with stakeholders.
The purpose of the analysis is not to predict the future but instead examine different scenarios, he said.
The plan is to follow up on the assumptions, data and scenarios by mid-April and present the initial findings by late April. Analysis Group will present final findings and initial recommendations in June ahead of a presentation of final recommendations in July.
ATLANTA — When NERC considers a new reliability standard, it convenes drafting teams heavy on engineering expertise and system operations. But for its eighth annual Human Performance Conference last week, NERC brought in firefighters, psychologists and speakers from the airline industry to provide lessons.
“We find that all industries have people, people who actually operate the same way, whether they’re moving electrons or moving aircraft,” explained NERC Vice President and Director of Reliability Risk Management James Merlo, who served as master of ceremonies for the three-day event, co-hosted by the Department of Energy and the North American Transmission Forum (NATF).
The conference attracted more than 400 attendees from 180 organizations, including linemen, control room operators — and at least one utility billing analyst, who said he attended because his company uses root-cause analysis on billing errors.
NATF HP Assistance Visits
At the beginning of the conference, NERC CEO Jim Robb signed a new memorandum of understanding with NATF, whose 7,400 subject matter experts conduct peer reviews to promote “excellence and continual improvement.”
The nearly 90 companies in NATF operate 80% of transmission of 200-kV and higher. “It’s an impactful set of members,” NATF CEO Tom Galloway said. “If we get the forum oriented on a topic, we can typically move the ball forward pretty well.”
Representatives of MISO, Arizona Public Service and Tri-State Generation and Transmission Association shared their experiences with inviting NATF to visit.
MISO’s John Rymer, who formerly worked in transmission substation operations for Duke Energy, said he asked NATF to help transfer human performance (HP) tools from the field to the RTO’s control room. “These assistance visits really help you pinpoint where you need to concentrate your efforts,” he said.
Rymer said he is looking for “low-hanging fruit” in spreading the HP message in real-time and control-room operations first. “You can move that upstream or downstream in our organization, because engineering, IT, all these groups, can utilize the same tools,” he said.
Sage Williams, manager of Tri-State’s Eastern maintenance region, agreed. “HP can affect not just field guys. It’s your entire organization: engineering, system operations,” he said.
Sharing Mistakes, Using Technology
Digger derricks — utility trucks with augers for digging holes for poles and boom-mounted hydraulic lifts for working on wires — played supporting roles in stories by several speakers who shared mistakes they made as linemen.
In a talk titled, “How strong character improves safety and reliability,” former lineman Jeff White, now an HP consultant with Applied Learning Science, recounted how his truck flipped on its side when soft ground gave way underneath its outriggers while he was installing a pole on a new golf course.
After the crew used a second truck to get the first one back on its tires and wiped off the mud, the lead lineman told White and the other crew members not to report the incident. “‘This was a nonevent. What you just witnessed, erase from your memory.’”
White initially agreed, but after a sleepless night, he told his foreman of the incident the next day, fearful that the truck might have sustained unseen damage that could result in an injury to another worker.
“What if the bolts on that turntable — half of them are broken and we can’t see them? What if there’s factures in that steel that we can’t see? I need to speak up,” White said.
In another presentation, MidAmerican Energy displayed 3D recreations of field accidents, crafted by 3DInternet.
Mike Buntz, a MidAmerican line crew foreman, narrated an animation of a near tragedy that occurred while replacing a rotten utility pole. The truck became fully energized when its boom contacted an overhead wire, setting the grass around it on fire. Luckily, no one was injured.
“It wasn’t one of my prouder moments,” Buntz said. “But I agreed [to participate in the animation] hoping that I could help somebody down the road.”
“One of the things that we learned about using these 3D animations is it helps us to have a better appreciation of what actions made sense at the time … what happened and why,” said Sam Reno, MidAmerican’s performance improvement program manager. MidAmerican also is using GoPro cameras mounted on hardhats to produce training videos.
Peter Jackson, an HP coordinator for Georgia Power, said utilities often have “brittle systems” that assume 100% error-free performance.
He demonstrated a pilot program using visualization technology that turns an iPad into a situational awareness tool that shows real-time data on substation equipment’s health and other metrics.
Jackson said the tools can help utilities deal with the loss of experience as more of their aging workforce retires.
“We think that this really helps our guys build a deeper knowledge of the tasks and how to do it right,” he said. “We also think there’s an application potential for everything from troubleshooting to [simulations of] high-risk tasks.”
Answers from the Field
Michelle Miller and former colleague Monika Bay recounted their efforts to improve worker safety at Baltimore Gas and Electric after the electrocution of a worker at a substation.
“You can have the best intervention design in the world, but if you cannot convey it in a way that connects with the head and the heart of these front-line employees you will not be successful,” said Bay, who left BGE a year ago to start her own company, Safety & Operational Risk Solutions.
Bay said sustaining improvement “is by far the hardest part. This is really about line leaders keeping the language alive — keeping these concepts alive in their own workgroups.”
After her and Miller’s work, workers in the field started bringing risks to them, Bay said.
One such issue: the potentially fatal consequences of confusing a black, yellow-striped electric line with a nearly identical black, yellow-striped, three-quarters-inch, high-pressure, plastic gas pipe.
At BGE, gas lines are supposed to be buried 2 feet below ground, with electrical lines a foot below them. In practice, however, the lines can get transposed, meaning a worker expecting to cut a gas line could end up getting electrocuted by cutting the electric cable. The only apparent difference between the two: The gas pipe has four stripes; the electric cable only three.
“It’s 2 o’clock in the morning, I’m a gas mechanic, I’m 2 feet down in the hole, it’s raining and muddy, and I’m going to tell the difference?” Bay said.
“It wasn’t just this: We had 16 pairs of assets where the gas and electric looked very similar.”
Bay said BGE’s Executive Safety Council, which included its chief operating officer, was “horrified” by the disclosures.
“System design often puts risk into the hands of the employees,” she said. “Sometimes we don’t know some of the risk that front-line guys are dealing with because they’re just dealing with it.”
Lessons from the Airlines
Christian Vehrs of Delta Air Lines described how an aircraft maintenance employee confused a fuel heater valve with a nearly identical engine anti-icing valve because of a faulty manual and his own confirmation bias.
“These manuals are 20 years old, and we’re still discovering mistakes,” he said.
David Marx of Outcome Engenuity used dice to illustrate resilient systems. The more dice you roll, he said, the more redundancy — like setting multiple alarm clocks to prevent oversleeping.
The redundancy provided by multiple “dice” is essential in aeronautics, he said, because while Federal Aviation Administration rules require a 1 in 1 billion chance of failure, “nobody can design a part that will never fail.”
Marx used the experience of pilot Chesley “Sully” Sullenberger, who famously landed his Airbus A320 on the Hudson River when his engines failed after striking a flock of Canada geese shortly after takeoff from LaGuardia Airport in 2009.
Airline engines are expected to fail only once in every 50,000 hours. Because planes must have two engines, the chances of both failing simultaneously should be 50,0002, or 1 in 2.5 billion, Marx noted.
In Sullenberger’s case, however, LaGuardia was near a landfill that attracted birds, meaning the dice were “stuck together,” Marx said. (Airport officials increased their bird-killing programs after the incident.)
In another example, Marx cited a woman who died in 2017 after mistakenly being given a paralytic, vecuronium, instead of the mild sedative midazolam — marketed under the brand name Versed — that had been prescribed for her during a PET scan.
Hospital procedures set four “dice,” starting with an automated dispensary stocked with the drugs. A nurse mistakenly chose the wrong drug when the autocomplete function gave her options after typing the letters “V-E.”
The nurse then failed to check the drug at the dispensary or later when she delivered it to the patient. Finally, the fourth die was the nurse’s failure to remain with the patient to monitor her reaction to the drug.
“What should have been four dice became one,” he said — the active failure of choosing the wrong drug compounded by the nurse’s failure to perform the other three safeguards. The nurse is now facing reckless homicide charges.
Marx said the incident illustrated why many of us ignore speed-limit signs but slow down when we see a police car.
“We are not inherently rule followers; we are hazard and threat avoiders,” he said. “The police officer represents consequence. The sign just represents the rule.”
Lessons from the Football Field
Dave Sowers of KnowledgeVine used a video of the play known as the “Prayer at Jordan-Hare” — Auburn University quarterback Nick Marshall’s unlikely 2013 game-winning touchdown pass over the University of Georgia — in a discussion on the role of luck.
It was 4th and 18 with 36 seconds left in the fourth quarter. Auburn Head Coach Gus Malzahn called for a pass to get the first down, which would have put the team into field goal range. And the intended receiver was wide open as a second receiver went deep, drawing triple coverage. Marshall unwisely threw the ball to the deeper receiver, but two of the Georgia defenders collided, one tipping the ball into the hands of the receiver, who ran into the end zone untouched.
Marshall was lucky in that instance, but his gunslinger judgment ultimately proved his undoing, as too many of his passes ended up intercepted. “That’s why he’s not playing on Sundays” in the NFL, Sowers said. Instead, he plays for the Canadian Football League’s Saskatchewan Roughriders.
HP in the Control Room
Mohammed Alfayyoumi recounted the changes he made since becoming director of Dominion Energy’s transmission system operations center.
He spread out the workload by scheduling switching orders throughout the week rather than having them all on Mondays. He doubled the operations staff to four per shift after benchmarking Dominion’s staffing against similar-sized utilities.
He also increased simulator training, began near-miss reporting and training in root-cause analysis, and eliminated work that didn’t add value by automating 6,000 phone calls per week.
Operator hiring was improved by adding testing and screening, including more complex behavioral interviews.
“We invest a lot in steel and copper but not a lot in humans,” Alfayyoumi said. “Operator selection is vital to human performance, because you cannot fix poor selection. If you hire the wrong operator, there’s nothing you can do to make him better,” he said.
Adaptive vs. Procedural Systems
Consultant Jake Mazulewicz made the case for “adaptive” over “procedural” systems, recounting a conversation with an employee for an unnamed company who complained it had become excessively dependent on procedures.
“He said when an incident happens, even something small — someone cuts themselves with a knife, no stitches, very small stuff — everybody hears about it. And within two or three weeks you can bet your next paycheck that [the] safety and training [department] is going to say … ‘Here’s a new and updated procedure to make sure that never happens again.’
“Nobody even bothers reading the new procedures … because it doesn’t matter, because it’s going to change,” Mazulewicz continued.
Under system-based thinking, he said, “when you see an error … you don’t think who’s wrong, you think that’s a signal that my … system could use some improvement. … Almost every incident we’re talking about is triggered by human error, but it’s caused by a whole lot of other things: latent organizational weaknesses, previous decisions, things like that.
“How do you minimize errors in a system-based thinking? You improve your system. … You make it hard for people to do the wrong thing, and you make it easy for people to do the right thing.”
ATLANTA — The ballroom at NERC’s Human Performance Conference was pin-drop quiet Wednesday as Joseph W. Pfeifer, former chief of counterterrorism and emergency preparedness for the New York City Fire Department, gave an hourlong speech recounting his experience leading firefighters into the World Trade Center on Sept. 11, 2001.
Pfeifer’s experience was captured in brothers Gédéon and Jules Naudet’s documentary, “9/11.”
One of the filmmakers accompanied Pfeifer, then a battalion chief, as he and his men rushed to the World Trade Center after the North Tower was hit by the first highjacked airliner at 8:46 a.m. The film captured the chaos and confusion when the second plane hit the South Tower at 9:03 a.m., then the collapse of the South Tower at 9:59 a.m., which left the glass-walled lobby of the North Tower pitch black.
It was then that Pfeifer ordered his firefighters to abandon rescue efforts and evacuate the North Tower, he told the conference, which was co-hosted by the Department of Energy and the North American Transmission Forum.
“That sounds like a simple order when you look back in hindsight. I had no idea that the whole [South Tower] had collapsed. I thought the only people in trouble were us. But giving an order where you are pulling the rescuers out and leaving a thousand people behind is not an easy order at all. But it’s using that two parts of the brain — the intuitive part and the analytical part.”
Pfeifer was back out on the street when the second tower collapsed at 10:28 a.m., sending him and others running away.
Pfeifer said the event illustrated “organizational bias” — how firefighters, EMTs and police tend to stay in their own groups even when working together.
After the first tower collapsed, police in a helicopter circling the North Tower reported that the building’s top 15 floors were “turning red” and the corner of the building was starting to buckle. “‘Pull everybody back three blocks,’” Pfeifer said the copter warned, fearing the second building’s collapse.
“That message never got through to the fire department, and the fire department never asked,” Pfeifer said. “Here you have two great organizations — NYPD and FDNY — and they didn’t talk to each other at the most critical time.”
Some 71 law enforcement officers and 343 firefighters — including Pfeifer’s brother — died that day, along with almost 3,000 civilians. Among those killed were the top-ranking firefighter on the scene and other command chiefs.
“We had no command staff. They were all gone. So how do you re-establish command?” Pfeifer asked.
After the second building toppled, Pfeifer recalled, his immediate boss, Deputy Assistant Chief Peter Hayden, got on top of a burned-out fire truck and gathered the surviving firefighters and reinforcements together.
“The chief said, ‘I want you to take off your helmets, and we’re going to have a moment of silence, because we lost a lot of people today,’” Pfeifer recalled. “And we took off our helmets.
“And then he asked us to put back on our helmets. And in the moment of putting back on the helmets, he re-established command, because there was a lot of stuff to do. There were rescues to be made, and fires to be put out. But what he did, he used what I’m calling now ‘crisis empathy.’ … He listened to what we were feeling.
“We knew it was bad, and we knew we lost a lot of people, but by him being able to recognize that and then articulate it, [it] made all the difference in the world and it re-established command. So, sometimes those small gestures mean a lot more than it sounds.”
American Municipal Power said Wednesday that PJM’s rush to file its energy price formation proposal with FERC leaves the door open for design flaws.
AMP CEO Marc Gerken sent a letter to the PJM Board of Managers criticizing the RTO’s “arbitrary” and “self-inflicted” deadline to implement a revised set of rules that a majority of stakeholders doesn’t support. (See PJM Advances Own Energy Price Formation Plan.)
“Broad review of all aspects of market changes is one of the primary benefits of the stakeholder process; a benefit PJM staff seems disinterested in availing itself of,” Gerken wrote. “While PJM and stakeholders are often under tight timelines, that is not the case here. There is simply no need for PJM to rush ahead with this [Federal Power Act Section] 206 process.”
Section 206
The letter comes two weeks after PJM staff hosted a meeting with stakeholders reviewing the evolving language of its proposal, which they said would be filed by March 31. Nine sections to be added to the Operating Agreement had not yet been finalized, Gerken said, while manual revisions memorializing the changes had yet to be drafted.
Filing under FPA Section 206 allows PJM to submit a proposal that doesn’t have stakeholder consensus. Stu Bresler, senior vice president of operations and markets, told stakeholders in February that staff would recommend the board submit the RTO’s proposal to FERC after multiple compromise packages failed to garner enough support. (See Last Gasp Bid on PJM Price Formation Falls Short.)
Gerken argued that PJM’s lack of preparedness suggests the stakeholder process could have carried on despite the Jan. 31 deadline for a compromise set by the board in December. (See PJM Board Demands Action on Energy Price Formation.)
“That this level of detail is still being developed should be a clear sign to the board that PJM was no more prepared than the rest of the stakeholders to act within the board’s arbitrary deadline,” he said. “Forcing a solution and an unrealistic deadline has resulted in PJM being forced to make an FPA Section 206 filing rather than a [Section] 205 that could have resulted from a reasonably managed process.”
He also criticized staff’s decision to let manuals determine key aspects of its proposal, saying “it does not strike the appropriate level of granularity that should be included in the Operating Agreement.”
“Not addressing these components of PJM’s proposal fails to give stakeholders the opportunity to understand and provide feedback on PJM’s proposed changes,” he said.
Undisclosed Changes
Gerken’s letter further chastised PJM for making changes to its proposal after the Jan. 24 meeting of the Markets and Reliability Committee. He said staff posted PowerPoint slides detailing the changes online 24 hours before the March 14 meeting, some of which he described as “significant” alterations.
PJM presented the following changes to stakeholders during the meeting, including:
Capping demand response procurement at 50% instead of the previously recommended 33%;
Changing how equivalent demand forced outage rates are reflected in the operating reserve demand curve (ORDC);
Recalculating lost opportunity costs for offline resources;
Revoking market participants’ ability to self-schedule resources as secondary or non-synchronized reserves;
Changing real-time treatment of inflexible resources with a day-ahead reserve commitment; and
Using the ORDC to calculate a secondary reserve nonperformance penalty.
“PJM had an obligation to inform stakeholders of such fundamental changes prior to voting at either the January MRC or the special [Members Committee meeting] that was called to vote on the consensus proposal,” Gerken said.
An Unusual Step
PJM took an unprecedented step earlier this month when it convened a meeting to discuss the Section 206 filing with stakeholders. Typically, feedback isn’t sought on 206 filings.
Dave Anders, director of stakeholder affairs, said staff decided to organize the meeting after members requested to view the proposed tariff revisions. Engaging stakeholders prior to filing with FERC is a lesson the RTO learned when implementing Capacity Performance rules, he said.
It appears the board won’t be stalling the process any further, however. Jeff Shields, a PJM spokesman, told RTO Insider on Thursday that staff will file the plan Friday afternoon.
“It will be a timely and comprehensive proposal addressing well-documented, much-needed reforms to the way reserves that ensure reliability and flexibility are priced and compensated in our markets,” Shields said.
FOLSOM, Calif. — CAISO’s Board of Governors on Wednesday unanimously approved a proposal meant to address concerns that the ISO’s market power mitigation rules disincentivize Pacific Northwest hydroelectric resources from participating in the Western Energy Imbalance Market.
The concerns arose shortly after Canada-based Powerex joined the EIM last April as the market’s first non-U.S. member. The company, responsible for marketing the ample surplus generation produced by BC Hydro, quickly determined that transmission constraints at the U.S.-Canada border were frequently triggering CAISO’s local market power mitigation (LMPM) processes in the EIM, which requires use of default energy bids (DEBs) to settle transactions. (See Troubled Waters for Powerex in EIM.)
Powerex found that the inflexibility of the formulas underpinning the DEBs left its market operations out of the money by forcing it to sell power into low-priced, oversupplied markets, when in fact it was attempting to buy on the cheap for later arbitrage. Other operators of the region’s fast-ramping hydroelectric resources noted the rules posed a similar risk for them.
“This issue is particularly acute in the Western Energy Imbalance Market because of the Northwest’s numerous hydro resources that have opportunity costs for energy sales because of their water limitations. Suppliers operating these resources may have disincentives to offer these needed flexible hydro resources to the EIM if they cannot reflect their costs,” CAISO Vice President Keith Casey wrote in his memo to the board regarding the proposal.
In response, the ISO proposed a set of market changes designed to prevent the LMPM process from resulting in the dispatch of resources at prices below their costs.
The plan, which still must be approved by FERC, would create a standard DEB for hydropower resources. The measure is needed, Casey wrote, because CAISO’s “market power mitigation process reduces a market participant’s submitted energy bid to a resource’s default energy bid, calculated by the ISO, in the event it detects market power. Default energy bids are intended to reflect a resource’s actual marginal costs of energy.”
The new option for DEBs is “specifically designed for hydro resources that better estimates these resources’ actual costs, which typically consist of opportunity costs reflecting their limited water availability,” Casey said in the memo.
Severin Borenstein, the newest board member appointed by California Gov. Gavin Newsom in January, indicated he wasn’t entirely comfortable with the proposal, but he voted for it nonetheless.
“I’m still trying to wrap my head around the economics of this,” said Borenstein, an MIT-trained economist and faculty director of the Energy Institute at the University of California, Berkeley’s Haas School of Business. “Cleary the hydro producers in the Northwest care about this” because they are getting value from the market and want it to operate in a way that’s more favorable to them, he said.
In other matters:
The board unanimously elected David Olsen to another one-year term as its chair and named Angelina Galiteva as vice chair.
Over objections from Pacific Gas and Electric and Southern California Edison, the board approved a plan to expand the EIM’s scope of authority on changes to real-time market rules when the primary driver of the changes is the EIM.
The board approved CAISO’s 2018/19 transmission plan, with several major changes over last year’s plan. The plan, intended to ensure grid reliability, identified 13 new transmission projects at a projected cost of $644 million, all within PG&E’s service territory. It also recommended canceling six transmission projects in PG&E’s territory that planners concluded were no longer needed, eliminating $440 million to $550 million in future costs.
RMR/CPM Updates
The board approved a plan to improve CAISO’s reliability–must-run (RMR) and Capacity Procurement Mechanism (CPM) programs, which let the ISO procure energy and keep generators online that might otherwise be retired. Of particular concern are the state’s gas-fired plants that are essential for meeting peak demand but are under financial strain from the falling costs of solar and wind power.
The newly approved plan is intended to simplify and clarify the RMR process in accord with current market conditions and to compensate generators for keeping plants online.
Some stakeholders and board members expressed concerns that generators might propose retiring or mothballing plants to game the market. CAISO planners said they believed a new provision, requiring generators to submit an affidavit explaining their reasoning and intentions for retiring resources, would help mitigate those risks.
