Page 1081 – RTO Insider

July 30, 2019January 26, 2025

NERC Committee Reorg Sparks Concern

By Rich Heidorn Jr.

Not everyone is sold on NERC’s proposal to merge three technical committees into a single Reliability and Security Council (RSC).

The merger of the Planning, Operating and Critical Infrastructure Protection committees, announced in June, will reduce the committee membership from a combined 100-plus to 33 voting members and five non-voting members. (See Three N E RC Committees Likely to Merge.)

The draft p rop o s al by the Stakeholder Engagement Team (SET) is intended to improve efficiency in recognition of the increasing overlap among the committees’ work. NERC officials said the Member Representatives Committee (MRC) and the NERC board had received complaints that too much manpower was being spent in supporting the technical committees.

The new Reliability and Security Council will have 33 voting members and five non-voting members, a big reduction from the 100-plus members on the three committees it will replace. | NERC

NERC’s Stephen Crutchfield told the Resources Subcommittee during a briefing July 24 the new committee will use a “hybrid” of the regional representation used by the CIPC, the sector-based membership of the PC and OC and the at-large membership of the MRC and Reliability Issues Steering Committee (RISC).

The RSC will include one voting member from each sector (except for the regional entities), 20 at-large members, a chair and vice chair. The non-voting members will include the NERC secretary, two U.S. federal government representatives, one Canadian federal representative and one Canadian provincial member, “straight out of what the OC and PC do today,” Crutchfield said.

Members will be selected based on interconnection diversity, subject matter expertise and a mix of small and large entities, he said.

“It is my opinion this whole revision in this manner is going to reduce stakeholder participation,” said Gerry Beckerle, of Ameren. “It’s going to reduce the effectiveness and will reduce the [level] of expertise we have at this level … I think this is a near-sighted effort.”

Beckerle questioned how the new organization would affect participation by non-members. “There won’t be enough room anymore in the meeting [space] correct?”

“Well, I don’t know,” Crutchfield responded. “I’ve heard people say we could have up to 300 people at the first meeting of this thing, so plan accordingly.”

“The new NERC offices meeting space is going to be capable of handling that large of a group?” Beckerle asked.

“I don’t think so,” Crutchfield said.

“I thought one of the reasons [for the change] was so they could hold these meetings at the NERC offices,” Beckerle continued.

“This team has not discussed specifically about how the meetings are going to be run,” Crutchfield said.

He added initial plans to allow nonmembers to listen via WebEx have “been kind of panned. It could be logistically a nightmare.”

The new Reliability and Security Council will have 33 voting members and five non-voting members, a big reduction from the 100-plus members on the three committees it will replace. | NERC

The current schedule calls for seeking MRC endorsement on Aug. 14 and delivering a final proposal to the board Nov. 6.

Assuming board approval, nominations for the RSC would be opened in November with appointments in January or February and the first meeting in March.

Resources Subcommittee Chair Tom Pruitt, of Duke Energy, expressed concerns over the schedule. “It seems to be a pretty aggressive timeline, personally,” he said. “I’m not sure if you go this quickly you’re going to be able to work out all of the kinks and all of the details.”

Expertise Needed

Crutchfield said “the RISC is going to be more of a forward-looking group, whereas the Reliability and Security Council will be [implementing policy]. And they both report to the board [of trustees].”

He said the proposal to have 20 at-large members is recognition that combining the OC, PC and CIPC will require members with broader expertise. “Having that at-large [membership] allows you to find the right set of people who can cover all the aspects you’re looking for — the technical, the leadership, the project management kind of oversight people … Whereas with the sector-based [membership], you may have somebody who’s just completely operations-focused. So now you’ve got to find somebody else to fill that planning role or somebody else to fill that CIP role.”

Pruitt noted the proposed merger borrowed changes some of the regional entities, such as the Midwest Reliability Organization, have adopted.

But Beckerle said the regions’ committee structure is not applicable.

“Since NERC develops continent-wide policy, I think it makes sense we have a group such as the OC, PC and CIPC to provide detailed stakeholder technical direction to NERC,” Beckerle said. The regions “have a much different role in things than they used to back when there were quite a few regional standards, procedures and policies. I think trying to compare and duplicate what’s been successful at the region level is probably not fully appropriate at the NERC level.”

MRC Questions

The reorganization also was discussed at the MRC informational session July 19.

Mark Lauby, senior vice president and chief reliability officer, said he was not concerned about a loss of stakeholder engagement.

“Where the real work is going on is in the task forces, subcommittees and working groups … [The RSC] will enable us to make all three aspects — planning, operating and cyber — a focus and address those problems together as one chunk of work rather than fragmented. And I think it will create a lot more effective solutions,” Lauby said. “I don’t think we’re going to be losing that much when it comes to engagement at that project management level.”

Board of Trustees member Robert Manning praised the Stakeholder Engagement Team for its “innovation and creativity.”

“It’s sometimes challenging to move to a new structure when we know the structure we have is very effective,” he said. “I think you guys have tried to make sure we preserve the best of what we have and open the door to efficiencies going forward.”

He added: “The nominating process [for RSC members] is going to be very, very important.”

Board of Trustees Member David Goulding agreed. “It still seems to me there’s a fair bit of criteria work [that] needs to be done [on nominating RSC members], particularly if — being an optimist — we have a lot of people wanting to actually be members. … The criteria [are] going to be … interesting … to put together.”

Membership criteria will be defined in the participation model presented to the board in November.

A webi n ar on the proposal is set for Aug. 8. MRC members can provide feedback via the committee through Aug. 6. Industry comments to the board will be accepted through Aug. 15.

July 29, 2019

Standards Comm. Acts on GMDs, Operator Certs., Cyber

NERC’s Standards Committee approved the posting of proposed changes to its geomagnetic disturbances (GMDs) standard and authorized new initiatives on cyber system information access management and operator certifications during a brief meeting Wednesday.

Revised GMD Standard Set for Posting

The committee authorized the initial posting of proposed reliability standard TPL-007-4 and its implementation plan for a 45-day formal comment period. The ballot pool will be formed in the first 30 days, and initial ballots and nonbinding polls on the violation risk factors and violation severity levels will be held during the last 10 days.

The proposed revisions to TPL-007-3 (Project 2019-01) were made in response to FERC Order 851, which broadened the definition of GMDs, required grid operators to collect certain data and imposed deadlines for corrective actions (RM18-8, RM15-11-003). (See Revised NERC GMD Standard Approved.)

FERC’s November order directed NERC to revise the standard to require the implementation of corrective action plans for responding to vulnerabilities to “supplemental” GMD events and to authorize case-by-case extensions of deadlines on corrective action plans.

GMD storm in Fairbanks, Alaska, April 2011 | *NASA*

SAR Authorized on BES Cyber System Information Access Management

The committee accepted a standard authorization request (SAR) and appointed a standard drafting team for potential revisions regarding access to bulk electric system cyber system information (Project 2019-02).

The team will work to clarify the critical infrastructure protection (CIP) requirements on managing access and securing BES cyber system information (BCSI).

This project will consider revisions to CIP-004 and CIP-011 and will review BCSI definitions in the NERC Glossary of Terms. The SAR said the changes would increase “choice, greater flexibility, higher availability and reduced-cost options for entities to manage their BCSI.”

The project also will seek to clarify the protections expected when utilizing third-party solutions such as cloud services. (See Panelists Seek FERC OK to Move to Cloud.)

Move to a Single Operator Credential

The committee approved a SAR by the Personnel Certification and Governance Committee to implement its “One System Operator Certification credential” white paper to require all system operators hold the same certification (PER-003-2). The committee said the change from the current four credentials (Reliability Coordinator; Balancing and Interchange Operator; Transmission Operator; and Balancing, Interchange and Transmission Operator) will support reliability by ensuring all system operators have the same base knowledge. It would require 140 hours of continuing education hours and 30 hours each of standards and simulation training.

Request for Interpretation Rejected

The committee rejected Powerex’s request for interpretation (RFI) of INT-006-4 (Evaluation of Interchange Transactions). Powerex requested clarification on whether the time allotted in Attachment 1, Column B for the “Timing Requirements for all Interconnections except WECC” and “Timing Requirements for WECC” tables are mutually independent of other columns.

It also sought clarification on whether a balancing authority that is not the sink BA can be allocated additional time from other table columns and exceed the assessment time listed in Column B. Powerex also asked whether a transmission service provider can be allocated additional time from other columns and exceed the assessment time listed in Column B in either table.

NERC staff recommended rejecting the RFI, saying, “The meaning of the reliability standard is clear and evident by … the plain words that are written.

“The amount of the time specified in each column of the timing tables pertains to only the specific column. Each of the requirements referencing Column B of the tables (Requirements R1, R2, R3) provide that the required action shall take place ‘prior to the expiration of the time period defined in Attachment 1, Column B’ and makes no reference to additional time that may be allocated from other table columns.”

Standards Documents Retired

The committee approved the retirement of three reliability standards resource documents, as recommended by the Standards Committee Process Subcommittee:

SC Procedure – Approving a Field Test Associated with a Reliability Standard (dated March 10, 2008);
Guidelines for Interpretation Drafting Teams (Sept. 19, 2013); and
SC Procedure – Processing Requests for an Interpretation (Dec. 9, 2012).

Revisions to the Standard Processes Manual (Appendix 3A to the NERC Rules of Procedure) clarified the processes for approving field tests, processing requests for interpretations and activities for interpretation drafting teams. The changes were approved by FERC effective March 1.

— Rich Heidorn Jr.

July 29, 2019February 5, 2025

Experts Urge State DER Cybersecurity Standards

By Amanda Durish Cook

INDIANAPOLIS — State regulators should establish standards to ensure the cybersecurity of distributed energy resources, experts said at the National Association of Regulatory Utility Commissioners’ 2019 Summer Policy Summit last week.

More DERs means more consumers joining the grid — and “more credit card numbers, more identifying personal data” at risk, said Tobias Whitney, technical executive for the Electric Power Research Institute, during a July 23 panel.

Tobias Whitney, EPRI | © ERO Insider

To address cybersecurity risks, Whitney recommended those in the industry do more to understand vulnerabilities in the supply chain and train a “cross-functional” workforce fluent in IT, operational technology, devices and connectivity. He also suggested industry players maintain security metrics to understand what cybersecurity measures are working.

Colleen Glenn, control systems cybersecurity analyst for the Idaho National Laboratory, said current DER technology is designed for functionality and not cybersecurity.

“Cyber vulnerabilities and cyber threats are inextricably linked. You can’t have one without the other,” Glenn said.

She cited the steps of the Industrial Control System Cyber Kill Chain as a common progression of events when a bad actor hacks the grid: reconnaissance, weaponization, targeting, delivery, exploitation, installation, control and action.

Colleen Glenn, Idaho National Lab | © ERO Insider

Glenn said hackers often use open-source, Internet-based information to begin a cyberattack. She said a popular starting point is the search engine Shodan, which identifies control systems connected to the Internet.

Web-accessible platforms are common with DERs, Glenn said, adding that she once accessed a solar array and its micro inverters through a webpage — all without a single prompt for login credentials. Sometimes, equipment passwords are contained in public operating manuals, and wind turbines are even “daisy-chained” together so cyber access to one means access to all, she said.

“So often vendors are the ones that really control what is designed. … Unless there’s a widespread demand for this, cybersecurity is not a major concern because it’s expensive and requires research,” Glenn said.

Danish Saleem, NREL | © ERO Insider

Danish Saleem, DER cybersecurity standards lead for the National Renewable Energy Laboratory, said vendors and utilities will not develop a requirement to include cybersecurity controls on their own.

Instead, cybersecurity controls should be required in utilities’ request for proposals, Saleem said.

“[Utilities] say, ‘Yeah but we don’t need another thing in our system to manage,’” he said. “This has to come from regulatory bodies. You have to fine them.”

Beyond that, regulatory bodies should include basic cybersecurity standards in the approval process, Saleem said. Cybersecurity should be baked into utilities’ design-level work, including plans to periodically update the controls.

Saleem also said he’s looking for regulators’ input on the SunSpec/Sandia DER Cybe r security Workgroup, which is examining how the IEEE 1547 DER interconnection standard can be revised to include more cybersecurity.

Glenn urged regulators to participate in cybersecurity conferences and stay abreast of cybersecurity topics. “I think one of the greatest things you can do is be a champion of cyber hygiene,” she said.

DER Forecasting Essentials

Later in the day, another panel discussed the need for improved DER forecasting.

Juliet Homer, PNNL | © ERO Insider

Juliet Homer, senior energy research engineer for Pacific Northwest National Laboratory, said DERs traditionally relied on historical trends for forecasts, excluding predictive factors.

“Going forward, there’s a need to move beyond these into more advanced forecasting,” Homer said. She said forecasting could consider growth projections, DER cost decreases and carbon goals. She also said commissions might use the Bass Diffusion Model, which gives a starting point picture of market penetration based on the theory that early adopters of a new technology influence subsequent adopters.

“With the democratization of our grid, customers are more in control, and they can be sneaky,” joked DER expert Patrick McCoy, of the Sacramento Municipal Utility District.

McCoy said regulators need transparency into DER load data, but that data can be proprietary or veiled behind privacy agreements.

Patrick McCoy, SMUD | © ERO Insider

“You’ve got third parties now that control their own [DER] data. … It’s not just about utilities anymore. It’s third parties and customers that are part of the equation,” he warned.

McCoy said commissions should draw distinctions between “need-to-have” data versus “nice-to-have” data and go after necessary data first. He said regulators should pursue reports on resource planning, distribution planning, DER studies, cost trajectories and economic studies. He also said regulators should gain insights into utilities’ customer research.

“It’s a moving target,” McCoy admitted of DER forecasting. “There’s a lot of work to be done.”

July 29, 2019

NARUC Game Plans for ‘Black Sky’ Event

By Amanda Durish Cook

INDIANAPOLIS — State regulators considered the impact of a prolonged blackout for about half the country during the National Association of Regulatory Utility Commissioners’ first-ever “black sky” exercise July 21.

The simulation, part of the 2019 Summer Policy Summit, focused on terrorist-originated electromagnetic pulses. John Heltzel, director of resilience planning for the Electric Infrastructure Security Council, said EMPs should not be dismissed as an obsolete Cold War-era threat. “There are real actors in the real world that are thinking of ways to disrupt us with EMP,” he said.

The EIS Council defines a black sky as a catastrophic event that severely disrupts critical infrastructure in multiple regions for a long period. Heltzel said other black sky causes are earthquakes, severe weather and geomagnetic disturbances. Heltzel said the earth is due for a powerful sun storm within the decade, with such storms able take down large regions of the electric grid.

Heltzel also pointed to the economic collapse of Venezuela as another blackout trigger. “They were back in the Stone Age. They were drawing buckets of water from streams to drink. No purification,” Heltzel warned.

He also cited the risks of climate change — whose urgency, he said, is not in question.

“I’m not going to debate something I feel is very obvious. … The fact is the number of natural disasters is increasing, that from a preparedness and resilience standpoint, we cannot afford to not take action. … We need to make these events survivable because they’re not going to change,” he said.

The exercise simulated an approximate six-month total blackout on the entire Eastern Interconnection in winter affecting about 100 million people. It featured videos of faux newscasts, boil water advisories, interviews with evacuees, casualty reports and chaotic Department of Homeland Security, Department of Defense and Federal Emergency Management Agency briefings. The players eventually learned the blackout was caused by an EMP attack from a ship in the Gulf of Mexico.

In the first hours of the event, New York City restaurants held “fire sales” to get rid of food before it spoiled.

The simulation touched on gridlocked expressways, first responder no-shows, water and gas shortages, hospital evacuations, sewage backups, riots, inoperable interstate fuel lines and burned out generators. It also imitated mass population migrations, makeshift shelter setups and aid convoys. Power restoration was scarce and spotty, mostly on the fringes of the affected area, with some power plants and transformers irrevocably damaged.

Heltzel said that as energy infrastructure becomes more interconnected, interdependencies are compounded, so the loss of one connected element “becomes rapidly, extremely difficult.”

In between video clips, Heltzel pointed out that most military bases aren’t equipped to be energy self-sufficient. He also noted that the one area that didn’t lose power during 2012’s Hurricane Sandy was microgrid-equipped Princeton University.

“Generators are a problem because everyone thinks they’re a panacea,” Heltzel said, noting that generators sent to Puerto Rico during Hurricane Maria in 2017 quickly ran out of fuel and became useless.

Puerto Rico Energy Bureau Associate Commissioner Lillian Mateo-Santos recounted paying her neighbor for use of his diesel-run generator in the weeks following the hurricane. She said she remembered people feeling overwhelmed by hopeless.

“Hopelessness erodes any effort from the government or aid organizations. … You’re stuck in that mode,” she said.

EIS Council staff at the conference called the hurricane a wake-up call.

Regulators in the audience said that during a blackout, a near-term goal should be to convince as many people as possible to shelter in place. Others said state agencies should set up mandatory attendance agreements with employees in advance.

Some regulators pointed out that a blackout could become a nuclear disaster as well, as cooling systems lacking power eventually fail.

Heltzel said his simulation and warnings aren’t cause for hopelessness. “We’re not the doom-and-gloom guys. We’re the optimists,” he said.

He urged regulators to develop emergency communication systems and action plans that include backup power systems in certain necessary areas and microgrid-equipped military bases. He also advised the installation of backup batteries for traffic lights on major evacuation routes.

Regulators should also call for emergency operating procedures from their utilities and create a prioritization of power needs so responders know where to direct generators and concentrate restoration efforts first, Heltzel said.

He also said only a handful of states have completed preparations under the Department of Homeland Security’s Power Outage Incident Annex, which advises federal responders on how to provide recovery for different localities within a state.

“Ask them if they’ve got a plan in place where every soldier and airman knows where to go,” Heltzel said, referring to National Guard leaders.

July 29, 2019

Tensions Boil over on PJM’s Supplemental Projects

By Christen Smith

Tension among PJM sectors boiled over Thursday after members once again deferred a vote on proposed manual revisions that seek to clarify the intersection of regional and supplemental transmission planning.

It’s the fourth delay since LS Power returned to the Markets and Reliability Committee in April for endorsement of its proposed changes to Manual 14B that would stipulate PJM remove a supplemental project from its Regional Transmission Expansion Plan if regulators denied the proposal’s certificate of public convenience and necessity.

PJM’s Markets and Reliability Committee met July 25 in Valley Forge, Pa. | © *RTO Insider*

Some stakeholders said they just want to move forward — whether that’s through a vote on manual language or taking the dispute to FERC — while others suggested PJM and certain sectors were dragging their feet intentionally.

“The issues that remain are obviously the toughest,” said Sharon Segner, vice president of LS Power. “We are thinking through options such as declaratory motions [at FERC] and things in that light if we can’t reach consensus. We want to do everything we can in terms of working through the process.”

pjm — Sharon Segner, LS Power | © *RTO Insider*

PJM Vice President of Transmission Planning Ken Seiler said Thursday that while staff “generally agree” that supplemental projects should not be converted to baseline RTEP projects, nor undermine the integrity of the competitive FERC Order 1000 process, there are still concerns about displacing supplementals and when to remove projects without unraveling the entire RTEP.

“What takes precedent? Baselines? Supplementals? Upgrades? What’s the timing on it; what does that look like; and how do we coordinate on it, and where does the cost allocation lie?” he said. “The difficulty in all of this is … we can come up with language to mitigate 90% of the issues, but there’s always the one-in-100,000 scenario that we couldn’t conceive of in this group.”

Supplemental projects — those PJM deems unnecessary for reliability, operational performance or economic efficiency — have tripled over the last 13 years, accounting for 62% of the submitted RTEP project costs since January 2017, according to an analysis from American Municipal Power. In 2018, AMP found, transmission owners added $5.7 billion in supplementals and just $1.5 million in baselines into the RTEP.

LS Power and other stakeholders argue PJM holds ultimate authority over supplemental projects and should approve manual language that clarifies when and how such projects get dropped from the RTEP, though RTO staff don’t see it that way — even going as far as rejecting stakeholder-endorsed revisions that would have stated as much back at the January MRC. (See PJM Rebuffs Stakeholders on Supplemental Projects.)

PJM’s unprecedented move spawned a special session of the Planning Committee that began meeting in February to piece together language that would satisfy stakeholders concerned about transparency and the possibility of supplementals displacing more cost-efficient regional transmission upgrades.

Aaron Berner, PJM’s manager of transmission planning, said that while conversations over the last nine meetings have been “robust,” there’s still more consensus to be found — a delay that left some stakeholders exasperated.

“From my perspective, we need to come to closure,” said Ed Tatum, AMP’s vice president of transmission. “This has to be done in 30 days.”

Bob O’Connell, director of regulatory affairs for Panda Power Funds, urged fellow members to consider delaying a vote until a proposal is ready, noting that he wanted to do anything to get the issue off the MRC’s plate.

“I don’t think we need to have this on the agenda month after month if they are not ready,” he said.

‘Unusual Circumstance’

Stakeholders approved the delay in a sector-weighted vote of 4.34 to 0.66, but the conversation was far from over.

PJM — Greg Poulos, CAPS | © *RTO Insider*

Greg Poulos, executive director of the Consumer Advocates of the PJM States (CAPS), later presented a first read of Operating Agreement language crafted by the D.C. Office of the People’s Counsel and the Public Power Association of New Jersey to prevent PJM from unilaterally shelving endorsed rule changes without any recourse for disgruntled members.

“If stakeholders approve manual language and PJM says we cannot implement language, this OA language comes into play,” he said. “We’d ask stakeholders to be able to go to FERC. This is an unusual circumstance.”

Poulos said the language follows PJM’s choice in January to reject manual language that would have stated supplemental projects “should be based on written articulable criteria, models and guidelines that are measurable and, to the extent available, quantifiable (e.g., asset replacement prioritization) so stakeholders can replicate TO planning decisions and validate their proposed solutions.”

AMP, the author of the revision, cited the transparency principles in FERC Order 890, saying TOs should, to the extent available, disclose asset-specific condition assessments and the criteria and models supporting supplemental projects. LS Power’s language about removing supplementals was accepted as a friendly amendment to the proposal.

PJM, however, said such revisions were an “overreach of the RTEP” and inconsistent with FERC rulings. While special PC sessions have continued to work the LS Power amendment, AMP’s proposal remains “in limbo,” Poulos said Thursday.

“The ideal is that this is not even necessary because we’ve reached consensus on the manual changes,” the D.C. OPC’s Erik Heinle said. “That’s our preferred route.”

States’ Role

A second proposal from Poulos clarified states’ rights in the transmission planning process, noting that PJM should “wait to see” if the relevant state regulator has even considered the supplemental project, let alone approved it, before including it in RTEP modeling.

The presentation stirred up more frustration among stakeholders and PJM itself, which argued the proposed OA language was out of scope, incomplete and inappropriate for a first read at the MRC.

“I don’t want there to be any suggestion that this OA language is anything that PJM has worked on or approved or endorsed,” said Chris O’Hara, counsel for PJM. “There’s language about removing things from the base case. … There’s nothing in your language about how that’s done, the notice, the abandonment costs,” he said. “There are so many issues in your language … some of which should be in a problem statement and issue charge.”

Other sectors — including TOs, generators and load — argued they weren’t consulted on the proposal and worried about the “collateral damage” that may ensue because of it. Others said the conversation belonged in a lower committee — not a special session scheduled on short notice on Friday afternoons that few can attend regularly.

“I suspect I support the proposal in principle, but I’m always worried about making an exception to how we approach something,” said Marji Philips, director of RTO and federal services for Direct Energy. “I think it should have been discussed in a lower committee. My point is that you did not consult with all the stakeholders and that makes me very concerned.”

David “Scarp” Scarpignato of Calpine said generators “have a big interest” in the language, but none were involved in drafting it.

“At least Calpine is in favor of more competition in transmission, but we are against accidentally harming us if this is done,” he said.

Jason Barker, Exelon’s director of wholesale market development, agreed it’s “best practice” for such issues to undergo vetting through the lower committees “where the subject matter experts reside.”

“We would support such a motion for a more holistic discussion of the issues,” he said, noting that TOs weren’t involved in the proposal either. “This is something we would find a lot of tension with. It seems reasonable to step back and have a discussion about this at the Planning Committee.”

AMP’s Tatum pushed back against the suggestion that the language was out of scope or that sectors were shortchanged of involvement.

“Can we all please stop pretending that we haven’t been talking about this since January? There’s been nine special meetings,” he said. “This situation is such that PJM has not taken the role to develop the OA language. CAPS did. That’s it.”

Susan Bruce, representing the PJM Industrial Customer Coalition, said she agreed with much of what had been said, including that discussions at the special sessions have suffered from a lack of sector representation and quarreling over process versus substance.

“To Ed [Tatum]’s point, we’ve talked around this so much; further delays start disrespecting the legal process and we want to have more confidence in the transmission space than exists currently,” she said. “I feel like we need to do something differently to move the issue forward — to feel like we’ve done the right thing. But it can’t be something that takes a long time — that feels like customers are being prevented from bringing something up for a vote, which is where we are at.”

PJM’s Seiler agreed that “conceptually nothing is new” in the proposed OA language, but that “the devil is in the details.”

“Whenever we get into the wordsmithing, we get into new things,” he said. “A little bit more time to surgically work these issues would be helpful. Either we agree and move on and then take what we can’t agree on to FERC and call it a day.”

PJM will hold three additional special PC sessions before the MRC meeting in August.

July 29, 2019

PJM MRC Briefs: July 25, 2019

Interim PJM CEO Susan J. Riley told the Markets and Reliability Committee last week that the Board of Managers remains committed to an overhaul of market design in the wake of the GreenHat Energy default, but she urged stakeholders to move forward on “badly needed” credit policy reforms.

“I’m in the process of retaining independent expert policy advisers,” she said. “We need to get that right. We can’t have another situation like we experienced earlier with GreenHat.”

Riley took over for former CEO Andy Ott this month after he retired and expects it will take about four months to find his permanent replacement. In the meantime, Riley said she’s been meeting with stakeholders to better understand the shifting dynamics of members’ priorities and to “strengthen relationships.”

“Your needs are changing and they vary from state to state, sector to sector and company to company,” she said. “The pace of change is faster than what we’ve seen in the past.

“We are a service organization, and I certainly don’t have all the answers, but I look forward to working with you over the next few months to better understand what your needs are.”

Riley concluded her remarks by saying PJM has the “highest concentration of really smart, highly ethical, highly committed people that I’ve ever worked with, anywhere, and I don’t want to lose sight of that as we move forward in making necessary changes. I think you, as our members, are in very good hands here.”

Task Force Sunsets Postponed

Dave Anders, PJM’s director of stakeholder affairs, told the MRC he will postpone a vote on sunsetting both the Energy Price Formation Senior Task Force and the Energy Market Uplift Senior Task Force as staff review other dormant groups in need of closure.

“I think there are more groups out there we need to take a look at,” he said. “We haven’t been really very disciplined about sunsetting task forces.”

The uplift group formed in 2013 and completed its work in 2017 with changes to the Operating Agreement to restrict the locations for up-to-congestion trades, increment offers and decrement bids. (See “Stakeholders Endorse Third Phase of PJM’s Uplift Solution Despite Opposition,” PJM MRC/MC Briefs: June 22, 2017.)

PJM filed its price formation plan with FERC in March and awaits a ruling. Some stakeholders questioned the logic of sunsetting the related task force before receiving an order from FERC, to which Anders agreed. He said staff will return to the MRC with a more comprehensive list of task forces next month.

Manuals Endorsed

PJM stakeholders unanimously endorsed the following manual revisions:

B. Manual 13: Emergency Operations, to provide a single location for reporting operational restrictions that impact multiday operations planning, replacing multiple forms of reporting currently employed by members. The changes, which incorporate lessons learned from 2018/19 winter operations, are intended to improve operators’ situational awareness and communication regarding cross-sector interdependencies. The changes align with new Markets Gateway functionality for resource limitation reporting to be implemented on Aug. 1 and adds clarifications on which units may be placed in maximum emergency during emergency operations.

C. Manual 18: PJM Capacity Market, adding administrative updates, deleting outdated provisions and adding revisions to conform with FERC orders resulting from a periodic review.

D. Manual 21: Rules & Procedures for Determination of Generating Capability, to clarify capacity injection rights (CIR) evaluations and conform with Tariff changes. Adds more explicit explanations and some omitted testing criteria regarding CIR evaluations for combined cycle units. Reclassifies run-of-river hydro units with storage and dispatch capability.

E. Manual 28: Operating Agreement Accounting, resulting from the periodic review. Adds documentation of the process to be used if state estimator loss data are unavailable for calculating transmission loss deration factors. Deletes obsolete section on calculation of credits for quick-start reserves. Updates credit calculation for resources providing reactive services. Updates formula terms for consistency.

F. Manual 39: Nuclear Plant Interface Coordination, resulting from the periodic review with the Nuclear Generators Owners User Group. Adds language on coordination around remedial action and load shedding schemes. Adds language regarding the regulatory requirements of the deactivation and retirement process and to address the coordination between reliability coordinators.

— Christen Smith

July 29, 2019

AEP Applauds Ohio Bill Subsidizing Coal, Nuclear

By Tom Kleckner

American Electric Power CEO Nick Akins last week praised Ohio’s controversial bill creating subsidies for nuclear and coal plants, saying the Columbus-based company “sees positives from this legislation.”

Akins told financial analysts during the company’s second-quarter earnings call Thursday that the bill, signed into two days earlier, would provide recovery for its Ohio Valley Electric Corp. coal plants through 2030 and for existing renewable contracts, as well as the opportunity for AEP Ohio to enter into bilateral contracts with certain customers.

However, the bill also phases out Ohio’s renewable energy mandate after 2026. (See related story, Ohio Approves Nuke Subsidy.)

AEP has portrayed itself as a renewables leader, having recently acquired Sempra Renewables for almost $1.1 billion, announcing plans to buy 1.5 GW of energy from three new Oklahoma wind farms and proposing a 400-MW solar project in Ohio.

AEP has nearly 5.3 GW of regulated and contracted renewable generation in its portfolio, the company said.

The legislation “still provides benefits for the recovery of existing renewable contracts until 2032 and provides additional support for solar projects that have already received siting approval,” Akins told financial analysts during the call.

AEP reported earnings of $461.3 million ($0.93/share) for the quarter, a nearly 13% drop from 2018’s second-quarter performance of $528.4 million ($1.07/share).

The company pointed to moderate weather in its service territory, trade tariffs and the strong U.S. dollar as slowing demand. It still reaffirmed its 2019 operating earnings guidance of $4 to $4.20/share.

“We’d be disappointed if it wasn’t in the upper end of that. We’re watching the economy, obviously,” Akins said. Should tariff issues be resolved before the 2020 elections, he said, “We should be in really good shape.”

AEP’s share price, which set an all-time record of $91.99 in June, lost 64 cents after its Wednesday close. The company stock ended the week at $88.95/share.

July 28, 2019

Storage Week: Hairless Cats, Rising Stats and Skeptics

By Hudson Sangree

SAN FRANCISCO — Can battery storage become a significant part of the grid in the next five to 10 years?

Some who spoke at Infocast’s Storage Week Plus conference last week were optimistic it could happen, while others sounded notes of caution. Some saw batteries as a way of storing excess solar and wind energy for later use, while others said batteries were best at supporting the grid in other ways.

The relative novelty of battery storage and uncertainty surrounding it makes it a “a little bit of a mutant child,” said Holly Christie, associate general counsel at Invenergy.

“I have a hairless cat, and sometimes when I take the hairless cat for a walk, I get a lot of strange looks from people. They’re like, ‘Is it a dog? Is it a rat?’ And I feel like with storage, it’s like that too,” Christie said. “They’re like, ‘Do we paper it up like a power farm?’ No. ‘Do we paper it up like an asset acquisition?’ Not really. It’s not a financial tool.”

Unlike most aspects of the energy industry, there are no standardized forms to fill out or typical deal structures, so each project tends be “cool [and] very organic” but also fraught with financial and legal challenges, Christie said.

What many speakers agreed on was that interest in storage is growing among regulators, utilities and developers, pushing it forward at a surprisingly rapid pace in an industry that’s generally slow to adopt new technologies.

“It’s a very, very exciting time to be in the energy business,” said Barry Worthington, executive director of the United States Energy Association, a D.C.-based interest group. Worthington moderated the panel on standalone storage that Christie appeared on.

“I’ve been in this business for 40 years, and I’ve never seen the rate of change that we’re witnessing now … [including] one of the most exciting parts — storage,” he said.

He was on a storage panel at a conference five or six years ago, he said, “and I think there were six people in the audience at that time. And you look at the audience today … and it’s really quite remarkable.”

Movin’ on Up

The audience for Storage Week Plus filled a sizable meeting room at the historic Westin St. Francis hotel on Union Square. Representatives of RTOs/ISOs, major utilities and green energy groups listened to a dozen panels on storage and renewables, project financing and opportunities for utility-scale storage, among other subjects.

The upscale venue and size of the conference signaled the emergence of storage as a viable solution for reliability challenges, some speakers said.

Neeraj Arora, a partner at law firm Morgan, Lewis & Bockius, moderated a panel on what off-takers, such as utilities and corporations, expect from storage. Five years ago, those expectations were extremely unclear, Arora said. At that time, there was less than 100 MW of installed storage in the U.S. Now there’s less than 1 GW, but the figure is growing fast, and in five years, there will be 5 GW of storage, he said.

“We’re going from a $1 billion market this year to something like a $5 billion market in five years … and as many of you who have been coming to this conference know, we’ve gone from Oakland to the Hotel Kabuki [in San Francisco’s Japantown], and now we’re here at the esteemed Westin, so we can see that industry is certainly maturing.” (See Calif. Needs far more Storage to Decarbonize, Panelists Say.)

One of his panelists at Storage Week, Arora noted, was James Barner, manager of long-term strategic planning at the Los Angeles Department of Water and Power. The department is seeking approval from its board to buy power at record-low prices from the nation’s largest solar-plus-storage project, with 400 MW of solar and 200 MW of storage.

The deal may be an indicator of the future trajectory of storage, some speakers said.

In five or 10 years, storage will be much bigger, said Randolph Mann, founder and president of esVolta, a Southern California company that develops, owns and operates utility-scale energy storage projects.

“I think we’ll have, as an industry, utility-scale storage in every state in the country,” Mann said. “I think that it will be a … core piece of every utility’s platform and tool kit. I think the technology will be reliable enough, the contracting structures will be reliable enough, that we’ll have a lot of institutional capital participating in the industry. And I don’t think we’ll be able to do Storage Week conferences in a room this size.”

Harnessing Expectations

Others, however expressed a degree of skepticism that battery storage, with its high costs and short run times, would be the answer to storing excess wind and solar power for later use, such as meeting peak demand.

Instead, they said batteries were most adept at providing grid support.

For instance, CAISO Updates Storage as Transmission Asset Plan.) In a pilot project under that initiative, Pacific Gas and Electric will install 7 MW of battery storage at a 70-kV substation near Dinuba. It will be the first dedicated storage transmission asset in CAISO.

The battery will be used only occasionally, including to support transmission operations during emergencies, said Nicole Efron, a PG&E principal who presented at the conference. It will not bid into CAISO’s market, but the storage unit was deemed a more cost-effective solution to reliability concerns than running new conductors, she said.

“This is an instance where a single-use unit could work” because alternatives were more expensive, Efron said.

Barner said pumped storage likely would be the key to longer-term storage and discharge, not batteries. Pumped hydroelectric power provides lower-cost and longer duration discharge than batteries, lasting a full day instead of a few hours, he said.

Kevin Short, the general manager of the Anza Electric Cooperative in Southern California, said storage is essential, but he questioned how fast it might be adopted in an industry that has been hesitant to adopt new tools over the last century.

“If Thomas Edison were alive today, he’d recognize about 90% of what we do,” Short said.

Storage “is a piece of the puzzle we absolutely need to adopt,” he said. “It’s very similar to the trajectory solar took a few years ago.”

Invenergy’s Christie said lithium-ion batteries are prone to fires and explosions and likely will be replaced with newer battery technology.

After her remarks, USEA’s Worthington asked her how she walks her hairless cat. On a leash, she said, with a harness and “little T-shirts.”

“I recommend it,” she said. “Once you go flesh, you’ll never go back to fur.”

“I don’t like cats, but I’m going to have to give some consideration to having a hairless cat,” Worthington said, prompting laughter. “I think the hair part is what makes me not like cats. You learn something every day.”

July 28, 2019

MISO Studying Projects to Cut North-South Tx Reliance

By Amanda Durish Cook

MISO is evaluating nine projects to supplement or substitute for the contract path on SPP transmission linking its Midwest and South regions.

The RTO last week said it is still analyzing project ideas submitted by stakeholders, with nine projects passing the initial screening phase and multiple HVDC options undergoing further analysis, before completing the first round of screening.

It received 35 project ideas to reduce dependence on the North-South transmission constraint after it opened the floor to ideas in April, Economic Studies Engineer David Severson said during a conference call with stakeholders Thursday. (See MISO Seeking Proposals to Relieve North-South Constraint.)

The RTO now says its analysis will continue beyond the 2019 Transmission Expansion Plan (MTEP 19) deadline in December. In spring, staff said they weren’t bound to a deadline to submit any project recommendations and could take more time to conduct thorough testing of candidates.

“Given the uniqueness of some of the solutions we received … we fully expect the study to continue into 2020,” Severson said.

He added that MISO might try out new “exploratory” benefit metrics on the project candidates, although those metrics would not yet be applied to official benefit-cost ratio figures. The RTO has so far suggested it might incorporate the benefits of increased capacity flowing between regions as a new metric.

MISO currently relies on three metrics in its ratios, including adjusted production costs, the value of deferred or avoided reliability transmission projects, and the value of reducing power flows on the North-South constraint.

It will provide more updates on ideas later this year. Multiple stakeholders asked RTO staff to return with maps of potential transmission routes, a suggestion Severson said he would take under advisement.

8-Project Draft from Congestion Study

MISO will work through fall on its 2019 Market Congestion Planning Study, which now contains a shortlist of eight projects.

The RTO last month reported it was analyzing seven projects that passed the first round of screening. Those projects focused on just three congested areas, leaving MISO to compare multiple alternatives for just two congested areas. (See “Shortlist from MCPS,” MTEP 19 Revealing High Price Tag.) Additional projects are now in the running to solve interregional congestion.

The project shortlist has grown to eight after initial testing, with only one regional project focusing on a 345-kV flowgate in southern Minnesota, the $32 million Helena-Scott County 345-kV line, which stands to deliver a 4.76:1 benefit-cost ratio, MISO said. The project is now the best option out of three originally proposed to solve the Minnesota congestion.

While MISO has whittled down options on the lone regional project, the number of possible interregional solutions has grown.

The remaining projects address interregional flowgates, with three intended to ease two MISO-SPP flowgates in southwest Arkansas and on the Iowa-Nebraska border, and four addressing two MISO-PJM flowgates in northwest Indiana and western Illinois.

Possible MISO-PJM projects range in cost from $23.3 million to $34.6 million, while costs for the potential MISO-SPP solutions range from $35 million to $58 million.

All of the projects still must undergo further testing before they are deemed viable. Economic Studies Engineer Karthik Munukutla also said MISO is coordinating with SPP and PJM to figure out if they foresee benefits from the potential interregional projects.

“We want to make sure the projects we are testing stand the test of time,” Munukutla said.

He said staff will wrap up studies in August and reveal final recommendations at the Planning Advisory Committee meeting Sept. 25. “We will have all the recommendations there, both from an interregional and regional standpoint.”

July 28, 2019

Women Shaping New England Energy Agenda, Group says

By Michael Kuser

BOSTON — More than 200 people — nearly all women — gathered on the sparkling new Campus Center at the University of Massachusetts Boston on Wednesday for the annual summer meeting of New England Women in Energy and the Environment (NEWIEE).

NEWIEE — Katherine Newman, UMass Boston | © *RTO Insider*

“There’s just so much going on here that is relevant to the work that you do in the energy and environment field,” UMass Boston Chancellor Katherine Newman said as she welcomed the group’s members and state officials invited from around the region.

Newman pointed to a program the university inaugurated this year to establish 20 industry clusters on the campus, companies linked together by “common labor markets” and looking for people with the “same kinds of skills.”

“One of them will definitely be in energy and environment,” she said.

Massachusetts Attorney General Maura Healey quoted the former president of Ireland, Mary Robinson, who recently said that “climate change is a manmade problem with a feminist solution.”

“The crisis we face is, of course, existential,” Healey said. “No other country is going to solve this problem for us, and even while our federal government hands control over to coal lobbyists and climate change deniers, the world does continue to look to us for global leadership. And we need to demonstrate the path that transitions our economy away from fossil fuels by transforming the way we power our communities.”

Healey will host the annual meeting of the National Association of Attorneys General’s Eastern Region in Boston this September and is making energy the focus of that meeting. “That’s how important I view this topic,” she said.

She recommended applying the clean energy revolution to buildings and transportation as well as to the power sector, possibly mandating efficiency retrofits on old buildings, and incentivizing the adoption of electric vehicles.

Regional Collaboration

“On behalf of a very small state with a strong governor [Gina Raimondo], we can collaborate to help make this region be more than the sum of its parts,” said Carol Grant, commissioner of the Rhode Island Office of Energy Resources. “At the end of the day, that is the goal. Each state is going to do what each state is charged with, but how can we collaborate?”

Raimondo set a goal of developing 1,000 MW of renewable energy in the state by 2020, Grant said. “The good news is, as of the second-quarter report — not out officially — we will be over 750 MW, so we are going to make that goal.”

Grant also said her office works to ensure the state’s clean energy moves help those who need it most, such as by introducing electric buses into poor communities identified as most subject to public health disparities.

“Our renewable portfolio standard is set at 38.5%,” Grant said. “When we set it, we were first in New England; now we’re fourth. That’s amazing and a compliment to Maine and to other states that have been pushing their RPSes. So everybody keep going.”

Energy and climate are a focus of Maine Gov. Janet Mills, said Hannah Pingree, director of the governor’s Office of Policy Innovation and the Future (OIF).

A former state legislator, Pingree recommended NEWIEE members “run for public office, in your spare time if you have to, because that’s where policy gets made.”

Maine is about two years behind Rhode Island in the push for clean energy, but it is now first in the country on RPS targets with a goal of 80% renewables by 2030, she said.

The state led the country in offshore wind in 2008 and 2009 until Mills’ predecessor, Gov. Paul LePage, “shut that down in a big way,” Pingree said. (In 2008, former Gov. John Baldacci established the Maine Ocean Energy Task Force, which in 2009 published a report recommending the development of 5 GW of offshore wind energy by 2030.)

LePage served two four-year terms until Mills was inaugurated in January.

“My kids are into ‘Harry Potter’ now, and I’m sure you’re all familiar with the phenomenon of ‘He Who Must Not Be Named,’” Pingree said of LePage.

The University of Maine has received a $40 million grant from the U.S. Department of Energy to build Maine Aqua Ventus, which they hope will be the country’s first floating offshore wind platform. In addition, she said her state is working with New Hampshire and Massachusetts on a Bureau of Ocean Energy Management task force to develop offshore wind regionally. (See New England Officials Speak on Grid Transformation.)

Kathryn Bailey, New Hampshire PUC | © *RTO Insider*

New Hampshire Public Utilities Commissioner Kathryn Bailey recommended that project developers “work with local people way before they put any plan forward. They need to get buy-in from local people.”

Bailey served on the state’s Site Evaluation Committee that rejected Eversource Energy’s proposed 1,090-MW Northern Pass transmission project to carry Hydro-Québec hydropower to Massachusetts. The New Hampshire Supreme Court the previous week upheld the rejection, and on Thursday, Eversource filed with the Securities and Exchange Commission its intent to drop the project.

“Not every local person has to buy in, but without it, you’re going to get a lot of animosity and opposition, and it’s really hard to overcome that,” Bailey said. “It may cost you more, but in order to get these things sited — and cost is my main issue — you’re going to have to pay a little bit more for it than people thought because you can’t do it without some local support.”

‘Women Know What to Do’

When Healey first became attorney general in 2014 — she was re-elected last year — she brought together what had previously been separated: the office’s Environmental Protection and Energy divisions.

“It was my view that unless we thought about synergies between these spaces, we weren’t going to get to where we needed to be. So that’s why we created, for the first time, an Energy and Environment Bureau, housed everybody together, and I think it’s made us smarter, more strategic and hopefully … more of a leader in this space,” Healey said.

Maura Healey, Massachusetts AG | © *RTO Insider*

Study after study has shown that women are more likely to understand the impact that climate change will have on their lives, she said, and they’re more likely to worry about what that’s going to mean for future generations.

“And even more importantly, women know what to do. We know the game plan; we know the blueprint. Every day, we see cities across this country adopting their own Green New Deals. Every week we see hundreds of municipalities and businesses signing new clean power purchase agreements. Our clean tech community continues to roll out new programs and policies that are making real differences.”

Ultimately, running the economy on clean energy is a win for everyone — for consumers, the climate, public health and the economy, she said.

“I explain to people that I am forced to sue Donald Trump and his administration time and time again because the actions they are taking undermine the interests of Massachusetts residents and our businesses,” Healey said. “I explain that Massachusetts has over 100,000 clean energy jobs and growing right now, twice the number of coal jobs in the entire country and representing an $11 billion dollar industry.”

The solar and wind industries are creating jobs 12 times faster than the rest of the economy, she said, with more Americans working in solar energy than in oil and natural gas extraction. “Think about that.”