The Public Utility Commission of Texas on Friday approved Oncor’s application for a certificate of convenience and necessity to begin work on its Far West Texas Project, a transmission upgrade to meet the Permian Basin’s oil and gas production load growth (Docket 48095).
ERCOT approved the Odessa EHV-Riverton and Bakersfield-Solstice 345-kV transmission lines in 2017. The grid operator’s Board of Directors designated the Odessa-Riverton line as critical to system reliability in February. (See “Directors Grant ‘Critical’ Status to West Texas Project,” ERCOT Board of Directors Briefs: Feb. 20, 2018.)
The project is expected to cost $336 million to $501 million, depending on the route selected. Oncor has presented a recommended route and 88 alternatives, each between 110 and 133 miles in length.
Oncor said it has already acquired between 12 and 15% of the right of way, depending on the route selected.
Garland, Cross Texas to Share 345-kV Line
Limestone-to-Gibbons Creek transmission line | Cross Texas
The PUC approved a request by Cross Texas Transmission and the city of Garland to share a 67-mile transmission line, completed as part of the Houston Import Project (Docket 48202).
Cross Texas will transfer 38 miles of the Limestone-to-Gibbons Creek 345-kV double-circuit transmission line to Garland. Cross Texas, a unit of LS Power, built the line under an agreement with Garland, which paid for a portion of the line during construction. The line was energized in April.
ERCOT had directed the entities to build the line and upgrade the Gibbons Creek substation as part of the $590 million Houston Import Project. The rest of the project comprised transmission and substation upgrades.
PUC to Intervene in FERC Dockets
PUCT Chair DeAnn Walker | Admin Monitor
The commissioners went into a closed session as soon as they convened their open meeting. Following the 39-minute executive session, Walker said the PUC would intervene in three dockets at FERC:
ER18-2358, which would place GridLiance’s Oklahoma transmission facilities and its annual revenue requirement under SPP’s Tariff.
ER18-2273, in which MISO seeks a one-year waiver of its Tariff requirement to conduct quarterly voltage and local reliability (VLR) studies. The RTO also seeks permission to designate a VLR issue in the Baton Rouge, La., area as “commercially significant,” thus allocating the costs to load-zone asset owners in the EES, CLEC, LEPA and LAGN local balancing authorities.
ER18-2363, a MISO request to revise part of its resource adequacy construct, creating external resource zones, allocating excess auction revenues to load-serving entities affected by the changes, and aligning parameters used to calculate auction inputs.
The PUC also agreed to publish questions for stakeholder comment for a rulemaking addressing battery storage and other non-traditional technologies in delivery service (Project 48023).
It also set a deadline of 8 a.m. Sept. 17 for retail electric providers (REPs) to list their offerings in both Spanish and English on the commission’s Power to Choose website, where consumers in Texas’ competitive areas can shop for electricity providers.
Chair DeAnn Walker noted 34 of the 57 REPs on the website don’t include their offerings in both languages.
PUCT’s Shelly Botkin, DeAnn Walker, Artur D’Andrea (left to right) share a light moment with staff. | Admin Monitor
“I’m not happy with that at all,” Walker said. “I’ll give them the weekend to get it done. If they don’t have it at 8 a.m. Monday, [staff] will start pulling off the ones that aren’t” bilingual.
True to her word, the PUC deactivated 221 electricity plans from 18 retail electric providers Monday morning. Some plans were quickly reactivated later in the day, when the REPs listed their offerings on both websites.
The ERCOT market has 117 REPs that offer more than 900 electricity plans.
ERCOT Files Bylaw Changes for Approval
ERCOT on Sept. 11 filed amendments to its articles of incorporation and amended and restated bylaws for the PUC’s approval. The grid operator hopes to have the changes in place for the 2019 operating year.
The ERCOT board approved the changes in August, the first to the governing documents since 2000. The amendments to the bylaws clarify the definition of affiliates and affiliate relationships.
The New England Power Pool’s proposal to codify its longstanding ban on press and public attendance at stakeholder meetings was attacked by consumer advocates, environmental groups and press advocates Friday.
Only one comment — by six former NEPOOL chairs and current Chair Tom Kaslow — was filed in support of the press ban before Friday’s filing deadline (ER18-2208).
“What some are characterizing as ‘secret’ is merely a discreet and considerate process for considering options and pursuing consensus,” the group wrote. “From our personal experience, and from what we have overwhelmingly heard from NEPOOL members, the presence of press reporters to attend and report widely on meetings would unfavorably change the stakeholder process, leaving many of NEPOOL’s participant members hesitant to share their positions as openly during the problem-solving and deliberative process.”
The filing was authored by Joel S. Gordon of Public Service Enterprise Group. Signing it were Kaslow, of hydropower generator FirstLight Power Resources; Cal Bowie, of Eversource Energy; Dan Allegretti, of Exelon; consultant Peter Fuller, who chaired the New England Power Generators Association while a vice president with NRG Energy; consultant Robert Stein; and attorney Donald Sipe, who represents industrial consumers.
On Aug. 13, NEPOOL asked FERC to approve amendments to its Agreement to codify an unwritten policy of banning news reporters and the public from attending the group’s stakeholder meetings. The group drafted the revisions after RTO Insider reporter Michael Kuser, who lives in Vermont, applied for membership in NEPOOL’s Participants Committee as an End User customer in March.
RTO Insider responded to NEPOOL’s filing with a Section 206 complaint Aug. 31 asking the commission to overturn NEPOOL’s ban or terminate the group’s role and direct ISO-NE to adopt an open stakeholder process like those used by other RTOs (EL18-196). Comments in that docket are due Sept. 20.
Former NEPOOL Chairs Cal Bowie, Joel Gordon, Pete Fuller, Don Sipe, Dan Allegretti, Roberto Denis, Bob Stein, and Brian Forshaw, pictured in the group’s 2014 annual report. All but Denis and Forshaw signed comments supporting NEPOOL’s ban on the public and press. | NEPOOL
New England is the only one of the seven U.S. regions served by RTOs or ISOs where the press and public are prohibited from attending stakeholder meetings.
‘Opportunity to be Represented’
PSEG’s Gordon said that NEPOOL’s practices of posting meeting materials and minutes “ensure that all parties with a direct interest in the New England wholesale electricity markets have the opportunity to be represented and fully informed of issues under consideration and the direction of the solutions.”
But William P. Short III, who represents End Use customers at NEPOOL, said the meeting minutes are insufficient. He urged FERC to listen to the audio tapes of the May 4 and June 26, 2018, Participants Committee meetings at which the press ban was debated.
“At the May 4, 2018, meeting, we debated this issue for at least a half-hour, if not, an hour. The meeting minutes on the subject of banning the press from NEPOOL membership are just three sentences,” Short said. “The public needs to have the press in the room to catch these super-sanitized versions of these proceedings that mislead both non-attending participants, the public and the FERC commissioners and staff.”
Short — who joined with Massachusetts Assistant Attorney General Sarah Bresolin Silver to sponsor an unsuccessful proposal to allow press to become NEPOOL members — said he has been involved with NEPOOL since 1998. “Until Michael Kuser’s membership application, neither the Membership Subcommittee nor the Participants Committee had ever denied an applicant its request for NEPOOL membership,” he said.
Press, Consumer, Environmental Groups File Protests
Also filing a protest was Jordan Frias, president of the New England Professional Chapter of the Society of Professional Journalists (SPJ), who said the proposed ban “raises suspicion about what [NEPOOL] is trying to hide.”
“Not allowing reporters access to public policy debates that will determine changes to the electricity markets in regions, including New England, is doing a disservice to energy consumers,” Frias said. “FERC members need to think long and hard about whether they want to further cement lack of transparency from NEPOOL committee members or if they want restore the public’s trust in this committee by allowing journalists to do their jobs.”
Gordon expressed concern that stakeholders’ “questioning and brainstorming … might be reported as representing formal versus probative positions.”
But Rick Blum, policy director of the Reporters Committee for Freedom of the Press, a D.C.-based nonprofit that provides legal resources to protect journalists’ newsgathering rights, noted that other RTOs “operate effectively without a general ban on press.” He cited PJM’s media code of conduct, which states that “work products should be treated in the spirit to which they are intended, that is, not as final or complete documents nor the final position or view of a participant.”
The Union of Concerned Scientists’ Michael Jacobs noted that UCS is active in PJM and MISO stakeholder meetings, which RTO Insider covers. UCS’ experience “demonstrates that there is a productive public interest and stakeholder benefit to an active press presence at RTO meetings that outweighs NEPOOL’s stated rationale for this action,” Jacobs wrote.
He said press coverage helps his group with “the very real difficulty of tracking the many issues” before RTOs. “UCS believes that complex issues are better resolved when there are more informed parties, and information is more accessible. Press participation in NEPOOL improves our collective problem-solving abilities, not reduces them,” he said.
In a preliminary response, NEPOOL’s Participants Committee said the SPJ and UCS filings reflect a “fundamental misunderstanding” of the organization’s proposal.
“The amendments simply and clearly are solely about whether press can be members in NEPOOL, not whether press can attend NEPOOL meetings,” Day Pitney attorney Patrick M. Gerity wrote. “The amendments clarify that the press cannot become NEPOOL participants or representatives of participants. … There are widely published articles in the press on NEPOOL activities, notwithstanding that no press is or ever has been a member.”
Gordon: New England is Different
Gordon acknowledged that other RTOs conduct stakeholder meetings with press present. “While that approach may yield adequate dialogue for those regions, it does not follow that there will be no adverse impact on the existing dialogue within the NEPOOL stakeholder process if members of the press are in attendance,” he said.
He said NEPOOL’s six sectors allow “membership by all parties with legitimate interests in our mission.”
“A key principle for that dynamic is that the audience for the stakeholders who participate in NEPOOL meetings, and those for whom transparency is most critical, are the other NEPOOL stakeholders who hear the entire dialogue and understand and respect its context,” he continued. “We believe that this is an important and unique component of the New England stakeholder process that has made NEPOOL an effective stakeholder organization over the last decades — those who attend are communicating with ISO-NE, states officials, consumer representatives and all other stakeholders in attendance for the benefit of each other, not for the benefit of an audience outside the room.”
NEPOOL ‘Careerists’
New Hampshire Consumer Advocate D. Maurice Kreis, a member of the End User Sector, termed the signers of the Gordon filing “NEPOOL careerists,” saying they and their companies “benefit from the current arrangements” barring public and press attendance.
“NEPOOL relies on written testimony of an industry insider and NEPOOL veteran who has essentially built an entire career on providing information and insight that is otherwise unavailable to non-attendees because NEPOOL meetings are closed and secret,” he said, referring to the testimony filed by Stein that accompanied NEPOOL’s initial filing.
As an independent consultant, Stein testified, he supplies clients with “a confidential compilation of information from [NEPOOL] stakeholder meetings tailored to their individual business interests, giving them confidential analyses of issues of interest and insight on how their business interests could be affected by proposals by ISO New England Inc. (ISO-NE) and other stakeholders.”
Said Kreis: “The commission should view the proposed changes to the NEPOOL Agreement for what they are: an unabashed effort by the large and powerful corporate actors that dominate NEPOOL to strengthen the status quo to the detriment of consumers, public interest groups and others who would subject New England’s wholesale electric markets and bulk power transmission system to the skeptical scrutiny such a vital public resource deserves when left in private hands.”
Blum, of the Reporters Committee, made a similar observation, saying NEPOOL’s proposal “would appear to continue to allow meeting participants whose primary purpose is not news reporting to collect information based on their observation of, and participation in, NEPOOL meetings and distribute it to individuals or entities that do not themselves participate as members in NEPOOL meetings. The proposed amendments would only bar those individuals or entities whose primary purpose was newsgathering from membership and, thus, engaging in the same newsgathering and reporting activities.”
Tyson Slocum, energy program director for Public Citizen, raised the same issue. “When deliberative bodies are transparent and open to the public, information resources regarding details of their proceedings are inexpensive, reflecting the ease with which the information can be obtained and disseminated. Banning the public and journalists creates new ‘markets’ for those permitted access to NEPOOL proceedings to financially commodify access and intelligence about NEPOOL’s activities,” he said.
“NEPOOL’s restrictions on public and media access allow those with privileged access to possess valuable information about NEPOOL activities that are nonpublic, which they can then sell for lucrative amounts to interested parties. NEPOOL is rife with a small army of well-connected consultants — many of whom trade on their former roles as NEPOOL officers in a ‘revolving door’ scheme — who sell information gleaned from their exclusive access to private NEPOOL proceedings.”
Slocum noted that many NEPOOL members that voted in favor of the ban are active in other RTOs. “Should FERC agree with NEPOOL’s press ban, it is likely that these and other companies will push for similar restrictions in other RTOs,” he said.
Order 719
In a joint filing, environmental groups Earthjustice, the Conservation Law Foundation and the Natural Resources Defense Council’s Sustainable FERC Project said NEPOOL’s press ban “severely compromises the transparency of ISO-NE decision-making, undermines confidence in its proposals and decisions, and threatens to undermine public interest outcomes in the region.”
They said the policy is in “direct conflict with commission Order 719, including the mandate that RTO/ISO processes be inclusive, fairly balance diverse interests, represent minority interests and be responsive.”
“Opaque RTO/ISO deliberations undermine customer confidence by enabling the perception, whether justified in reality or not, that a group of privileged insiders wields outsize influence over grid operator decisions affecting millions of customers,” they said. “In contrast, press access can encourage customer confidence by demystifying RTO/ISO processes.”
FERC commissioners were unaware of the ban when they approved Order 719 (RM07-19, AD07-7) in 2008, former Chairman Jon Wellinghoff said last week.
Similarly, former FERC Chairman Pat Wood III and former Commissioner Nora Mead Brownell said they were unaware when they approved NEPOOL as ISO-NE’s stakeholder body in 2004 that NEPOOL barred the public and press from its meetings. (See Wood, Brownell: Unaware of Press Ban When OK’d NEPOOL.)
CARMEL, Ind. — MISO says the time is not yet ripe for creating a detailed solar capacity credit process, but it is leaning toward adopting a process similar to the one used to establish wind credits.
The RTO last week said it will continue its practice of using individual operational data to determine credits — with new solar units continuing to receive a 50% capacity credit — until more operational data are available to perform a full credit study. At that point, it will likely use its effective load-carrying capability (ELCC) measurement, a loss-of-load expectation-based study that examines the MISO system with and without certain resources, staff said.
Speaking during a Sept. 12 Resource Adequacy Subcommittee meeting, MISO Resource Adequacy Coordination Engineer Eric Rodriguez said the increasing number of proposed solar projects entering the interconnection queue portend a need for a study process. Solar projects comprise 35.7 GW of MISO’s 90-GW interconnection queue, but the RTO currently has just 314 MW of solar generation in commercial operation in front of the meter.
“Three hundred fourteen megawatts is not enough to perform the ELCC,” Rodriguez said.
Rodriguez pointed out that MISO first conducted an ELCC study for wind resources when MISO had between 5.6 and 8 GW of installed wind generation on its system. He said MISO would determine another accreditation process if a solar ELCC capacity credit study resulted in an unreasonably low credit.
He also told stakeholders that “other potential methods for crediting solar’s contribution to serving load will be investigated.”
“I hope we make good use of this buffer of time,” said Customized Energy Solutions’ David Sapper, suggesting that MISO’s wind capacity method might not work best for determining solar capacity credits, especially because the RTO’s recent renewable impact study shows that solar plays a role in managing the day’s traditional gross peak hour but leaves a more pronounced net load to be attended by other resource types. (See MISO Renewable Study Predicts Later Peak, Narrower LOLE Risk.)
MISO Manager of Probabilistic Resource Studies Ryan Westphal said the RASC will take up how solar is most effectively studied for capacity accreditation in 2019.
Other stakeholders urged MISO to act quickly on the issue, given that utilities file 15-year resource plans and would like to accurately gauge the value of their solar capacity.
TEMPE, Ariz. — It’s been two months since Peak Reliability announced it will be winding down its operations at the end of 2019, but the issue won’t recede into the background any time soon, Western Electricity Coordinating Council members heard last week at the group’s annual meeting.
WECC held its annual meeting Sept. 11 in Tempe, Ariz. | WECC
Just the opposite: Industry participants must now race the clock to ensure the Western Interconnection makes a smooth transition into a new era of balkanized reliability coordinator (RC) coverage.
Frye | WECC
“The hot topic of the day, and will be for the coming months … is the RC issue,” CEO Melanie Frye told the WECC board of directors Wednesday, the same day she revealed that CAISO is slated to provide RC service to about 72% of the West’s net energy load. (See CAISO RC Wins Most of the West.)
“Count me among those heartsick at what’s going on with Peak,” said Brian Theaker, director of market affairs at NRG Energy who also sits on WECC’s Member Advisory Committee (MAC). “I mean, we spent all this effort to put together the West-wide, interconnection-wide view, only to have it unravel like this, and I’m still just shaking my head from it.”
Thilly | WECC
“I know that the Eastern Interconnection operates with multiple reliability coordinators … and the lights don’t go out,” said NERC Trustee Roy Thilly, who said NERC’s board has asked for a report on developments related to the RC issue at each of its meetings. “But the transition, I suspect, creates its own set of issues that we need to watch very carefully. We don’t want any gaps, no communication failures; and the structure has got to work in terms of the geography.”
Here’s more of what RTO Insider heard during the event about what Thilly jokingly referred to as “the little thing called the Western reliability coordinator set of issues.”
Transparency, Independency
Ortiz | WECC
David Ortiz, acting director of FERC’s Office of Electric Reliability, noted that the West consists of a network of load connected by a “relatively sparse” transmission network compared with the eastern U.S.
“The result is a system in which disturbances here in Arizona can be felt immediately in Washington,” Ortiz said, pointing out the region has deployed a collection of wide-area remedial actions schemes to support transmission operations. “Perhaps more than any region, maintaining reliability in the West does require a wide-area view.”
He said a successful RC transition will entail more than just the new RCs assuming Peak’s key functions. “This also requires that transmission operators and balancing authorities throughout the West work hand in hand with their reliability coordinators to maintain reliability.”
WECC members representing consumers expressed concerns that the new RC arrangement will be less transparent and provide them reduced input into reliability issues.
Maury Galbraith, executive director of the Western Interstate Energy Board (WIEB), previously told RTO Insider that WIEB has special concerns about how CAISO is proposing to govern its new RC. He noted that, unlike at Peak, CAISO’s member advisory committee would consist only of industry representatives. Also, CAISO does not plan to open RC meetings to the public, nor would meeting notes be made available to the public.
At the WECC meeting, Galbraith told WECC board members that WIEB’s Western Interconnection Regional Advisory Body (WIRAB) has submitted written comments to CAISO focusing on concerns about “transparent” and “independent” decision-making by the proposed RC, and a meaningful role for WIRAB to provide input and advice on RC activities.
Galbraith noted that WIRAB representatives had recently met with CAISO officials about their concerns, “and I’m hopeful that we’ll be able to resolve some of these governance issues with the folks at the Cal-ISO in the next several weeks.”
David Clark, a Utah Public Service Commissioner who also sits on both the WECC MAC and WIRAB, said state regulators have become accustomed to “an approach to RC coordination that has given us a lot of opportunity to participate, to observe, to gain comfort with the independence that’s been evident and the schemes that are used to remediate troubling — even threatening — conditions. In the future, we’re going to have a much different model, and we want to make sure that we don’t lose sight of some key principles as this new model evolves.”
Clark said those who have a statutory obligation to represent the interests of electricity customers “want some means of assuring ourselves that the daily, hourly, even minute-by-minute coordination is occurring effectively, independently of any improper influence. So we need transparency to be able to achieve that level of comfort.”
WECC’s annual meeting focused on the transition of the Western Interconnection from Peak Reliability to multiple reliability coordinators. | WECC
“We think WIRAB has an important role to play in this, and so we’re looking for WIRAB to be able to advise whoever is setting the policy for the reliability coordination function,” Clark added.
MAC representative Fred Heutte, of the Northwest Energy Coalition, said WECC end-use members seek “an appropriate role” for providing “broader input” into oversight of the region’s multiple RCs. “Not so much about the details, or about issues related to management of multiple RCs. But rather, what’s the appropriate role for the non-BA, non-TO stakeholders in the RC process.”
“That will be quite a bit different than what we’ve seen with Peak with member class representation and an independent board and a MAC and all that. The structures that will be in the new RCs will be quite different, but we think the same themes are involved,” Heutte said.
‘Clarity of Communication’
A guest panel on how reliability coordination works in the Eastern Interconnection — with its multiple RCs — pointed to the need for a different kind of transparency.
Arness | WECC
MISO seams management expert Ron Arness pointed out that his RTO coordinates its reliability activities with eight RCs.
“Transparency [into neighboring areas] is important,” Arness said, emphasizing the importance of “clarity of communications,” managing loop flows and developing congestion management tools. He also emphasized the importance of accurate internal and external models and performing drills to test coordination.
“It’s necessary to have a wide view,” Arness said.
Warren | WECC
Cameron Warren, manager of transmission operational planning at Entergy, noted that his utility joined MISO’s market and RC services in 2013 after functioning as its own RC since 1998. He offered a piece of advice to his Western counterparts facing the switch to a new RC.
“You’re moving to a company that’s not as familiar with your territory as you are,” Warren said. “Training is key.”
Lorissa Jones, of the Bonneville Power Administration, asked whether outage coordination policies are aligned throughout the East.
Yes, Arness answered. “It is important that outages are coordinated and communicated,” he said. “That clarity of communication is important here.”
WIRAB’s Galbraith asked how MISO provides transmission congestion relief to its neighbors that don’t participate in organized markets. Arness pointed to the RTO’s use of the transmission loading relief process.
“It does not take economics into account” in dispatch orders, instead functioning “purely on a reliability basis,” Arness explained.
“Is there some sort of higher-level forum where RCs from the Eastern Interconnection get together to collaborate and talk about interconnection-wide models or broader issues that affect more than one RTO or TOP?” Frye asked.
Frye (left) and Heutte | WECC
“I’m not aware of an official NERC organization that deals with the coordination of [energy management system] models, but people — like myself — we have a communication process,” Arness responded. “We’ve worked out a process where [MISO’s RC function knows] when MISO updates models, and we have to know when our neighbor updates their models, and we have to know how MISO’s going to get a copy of those models and know what those changes are. So that’s a structure and a process that’s built-in. It’s paramount.”
WECC board Chair Kris Hafner asked what the West should do — or avoid — as it transitions to multiple RCs.
Warren pointed to the importance of “having the RCs get together, communicate, lay out the operating agreements on how they’re going to manage any congestion that’s going to impact one utility or another. And ensuring that they go into it with a true wide-area view.”
Arness reiterated the importance of clear communication.
“Make sure clarity of communication is in place not only within the reliability coordination entity and all the various people that are working on reliability coordination, but also with neighbors. … Have the coordination agreements in place that spell out that that’s going to occur.”
Illinois’ nuclear generation subsidies do not interfere with FERC-regulated wholesale power markets, the 7th U.S. Circuit Court of Appeals ruled Thursday in the latest judicial pronouncement on state-federal jurisdiction over the electric industry.
The 7th Circuit ruling in Electric Power Supply Association v. Anthony M. Starr upheld a July 2017 district court ruling and was consistent with an amicus brief by FERC that said the Illinois zero-emission credits program did not violate the Federal Power Act. Starr is director of the Illinois Power Agency. (See Analyst: FERC Asserts Role in Handling Nuke Subsidies.)
Exelon’s Clinton nuclear facility, which benefits from Illinois’ zero-emissions credit program. | Nuclear Regulatory Commission
The court’s opinion cited the Supreme Court’s 2016 Hughes v. Talen ruling, in which the court rejected Maryland regulators’ attempt to subsidize a combined cycle plant, saying that the state’s contract for differences — which required the generator to bid into and clear the PJM capacity market — could distort prices. The court cautioned that its opinion should not “be read to foreclose [states] from encouraging production of new or clean generation through measures ‘untethered to a generator’s wholesale market participation.’”
“And that’s what Illinois has done,” the 7th Circuit said Thursday. “To receive a credit, a firm must generate power, but how it sells that power is up to it. It can sell the power in an interstate auction but need not do so. It may choose instead to sell power through bilateral contracts with users (such as industrial plants) or local distribution companies that transmit the power to residences.”
EPSA had contended that the ZEC program infringed on FERC’s jurisdiction by indirectly regulating interstate energy markets by using average auction prices as a component in a formula that affects the cost of the ZECs. But the court said the value of ZECs does not depend on the generators’ auction offers.
“Every successful bidder in an interstate auction receives the price of the highest bid that clears the market. The owner of a credit receives that market‐clearing price, with none of the adjustments that Maryland law required,” the court wrote. “The zero‐emissions credit system can influence the auction price only indirectly, by keeping active a generation facility that otherwise might close and by raising the costs that carbon‐releasing producers incur to do business. A larger supply of electricity means a lower market‐clearing price, holding demand constant. But because states retain authority over power generation, a state policy that affects price only by increasing the quantity of power available for sale is not preempted by federal law.”
The court also rejected claims that Illinois’ program violated the dormant Commerce Clause, saying “the cross subsidy among producers may injure investors in carbon-releasing plants, but only those plants in Illinois (for the state’s regulatory power stops at the border).”
The court noted FERC’s June ruling requiring PJM to change its minimum offer price rule to address capacity market price suppression from state subsidies for renewables and nuclear power. (See FERC Orders PJM Capacity Market Revamp.)
EPSA had contended that FERC’s ruling was proof that the Illinois statute must be pre-empted. “But that’s not what the commission said,” the court noted. “Instead of deeming state systems such as Illinois’ to be forbidden, the commission has taken them as givens and set out to make the best of the situation they produce.”
EPSA said it was reviewing the order and hadn’t decided whether to seek a Supreme Court review. A similar court challenge is pending in the 2nd Circuit over New York’s ZEC program. (See 2nd Circuit Hears New York ZEC Appeal.)
“Today’s decision confirms that state subsidy programs such as nuclear bailout ZECs can harm wholesale markets,” EPSA said in a statement. “FERC told the 7th Circuit the commission can mitigate these negative effects and today’s opinion relies on that representation. EPSA now expects FERC to act promptly in the pending PJM capacity market docket to prevent the acknowledged harms state ZEC programs inflict on federally-regulated wholesale power markets.”
Analysts at ClearView Energy Partners issued a research note Thursday predicting the 2nd Circuit will also uphold the New York ZECs. “If the ZEC’s opponents seek review at the U.S. Supreme Court (via a petition for a writ of certiorari), we think they face an uphill battle,” ClearView said.
The analysts acknowledged however, that the 2nd Circuit’s rejection of the New York ZEC program “could meaningfully improve the prospects for Supreme Court review” to resolve the split rulings.
TEMPE, Ariz. — The Western Electricity Coordinating Council’s effort to clarify its mission will no longer include a name change, the group’s new chief said Wednesday.
Under previous CEO Jim Robb, WECC last year revived a proposal to change its name to “Reliability West” as part of a broader campaign to rebrand its image to reflect its refocus on its core reliability assurance mission after the 2014 bifurcation that divided WECC in its current form from what would become reliability coordinator Peak Reliability. (See WECC Finding New Direction in Old Mission.) The business case for the name change was set out in a November 2017 white paper.
The WECC Board of Directors tabled the name change in June after an advisory vote among the group’s members and also in light of WECC’s continued search for a replacement for Robb, who left his role to take over the top post at NERC. (See NERC Names WECC Chief to Top Post.)
“The rationale for the name change had some substantive content to it,” Chair Kris Hafner said during a quarterly meeting of the WECC board Sept. 12. “It was thought to basically bring to closure any lack of clarity posed by bifurcation and the respective roles of Peak and WECC and to avoid any role confusion.” That latter point became “a moot issue” after Peak’s July announcement that it would cease operations at the end of 2019, she noted. (See Peak Reliability to Wind Down Operations.)
“The hope Jim Robb had was to recast WECC in light of its new mission, to remove the ‘coordinating’ term from its name to avoid confusion with reliability coordinator — or planning coordinator,” Hafner said.
She added that brand clarity was another factor driving the change, given that other organizations share the WECC acronym, particularly the Wisconsin Energy Conservation Corp., which operates in four Western states in the electric power space.
Despite those issues, it turns out WECC’s name will remain unchanged.
Frye | WECC
“I appreciate the decision that the board made back in June, coming in as a new CEO to have an opportunity to be part of the conversation that I think is really thoughtful,” new CEO Melanie Frye told the board. “I think that it makes sense at this time to not proceed with a WECC change in name, but to do some things … to mitigate the risks and those things that we identified in the business case.”
Key among those things: changing the organization’s web address from a .biz to a .org to reflect its status as a non-profit.
“With that it would give us the opportunity to refresh the brand — the look and feel when someone visits our webpage, and know that they’re dealing with a reliability organization, not a conservation council,” Frye said, adding that WECC could refresh its logo and color palette in what that would “really identify and distinguish ourselves” from the other “WECC” entities. It would also build relationships with those organizations to handle situations when correspondence is misaddressed to them, she said.
Frye also suggested that WECC’s rebranding emphasize use of the shorthand version of its name, rather than the spelled-out version.
“I think the goal would be to not divert focus from our staff or from the industry in trying to address any change of name of the organization,” Frye said.
She told board members she would report back to them in December on any progress staff make in addressing the issues identified in the name change business case, and how they plan to proceed in 2019.
MISO hopes to become more customer- and employee-focused in 2019, unveiling plans for a new feedback tool, a data gathering project and a new committee.
The RTO plans to create a Customer Experience Steering Committee next year that will examine customer perceptions of it and explore improvements it can make in interacting with them. It has yet to decide who will sit on the committee.
MISO also said it will create and introduce a “Voice of the Stakeholder” program to gather both customer and employee opinions. Senior Vice President and Chief Customer Officer Todd Hillman said MISO plans this year to begin “journey mapping” — collecting data by following customer requests or comments from submittal to the RTO’s response and eventual outcome. MISO has hired management consulting firm West Monroe Partners to assist on the project.
Hillman said MISO will create a “centralized platform” for capturing feedback from customers and employees to transform itself from a “service provider to a collaborative entity to a trusted RTO adviser and partner.” Speaking during a Sept. 11 conference call of the Corporate Governance and Strategic Planning Committee of the Board of Directors, Hillman said MISO will eventually examine and rank customer- and employee-experience improvements similarly to how it uses the Market Roadmap process to set priorities for market improvements.
MISO Director Mark Johnson asked if stakeholders will really offer ideas using the Voice of the Stakeholder program.
“They’re actually eager to provide the feedback, but the mediums we provide are limited,” Hillman responded. “We need to make this more routine.”
Hillman also said MISO’s current employee feedback tool was put in place in the early 2000s and is now “feeble.”
“There’s nothing more dangerous than asking employees what they think and not being able to act on it,” he added.
Meanwhile, MISO is circulating a survey through Sept. 26 to identify possible improvements on its current customer training process.
CARMEL, Ind. — The Resource Adequacy Subcommittee has allowed MISO to use last year’s capacity export limit for Missouri’s Zone 5 after the RTO could not identify the limit.
MISO recently released zonal capacity import and export limits from this year’s loss-of-load-expectation study but said it could not find transmission constraints or a capacity export limit for Local Resource Zone 5. In its place, the RASC by consent allowed the Loss-of-Load-Expectation Working Group to use last year’s 2,122-MW export limit for the zone in the 2019/20 Planning Resource Auction.
MISO’s capacity export limits determine a local resource zone’s export capability on transmission for the PRA. When MISO cannot determine a transmission limit, it uses a generation-limited transfer study, which simulates further stressing of the transmission system after the RTO hypothetically runs out of generation to dispatch in the zone. The study is meant to discover whether a zone’s first transmission constraint would occur only after all the zone’s generation is dispatched at maximum levels.
In Missouri’s Zone 5 this year, no constraints were found even after the generation limited transfer study, said Laura Rauch, MISO director of resource adequacy coordination.
“We did run into an issue with Missouri capacity export limit,” Rauch told stakeholders attending a Sept. 12 RASC meeting.
Rauch also said MISO’s current process doesn’t provide for another analysis if it is unable to determine zonal transmission limits after an initial analysis and a generation-limited transfer study. “This is a situation that is not documented in our process,” she said. “We wanted to bring this to the RASC because this is a policy issue.” Rauch said the LOLEWG will begin working on a solution and codifying a new process.
Customized Energy Solutions’ David Sapper asked for more discussion on MISO’s options. He said because the RTO could find no constraint, the zone’s capability is hypothetically unlimited.
“I think it’s worth a round of feedback,” Sapper said.
“For the auction clearing, we do need to input some number, whether that’s 9,999” or another value, Rauch said.
RASC Chair Chris Plante said it was unlikely that imposing a limit as low as 2,000 MW or as high as 9,999 MW would affect auction clearing results.
Sapper pointed out that MISO using the previous year’s limit potentially opens the doors to using other previous capacity auction values. It could become that the “past is not prologue,” he said.
Consumers Energy’s Jeff Beattie asked the room if anyone thought the one-year adoption would violate MISO’s standard to value reliability first. Rauch said that standard does contain language allowing use of historic capacity limits when appropriate.
“Our view of Zone 5 is that there isn’t significant change from last year,” Rauch said.
New CONE values
MISO has also made its annual FERC filing to update its cost of new entry values for the 2019/20 planning year. The RTO’s CONE now ranges from a low of $81,640/MW-year ($223.67/MW-day) in Louisiana and East Texas’ Zone 9 to a high of $89,960/MW-year ($246.47/MW-day) in Missouri’s Zone 5.
“The estimates are down from a year ago, as they were last year, about $2,000 to $3,000 across the board,” MISO adviser Mike Robinson said.
CONE represents the estimated annualized capital cost of constructing a 237-MW nominal capacity combustion turbine plant in different locations in the footprint. MISO uses CONE as the maximum offer and maximum clearing price in its PRAs.
RENSSELAER, N.Y. — NYISO has asked FERC to reject a complaint by the Independent Power Producers of New York (IPPNY) seeking to bar the ISO from allowing PJM resources to sell installed capacity into Zone J using unforced capacity deliverability rights (UDR) facilities (EL18-189).
Presenting the monthly Broader Regional Markets report, Rana Mukerji, senior vice president for market structures, told the Business Issues Committee on Wednesday that IPPNY incorrectly assumes that transactions across Zone J merchant transmission facilities (MTF) would be subject to curtailment on the same basis as non-firm service within PJM. IPPNY also has not shown that transactions across the Zone J MTFs are no longer deliverable to the New York Control Area interface, Mukerji said.
“Whether the Zone J MTFs have firm TWRs [transmission withdrawal rights] or non-firm TWRs makes no practical difference for curtailment purposes,” NYISO said in its Aug. 20 response to IPPNY’s July complaint. “It was therefore reasonable for the NYISO to conclude that the TWR conversions do not impact the deliverability of transfers across the Zone J MTFs.”
The BIC endorsed changes to NYISO’s unsecured credit scoring model following its first review of the methodology since 2009.
John Jucha, senior credit analyst for corporate credit, said that to qualify for unsecured credit, a market participant must meet financial, credit rating and on-time payment history requirements.
The review found that the model was still performing “within an acceptable range” overall but that the calculation of revenue/market capitalization was not a reliable predictor of default for public companies, Jucha said. It also found that size variables were not represented in the model despite their “strong predictive power.”
Rating all market participants — including corporates, financial institutions and government entities — on the same scorecard may mask differences between them, the analysis found.
Under the new model, the 12.7% weighting for revenue/market cap will be replaced with a measure of total assets. The ISO also will consider using third-party credit ratings for non-corporate segments such as municipalities and financial institutions. It will also create additional rules for the qualitative assessment of market participants to reduce subjectivity under the current “open-ended assessment.” Additional changes were made to automate data entry and improve model transparency.
The BIC vote urges the Management Committee to recommend the changes to the Board of Directors.
Revisions to OATT Attachment L
The BIC voted to recommend the Management Committee approve revisions to Attachment L of NYISO’s Open Access Transmission Tariff updating terms regarding transmission congestion contracts (TCCs).
Gregory R. Williams, manager of TCC market operations, said the updates to Section 18.1.1 (Table 1A) of Attachment L followed an annual review. Among the changes were revising contract expiration dates from Dec. 31, 2017, to Dec. 31, 2027.
The ISO will seek approval of the revisions at the MC meeting Sept. 26.
Updating 2017 CARIS Database
Senior Planning Engineer Chen Yang reviewed changes NYISO is making in its Congestion Assessment and Resource Integration Studies (CARIS) Phase 1 database for Phase 2 studies extending through 2036. The Phase 1 base case covers the years 2017-2026.
Phase 2 of the Congestion Assessment and Resource Integration Studies (CARIS) database will aid in evaluating economic transmission projects through 2036. | NYISO
The Phase 2 base case, which will be used to evaluate regulated economic transmission projects and optional studies, incorporates retirements, additions and changes to in-service dates for more than a dozen generating facilities. The new model also reflects transmission capacity increases or other changes regarding six grid projects.
The ISO’s rules require it to review the changes with the BIC but do not require committee approval.
ISO to Begin Incorporating 100+kV Tx Facilities in Markets
Shaun Johnson, director of market mitigation and analysis, briefed stakeholders on a project to begin scheduling and pricing lower-voltage transmission in the day-ahead and real-time markets, beginning with four 100+kV facilities in November and 18 in December.
NYISO is the NERC transmission operator (TOP) for 230-kV and higher transmission in the state while the transmission owners are the TOPs for the lower-voltage system. The ISO helps the TOs manage constraints on the lower transmission lines through transaction curtailments, phase angle regulator adjustments, day-ahead reliability unit (DARU) commitments and other out-of-market actions, which can harm price formation efficiency and price transparency.
Johnson said the project will reduce out-of-market actions by allowing the market software to use more efficient solutions to thermal overloads when such solutions are available. It also will more accurately represent the cost in locational-based marginal prices to secure the system, he said.
NYISO’s Market Monitoring Unit, Potomac Economics, had recommended the move in each of its State of the Market reports since 2014, leading the ISO to publish a white paper on the topic in June 2017.
The MMU said that incentives to invest in resources on the 115-kV system in upstate New York are inadequate and that managing lower-voltage facilities through out-of-market actions has increased power supplier uplift payments and contributed to the need for cost-of-service contracts to keep older resources operating. At times, transfer limits on internal and external interfaces are reduced to manage 115-kV security.
LBMPs up 40% Year-on-Year
NYISO LBMPs averaged $42.56/MWh in August, up 7.5% from $39.58/MWh in July 2018 and nearly 40% higher than the same month a year ago, Mukerji said in his monthly operations report.
Year-to-date monthly energy prices averaged $46.37/MWh in August, a 30% increase from a year ago. August’s average sendout was 537 GWh/day, higher than 529 GWh/day in July and 477 GWh/day a year earlier.
Transco Z6 hub natural gas prices averaged $3/MMBtu, up about 10.5% from July and up 39.2% from a year earlier. Distillate prices climbed slightly compared to the previous month but were up 33.8% year-over-year. Jet Kerosene Gulf Coast and Ultra Low Sulfur No. 2 Diesel NY Harbor averaged $15.67/MMBtu and $15.36/MMBtu, respectively.
Total uplift costs and uplift per megawatt-hour came in higher than July, with the ISO’s 59 cents/MWh local reliability share in August up from 44 cents the previous month, while the statewide share dropped from -57 cents/MWh to -61 cents. Uplift, excluding the ISO’s cost of operations, was -2 cents/MWh, higher than -13 cents in July.
Thunderstorm alert (TSA) costs in New York City were 14 cents/MWh, down a third from 21 cents in July. TSAs are called when actual or anticipated severe weather conditions lead the ISO to reduce transmission limits on the UPNY-SENY interface, which often leads to severe congestion. Because a TSA may alter the capability of the transmission system in ways that are difficult to hedge in day-ahead markets, day-ahead prices reflect the probability-weighted expectation of infrequent high-priced events in the real-time market.
TEMPE, Ariz. — CAISO is poised to take the lion’s share of the West in the competition for reliability coordinator (RC) customers, the Western Electricity Coordinating Council revealed Wednesday.
Speaking during the Regional Entity’s Wednesday board meeting, WECC CEO Melanie Frye said her organization has received tentative RC commitments from balancing authorities and transmission operators representing all but 2% of net energy load in the West.
The results: 72% of the region’s load will likely sign on with CAISO’s new RC, while 12% of load will go with SPP.
WECC and NERC requested that Western BAs and TOs declare their RCs by Sept. 4. The action became necessary when Peak Reliability, which has been providing the Western grid’s RC function following a major outage in 2011, announced in July that it will wind down its services by the end of 2019.
Frye also confirmed that BC Hydro is moving ahead with plans to set up an RC covering its own territory in British Columbia, Canada, representing about 7% of WECC load. Its neighbor to the east, the Alberta Electric System Operator (another 7% of load), will continue to provide for its own RC needs.
“Clearly, we need to follow up with the uncommitted to see where their intentions lie,” Frye said.
Among the uncommitted are Avista in northern Washington and Public Service Company of New Mexico (PNM), the state’s largest utility.
Frye said PNM was “leaning in one direction, but after hearing what their neighbors were doing, they are back into consideration.” The utility last month announced that it intends to join CAISO’s Western Energy Imbalance Market, while its neighboring BAs have recently signaled they are selecting SPP as their RC. (See PNM Seeks to Join Energy Imbalance Market.)
WECC declined to list the BAs’ RC selections, telling RTO Insider it would instead defer to each BA to make its own announcements.
But a map released by WECC at the meeting shows the SPP RC will still grab a big slice of the inland West, largely a product of the Western Area Power Administration’s decision to deepen its relationship with a market operator that already serves part of its sprawling transmission network. (See WAPA to Divide RC Services Between CAISO, SPP.)
CAISO’s RC will dominate the West Coast, Idaho, Montana, Nevada and Utah — areas heavily represented in the EIM. Frye offered a caveat regarding the map: “These are the draft nonbinding footprints that came in at our request. … Official commitments aren’t due into CAISO until Nov. 1.”
On Monday, SPP confirmed that 15 Western utilities have indicated they will use the RTO’s RC services:
Arizona Electric Power Cooperative
Black Hills Energy’s three electric utilities: Black Hills Power; Cheyenne Light, Fuel and Power; and Black Hills Colorado Electric
City of Farmington, N.M.
Colorado Springs Utilities
El Paso Electric
Intermountain Rural Electric Association
Platte River Power Authority
Public Service Company of Colorado (PSCo)
Tri-State Generation and Transmission Association
Tucson Electric Power
WAPA’s Desert Southwest, Rocky Mountain and Upper Great Plains-West regions.
The list did not include some utilities that WECC’s map indicates have also chosen SPP, including two small pockets in the Pacific Northwest which align with Avangrid’s recently inaugurated wind-heavy “Green Balancing Authority” on both sides of the Columbia River. Southern California’s Imperial Irrigation District, which has historically had a contentious relationship with CAISO, also appears to have selected SPP as its RC.
The RC elections will give SPP a presence in 21 states, adding Arizona, California, Colorado, Oregon, Utah, Washington and what appears to be a thin slice of Nevada to the 14 states where it currently has members: Arkansas, Iowa, Kansas, Louisiana, Minnesota, Missouri, Montana, Nebraska, New Mexico, North Dakota, Oklahoma, South Dakota, Texas and Wyoming.
PSCo had announced Sept. 11 that it had selected SPP as its RC provider. Ironically, the company in April all but put the kibosh on SPP’s planned integration of the Mountain West Transmission Group, announcing that it was withdrawing from the Rocky Mountain group and its efforts to join the RTO. (See Xcel Leaving Mountain West; SPP Integration at Risk.)
SPP COO Carl Monroe said he welcomed the news that PSCo has joined others in selecting the RTO as its RC. Those committing to SPP include all of the original Mountain West entities except Basin Electric Power Cooperative and two WAPA regions.
“We’ve worked hard over the last several months to demonstrate the quality and breadth of our service in terms of technical expertise, a customer-centric approach to doing business and the integrity of our people and processes,” Monroe said.
The RTO has said it remains committed to adding the rest of the Mountain West as members. However, that work has been overtaken by the Western RC initiatives. It said it will soon finalize plans for the governance and operation of its Western RC services, taking input from customers, neighboring RCs and regulatory stakeholders.
SPP plans to become certified as an RC in the second half of 2019 and to begin offering services in December 2019.
Frye said WECC will now begin “analytical work” related to transmission that crosses RC boundaries and look into whether there are “different types of studies we can do around frequency” issues. She said her organization also wants to convene a monthly call with BAs and TOs to consider a Western Interconnection-wide plan for transitioning to the new RC arrangements.
WECC will work with NERC to ensure the new RCs are certified and their members are properly registered.
“We’re also working with BC Hydro and [British Columbia] officials to see what kind of certification-like activity they will want to do in that province,” Frye said.
