Page 1132 – RTO Insider

August 13, 2018

PJM PC/TEAC Briefs: Aug. 9, 2018

VALLEY FORGE, Pa. — Opponents and advocates of new rules to increase the importance of cost containment in transmission project proposals found themselves in uncommon agreement at last week’s PJM Planning Committee meeting.

Both shared concerns over the RTO’s plan to delay inserting some language for the new rules into Manual 14F.

Staff explained that it was a last-second decision meant to avoid confusion for those reading the manuals, and while stakeholders didn’t fully support the explanation, they eventually agreed to endorse some of the modified manual revisions but defer voting on the cost-containment language.

The wide-ranging changes include revisions to PJM’s processes for selecting “market efficiency“ transmission projects and prequalification for submitting proposals. But stakeholders were focused on how PJM plans to implement the cost containment rules, which were endorsed earlier this year following a controversial stakeholder process. (See Cost Containment Clears MC Vote Despite PJM Plea.)

While some of the changes could be implemented immediately, two frameworks for comparing projects are being developed by PJM and its Independent Market Monitor. The first framework on construction costs is expected to be ready for use in December, while the second comparing return on equity and capital structures is expected by May. Because they aren’t ready for use, staff decided to keep language revisions related to frameworks out of the public version of the manual. They are being maintained in an internal version that will be brought for stakeholder endorsement once the frameworks are finalized.

pjm inverter based generators — PJM’s Jason Shoemaker | © *RTO Insider*

“The manual is a reflection of what’s in effect today, and the comparative process is not a part of that today,” PJM’s Jason Shoemaker explained.

LS Power’s Sharon Segner, who led the campaign to get the cost containment language endorsed, said PJM would be “picking and choosing” which parts of the approved revisions it’s implementing.

“This is kind of different than what was communicated to me just a few days ago as far as the approach, so I’m just concerned,” she said.

Alex Stern of Public Service Electric and Gas, who largely opposed Segner throughout the cost containment battle, joined her in expressing concern because staff was not being clear with exactly what changes it was proposing from what was presented at the first reading last month and its meeting materials did not reflect the changes or represent the statements being made. His concern stemmed particularly from PJM’s representation that it was removing language from the manual that had received stakeholder endorsement. Withholding the language related to the frameworks from the revisions up for endorsement wasn’t clearly spelled out in the issue presentation PJM posted online prior to the meeting, and Stern questioned whether an endorsement should move forward when significant changes were being unclearly communicated immediately before the requested endorsement vote.

“This is a change also from my point of view,” he said. “I’m not clear as to why you’re carving it out.”

PJM’s Sue Glatz assured stakeholders that the withholding was limited to one section in the manual and a note would be included explaining that the material will be added later “so it’s not being lost.” She pointed out it would also be captured in the meeting’s minutes.

PJM’s Steve Herling said it wasn’t the first time staff had used this tactic, so he didn’t understand the “nervousness.” Including it now wouldn’t impact whether — or how quickly — the frameworks are completed, he said, and “it’s highly likely“ that additional manual language beyond what has already been approved will be needed to comprehensively detail the process.

“We can’t post language … [that] will cause confusion if it’s not ready to be implemented. People will be reading the manuals,” he said. “When it is ready to be implemented, it will be posted.”

“I think taking out the note causes more confusion than it helps,” Stern said. “I’m actually confused the other direction how it helps to carve this out when there is the confusion. … I’m really not sure what people are concerned about.”

Once the situation was explained, Tonja Wicks of Duquesne Light said she was supportive of PJM’s plan. American Municipal Power’s Steve Lieberman said he was “sensitive” to Herling’s points.

PJM eventually offered to remove the cost-containment language from the endorsement vote proceeding, with the Manual 14F changes focused on market efficiency procedures.

Following additional debate, Segner eventually decided to trust the process.

“I’m still a little confused, but I think we’re on the right path, and I’m going to support this today,” she said.

PJM’s Mark Sims reviewed staff’s planned timeline for implementing the cost containment measures. He explained that the comparative frameworks will help staff put proposals into a fuller context that includes constructability and financial data, along with risk evaluations.

DER Ride-through

Staff are asking stakeholders for the opportunity to investigate whether certain operating parameters for inverter-based generators create a reliability risk for the grid.

PJM’s Andrew Levitt presented a proposed problem statement and issue charge to determine whether the “ride-through” settings for distributed energy resources like residential wind and solar might create low-voltage risks. For safety and other reasons, DERs are configured to trip off within two seconds if they experience under- or over-voltage. As the amount of DERs grows, all of them tripping during such an event could exacerbate the situation. A new industry standard would address that issue by requiring DER to ride through certain system fluctuations.

Levitt had previously approached the Operating Committee in March about transmission owners taking the lead in implementing the new Institute of Electrical and Electronics Engineers standard. (See “Implementing DER Ride Through,” PJM Operating Committee Briefs: March 6, 2018.)

Normal conditions wouldn’t cause an issue, Levitt said, but “our relay clearing logic doesn’t always work correctly” and could exceed the two-second threshold.

“Really, we would need to change our planning criteria under that kind of a scenario,” he said. “Ride-through is good; lack of ride-through is bad.”

Stakeholders noted several challenges that would have to be addressed, including the safety of utility workers working on lines, engineering and regulatory differences between the transmission and distribution systems, and the appropriateness of focusing on one technology type.

PJM will be hosting a technical workshop on the issue Oct. 1-2, Levitt said.

CIRs

Staff announced that stakeholders impacted by planned revisions to how PJM calculates the output of generating units will have more than six years to prepare for the changes.

Changes planned for Manual 21 would revise and add detail to how PJM would test a generator’s output and determine its net capability each year. Among the changes, the capacity factors for wind and solar units would be calculated using the median factors instead of the average. Throughout the year, PJM’s Jerry Bell has been presenting analysis showing that the median more closely predicts actual performance than the average. (See “Skepticism of Gen Capability Changes Continues,” PJM Operating Committee Briefs: June 5, 2018.)

However, the changes would mean that affected wind and solar units would have their capacity injection rights (CIRs) reduced. The potential reductions have concerned stakeholders because they have to pay for the CIRs. Bell has said the CIRs could be reallocated to other projects, but they would be constrained to projects on the same transmission line.

In an attempt to placate the concerns, Bell announced that the changes won’t go into effect until the 2025 delivery year. Stakeholders will be alerted to CIR reductions by Aug. 1, 2024, and have to identify where they plan to move the CIRs by Jan. 1, 2025. They will then have until the end of that year to utilize them elsewhere. Any unused CIRs won’t technically be lost until June 1, 2026.

“When it comes to incorporating intermittent resources … this has always been a work in progress,” PJM’s Tom Falin said. “This is just a further refinement in that area as we have accumulated more data.”

The longer lead time seemed to have its intended effect.

“These changes are certainly much improved from the initial proposal,” Dayton Power and Light’s John Horstmann said.

TO Supplementals Discussion

PPL’s Frank “Chip” Richardson announced that TOs will be hosting an online conference on Aug. 28 to discuss additional details of their plan to implement FERC’s order from earlier this year requiring TOs to increase stakeholder engagement in the development of supplemental projects.

Supplemental projects are transmission construction initiated by TOs to address their own planning criteria and aren’t in response to any wider planning criteria. FERC determined that PJM TOs’ processes for developing those projects weren’t in compliance with Order 890, sending reverberations through several stakeholder initiatives that most recently culminated in the termination at July’s Markets and Reliability Committee meeting of a task force focused on end-of-life supplemental projects. (See PJM Stakeholders End Tx Replacement Task Force.)

ARR Analysis Finds Infeasible Facilities

PJM’s Xu Xu announced at last week’s Transmission Expansion Advisory Committee meeting that the annual analysis of stage 1A auction revenue rights found one violation within PJM’s territory and eight across flowgates to MISO. The analysis assesses the simultaneous feasibility of the ARRs’ paths for a 10-year period.

The internal violation is expected to be addressed through a project that should be in service in 2020. Proposals to address the others are being considered in interregional planning with MISO.

Cost of Dominion’s Haymarket Line Triples with Undergrounding

A decision by Virginia regulators to settle a controversy over a transmission line planned through a historical community through partial undergrounding will triple the cost of the line, staff confirmed.

A 6-mile 230-kV line planned for the area of Haymarket, Va., to feed new data centers received national attention after protesters raised concerns about Dominion Energy’s plan to site it through a historically African-American community inhabited by descendants of emancipated slaves. The Virginia State Corporation Commission stepped in to approve project revisions under a newly enacted underground transmission pilot program as part of the Grid Transformation and Security Act of 2018, which went into effect July 1.

The revisions will underground roughly half the project, increasing costs from an initial estimate of between $45 million and $57 million to the new estimate of $174 million.

Because the proposal was a supplemental project initiated by Dominion, PJM confirmed that the entirety of the cost will be billed back to customers in Dominion’s zone. However, that might change after the D.C. Circuit Court of Appeals rejected earlier this month PJM’s cost allocation rules for supplemental projects that involve high-voltage lines. The rule, which had prohibited cost sharing for all supplementals, was remanded back to FERC for revision. (See DC Circuit Rejects PJM Tx Cost Allocation Rule.)

— Rory D. Sweeney

August 13, 2018January 21, 2024

Western RTO or Bust? Not so, Says Industry

By Michael Brooks

WASHINGTON — Industry opinions vary on the prospects for a full-fledged RTO in the Western Interconnection, with some optimistic and others thinking there are too many snags for it to work.

But that doesn’t mean market services can’t expand there in some other form, attendees of the Western Power Issues Roundtable said last week.

The 11th annual gathering, held by the Western Power Trading Forum in the offices of law firm Skadden Arps, came after several shakeups in the interconnection this year, including SPP pressing pause on its plan to integrate Mountain West Transmission Group and the announced demise of Peak Reliability. (See Still ‘Committed,’ SPP Halts Mountain West Integration Effort and Peak Reliability to Wind Down Operations.)

SPP’s efforts took a hit in April when Xcel Energy’s Public Service Company of Colorado (PSCo) subsidiary, representing 40% of Mountain West’s load, said it would leave the group. Peak, the reliability coordinator (RC) for most of the interconnection, had been attempting to create a new energy market in partnership with PJM. But in July it said would shut down as early as next year after CAISO moved to leave and provide its own RC services, attracting interest from nearly all of Peak’s customers by offering lower-cost services.

Kenna Hagan, senior manager of planning, policy and strategy at Mountain West member Black Hills Corp., said Xcel’s announcement, made late Friday, April 20, “floored many of us.” She said she called PSCo on Monday morning, saying, “‘I’m just checking to see if your executives were participating in Colorado’s state holiday.’”

But she assured attendees that Mountain West “is not dead.” She said group members are still examining the costs and governance structure of joining SPP without Xcel, but the current priority for everyone in the interconnection, not just Mountain West, is finding a new RC provider. CAISO has said most of the interconnection have signed letters of intent with it, but Hagan said at least two balancing authorities have pledged with SPP.

“I don’t think you can underestimate the time, creativity and effort that it takes to solve” the issues related to integration, Hagan said.

Stu Bresler, PJM senior vice president of market operations, said that though it has ended its relationship with Peak, “to the extent that there is a desire for folks in the West to continue talking about the possibility of developing their own market, we’re still interested in being involved.”

The plan remains the same as before Peak’s end: provide energy, ancillary and financial transmission rights markets. Then, should members “want to go down the path of an RTO,” expand to transmission and interconnection planning.

“We certainly are not saying it’s now or never,” Bresler said. “If now is not the right time to look at this, PJM is certainly not going anywhere.”

All Eyes on California

CAISO has also suffered setbacks in its efforts to expand, but those plans now appear closer than ever to becoming a reality.

A bill that would allow the expansion, AB813, passed the California State Assembly last year, and it’s now before the State Senate’s Appropriations Committee after passing two other committees in June. (See CAISO Regionalization Bill Edges Toward Senate Vote.)

“We are still very optimistic about 813 passing this year,” said Phil Pettingill, CAISO regional integration director. The two-year legislative session ends at the end of this month. If the bill passes the Senate before then, “it’s just a matter of the two houses reconciling it and sending it to the governor.”

But many at the conference expressed skepticism that CAISO would become an RTO, even if the bill passes. The bill would only allow CAISO to expand if it agrees upon a modified governance structure — and at least one transmission owner outside the state agrees to join.

Some in the West are concerned that a new RTO would be subject to California’s influence more than any other state’s. California has been one of the most aggressive in the U.S. in trying to curb carbon emissions and address climate change, while states such as Wyoming and Utah still heavily favor coal.

Former FERC Commissioner Tony Clark, senior adviser at Wilkinson Barker Knauer, wondered, even with “the most independent board you could possibly imagine … can you still get to a broader regional market, because you still have the inherent tensions between competing state public policies, state mistrust of each other… Maybe the [Energy Imbalance Market] is as far as we get.”

Wyoming Public Service Commission Chair Bill Russell said, “It’s probably a bigger risk for California than it is for the rest of us. I think California would be giving up more than the rest of us, and I don’t know if that happens.”

He noted that California wants to offload its abundance of renewable energy. “California is trying solve a problem. … We are open to the idea of an RTO, but for us, it’s just an option. We’re not trying to solve a problem.”

Russell opened the roundtable by admitting that “everyone in this room knows more about [RTOs] than I do.” When PacifiCorp told the PSC it was working with CAISO on expansion in 2015, none of the commissioners had even heard of RTOs, he said.

Now, he said, they are watching CAISO, SPP and PJM very closely. Given the concerns over governance, “the best solution for the West might be two markets, or three, that have various comfort levels for whoever’s doing those markets,” Russell said.

[EDITOR’S NOTE: An earlier version of this story incorrectly stated that AB813 would not allow CAISO to expand unless at least one transmission owner outside the state agrees to join by the end of 2018.]

August 13, 2018

PJM Operating Committee Briefs: Aug. 7, 2018

VALLEY FORGE, Pa. — PJM is hoping to simplify its communication of items that require stakeholder action through a new “stakeholder impact slide” in appropriate presentations, PJM’s Rebecca Carroll told members at last week’s Operating Committee meeting.

The slide will identify what action is needed, the deadline and which stakeholders it impacts.

“It will spell out very clearly what the action is that is required for the stakeholder,” Carroll said.

The concept will be piloted in the OC and the Tech Change Forum before it’s rolled out elsewhere, she said.

Low Frequency

Grid operators handled an unusual number and variety of issues in July, staff explained.

Chief among them was a low-frequency event on July 10 between 3 and 4 p.m. Operators had been targeting a frequency of 59.98 Hz to account for a “time error correction,” but it fell to 59.903 Hz by 3:45 p.m. The event occurred in two frequency drops, and staff are puzzled over what caused the first one.

A timeline of the July 10 low-frequency event with brief analysis of several events. | *PJM*

In the five minutes after 3:30 p.m., the frequency gradually dropped by 0.04 Hz, and PJM staff are working with NERC’s Resource Subcommittee to determine why. PJM’s Chris Pilong said the analysis is “not to point fingers” and that RTO tools intended to determine the cause of such issues “right now … aren’t pointing to anything.”

“It’s going to be outside the PJM system,” he said. “We’re thinking there may be some data errors in there somewhere.”

A second 0.03-Hz drop that began around 3:40 p.m. was caused by an 800-MW pseudo-tied unit tripping, Pilong said. Just before the drop, PJM initiated a synchronized reserve event, which deployed all the RTO’s synchronized reserves. PJM’s pseudo-tie error was roughly 900 MW under its target leading into the reserve event, and it dropped further down to 1,800 MW at the frequency’s lowest point.

PJM called a “simultaneous activation of reserve” (SAR) with the Northeast Power Coordinating Council at 3:50 p.m., about five minutes after the second frequency drop. The frequency rebounded to above its target level within five minutes.

Staff said the event isn’t normal but does happen every three years in the Eastern Interconnection. While this was the lowest they’d seen, it would have had to fall another 0.1 Hz for operators to call for a load action.

The puzzle for staff is what caused the initial drop, which drifted down rather than dropping immediately in a way indicative of a unit tripping.

“We drifted low. It wasn’t a step function low,” PJM’s Glen Boyle said.

Spinning Events

Grid operators also dealt with “obviously a higher volume of spinning events” than usual during July, Pilong said. The cause was multiple generators tripping, he said, but initial analysis indicates they were all unrelated. He said staff would analyze whether the system is experiencing more generators tripping or if there are any other takeaways.

“This could have just been a fluke month, or it could be a trend of something more,” Pilong said.

Load Shed

Staff confirmed that the load shed ordered July 18 was dissimilar to the load shed that occurred just months earlier in the same transmission zone.

The July 18 event occurred in the Lonesome Pine area on the border of Virginia and West Virginia after tripped equipment caused low voltage in the area. The events in American Electric Power’s zone were the first since PJM implemented Capacity Performance and its financial penalties and bonuses for generator performance during reliability events such as load sheds, though neither event triggered those calculations. (See 2nd Load Shed of PJM’s CP Era Follows Closely on 1st.)

PJM Operating Committee Load Shed — A diagram of the area around the July 18 load shed. | *PJM*

Staff said the events differed in that the Lonesome Pine event was in response to actual system conditions while the previous Twin Branch event was based on concerns identified through simulations.

“That was a little more complex,” Pilong said. “This one was a little more straightforward.”

Citigroup’s Barry Trayers asked if PJM would develop additional CP event categories for situations like this with no financial repercussions. Staff confirmed the Lonesome Pine event did not create a balancing ratio since no generators were involved.

User Interface Fuel Security Changes

PJM’s Brian Fitzpatrick announced “voluntary” gas usage data requests, but stakeholders were skeptical whether the requests would be implemented that way.

Fitzpatrick said PJM is asking gas-fired generators to report through its Markets Gateway online interface all gas nominations made to the appropriate city gate. PJM is attempting to correlate the amount of gas requested at a location with its ongoing study of gas pipeline contingency plans.

“We’re not looking for what the [local distribution company] is nominating,” Fitzpatrick explained. “We’re looking for what the generators are nominating to the LDC.”

PJM’s Dave Souder confirmed that “it’s not a mandatory field” that must be completed for a generator’s energy market bid to be accepted, “but it is information we’re asking for” and staff will be contacting those who don’t comply to help them become “comfortable” with providing the information.

“It’s voluntary to the extent that if you don’t enter it, we won’t reject your bid … but this is information that we want so that we can move this gas contingency process forward,” Souder said.

— Rory D. Sweeney

August 13, 2018

SPP Briefs: Week of Aug. 6, 2018

SPP’s Schedule 1A Task Force last week kicked off an expected monthslong effort to develop an alternative rate structure to the RTO’s current method for recovering its administrative costs.

The Finance Committee and SPP staff have both discussed changing the fee’s billing units from transmission metrics to energy metrics by charging market transactions. The administrative fee, currently 42.9 cents/MWh, is collected under Schedule 1A of SPP’s Tariff on contracts between transmission providers and customers. (See SPP Stakeholders to Study Admin Fee Changes.)

“From an SPP standpoint, what we have now works fine,” CFO Tom Dunn told the group Aug. 8. “From a members’ standpoint, feedback indicates it’s not necessarily fine.” He said transmission customers have complained of difficulty recovering the charges “through their rate base process.”

While SPP’s costs have increased with the addition of the Integrated Marketplace, “the number of folks paying [the costs] is not necessarily growing,” Dunn said.

The task force discussed Dunn’s July presentation to the Markets and Operations Policy Committee, which led to the group’s creation. Members also took a first look at other grid operators’ recovery mechanism.

The task force is scheduled to present a recommendation to SPP’s Board of Directors and Members Committee in January.

SPP, MISO to Discuss Seams Transmission with Stakeholders

SPP and MISO are bringing stakeholders into the conversation as they continue efforts to improve transmission service along their seam.

The RTOs have agreed to remove their $5 million cost threshold and joint modeling requirement for transmission projects, two barriers that have prevented them from agreeing on interregional projects. (See MISO, SPP Loosen Interregional Project Requirements.)

The Interregional Planning Stakeholder Advisory Committee has scheduled a conference call on Aug. 27 to review with stakeholders the proposed changes to the interregional planning process.

SPP MISO M2M Payments admin fee — Bell © *RTO Insider*

Adam Bell, SPP’s interregional coordinator, told the Seams Steering Committee on Aug. 8 that feedback to the changes has been “somewhat split,” but staff are working to address stakeholder concerns.

“We need to move the conversation in a direction that everybody is happy with,” Bell said. He said the grid operators plan to file the revised process this year so they can begin a new study in 2019.

The RTOs are also working to schedule a meeting this fall with staff and stakeholders to further explain the January “Big Chill” and actions being taken to prevent a reoccurrence. Colder-than-normal weather and generation shortfalls in MISO South on Jan. 17 led to MISO exceeding its regional dispatch limit on transfers between its northern and southern footprints across SPP’s system.

MISO Adds $213,189 in M2M Payments to SPP

June’s market-to-market (M2M) payments between SPP and MISO came in at $213,189 in SPP’s favor. While the amount was the lowest since last August, June was also the 11th straight month and 19th of the last 21 in which the payments have been in SPP’s favor.

The RTO has recorded $53.8 million in M2M payments from MISO since the two began the process in March 2015.

Flowgates were binding for 713 hours in June.

— Tom Kleckner

August 12, 2018November 13, 2023

ERCOT Board of Directors Briefs: Aug. 7, 2018

ERCOT’s Board of Directors last week approved an ISO request to correct real-time prices following a July event that caused brief market palpitations. (See “Stakeholders, Staff Discuss Price Investigation Notices,” ERCOT Technical Advisory Committee Briefs: July 26, 2018.)

The correction changes 25 security-constrained economic dispatch intervals and nine settlement intervals between 4:30 and 6:30 p.m. on July 18. The average revision across all settlement points was a $10.67/MWh decrease, while the average change in 15-minute settlement price points was a $8.78/MWh decrease.

The ISO was required to seek board approval for the price correction when staff missed a two-business-day deadline to correct the July 18 error on their own.

A data-input mistake in ERCOT’s weekly operational model resulted in two double-circuit contingencies on a 138-kV line east of Dallas being identified as two triple-circuit contingencies. Kenan Ogelman, ERCOT vice president of commercial operations, said the contingency bound when it shouldn’t have, restricting nearby generation and affecting both system prices and prices near the generating units.

The issue, which wasn’t caught until July 19, affected the July 18 real-time operating day and the July 20 day-ahead operating day. Corrected day-ahead prices were published on July 23.

Woody Rickerson, ERCOT vice president of grid planning and operations, said staff have changed the operational model’s automated process to avoid similar mistakes in the future. Each model includes about 7,000 contingencies.

“We fixed the problem; we’ve validated the contingency files; we’re moving forward with the same process,” Rickerson said.

Staff Continues Southern Cross Work

Compliance Director Matt Mereness briefed the directors on ERCOT’s progress in accommodating the Southern Cross Project (SCT), a 2-GW DC tie in East Texas that would connect the ISO with SERC Reliability Corp.

Because ERCOT’s largest existing DC tie is 600 MW, Texas’ Public Utility Commission last year directed the grid operator to address several issues as a condition for energizing SCT, asking it to respond to 14 directives (Project No. 46304).

Mereness said ERCOT has begun work on six of the directives and is engaging members through the stakeholder process. Two other directives are updates to the PUC and are ongoing.

The board approved staff’s recommendation that no protocol or binding documents concerning primary frequency response are necessary in determining whether SCT or any other entity scheduling flows across the tie should be required to provide or procure the service.

The project is scheduled to be energized in 2023.

ERCOT Reports $16.7M Net Revenue Favorable Variance

ERCOT CEO Bill Magness told the board the ISO’s revenues continue to be favorable, thanks mostly to the record demand this summer.

“It’s load and weather that drives ERCOT,” he reminded the directors.

Magness reported system administration fees were $5 million overbudget through June because of the weather and Texas’ stronger economy. Including $4.2 million in interest income, the ISO is $16.7 million above its year-to-date projected net revenues.

Staff is projecting a year-end total of $19.8 million in favorable net revenues.

ERCOT has also made “significant progress” on a delayed congestion revenue rights software update, Magness said. He said a go-live date is expected to be finalized in September, now that communication has been improved with the vendor and a better process for managing bug fixes is in place.

Special Membership Meeting to be Set

The board voted to call a special meeting of ERCOT’s corporate members “as soon as reasonably practicable” to hold votes on amendments to the ISO’s Articles of Incorporation, which has been renamed the Certificate of Formation, and to the bylaws, which clarify the definition of affiliates and affiliate relationships. The board unanimously approved both sets of amendments.

The members’ annual meeting isn’t until Dec. 11, but ERCOT’s legal department wants to ensure the amendments are effective for the 2019 membership year.

The directors also approved the 2019 schedule for board meetings and accepted a favorable audit report on ERCOT’s employee 401(k) plan.

Board Clears 15 Change Requests

The board unanimously approved its consent agenda, which included a Nodal Protocol revision request (NPRR) it had remanded back to the Technical Advisory Committee in June.

NPRR847 incorporates an intraday weighted average fuel price into the mitigated offer cap. It unanimously cleared the TAC in May, but the board sent it back over concerns that the calculation of blended fuels was “vague and confusing.” (See “Board Approves 8 Change Requests,” ERCOT Board of Directors Briefs: June 12, 2018.)

The measure is intended to ensure resources are capped at the appropriate cost during high fuel-price events and that LMPs reflect the true incremental cost of fuel.

Director Nick Fehrenbach, who represents the commercial sub-segment within the consumer market segment, said he was satisfied with the language changes. He thanked ERCOT for taking his comments into consideration.

The consent agenda also included seven other NPRRs, a revision to the Nodal Operating Guide (NOGRR), two changes to the Planning Guide (PGRRs), an update to the Resource Registration Glossary (RRGRR), a system change request (SCR) and two changes to the Verifiable Cost Manual (VCMRR).

- NPRR8 56: Clarifies that for day-ahead make-whole settlement purposes, the “offline but available for SCED deployment” status is considered an online status and will be considered an offline status after system implementation.
- NPRR8 62: Incorporates a number of revisions addressing recent changes made by the PUC’s rulemaking related to reliability-must-run service (Project No. 46369).
- NPRR866: Addresses two objectives related to mapping registered distributed generation and load resources to transmission loads in the network operations model by codifying the existing process for mapping a load or aggregate load resource to its appropriate load point in the model; and by outlining how to map a registered DG facility to its appropriate load point in the model.
- NPRR873: Outlines expectations for posting information pertaining to intra-hour wind power and load forecasts on the Market Information Systems public area. The NPRR also proposes two new definitions and acronyms for the intra-hour wind power and intra-hour load forecasts (IHWPF and IHLF, respectively).
- NPRR874: Changes the “net allocation to load settlement” stability report by breaking out the load-allocated CRRs monthly revenue zonal amount from the other load-allocated charges, and by providing dollars per megawatt-hour by congestion management zone.
- NPRR875: Adds clarifying language to sync the protocols with NPRR864, which modifies the reliability unit commitment engine to scale down commitment costs of fast-start resources with less than one-hour starts.
- NPRR877: Allows for use of actual metered interval data for initial settlement of an operating day for electric service identifiers that currently require BUSIDRRQ load profiles.
- NOGRR174: Harmonizes the automatic voltage regulator and power system stabilizer testing requirements with the recently approved NERC Standard MOD-026-1.
- PGRR061: Includes locations for registered DG facilities in the annual load data request process.
- PGRR062: Proposes new processes, communication and document sharing and storage requirements to be included in the new generation interconnection or change request application.
- RRGRR017: Supports NPRR866 by providing a process for mapping registered DG facilities to their appropriate load points in the network operations model.
- SCR796: Modifies the Market Management System’s validation rules for bids and offers to exclude resource nodes within a private-use network site as valid settlement points for day-ahead market energy-only offers and bids, and for point-to-point obligation bids.
- VCMRR021: Aligns the VCM with the language proposed in NPRR847 by removing references to make-whole payments for exceptional fuel costs. The costs will be recovered in NPRR847.
- VCMRR022: Directs ERCOT to contract a coal index price with a fuel vendor and includes a methodology for calculating the quarterly fuel adder for coal-fired and lignite-fired resources based on that index.

— Tom Kleckner

August 12, 2018

California Wildfire Liability Plan Faces Skeptics

By Hudson Sangree

SACRAMENTO, Calif. — The state’s three investor-owned utilities want lawmakers to limit their liability for forest fires sparked by power lines, but the companies’ proposal met with stiff opposition Thursday at a capitol wreathed in smoke from fires burning in nearby mountains.

The plan, advanced by Gov. Jerry Brown at the behest of Pacific Gas and Electric and others, calls for the state to change a longstanding rule that holds private and public utilities strictly liable when electric lines cause wildfires. Under current law, the utilities must pay for all destruction of private property through the legal remedy of “inverse condemnation” if their equipment was a substantial cause of a fire.

inverse condemnation California Wildfire liability — California’s State Capitol Dome | © *RTO Insider*

Brown’s plan would still allow suits for inverse condemnation but would require judges to balance the public benefits of the electric infrastructure with the harm caused to private property and to determine if a utility acted reasonably in a particular circumstance. It would also require the utilities to pay proportional damages and not be entirely responsible if others were also at fault.

In addition, the proposal requires utilities to submit wildfire mitigation plans and to harden their grids with upgraded equipment more resistant to weather and fire damage.

Last year’s infernos in California’s famed wine country and the Sierra Nevada foothills resulted in billions of dollars in damage to homes, vineyards and businesses. The current fire season, which is less than half over, appears to be keeping pace.

At Thursday’s hearing, some lawmakers said the proponents’ timing couldn’t have been worse. The largest fire in state history, the Mendocino Complex Fire, raged in the coastal mountains north of San Francisco, and another major fire had closed Yosemite National Park during the peak of the summer tourist season.

The smoke from the fires turned the air in Sacramento into a yellowish haze.

“I don’t know if you noticed, but there’s smoke in the air,” State Assemblywoman Eloise Gomez Reyes told James Ralph, chief of policy and legal affairs for the California Public Utilities Commission. Ralph presented the governor’s plan on behalf of his boss, CPUC President Michael Picker.

Brown originally sent his proposal in writing to the legislature on July 24 with the understanding that it would be part of SB 901, a measure dealing with wildfire prevention. To take effect, the bill must clear the legislature by the end of August, when lawmakers adjourn at the end of a two-year session.

To that end, members of the State Senate and Assembly have held a series of conference committee hearings — on July 25, Aug. 7 and Aug. 9 — to take testimony and gather information. Powerful interests on both sides have argued for and against the proposal.

New Normal

Among those fighting the plan are ratepayer groups, the state’s trial attorneys, insurers, farmers, and cities and counties. They all stand to lose financially if the utilities are given what some call a bailout.

The utilities — PG&E, San Diego Gas & Electric and Southern California Edison — argue multibillion-dollar payouts threaten their financial stability, undercut fire-prevention efforts and result in rate hikes for consumers.

Last year’s fires, which among other damage wiped out a large area of the city of Santa Rosa, caused destruction on an unprecedented scale. Many in California attribute such long and destructive fire seasons to climate change and say they are the “new normal.” (See Wildfires Reshaping Regulator’s Role, CPUC Chief Says.)

That makes the utilities nervous because they tend to receive much of the blame and pay most of the costs.

So far, investigators with the California Department of Forestry and Fire Protection (Cal Fire) have concluded that 16 of last year’s Northern California fires were caused by trees or branches hitting PG&E power lines, along with a power pole failure and a conductor that crashed to the ground.

Eleven of the 16 cases have been referred to county prosecutors to review for possible criminal violations of a state law that requires adequate clearance between power lines and vegetation, according to Cal Fire news releases in May and June.

Altogether, the fires killed 18 residents, destroyed nearly 3,000 structures and burned more than 180,000 acres. The cause of dozens of other blazes, in what Cal Fire calls the “October 2017 Fire Siege,” remain under investigation.

‘Insurers of Last Resort’

The financial fallout for PG&E is huge. Last quarter the company posted a net loss of $1 billion and took a $2.5 billion pre-tax charge for third-party claims related to 14 of the fires. Fitch Ratings downgraded the company’s stock in February, estimating that it could face $15 billion in liability over the next 10 years.

The amount is so massive because California is the only state that relies on inverse condemnation to hold utilities primarily liable for wildfire damage, even when the companies complied with all safety requirements and were only partly to blame for fires.

The current law unjustly “makes utilities the insurers of last resort,” Henry Weissmann, a lawyer for Southern California Edison, told the legislative panel Thursday. He said utilities should be held to a negligence standard of liability, which would require proof of wrongdoing, rather than facing strict liability, which does not.

Weissmann said utilities still would have an incentive to prevent fires under the less-stringent standard because they would continue to be subject to lawsuits and government oversight.

Jan Smutny-Jones, CEO of the Independent Energy Producers Association, told lawmakers that the state’s progress in sourcing energy from geothermal, solar and other sustainable power producers was threatened by California’s insistence that utilities, and ultimately ratepayers, foot the bill for catastrophes.

“All of this is predicated on the financial stability of the companies,” he said. “If a utility goes broke … that’s a significant impact.”

Freeing up funds for fire prevention would lead to a safer state, proponents argued.

Skeptics, however, said they found it hard to believe that utilities would behave more responsibly if their potential costs were lessened.

Sen. Hannah-Beth Jackson noted that one rationale behind inverse condemnation is that utilities are given the power of eminent domain for easements on private property. They are therefore fully liable for damage to private property, she said.

“Shouldn’t we expect you’ll do everything possible to protect our property?” Jackson, also a lawyer, asked a panel of utility executives and advocates.

Another major goal of California’s policy has been to make wildfire victims whole as quickly as possible without subjecting them to years of litigation to determine negligence. Applying a strict liability standard skips that fight and moves the parties directly to the issue of damages, Jackson said.

The lawmaker said she had trouble grasping how holding the utilities to a lesser standard of liability would increase public safety, as they contend.

“Why should we reduce their liability and expect they’re going to do more with less liability?” Jackson asked. “I don’t understand the logic here.”

The committee’s next hearings are scheduled for Aug. 14 and 16. The agendas for those hearings and other materials will be posted online at http://focus.senate.ca.gov/wildfirecommittee.

August 12, 2018

MISO Fills out Storage Capacity Plan

By Amanda Durish Cook

CARMEL, Ind. — MISO last week laid out a more detailed proposal for how it will determine the capacity accreditation of electric storage resources under FERC Order 841.

The RTO is proposing to determine electric storage resources’ capacity based on two different measurements: the resource’s power output capability and its energy storage capacity as measured by MISO’s generator verification test capacity (GVTC).

miso ferc order 841 storage resources — Kim | © *RTO Insider*

Speaking at an Aug. 8 Resource Adequacy Subcommittee meeting, Senior Adviser of Capacity Market Administration Rick Kim said the rule will ensure both a megawatt and megawatt-hour measurement of a storage resource’s capability.

Kim said for storage resources under 10 MW or that have fewer than 12 months of operational data, MISO will apply a 5% default equivalent forced outage rate in its unforced capacity calculation. Other storage resources will be assigned a forced outage rate based on their quarterly data inputs to MISO’s generating availability data system (GADS). GADS reporting is required for storage resources 10 MW and above and optional for those under 10 MW.

Because NERC hasn’t yet addressed unit reporting for storage resources, Kim said resource operators should use the “miscellaneous” unit type option when reporting unit data.

“It’s going to be another year before we see registration of energy storage resources,” he added.

Kim also said storage resources connected to the transmission system will require either network resource interconnection service or firm transmission service with MISO to ensure capacity deliverability. If resources are connected at the distribution level, MISO will ensure deliverability with the distribution provider and transmission owner on a “case-by-case” basis, he said.

MISO has said that when storage resources are connected at the distribution level, market participants “must have sufficient metering or accounting for non-wholesale transactions to prevent double counting of energy.”

The RTO in June said it would accommodate Order 841 by dividing storage bid parameters into four operating modes: discharging, charging, continuous operations and offline. Market participants will be left to choose a mode for individual dispatch intervals and will also be responsible for managing the state of charge of their storage units. (See MISO Weighing Feedback to Storage Proposal.) Storage resources will be able to set prices under MISO’s extended LMP.

MISO and stakeholders will continue to discuss storage capacity accreditation at the September RASC meeting, with draft Tariff language targeted for October. November will be used to finalize the full Order 841 compliance filing before FERC’s early December filing deadline.

August 12, 2018

OGE Earnings Up, but Fall Short of Expectations

Oklahoma City-based OGE Energy said last week that a strong regional economy and positive regulatory developments led to an improved second quarter for the company, which reported earnings of $110 million ($0.55/share), compared to $105 million ($0.52/share) the year prior.

Earnings just missed Zacks Investment Research’s consensus estimate of 57 cents/share.

CEO Sean Trauschke said Oklahoma Gas & Electric continues to add customers near its historical average of 1%, the state’s unemployment numbers are at or under the national average and tax revenues are “now growing solidly again.”

“We are seeing growth on our system driven by our low rates and quality service. I’m very proud of our team’s work to deliver this competitive advantage to the communities we serve,” Trauschke told financial analysts during an Aug. 9 conference call.

“Our core is solid, our employees are doing a great job, and we’re effectively executing on our plans across every area of the company,” he said.

OGE in June reached a $64 million settlement with the Oklahoma Corporation Commission that provides full recovery of its investment in the newly converted Mustang Energy Center. The plant’s seven gas-fired combustion turbines have had more than 1,200 starts this year, Trauschke said.

OGE Energy Holdings, which includes OGE&’s 25.6% limited partner interest and 50% general partner interest in Enable Midstream Partners, contributed 11 cents/share to earnings and $35 million in cash distributions.

“Enable continues to perform very well and their financial metrics are strong,” Trauschke said. He told analysts OGE has not changed its thinking around how the petroleum-gathering company is organized.

— Tom Kleckner

August 12, 2018

MISO IMM Voices Concerns, Commends Competitive 2017

By Amanda Durish Cook

CARMEL, Ind. — MISO’s market was competitive in 2017, but the RTO should do more to address increasing congestion and low capacity prices, Independent Market Monitor David Patton told stakeholders last week.

miso imm m2m congestion david patton — Patton at MISO Board Week on June 19, 2018 | © *RTO Insider*

Patton said potential economic withholding throughout the year was low, at about 0.11% of load, with market power mitigation rarely necessary.

“The offers we’re getting and the market outcomes are very competitive,” Patton said in a 2017 post-mortem during an Aug. 9 Market Subcommittee meeting, part of his annual State of the Market report. In late June, he recommended seven new market revisions from the report to the Board of Directors. (See 7 New Recommendations from MISO IMM.)

Patton said MISO’s 2017 peak load of about 121 GW was comparable to the nearly 120-GW peak in 2016 and below the forecasted 125-GW peak. However, congestion costs last year still rose 7% to $1.5 billion, in part because of higher natural gas costs for frequently dispatched gas units.

Patton said four key factors have increased the RTO’s costs of managing congestion.

Factor 1: Lack of Market-to-Market Testing

Patton faulted MISO for not requesting testing from other markets to define market-to-market (M2M) constraints for congestion management. He said his team identified almost 170 chronically binding constraints costing $240 million in 2017 that were never classified as M2M, “generally because MISO did not ask for testing.”

“Most of those dollars are because MISO didn’t ask for the test from either PJM or SPP,” Patton said. “When you don’t define market-to-market constraints with your neighbors that are impacting them, then you’re basically subsidizing their flows on the constraint. You don’t go through the settlement process that would bill them for the constraint.”

Patton acknowledged that the RTO put a tool in place in January to screen for potential constraints, but he said his team has not yet assessed the results of the new practice.

Factor 2: Keeping the Current Pseudo-tie Construct

Patton again leveled his aim at the pseudo-tie process and said PJM’s dispatching of the RTO’s resources has to date resulted in 95 new M2M constraints and $155 million in congestion on those constraints.

“It’s no surprise that we think PJM’s Tariff … shows a lack of understanding of how to run an electrical system,” Patton said, adding that PJM cannot effectively model all constraints in the day-ahead market and is overscheduling flows on the MISO system.

Patton said the RTO should deny new pseudo-tie requests, and his firm, Potomac Economics, currently has a FERC complaint pending against PJM’s pseudo-tie construct. (See PJM: MISO Monitor Lacks Standing in Pseudo-tie Complaint.)

“We think it’s unfortunate that FERC hasn’t figured out how bad this is yet,” Patton said, adding that there are other ways for MISO to deliver PJM’s purchased capacity without giving it dispatch control over resources located in MISO. He said he hoped more of the RTO’s market participants would come out in public support of the complaint.

Factor 3: Need for Increased Outage Coordination

Patton said transmission and generation outages occurring simultaneously on the same constraint have contributed to $400 million in congestion to date — more than 30% of all of MISO’s real-time congestion.

“What this points to is the need to give MISO more authority in denying or approving outages,” Patton said. “In some cases, MISO is the only one that can coordinate these because of the lack of communication between generation and transmission.”

Greater outage coordination is an ongoing discussion in the RTO’s larger effort around resource availability and need currently being discussed in its Reliability Subcommittee. (See MISO Moving to Combat Shifting Resource Availability.)

Factor 4: Incomplete Facility Ratings

Patton said most of the RTO’s transmission owners don’t adjust their facility ratings to reflect ambient temperatures and wind speeds. He said adjusted facility ratings could have saved the RTO as much as $127 million in production costs in 2017.

“If transmission owners submitted dynamic ratings to MISO, we’d have much more transmission capability,” Patton said.

Capacity Auction

Patton also said the RTO’s capacity auction design is causing capacity prices to remain “inefficiently low.” The 2018/19 auction resulted in almost all local resource zones clearing at $10/MW-day, while the 2017/18 auction resulted in a single clearing price of $1.50/MW-day. (See MISO Clears at $10/MW-day in 2018/19 Capacity Auction.)

Had MISO implemented a sloped demand curve design in its auction, Patton estimated that auction clearing prices would have been $115.74/MW-day in all zones in the 2017/18 planning year and $111.06/MW-day in nearly all zones for the 2018/19 planning year. He said the RTO’s competitive suppliers stand to benefit the most from a sloped demand curve.

Patton said the RTO lost 2.6 GW of capacity on net in 2017 owing to a flawed capacity auction design, “persistent” low natural gas prices that suppress energy prices and environmental regulations “requiring costly retrofits for certain resources.”

MISO Response Timed to Market Roadmap

MISO Executive Director of Market Operations Shawn McFarlane said the RTO is still preparing its required response to the Monitor’s observations and recommendations.

He said this year MISO will align its written response with the release of the RTO’s Market Roadmap list of market improvements to its board. The RTO will publicly post a written response in October, present the response at the November Market Subcommittee meeting and discuss it with the board at the December meeting of its Markets Committee.

“This year we will use most of the 120 days allotted by the Tariff,” McFarlane said, adding that the RTO has historically provided a written response within 90 days.

MISO Charts Market Improvements with Stakeholder Help

Meanwhile, MISO is continuing its Market Roadmap prioritization to determine what improvements it should undertake in 2019. Unofficial Market Roadmap rankings show that the RTO and stakeholders agree that creating short-term capacity reserves is a pressing matter.

MISO melded its market improvement priorities with the Monitor’s and stakeholders’ rankings after a June and July voting period in which 67 stakeholders participated. (See MISO Stakeholders to Rank Market Improvement Ideas.) The preliminary results show the RTO should next year focus on creating an improved combined cycle generation model and developing a short-term capacity reserve product that can supply capacity within 30 minutes.

Three other projects earned medium priority: creating a multiday market forecast to guide generators’ commitment decisions (See MISO Moving to Combat Shifting Resource Availability.)

MISO market strategy adviser Lakisha Johnson said the RTO will finalize the prioritization of Market Roadmap projects through the end of the year.

August 12, 2018

Overheard at New York Energy Market Summit

By Michael Kuser

NEW YORK — NYISO CEO Brad Jones likely summed up the sentiments of the dozens of industry experts attending Infocast’s New York Energy Market Summit last week to learn more about the state’s rapidly evolving grid and changing policy landscape.

“All of us seem so thankful to be in this industry at this time,” Jones said. “There’s so much change going on, so much opportunity to do new things and create new things.”

Here’s more of what we heard at the summit.

Tx Development ‘Eats Its Own Young’

nyiso infocast new york energy market summit offshore wind — Sheen | © *RTO Insider*

Kevin Sheen, vice president of business development at Terra-Gen, said New York began falling behind other states in renewable development despite having started a 10-year renewable energy credit (REC) program in 2004 that managed to incent about 1,400 MW of wind over the past decade or so.

Realizing it needed to do more, the state last year began offering 20-year REC contracts, Sheen noted. He said that the state’s commitment to improve transmission signals to developers that New York is worthy of their investment and time. The ISO’s Congestion Assessment and Resource Integration Study process identifies the top congestion elements on the system and indicates where developers ought to be thinking in terms of building additional transmission. (See NYISO Study Identifies Key Areas of Tx Congestion.)

“Delays are part of development — they happen in every market — but I think New York has done the best they can to try to address that,” Sheen said.

Transmission developers cited permitting and interconnection costs as the two biggest risks for new project development.

“We recently saw Deepwater Wind narrowly get through the East Hampton town board process by a 3-2 vote, so five individuals held the fate of that 90-MW cable” connecting the offshore project to land, Anbaric Development Partners project manager Bryan Sanderson said.

Bringing 2,400 MW into NYISO Zones J and K is going to be hard because the ISO’s study process takes three to five years, Sanderson said, leaving companies to bid today on costs they will not know until 2022.

“Imagine New York procuring its first offshore wind farm and the interconnection costs come in $500 million more than projected,” he said. “That would be a huge embarrassment. Just ask Massachusetts about their Northern Pass experience.

“One problem with transmission development is that it eats its own young, so you solve the problem like congestion and the price arbitrage disappears,” Sanderson continued. “How do you pay for your line when your mere existence eliminates your profit stream?”

John Douglas, CEO of transmission developer oneGRID, noted there’s been talk of developing a national backbone grid to optimize renewables, but no one has resolved the problem of who will pay for it and how all the RTOs would interact.

“It’s unfortunate, because we’re going to end up with all these regional, Band-Aid optimizations when there could be something national,” Douglas said.

Public Policy Challenge

Jones addressed the conflict between state policies and RTO market principles, pointing out that both ISO-NE and PJM went to FERC with solutions to what they saw as state interventions that could undermine their wholesale markets.

“When New England brought CASPR [Competitive Auctions with Sponsored Policy Resources] to the commission, they said, ‘We want to address it in this way,’ essentially to change the capacity market structure, which would arguably eliminate the impact of state subsidies on new resources,” Jones said.

“The FERC agreed with them, but in a decision which I never knew was possible. They approved 3-2,” Jones said. “Clearly the FERC was torn; they struggled with that decision.” (See Split FERC Approves ISO-NE CASPR Plan.)

Jones said the commission saw ISO-NE’s solution as being different from PJM’s rejected solution in that the former was dealing only with new assets that were being subsidized, while the latter was dealing with both new and existing assets, primarily nuclear and coal units.

“New York looks very similar to PJM, with assets that have been retained, plus new assets, but FERC has not decided to take any action on New York,” Jones said. “I think the commission is waiting to see where the NYISO gets on its work to price carbon directly into the wholesale market.” (See Stakeholders Annoyed by NYISO Carbon Price Draft.)

Off the Grid

Douglas said he realized how most large industrial customers are looking for change when he heard that a survey by one of the nation’s largest utilities found that its top 15 customers all want to get off the grid.

“Imagine you’re an integrated, investor-owned utility and your top customers are all saying they don’t want to have anything to do with you,” Douglas said.

oneGRID is planning the 1,000-MW HVDC Empire Connector project to move energy from upstate into New York City via the Gowanus Substation in Brooklyn. The project is now in the second phase of its solicitation, aggregating wind, solar and biomass supply offers to sell into the city.

Contracted merchant power “is a forgotten pathway to transmission development,” and customers in New York want it, Douglas said.

“We found out how important physical delivery is to customers in New York City for both reliability, and probably more importantly, for resilience,” Douglas said. “HVDC is so controllable that it actually counts as in-city generation, so it’s a tremendous advantage.”

While renewable energy resources are known for changing the direction of power flow on the grid as smaller generators along the line feed their excess electricity back onto the grid, New York City has so far been unaffected by that phenomenon, said Damian Sciano, Consolidated Edison director of distributed resource integration.

“We’re in a dense urban area … so even when someone puts a fairly large solar installation in, or CHP [combined heat and power] — those are the two big things we see in our service territory — it’s pretty much consumed very close to where it’s generated,” Sciano said. “We don’t typically have backfeed on the substations.”

Valuing Offshore Wind

Lawrence Berkeley National Laboratory research scientist Andrew Mills said a team at the lab compared the levelized cost of energy estimates with value estimates and found that the most attractive U.S. sites for offshore wind are located off New England, while the least attractive are far offshore of Florida and Georgia, where the water is deeper and the wind speeds are lower.

Wind energy off the southeast coast is worth about $160/MWh less than the best sites up north, he said.

“We were very interested in questions about the seasonal and diurnal profiles of offshore wind and how much that might be driving differences in the value across these sites,” Mills said. “If you were to just have a flat block of power, which is constant across all hours, we wouldn’t be far off in the estimates we came up with … within 5% or so.”

Differences in average energy and REC prices primarily drive locational variations, not differences in diurnal and seasonal wind generation profiles, he said. The market value of offshore wind was lowest in the most recent year evaluated, 2016, falling roughly 50% from 2007.

The marginal total market value of offshore wind — considering energy, capacity and RECs — varies significantly by project location and is highest for sites off of New York, Connecticut, Rhode Island and Massachusetts. The median, 2007-2016 market value is highest in ISO-NE (around $110/MWh), in part because of higher REC prices. The energy and capacity value is higher for NYISO, particularly Long Island.

If you look south, the median value is “significantly lower, down in the $55/MW range in the non-ISO region south of PJM,” Mills said.

The capacity value can be up to 50% different from that calculated based on a flat block of power, but capacity value is only a small component of overall value, Mills said. The capacity credit of offshore wind in the NYISO and ISO-NE markets is significantly higher in winter than in summer, with offshore wind in these regions benefiting from having capacity credit assessed in both seasons.