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November 13, 2024

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DC Circuit Hears Arguments on FERC LNG Plant Approval

The D.C. Circuit Court of Appeals on Feb. 12 heard oral arguments on FERC’s approval of the Commonwealth LNG facility in Cameron, La. 

The case proceeds after the Biden administration paused new applications for liquified natural gas (LNG) export facilities in the U.S. (23-1069). 

FERC approved the Commonwealth project in late 2022. It would consist of 9.3 billion cubic feet per day of export capacity on 150 acres along the west bank of the Calcasieu Ship Channel, near three existing LNG export facilities and others being planned.  

In approving the project, FERC disregarded its potential to raise Louisiana’s greenhouse gas emissions by 1.7% on its own. The commission also ignored the environmental justice impact of the facility, which would be located on a heavily industrialized slice of the Gulf Coast, according to environmental groups Natural Resources Defense Council, Sierra Club, the Center for Biological Diversity and Healthy Gulf. 

FERC’s rules around approving projects that influence climate change are far from clear, but it has ruled on such impact before, Sierra Club attorney Nathan Matthews said during the hearing. In a case involving Northern Natural Gas Pipeline, it said 315 tons of GHG emissions per year was well below any threshold it would consider. 

“FERC could have done the same here where the 3.6 million tons per year of emissions are 36 times FERC’s draft threshold, which itself was equal to or higher than every other threshold any other agency proposed,” Matthews said. 

The commission has drafted rules amending how it processes natural gas projects, but they have not advanced since former Chair Richard Glick released them in 2022 and then had to withdraw them after criticism from the industry and Capitol Hill. 

The proposed facility would release 550 tons per year of nitrogen dioxide, which is harmful at any level and will cause the area around the terminal to exceed EPA’s limit for the gas in air quality standards, Matthews said. 

“FERC simply misunderstands cumulative effects,” Matthews said. “FERC concluded that there would be no cumulative impact problem here because the individual incremental impact of this project was individually insignificant. But the central thrust of the cumulative impact regulation and doctrine is to guard against the death of 1,000 cuts.” 

‘Incremental Impacts’

Judge Bradley Garcia asked whether the issue was FERC’s failure to label the nitrogen dioxide emissions as significant, which would have at least required it to explain why the facility should move forward regardless. 

“For every impact you identify as significant, you have to discuss mitigation of that impact,” Matthews said. “And here, we think that they could have redesigned the terminal to reduce these emissions, even if they were going to still approve the terminal.” 

A decision from the D.C. Circuit last year in a case the Center for Biological Diversity brought against FERC’s approval of an LNG facility in Alaska clearly laid out what the regulator had to do under the Natural Gas Act in its review of Commonwealth LNG, said FERC Attorney Susanna Chu. 

“Because, like this case, it’s a purely Section Three terminal case, there’s no Section Seven pipeline involved,” Chu said, referring to relevant sections of the Natural Gas Act. “So, the standard here is that the commission must approve the terminal proposal unless it makes a finding that the terminal is actually inconsistent with the public interest.” 

Chu was asked why FERC did not follow its finding in Northern Pass and determine that the 3.6 million tons of annual CO2 emissions from Commonwealth LNG are significant. The 100,000 tons per year threshold was only a draft proposal and FERC has not adopted it, Chu said.  

Judge Florence Pan asked whether there was any chance FERC would pick a threshold more than 36 times its proposal. 

Chu said that FERC has yet to make any final decisions on the question, but Pan pressed on — asking whether the project’s emissions would be significant if it increased the state of Louisiana’s emissions by 20%. 

“The issue with global climate change, as the commission explained in the environmental statement, is that there are incremental impacts,” Chu said. “And … you can’t attribute physical … global climate change impacts, such as sea level rise or other specific impacts, to a particular project. At least, the commission has not yet been able to identify a methodology that would allow it to do so.” 

FERC actually did more work than it had on previous projects in quantifying the emissions from Commonwealth. Garcia asked whether any of that influenced its decision-making when it came to mitigating pollution. 

The commission discussed climate change, but said it was unable to determine whether an individual project such as Commonwealth LNG would have a major impact on it, Chu said. Pan then said that it would seem easier to make an actual finding of significance and assess ways for the project to mitigate those impacts than to wind up in more litigation. 

“It’s been something that the agency has been grappling with,” Chu said. “I mean, this is a bipartisan, independent commission. And we see from the different, the evolution of the cases, the commission is moving [toward] more and more information in the environmental analysis.” 

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WPP: Cold Snap Showed ‘Tipping Point’ for Northwest Reliability

High imports from the Desert Southwest and Rocky Mountain balancing areas (BAs) helped the Northwest survive extreme weather from Jan. 12 to Jan. 16, showing the region’s reliability is at a “tipping point,” the Western Power Pool said.

A report released by WPP on Feb. 8 outlined the actions taken by the RC West Reliability Coordinator and quantified the interchanges that allowed the Northwest to avoid outages.

BAs in the Northwest reported lower-than-normal temperatures for a sustained period, contributing to high loads and the need for imported energy. Starting the morning of Jan. 13 and lasting through the evening of Jan. 15, the reliability coordinator placed four entities in either an Energy Emergency Alert Watch (EEA), EEA 1 or EEA 3. The report said the Northwest imported an average of 4,900 MWh of energy per hour over five days, underscoring the continued call for an interregional resource adequacy program that can provide support across BAs during extreme conditions.

By summing and averaging interchanges between Northwest BAs and Nevada Power Co., PacifiCorp East and Western Area Power Administration, and Upper Great Plains West, the report found that 2,067 MW of power that was delivered to the Northwest originated from the Eastern/Rockies AC system.

Using the same interchange data, the report also demonstrated that while CAISO was exporting to the Northwest during this time, the ISO and other BAs were net importers, receiving more energy from the Desert Southwest than they were exporting to the North.

“The Desert Southwest/Rockies BAs were net exporters of approximately 5,334 MW on average,” the report reads. “Those exports from the Desert Southwest/Rockies region supported CAISO and other California BAs as well as 2,833 MW of imports to the Northwest on the Pacific AC Intertie.”

Call to Action

WPP emphasized the need for initiatives like the Western Resource Adequacy Program to strengthen reliability during extreme weather events.

During the cold snap, “temperatures and loads were at or near historic peaks, BAs were managing through energy emergencies in real time and there was a significant amount of support required from BAs outside of the Northwest Region, particularly from the Desert Southwest and Rockies regions,” the report reads. “All these factors point to the need to act quickly to address potential capacity challenges in the Northwest and realize the benefits afforded by full, binding implementation of a nearly WECC-wide resource adequacy program like WPPʼs WRAP.”

CAISO is expected to release a report the week of Feb. 19 analyzing the response to January’s extreme weather.

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New York Approves Final Rule on Inverter-based Resources

The New York State Reliability Council’s Executive Committee on Feb. 9 approved a final rule for interconnecting inverter-based resources (IBRs) larger than 20 MW (PRR-151). 

The rule aims to reliably integrate large-scale IBRs into New York’s power grid by establishing minimum interconnection standards. It requires developers attest that their facilities comply with the IEEE 2800-2022 standard, which set uniform minimum requirements for the interconnection, capability and performance of IBRs. 

According to the council’s Reliability Rules Subcommittee (RRS), over 120 GW of large IBRs are currently in NYISO’s interconnection queue. This bottleneck, coupled with the increasing number of IBRs seeking interconnection in New York, prompted the council to act. (See New York Considering Standards for IBRs.) 

The committee spent more than a year working on the rule, including multiple stakeholder meetings, establishment of an IBR working group and two rounds of stakeholder comment periods. The approved rule incorporated stakeholder feedback to refine attestation requirements and exemptions for evolving technology to ensure flexibility for future IBR integration. (See “PRR-151,” NY State Reliability Council Executive Committee Briefs: Jan. 12, 2024.) 

Illustration of inverter-based resources (IBRs) connecting to grid | NERC

During the committee’s meeting, Richard Bolbrock, former EC chair, asked about the evaluation process for PRR-151 exemption requests. 

Roger Clayton, chair of the RRS, responded that the process “will have to be developed” because it is “highly technical,” and “making those sorts of evaluations is going to be a challenge.” He reminded the EC that “this is the first phases of our effort” and that the purpose was to standardize the rules surrounding IBRs “so that we don’t have a hodgepodge of designs” and “get ourselves into a situation like Texas did.” (See NERC Repeats IBR Warnings After Second Odessa Event.) 

Glenn Haake, vice president of regulatory affairs at Invenergy, raised concerns about the feasibility of adhering to the IEEE standard, saying, “The models that the OEMs (original equipment manufacturers) have, in many cases, are a work in progress.” Haake emphasized the need for a process that accommodates evolving equipment capabilities without hindering project development. “There needs to be a way to recognize the reality that this equipment is evolving and being improved to meet these standards, but currently, we don’t have the models, and I don’t know what models are available that do comply,” he said. 

Clayton responded that there are risks that a project could be found noncompliant with IEEE 2800 without the required attestation, but it is on developers to comply with the new rule. 

Zach Smith, vice president of system and resource planning at NYISO, applauded the council for the new rule, saying, “I think it is really valuable that New York is taking a lead on this, and I think it is going to inform NERC, as well as the rest of the industry in terms of the implementation of IEEE 2800.” 

PRR-151 will be incorporated in NYISO’s future interconnection review processes, excluding ongoing Class Year 2023 projects, to guide the ISO in incorporating IBR performance criteria and model validation methods into its interconnection studies. 

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CAISO Seeks FERC’s OK to Shut 2024 Interconnection Window

CAISO is seeking FERC approval to scrap its process for taking on new interconnection applications this year as it works through the “unprecedented volume” of requests submitted for the previous interconnection study period.

CAISO’s tariff requires it to open a new window for interconnection requests each year on April 1. But in a Feb. 8 filing with the commission, the ISO asked permission to forgo the process for 2024 to give it more time to study existing requests representing more than 350 GW of capacity — about seven times greater than CAISO’s peak load.

“Adding new interconnection requests at this time would exacerbate current challenges and delay studies further,” the filing stated. “Forgoing the 2024 window is a just and reasonable solution to prioritize the huge volume of existing interconnection requests on time.”

Like other RTOs and ISOs, CAISO uses a “cluster” approach to dealing with interconnection requests whereby multiple resources are studied together to assess their impact on the existing grid and determine the need for transmission upgrades.

For each cluster of resources, the two-year process consists of a Phase I interconnection study that determines what interconnection facilities and reliability and delivery upgrades will be needed by each potential interconnection customer. A Phase II study refines the cost estimates in the first study “based upon changes in queue and deliverability allocation results,” according to CAISO.

“Because the most common change in queue is an interconnection customer’s withdrawal, both the Phase II interconnection study and the annual reassessment typically remove no longer needed upgrades from interconnection customers’ studies and cost responsibilities, reducing costs,” the ISO noted in its filing.

In the Cluster 14 window of 2021, the number of CAISO interconnection requests skyrocketed to 373, up 241% over the previous — record-setting — cluster.  To manage the volume, the ISO was forced to cancel its 2022 interconnection window.

And on top of the sheer growth in volume, the ISO also saw that just 40% of resources dropped out of the queue after completion of the Phase I study, compared with a typical drop-out rate of 60%, which the ISO attributed to financial strength in the industry.

In 2023, Cluster 15 set yet another record, reaching 541 interconnection requests.

“Even accounting for the year without a cluster application window, Cluster 15’s extreme volume represents the low bar to submit an interconnection request and the high level of financial opportunity in generation development,” CAISO wrote in its filing. “Developers submitted these interconnection requests understanding they would face an extended study process and longer construction timelines. In [an] accurate but self-fulfilling prophecy, developers also submitted multiple interconnection requests because the CAISO would be unlikely to be able to open another interconnection request window in 2024.”

CAISO last year proposed to forgo the 2024 interconnection window when it began its Interconnection Process Enhancements stakeholder initiative, but deferred to stakeholder wishes to hold off on that move.

“Since then, stakeholders and the CAISO have focused their efforts on necessary reforms to enable meaningful study of cluster 15. The CAISO subsequently reproposed deferring the 2024 interconnection request window. No developer, transmission owner or other stakeholder opposed the proposal,” the ISO noted in its filing.

CAISO has asked FERC to approve the change effective March 31.

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PJM: ‘Conservative Operations’ Maintained Reliability During Jan. 2024 Storm

VALLEY FORGE, Pa. — PJM last week presented two deep dives into how the grid performed during the January 2024 Winter Storm Gerri, highlighting changes to how it committed generators to reduce risk. The RTO’s out-of-market actions cost $53.5 million. (See PJM: Grid Performed Well During January Winter Storm.) 

Much of the discussion during a Feb. 7 presentation to the Market Implementation Committee centered on PJM’s use of conservative operations to commit generators to operate throughout the storm. PJM’s Joe Ciabattoni said conservative operations were used to maintain transmission security that could not be accomplished with the resources committed through the day-ahead market alone.  

A subset of those resources whose start-up parameters would have prevented dispatchers from ramping them up and down throughout the storm as needed were given multiday commitments, as were gas-fired generators that might have difficulty procuring fuel without certainty regarding how long they would be expected to run. 

Around 98,000 MW of resources were identified for conservative operation commitment Jan. 12, of which 58,000 MW received multiday commitments. Two-thirds of the committed resources were gas-fired, while just over a quarter were coal. Conservative operations peaked at 15,189 MW of resources committed Jan. 16. 

Senior Dispatch Manager Donnie Bielak said fuel type was not a major focus in which resources were selected under conservative operations. PJM started by looking at which units were needed for reliability, and analysis of fuel security followed, he said. 

Uplift payments between Jan. 12 and 22 totaled over $53.5 million, with over half of that concentrated on the 15th and 16th. PJM’s Lisa Morelli said there is a correlation between the number of resources operating on multiday commitments and the amount of uplift paid, but there were other contributors to the amount of uplift as well. 

PJM Dispatch Manager Donnie Beilak | © RTO Insider LLC

During an Operating Committee presentation Feb. 8, Bielak said committing resources for multiple days proved valuable to dispatchers in mitigating the risks associated with fuel insecure resources.  

Bielak said PJM also modified its practice around committing gas resources to treat flexible combustion turbines as if they were inflexible. The RTO normally commits inflexible combustion turbines earlier in the day than other resources to provide additional time for them to procure fuel, which also has the added benefit of giving dispatchers more reaction time if that generator is unable to obtain gas. Bielak said PJM is considering standardizing the procedure going forward by adding triggers for when it may be initiated and transparency around how it will be used. 

Senior Vice President of Operations Mike Bryson said the storm presented unique challenges, including the worst weather manifesting at the end of a holiday weekend. Instead of buying one day’s worth of gas on a weekday, generators must buy for an entire weekend — a full three days if it’s a holiday. 

Gas must be purchased as a package over weekends, with the commitments largest during holiday weekends. 

Michelle Bloodworth, president of coal lobby America’s Power, questioned whether using a special dispatch process for inflexible resources undermines PJM’s incentives for generator investments in fuel security and winterization. Committing them early could also suppress prices for generators that have made those investments, which she said may further weaken the incentive to perform. 

PJM’s Brian Fitzpatrick | © RTO Insider LLC

Reviewing the load forecast performance, PJM’s Stephanie Schwarz said some of the underforecasting in valley periods was due to lower-than-forecast temperatures and snow cover suppressing behind-the-meter solar generation. 

The number of forced outages during Gerri was significantly lower than the December 2022 Winter Storm Elliott, peaking at 16,119 MW on Jan 16. Elliott peaked at 46,124 on Dec. 24, 2022.  

PJM’s Ray Lee said most outages experienced during Gerri were due to plant equipment failures, followed by gas procurement problems and freezing, which each contributed to a lesser extent than during Elliott. 

More generation owners submitted real-time temporary exceptions at least 24 hours in advance of being dispatched during Gerri than during Elliott. However, PJM’s Chris Pilong said generators are still underreporting constraints. He said that throughout the storm, all pipelines reported constraints to PJM, while only 22% of generators subsequently submitted temporary exceptions. 

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Ex-PUCO Chair, Ex-FirstEnergy Execs Indicted in Ohio

Three former Ohio utility and regulatory officials face dozens of new charges in the House Bill 6 scandal.

The Ohio Attorney General’s Office on Feb. 12 announced the latest developments in the long-running fallout over H.B. 6, which granted subsidies for the operation of two FirstEnergy Corp. nuclear power plants and locked in profits for the utility.

Indicted on charges ranging from theft to bribery to telecommunications fraud were Samuel Randazzo, former chair of the Public Utilities Commission of Ohio; Charles Jones, former CEO of FirstEnergy; and Michael Dowling, FirstEnergy’s former senior vice president of external affairs.

Charles Jones, former CEO of FirstEnergy | FirstEnergy

The new state indictment brings the first criminal charges against Jones and Dowling, who were fired by the company in 2020 after allegations of wrongdoing surfaced. (See FirstEnergy Fires Jones over Bribe Probe.)

A federal indictment announced in December brought bribery, fraud and other charges against Randazzo, who resigned as PUCO chair in late 2020. (See Former Ohio PUC Chair Charged with Bribery.)

The indictment runs 50 pages. It alleges that from 2010 to 2021, the three men “were literally as thick as thieves. Together, they would steal money from FirstEnergy, write legislative provisions worth unearned millions of dollars to FirstEnergy, legally guarantee … FirstEnergy’s [continued] profitability and take over the state government in a way that allowed FirstEnergy to regulate itself.”

Ohio Attorney General Dave Yost said a multiagency task force formed under the framework of the Ohio Organized Crime Investigations Commission prepared the case against the trio.

“This indictment is about more than one piece of legislation,” Yost said in a news release Feb. 12. “It is about the hostile capture of a significant portion of Ohio’s state government by deception, betrayal and dishonesty.”

Michael Dowling, FirstEnergy’s former senior vice president of external affairs | University of Akron

These are not the first charges brought in connection with the H.B. 6 scandal.

A federal jury convicted former Ohio House Speaker Larry Householder (R) of racketeering conspiracy in March 2023. He was sentenced in June to 20 years in prison but appealed his conviction. (See Former Ohio House Speaker Householder Sentenced to 20 Years in Prison.)

There have been numerous civil actions as well. Yost said his office has averted nearly $2 billion in charges to FirstEnergy customers over the period covered by H.B. 6.

FirstEnergy itself agreed to pay a $230 million federal fine for its role in H.B. 6. (See DOJ Orders $230 Million Fine for FirstEnergy.)

The Allegations

FirstEnergy was alleged to have spent $61 million in bribes, campaign contributions and advertising to advance Householder to the speakership. He then supported H.B. 6, which provided more than $1 billion in subsidies for the nuclear plants the company owned at the time.

The indictment paints a picture of a decadelong scheme that “all began with a well-lawyered theft in 2010.” The paperwork states and alleges that:

    • Randazzo was simultaneously a consultant for FirstEnergy; a representative of a group of large commercial electric users who thought they were paying too much for electricity; and the operator of two shell companies, Sustainability Funding Alliance of Ohio and IEU-Ohio Administration Co.
    • Randazzo subsequently skimmed $5.4 million of the $13.2 million he obtained for his commercial clients from FirstEnergy.
    • FirstEnergy paid out Randazzo’s consulting fees in full shortly before he was nominated to head the PUCO; Randazzo lied about the relationship in his testimony to the General Assembly and failed to disclose the millions of dollars he had received from the company he soon would regulate and would continue to work for as an unregistered lobbyist.
    • Randazzo wrote portions of H.B. 6 that subsidized the nuclear plants, which FirstEnergy said were losing money.
    • Also in H.B. 6, Randazzo scuttled a 2024 rate case that likely would have resulted in a PUCO order to lower FirstEnergy’s rates; this maintained FirstEnergy’s profits at the levels of 2018, a very good year for the company.
    • All the while, Jones and Dowling directed and funded Randazzo and other lobbyists. They profited personally as First Energy stock rose from $28.83 in May 2017 to $50.47 in January 2020.
    • Jones texted Randazzo a screen shot of the stock price in November 2019 with a two-word message: “Thank you!!”

The Charges

Randazzo was indicted on 22 felony counts: one count each of engaging in a pattern of corrupt activity, grand theft and bribery; two counts of aggravated theft; three counts of telecommunications fraud; six counts of tampering with records; and eight counts of money laundering.

Jones was indicted on 10 felony counts: one count each of engaging in a pattern of corrupt activity and bribery; two counts each of aggravated theft of $1.5 million or more and telecommunications fraud; and four counts of money laundering.

Dowling was indicted on 12 felony counts: one count each of engaging in a pattern of corrupt activity and bribery; two counts each of aggravated theft of $1.5 million or more, telecommunications fraud and tampering with records; and four counts of money laundering.

Sustainability Funding Alliance of Ohio is included in 11 of the criminal charges; IEU-Ohio Administration is included in five.

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NYISO to Pause New Interconnection Requests for 3 Months in Order 2023 Transition

RENSSELAER, N.Y. — NYISO on Feb. 6 presented the Interconnection Issues Task Force (IITF) with its plan for transitioning to its new generator interconnection procedures under FERC Order 2023, including a nearly three-month pause on accepting new interconnection requests.

The pause would begin April 4, one day after NYISO’s deadline to file its full Order 2023 compliance proposal with FERC. The commission last month approved a partial compliance filing that allows developers to opt in to certain studies that will be eliminated under the new rules. (See FERC Approves NYISO Waiver on Interconnection Study Requirements.)

The ISO would then begin accepting applications into a transitional cluster July 1, until Oct. 15; work on processing the projects would begin Jan. 15, 2025, with a goal of finishing by April 20, 2026.

The “first official study” under Order 2023 would then begin on May 1, said Sara Keegan, NYISO’s assistant general counsel, “but we’re still looking at this start date and how to actually tie it into the end of the [transitional study], so this is still a bit of an unknown.”

Keegan highlighted the possibility of changes to the proposed transition timeline because of the “inherent risks” associated with any FERC filing. She said FERC “does not have a deadline by which they have to act,” so should the commission not issue a timely ruling or require additional compliance requirements, “things could unravel” and necessitate adjustments to the proposed dates.

NYISO is “approaching this filing carefully,” Keegan said, and it “appreciates the frustration” from developers who are apprehensive about the transition, especially those either with projects already in the interconnection queue as part of class year 2023 or considering having their projects participate in the transitional cluster.

Keegan discussed other adjustments to NYISO’s interconnection procedures during the IITF meeting, which will eventually be in tariff Attachment HH. This proposed attachment will consolidate existing interconnection requirements from Attachment S (rules to allocate responsibility for the cost of new interconnection facilities), Attachment X (standard large facility interconnection procedures) and Attachment Z (small generator interconnection procedures), along with the new processes. The attachments will remain in NYISO’s tariff for the limited purpose of completing CY23 projects and facilitating the transition.

The ISO also posted a redline of Attachment HH, incorporating stakeholder feedback since the last IITF meeting.

NYISO will return to IITF stakeholders multiple times before the April 3 filing deadline to review and finalize the proposed tariff language.

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PJM PC/TEAC Briefs: Feb. 6, 2024

Planning Committee

Stakeholders Endorse Revised RRS Values 

The Planning Committee endorsed a PJM proposal to reset the installed reserve margin (IRM) and forecast pool requirement (FPR) values for the 2025/26 delivery year to reflect the shift to marginal ELCC accreditation approved by FERC last month (ER24-99). The changes were approved with 57% support. 

Driven by several resource classes seeing reduced average accreditation, the FPR would decline 15% from the 1.1171 endorsed by stakeholders last year to 0.9440, while the IRM would remain static at 1.17%. The FPR formula was changed in the filing approved last month to multiply the IRM by the pool-wide average accredited unforced capacity factor, rather than the equivalent forced outage rates previously used, to determine the capacity required to meet forecast peak load. (See “Stakeholders Endorse Reserve Requirement Study Values,” PJM PC/TEAC Briefs: Oct. 3, 2023.) 

PJM’s Pat Bruno said the RTO continues to review the unit-specific performance adjustment before it can release generator’s accreditation values, which are calculated using the adjustment and class ratings presented to the PC. Those values are to be considered by the Markets and Reliability Committee and Members Committee for endorsement Feb. 22. The PJM Board of Managers is expected to establish the values by the end of the month. 

PJM’s Patricio Rocha Garrido said the FPR values PJM proposed Feb. 6 differed from preliminary estimates because of increased winter risk being identified because of the resource portfolio including a higher concentration of solar resources and fewer wind generators. Bruno said there also was a smaller number of generators that attested to their ability to provide dual-fuel capability than expected and those that did seek that classification had a wide range of historical performance, resulting in some being disqualified. 

Multiple stakeholders said there was too little information to understand how the new figures were being calculated and the effect they could have on unit-specific accreditation, raising a concern that the new values were being moved to a vote too quickly. 

“I am concerned about PJM pushing us to vote. Clearly there was very little transparency into the numbers that PJM has published. They have extraordinary commercial implications for all of your stakeholders. To try and cut off conversation is really inappropriate,” LS Power’s Marji Philips said. After the meeting, Philips said she appreciated PJM allowing more voices to be heard before moving to a vote. 

PJM Corrects Electric Vehicle Load Forecast

PJM updated its forecast for electric vehicle load growth with corrected figures from S&P Global, which PJM contracted to provide estimates for the first time for the 2024 Load Forecast. (See “PJM 2024 Load Forecast Sees Jump from EVs, Data Centers, Heat Pumps,” PJM PC/TEAC Briefs: Dec. 5, 2023.) 

The projected numbers were incorrectly offset to increase one year in advance, PJM’s Andrew Gledhill said, resulting in the EV forecast being inflated by 10% for 2030. The revised forecast resulted in varying outcomes across transmission zones, with the MedEd region seeing the largest difference with a summer peak forecast over 2% smaller in 2030. 

Vistra’s Erik Heinle questioned if PJM plans to continue using contractors for this portion of its forecast or if multiple vendors could be used to receive estimates that could be analyzed or averaged together. Gledhill said PJM sees value in getting an outside expert opinion on EV load growth and there has not been any decision to change course. 

Transmission Expansion Advisory Committee

Supplemental Needs and Project Proposals

    • Exelon presented a $175 million project to build a new Keslinger Substation and several lines in its ComEd zone to serve a new customer with an ultimate load of 210 MW. Keslinger would include four new six-mile lines cutting into the Waterman-Crego Road and Crego Road-Glidden 138-kV lines, as well as two new 345-kV lines spanning 0.7 miles to cut into the Nelson-Electric Junction lines. The project is in the conceptual phase with an envisioned in-service date of Dec. 31, 2027.
    • Exelon revised the scope of a prior project to build a new Navy Yard 230-kV substation to serve growing load in Philadelphia, bringing the cost from $71 million to $82 million. The original design would have configured the facility as a breaker-and-a-half. Limited space led the utility to shift to a ring configuration. The project is in the conceptual phase with a projected in-service in 2029. 
    • Public Service Enterprise Group revised a project to upgrade communications equipment on 500-kV lines running between its Deans, East Windsor and New Freedom substations, increasing the cost from $20 million to $39 million. The new proposal would replace 68 miles of static wire with fiber lines and upgrade line relay equipment. The original proposal would have replaced the static wire with optical guide wire. The project, which is in the conceptual phase, would complete work on the Deans-East Windsor line in December 2025 and finish the East Windsor-New Freedom line in June 2027. 
    • PPL presented a customer service need to add 1,275 MW served by a 138-kV source in New Kingston, Pa. The load is expected to come online in the summer of 2026 starting at 40 MW and grow to 1,275 MW in 2032. 
    • Dominion Energy presented several distribution requests to serve data center loads in Northern Virginia. 
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SPP Board of Directors/Members Committee Briefs: Feb. 5-6, 2024

SPP senior management rolled out its top 2024 corporate goals for its Board of Directors and stakeholders, cautioning they don’t reflect all the important work the grid operator will take on this year.

“While we believe that every one of these goals [either is] … mission critical or [provides] significant strategic value, we’ll also strive to be as affordable as we can be as we undertake these efforts,” COO Lanny Nickell told the board and Members Committee Feb. 6 during their virtual meeting.

Topping the list, of course, is resource adequacy — “one of our greatest risks,” Nickell said —and mitigating those risks. “We’re continuing to see increasing amounts of intermittent generation,” he said. “At the same time, we’re seeing thermal generation being retired, [and] we’re experiencing extreme load growth, and also an increasing threat of extreme weather.”

SPP has listed 15 initiatives that reflect the priorities the Resource and Energy Adequacy Leadership (REAL) Team established in 2023. They include a winter resource adequacy requirement, value-of-lost-load metrics and usage policy, an improved outage policy, and winter and summer planning reserve margin (PRM) revision requests. (See ‘Therapy Session’: SPP REAL Team Reviews Draft LOLE Study.)

Nickell noted the three severe storms that swept across the SPP footprint during the past four winters and said it should not be a surprise the grid operator wants to “continue to enhance our readiness for extreme weather” as its second goal.

He said reports filed after winter storms Uri and Elliott contain 33 recommendations for improvements. Staff plans to close out the remaining open items from the reviews and bring back a final report to the board next January.

“We expect that will complete development of our market policies and will enhance our transmission planning processes to address extreme weather scenarios,” Nickell said.

The other three goals are:

    • optimizing the generator interconnection (GI) queue’s processing;
    • advancing innovative transmission policies; and
    • continuing the western expansion’s progress.

All five goals come with specific milestones designed to chart progress and gauge success at year’s end.

“We know priorities will likely change throughout the year. … These could very well get rearranged as we go through the year,” Nickell said. “We know that some of these are going to take years in order to fully effectuate and realize the benefits of the policies and requirements that are being proposed.”

To drive the message home to staff, CEO Barbara Sugg said SPP has, for the first time she could remember, developed a theme for the year: EMBRACE 2024. It’s an acronym for Expansion, Mission, Branding, Reliability, Affordability, Community and Engagement.

“EMBRACE is an acronym, because it’s the world we live in,” she said. “We’re going to see the word ‘EMBRACE 2024’ plastered throughout the [SPP headquarters] building. We really want the employees at every level of the organization to come together under this particular theme as we work on addressing the challenges and the opportunities that we face in 2024.”

Congestion-hedging Policies’ Implementation

SPP’s board and regulators approved the implementation of a package of eight congestion-hedging policies they signed off on in July 2023. The proposals are designed to increase equity, fairness and financial transmission rights awards among market participants. (See SPP Board/Members Committee Briefs: July 24-25, 2023.)

Stakeholders have since added language for the annual long-term congestion rights (LTCRs) analysis performed during each round of the auction revenue right (ARR) nomination process. This ensures nominated candidate ARRs do not violate any transmission-line thermal ratings under normal system conditions.

They also revised the policies to distribute ARR surplus. This includes an iterative approach to the ARR allocation’s first round and the distribution of excess auction revenues. Once approved by FERC, SPP would allocate 50% of the excess revenue in one year under the old method and 50% under the new method. After that, the new process would take over.

Board votes are not disclosed, but the Regional State Committee approved RR591 by a 10-2 vote, with South Dakota’s and North Dakota’s commissioners both casting dissenting votes.

North Dakota’s Randy Christmann said some members have invested the time to make the policies work for them, while others “maybe did less of that.”

“So now we’re just going to socialize it, and I just don’t find that right,” he said.

The board also approved without discussion RR583, which allows SPP to nominate LTCRs for federal service exemption and grandfathered agreement carveouts to further mitigate the load’s exposure to the day-ahead market’s congestion costs.

The rule change became necessary when SPP added the northern portion of the Western Area Power Administration, a federal power marketing agency. WAPA brought with it grandfathered transmission rights that caused some loss of congestion opportunities for other market participants.

“This is certainly not a fix to congestion-hedging issues, but it’s a good small step forward,” said Minnesota Commissioner John Tuma, the RSC’s chair.

Sarah Martz, a member of the Iowa Utilities Board, cast the lone opposing vote against the change during the RSC meeting over concerns it will create more scarcity of LTCRs should congestion-hedging rights be reset.

Compliance Deadline Met

The board and directors approved urgent proposed tariff changes (RR606) setting the PRM to meet a FERC compliance deadline. The change includes explanations of the loss-of-load expectation study methods, assumptions and approval process, and the timeline for the PRM’s approval and implementation process.

Staff met the deadline with a Friday filing, asking for an effective date of April 10.

The proceeding stems from FERC’s rejection in 2023 of several members’ attempt to overturn SPP’s 2022 tariff change raising the PRM from 12% to 15%. The commission in September 2023 denied a rehearing request, modified the discussion and directed the grid operator to make a compliance filing (EL23-40). (See FERC Rejects Protest of SPP PRM Increase.)

American Electric Power, Oklahoma Gas & Electric and Xcel Energy are the SPP members that protested the original order. Stacey Burbure, an AEP vice president, said AEP doesn’t believe the tariff change goes “quite far enough” and is not certain it “fully complies with a directed revisions directed by FERC and its order.”

“Our concern has always been, and remains, having an appropriate level of detail and the tariff to ensure that the process is transparent,” she said. “We fully support the need for flexibility and increasing the planning reserve margin to meet reliability needs, but we also recognize that there needs to be an appropriate balance with respect to the level of the detail and the tariff.”

AEP and Arkansas Electric Cooperative Corp. opposed the measure, which passed the Members Committee’s advisory vote 16-2, with three abstentions. AECC’s Andrew Lachowsky said the cooperative already is adding a 900-MW generating resource but is worried the PRM will be increased again before the unit goes online.

During the RSC’s discussion of RR606, Oklahoma Corporation Commission Chair Todd Hiett offered an amendment that, should the PRM need to be increased by more than a percentage point, the new value would not be effective until at least a year after the regulators’ and directors’ approval.

“Just to ensure we don’t do too much too fast,” Oklahoma Municipal Power Authority’s Dave Osburn said.

The amendment failed, 2-10. The RSC then unanimously approved the measure.

Board Approves Appeal

The board approved renewable interests’ appeal of a revision request (RR592) approved in January by the Markets and Operations Policy Committee, siding with their request to endorse an amendment that failed during that meeting.

The Advanced Power Alliance and nine other members asked directors in a letter to reduce the risk of further GI study delays by adopting the amendment or adding a later cluster study. The amendment would have approved RR592, effective with 2022 and 2023 Phase 2 studies. Instead, MOPC endorsed a fuel-based dispatch adjustment beginning with a 2021 Phase 2 study.

Transmission Working Group Chair Derek Brown, with Evergy, told the board MOPC’s decision could add six to 18 months to the GI backlog mitigation effort. As passed by MOPC, RR592 includes nonfirm, nonlegacy Integrated Transmission Planning generators as prior-queued in steady-state analysis dispatch tables.

David Kelley, SPP’s engineering vice president, said staff supported implementing the measure with the 2022 study.

“It gives us more time to work on any issues that we may see and allows us to complete [the 2021 study], and it wouldn’t prevent us from hopefully completing the goal that we’ve set for completing 2022 [studies] this year,” he said. “I think that sufficiently buys us enough time that we would be comfortable as staff if the board were to adopt the amendment.”

The Members Committee’s advisory vote to the board endorsed the appeal, 10-8, with three abstentions.

Western Expansion ‘Ramping Up’

Bruce Rew, SPP’s senior vice president of operations, said during the quarterly joint stakeholder briefing that the RTO’s western expansion is “ramping up” and “continuing to move forward.”

He said staff has completed drafting tariff changes for RTO West and created 15 revision requests. The first six tariff changes were approved unanimously by the Markets and Operations Policy Committee during January’s meeting, and the full package, including membership agreements and bylaw changes, will be brought to the board’s April quarterly meeting.

Several of the seven utilities in the Rocky Mountains region that are interested in joining the RTO have embedded entities within their balancing areas. SPP is working with the entities to determine how they would participate in the market or pseudo-tie out of the system to join another BA. Staff are preparing the entities to declare their intent by April 1, Rew said.

SPP plans to file its tariff changes May 31, even as systems development begins in April. Go-live is targeted for April 2026.

“We’re pleased with the progress so far,” Rew said.

SPP RTO West could add four states to SPP’s footprint: Arizona, Colorado, Utah and Wyoming.

3rd 100-year Storm in 4 Years

“What would the new year be if we hadn’t already had some kind of an extreme weather event?” Sugg asked rhetorically. “We all know that they’re no longer called 100-year storms when you have three of them in four winters. We might start calling them holiday storms, though, because they all are tied to some national holiday.”

Sugg said SPP experienced its highest 24-hour winter load during the January winter storm and its sixth-highest overall, just missing a seasonal peak by about 400 MW. The grid operator was able to import 6.7 GW from its neighbors at one point, exceeding the 6 GW of imports during the February 2021 storm.

“We were certainly thankful for our interconnections and our interregional transfer capacity,” Sugg said, thanking the RTO’s neighbors. “There is no way that we could have been successful with that winter event if not for our member companies and your system operators.”

Consent Agenda Passes

The board’s consent agenda approval included the Corporate Governance Committee’s review of stakeholder group rosters to ensure members’ expertise and geographic locations yield a “widespread and effective representation of the membership”; modification of a notification to construct (NTC) issued to Western Farmers Electric Cooperative for a 20-MVAR capacitor bank; withdrawal of an NTC issued to Southwestern Public Service Co. for a $1.1 million, 115-kV line upgrade; an out-of-cycle re-evaluation of a Northwestern Energy 115-kV project after a new power plant was added to models; the 2024 Transmission Expansion plan; and the 2023 Integrated Transmission Plan’s (ITP) short-term reliability project report.

The consent agenda also included three RRs that:

    • RR560: move operating criteria language to the system operating limits (SOLs) methodology.
    • RR597: document the day-ahead market’s high-level process used for effective limit application.
    • RR598: remove planning criteria portions outlining the methodology to develop SOLs and interconnection reliability operating limits in the planning horizon. This aligns with NERC’s retirement of Mandatory Reliability Standard FAC-010-3.
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PJM MIC Briefs: Feb. 7, 2024

Stakeholders Endorse Real-time Temporary Exception Manual Revisions

VALLEY FORGE, Pa. — The Market Implementation Committee endorsed revisions to Manual 11 to codify the real-time temporary exception paradigm approved by FERC on Nov. 30. This replaces PJM’s real-time values process for generators to submit any change in their ability to perform to their unit-specific parameters. (See “Real-time Temporary Exceptions Manual Revisions Proposed,” PJM MIC Briefs: Jan. 10, 2024.) 

The temporary exceptions process is designed for short-term events and repeat or long-term constraints over 30 days that should be reported to PJM and the Independent Market Monitor as period exception requests, PJM’s Lauren Strella Wahba said. Generation owners should notify PJM and the Monitor when the resource has returned to being able to operate at full capability. 

During the Feb. 8 Operating Committee meeting, PJM’s Chris Pilong said temporary exceptions led to an uptick in outages being reported at least a day in advance of the unit being scheduled. However, only 22% of gas generators reported outages despite all pipelines seeing constraints that warranted notifying PJM. 

PJM Discontinues Market Certification Exam

Citing low participation and difficulties keeping exam materials up to date with the rate of market design change, PJM has retired its market certification exam with the aim of replacing it with a certification of training completion which signals that an individual is competent with the procedures in place at that time. 

PJM’s Don Kujawski said it typically takes two to three years to develop new exams, introducing the possibility that questions may be outdated by the time trainees are in the classroom. Enrollment also has been significantly lower than the other certification programs PJM administers. About 60 people have taken the markets exam since its inception, whereas around 1,000 have taken the generation and transmission exams. 

The new paradigm will be put into practice with the market optimization workshop scheduled for the third quarter of 2024. 

Other Committee Business:

    • PJM provided additional detail on its quick fix proposal to revise Manual 11 to reflect its approach to interface pricing points, a mechanism that groups buses together when calculating LMPs for energy transfers between external areas. Delivering the second first read, PJM’s Zhenyu Fan said the proposal is a response to a recommendation from the Independent Market Monitor that PJM adjust the weighting of the component interfaces to maintain congruity between prices and system conditions and also conduct annual reviews of the mapping of neighboring balancing authorities to individual interface pricing points. The manual revisions would add a definition for interface pricing points and establish an annual review looking at power flow impacts on each interface. Fan said similar language already included in the governing documents and the manual changes, which are set to be considered for MIC endorsement March 6, would memorialize existing practices. (See “Quick Fix Proposal on Interface Pricing Points,” PJM MIC Briefs: Jan. 10, 2024.) 
    • PJM’s Pete Langbein told the committee that an increase in load forecasting will prompt demand for about 3,000 MW of additional capacity in the third Incremental Auction, which is set to open Feb. 27.