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November 5, 2024

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SPP Markets+ Participants Executive Committee Briefs: Jan. 23-24, 2024

WESTMINSTER, Colo. — The competing efforts by SPP and CAISO to build and deploy an RTO in the Western Interconnection have sometimes been painted as a race in which the winner will be first grid operator to reach the finish line.

Hold your horses, now (pun intended).

Some in the West have come to the conclusion there are likely to be two day-ahead markets in the West: CAISO’s Extended Day-ahead Market, and SPP’s Markets+ and/or RTO West. They’re also saying it is now time for CAISO and SPP to begin talking about seams issues.

“We are accepting the possibility of two day-ahead markets,” Vijay Satyal, deputy director of regional markets for Western Resource Advocates (WRA), said last week during SPP’s first Markets+ Participants Executive Committee (MPEC) meeting of the year. “For now, we will seek to ensure there’s little seams impact from possible bifurcated day-ahead markets in the West.”

SPP Markets

Vijay Satyal, Western Resource Advocates | © RTO Insider LLC

Satyal raised the possibility of two markets several times during the meeting. WRA, a nonprofit environmental law and policy organization, has maintained for five years that the region’s economic, reliability and environmental benefits are maximized with one large Western RTO.

Now, Satyal says, “the sooner, the better” that CAISO and SPP start talking with each other.

SPP said its Markets+ staff and CAISO began regular informal monthly meetings in July to discuss the design and status of both markets. The RTO has much more regular communication over reliability issues with CAISO as a neighboring reliability coordinator in the West.

Carrie Simpson, SPP’s senior director of seams and Western services, said the conversations include “making our seams as seamless as possible” and present an opportunity for SPP to work with CAISO and stakeholders to find a better way to mitigate the risks on both sides.

“This could be one of those areas that we’ve worked for improvement. This [design item] is a good way to just recognize that [participants] might have to carry more [flexibility reserve] because this type of product is coming in,” she said, noting tariff language brought forward by the Markets+ Seams Working Group (MSWG). “The seams group felt it was appropriate to allocate the uncertainty costs to these types of transactions. It allocates the cost to those who are buying from CAISO to sell into SPP because of the uncertainties around those types of transactions.”

Chelan County Public Utility District’s Tuuli Hakala chairs the MSWG. She suspects most members of her team joined to work on those very issues.

“My expectation is that as we’re working through protocols, we’re identifying elements where this is an area where this policy could be improved through formal coordination,” she said.

Satyal said he didn’t think the discussions between the grid operators go far enough or give enough transparency to stakeholders that might be affected by both market footprints.

“It is going to be extremely important to build interoperability agreements (i.e., seams management) so that we have better coordination between the two markets,” he told RTO Insider. He called for agreement on issues “involving either reliability management or the economic impacts, transmission and greenhouse gas management that come with two adjoining markets at work together.”

“This is a proactive request that WRA feels is important and in the interest of the public, ratepayers and customers,” Satyal said. “The next year and a half are critical for both markets to come to the table and agree on a principle statement around the seams, to agree on what are the operational areas and then what are the specific practices that require coordination. [CAISO and SPP] have had initial discussions, but if there’s going to be a true transparent stakeholder process … the utilities and market participants that are going to sign participation agreements should be aware and be part of this.

“Doing so now would make future seams agreement work more flexible to update and propose to FERC for approval,” he added, calling for a seams evaluation or study scenarios that look at three different levels of power flows as the ideal next step. “It’s important that all parties come to the table and support the two market operators in the minimum elements of a seams framework.”

MMU, MSC to Collaborate

SPP’s Market Monitoring Unit and the Markets+ State Committee (MSC) agreed to collaborate on clearly defining an observed participant obligation gap in the tariff that was identified by state regulators.

At issue is a 2022 FERC Notice of Proposed Rulemaking related to “duty of candor.” It would require all entities communicating with the commission or other organizations — e.g., the MMU — about FERC matters to provide “accurate and factual information” (RM22-20). (See FERC NOPRs Would Require ‘Candor,’ Improved Accounting for Renewables.)

SPP Markets

Snohomish Public Utility District’s Joe Fina weighs in on the duty-of-candor tariff language. | © RTO Insider LLC

Oregon Public Utility Commissioner Letha Tawney called into the meeting and said the MMU’s “continued concern” of a weakness in the existing Markets+ tariff “concerns the MSC.” She said the committee is seeking rules that “explicitly apply” to all entities, with everyone held to the same expectations.

“We all know when there is trust, and that is built on transparency, and the rules apply to everyone who participates … and you are seeking those customer benefits that an efficient, well-functioning market can deliver. From that perspective, we are all very aligned,” Tawney said. “We all know from our shared experience in the West that there is a fragile trust that the West has begun to build in the concept of security-constrained economic dispatch.”

The MMU argued before the MPEC in November that “duty of candor” language was missing from the tariff. Asked for examples of duty-of-candor violations, Monitor Keith Collins said he could offer hypothetical examples, but he would be breaking FERC rules by giving specific examples of what counts as privileged information.

“There are times when we asked for more information, and we would expect that information to be accurate and factual,” Collins said. “Unfortunately, that has not always been the case, and that can create some problems for us.”

“It remains unclear to MSC members that all market participants will have the same obligations in how they respond to requests for information from the MMU outside of a specific market-manipulation situation,” Tawney said. “There have been challenges [in the Eastern Interconnection] to holding everybody to that obligation to respond.”

The Markets+ legal subgroup will assist the MMU and MSC in determining any changes that need to be made in addressing the issue and bring recommendations to MPEC’s Feb. 20 virtual meeting. If consensus is not reached, the MPEC will move forward with the existing tariff language.

The MPEC also asked the MSC to update the Interim Markets+ Independent Panel (IMIP) that is overseeing the first phase of the market’s development.

Independents Sector Changes

MPEC members unanimously endorsed a recommendation from the Independents sector to create a Markets+ Interim Governance Task Force that would review and process governance issues before they go to the committee. The group’s makeup is subject to MPEC’s determination.

Those issues include the weighting of votes within the sector, a sticking point since last year, and potential improvements of Markets+ sector definitions. (See IMIP Approves SPP Markets+ Governance Tariff Language.)

The Independents sector has also proposed that its votes be calculated on a single-vote-per-member basis, with at least half of the sector reserved for Markets+ participants, stakeholders with at least 1 MW in the market’s footprint or stakeholder organizations with at least five members, a majority of whom must be involved in wholesale markets.

The sector is a catch-all comprising public information groups, independent power producers, markets and other participants that aren’t investor-owned or public power utilities.

“It’s a very broad sector,” said Kylah McNabb, speaking for the National Resources Defense Council. “This helps the Independent sector manage itself, given our diversity.”

Draft Tariff Posted

Stakeholders endorsed several more pieces of tariff language during the meeting, with SPP posting the draft’s 592 pages Jan. 26. MPEC members have until Feb. 9 to submit their comments on the tariff and its 14 attachments detailing the market’s services, terms and conditions.

The IMIP will take up the tariff for approval in late February. The SPP Board of Directors will then consider it during a special meeting in late March, after which it will be filed at FERC.

SPP is hoping for the commission’s approval in about nine months, allowing it to begin Phase II of Markets+’s development.

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GCPA Elects R Street’s Garza as President

HOUSTON — The Gulf Coast Power Association’s membership has elected Beth Garza, a senior adviser for R Street Institute and long-time presence in the ERCOT market, to a two-year term as president. 

Garza joined R Street after 11 years with Potomac Economics. She served as the ERCOT Independent Market Monitor’s deputy director or director for Potomac until 2019. 

Her 35 years in the electric industry also have included leadership roles at ERCOT, NextEra Energy and Austin Energy, where she gained expertise in generation and transmission planning, system operations, regulatory affairs and market design. She has an engineering degree from the University of Missouri and is a registered professional engineer in Texas. 

GCPA’s Board of Directors filled out its officers by selecting Brian Lloyd, vice president with Oncor, as vice president; Mark Egan, Energy Evolution Advisors’ founder, as treasurer; and Donna Benefield, senior vice president with NRG Energy, as secretary. 

Outgoing President Mark Dreyfus made the announcement during the GCPA’s annual meeting Jan. 18. He said 2023 was a “fantastic” year with corporate memberships up from 137 to 153, its largest corporate membership on record. Individual memberships increased from 301 to 337. Registrations for meetings and conferences were up 28% over 2022 as the organization set attendance records for its annual spring and fall conferences and its MISO–SPP forum. 

The attendance numbers resulted in strong financials for the organization. Total revenues exceeded $1.9 million, an increase of just over $400,000 from the prior year “because of the economic recovery and strong attendance memberships revenues,” and added $651,000 to the GCPA’s coffers. 

The profits will be used to fund the organization’s scholarship program, which was resumed after the COVID-19 pandemic. Under the revamped program, GCPA will award ERCOT, MISO and SPP $20,000 each to go to outstanding students in their summer internship programs. 

Dreyfus said the hunt continues for a new executive director with the experience and contacts “to really keep the organization moving forward.” Kim Casey announced her retirement last year; she was the fourth ED in GCPA’s history. 

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Petition Seeks PURPA Protections for Rooftop Solar

Solar advocates have petitioned FERC to take enforcement action against Arizona’s Salt River Project for setting rates that allegedly discriminate against customers with rooftop solar. 

The rooftop solar rates are in violation of the Public Utilities Regulatory Policies Act (PURPA), according to the petition. It was filed Jan. 12 by the nonprofit advocacy group Vote Solar and two SRP residential customers with rooftop solar. 

“SRP’s current policies for residential customer solar violate the commission’s rules and have decimated what was previously a robust market for solar,” the petition said. 

The petition asks FERC to compel SRP to offer nondiscriminatory electric rates for rooftop solar customers as well as fair rates for buying electricity from those customers. 

As an alternative to an enforcement action, the petition asks the commission to make a finding that SRP’s rates for rooftop solar customers violate PURPA. 

PURPA is intended to encourage development of small power producers and co-generators and to reduce fossil fuel demand.  

SRP said in a statement that it is reviewing the FERC filing.  

“Based on an initial review, we believe the claims are without support and the background provided regarding SRP’s programs and support of its solar customers is inaccurate,” the utility said. 

SRP said it has a number of rate options for rooftop solar customers and, as of September, had more than 54,000 residential customers with rooftop solar systems. 

Solar Rate Plans

Rate disputes are often resolved by a state’s public utility commission, according to David Bender, an Earthjustice attorney who’s working on the case on behalf of Vote Solar.  

But because SRP is not regulated by the Arizona Corporation Commission, the petitioners took their issue to FERC, Bender told RTO Insider. 

If FERC doesn’t initiate an enforcement action within 60 days, the petitioners may bring an action in federal court. 

According to the petition, SRP has separate rate plans for rooftop solar customers and nonsolar customers. 

The solar customers pay a fixed monthly charge that is up to $25.44 higher than that paid by nonsolar customers, the petition said, while the kilowatt-hour charge and demand charge are the same for both types of customers. 

In addition, the petition said, only non-solar customers are offered the EZ-3 time-of-use plan, which includes a “more advantageous” three-hour peak period: 3 to 6 p.m. or 4 to 7 p.m.  

In contrast, the time-of-use plan offered to solar customers has a longer peak period that varies by season — 2 to 8 p.m. in the summer and 5 to 9 a.m. plus 5 to 9 p.m. during the winter, according to the petition. 

“All of the solar-customer tariffs impose higher fixed charges and preclude solar customers from benefits available under tariffs for nonsolar customers,” the petition alleged. 

SRP’s rates to buy electricity from solar customers also violate PURPA, according to the petition, which said that the 2.8 cents/kWh reimbursement under several of SRP’s tariffs is lower than the utility’s full avoided costs. 

New Mexico Case

Bender worked on a similar case involving solar rates charged by the Farmington Electric Utility System, owned by the city of Farmington, N.M. 

In that case, FERC declined to act on a petition filed in April 2019 by Vote Solar and several Farmington residential electric customers who had rooftop solar. The parties contested a “monthly standby charge” that the Farmington utility charged its solar customers. 

They took their case to federal court. The case was dismissed in U.S. District Court, but a Court of Appeals reversed the decision. Farmington rescinded its additional charges for solar customers and, under the terms of a settlement, agreed to credit or refund customers who had paid the standby charge. 

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Clean Energy Advocates Call on States to Step up Support for Storage

While the deployment of utility-scale battery storage has accelerated in recent years, additional regulatory and policy support is needed to scale up the industry and fully realize its potential benefit to the grid, a panel of experts convened by the Clean Energy States Alliance said Jan. 29.

The panel’s discussion focused on the lack of revenue available to battery storage resources in restructured wholesale markets, despite studies showing overall cost savings associated with deploying large-scale solar on the grid.

“The revenue does not equal the costs, so we need state support, and we need policy,” said Julian Boggs, director of state policy for Key Capture Energy.

Boggs pointed to the large risks investors assume when developing battery storage projects that rely on wholesale market revenues. For the industry to reach the scale needed to support the clean energy transition, “it’s going to take a lot more certainty in those revenues,” Boggs said.

States should step up to help provide this stability, Boggs added. “You need long-term contracts at scale; that’s the name of the game. I think policy makers are increasingly getting that.”

Joan White, director of storage and interconnection for the Solar Energy Industries Association, said California and Texas have led the country in storage deployment because “the market fundamentals really are there.”

Panel clockwise from top right: Todd Olinsky-Paul, Clean Energy States Alliance; Julian Boggs, Key Capture Energy; Waylon Clark, Sandia National Labs; Ted Ko, Energy Policy Design Institute; Joan White, Solar Energy Industries Association (SEIA). Imre Gyuk, director of Energy Storage Research at the U.S. Department of Energy Office of Electricity, also spoke. | Clean Energy States Alliance

“When the value of storage truly is captured in a market design, you can see a market take off in this exponential curve,” White said. “We’ve seen that in California and Texas — they’ve got really big deltas between their off-peak energy and their on-peak energy costs.”

White added that the lack of carbon pricing in wholesale markets distorts the true value of battery storage.

“When we look at wholesale markets, there’s no reflection of the cost of climate change or the cost of carbon,” White said. “I think the biggest thing we can do in terms of market design is incorporate the cost of carbon into market prices.”

Ted Ko, executive director of the Energy Policy Design Institute, also advocated for a carbon price, while highlighting Massachusetts’ Clean Peak Energy Standard as an “interim solution.”

The Clean Peak Energy Standard mandates that electricity suppliers buy an increasing number of certificates from qualifying clean resources, including energy storage and demand response.

“You eventually want to get to carbon pricing in the wholesale markets,” Ko added.

Regarding ongoing issues with interconnection, White said FERC Order 2023 contains “a couple small wins for storage,” including improvements to how system operators and transmission owners model storage resources in interconnection studies.

At the same time, White stressed that structural changes at a federal level are needed to “clean up the dumpster fire that is interconnection at the RTO level.”

“In order to reach our decarbonization goals, we need a grid that is two to three times our current size, and FERC Order 2023 does not plan or finance that grid in any way,” White added.

White also expressed concern that FERC Order 2222, which requires ISOs and RTOs to allow distributed energy resource aggregations to participate in wholesale markets, will not address the underlying revenue deficiencies that serve as barriers to entry.

“If the underlying market fundamentals aren’t there … the resources aren’t going to show up,” White said. “The timeline is long, and the revenue isn’t there in most markets.”

Looking at the long-term outlook of the battery storage industry, the panelists also emphasized the need for strong regulations and standards around fire safety.

“Getting fire safety right is a must, must, must for the industry,” said Boggs, who expressed support for requirements for storage systems to follow the National Fire Protection Association’s 855 standard, submit emergency response plans, and provide emergency training for first responders.

“This is coming whether we ask for it or not,” Boggs said.

The webinar was a presentation of the Energy Storage Technology Advancement Partneship (ESTAP). ESTAP is funded by the U.S. Department of Energy Office of Electricity, managed by Sandia National Laboratories, and administered by the Clean Energy States Alliance.

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Draft Plan Outlines California Vision for Offshore Wind

The California Energy Commission on Jan. 19 released a draft plan for offshore wind development, adding to the rapidly growing body of work identifying wind power as crucial to achieving state and national clean energy goals.

The plan was developed in accordance with AB 525, the 2022 bill that directed the commission to develop the strategic plan in collaboration with several other state agencies and established a goal of deploying 2 to 5 GW of offshore wind by 2030 and 25 GW by 2045 in California — powering 25 million homes and providing about 13% of the state’s supply. The draft plan also says the U.S. is on the path to deploy 110 GW by 2050.

“On the floating offshore wind side, there is no plan in the country — maybe the world — as comprehensive as this one,” Adam Stern, executive director of Offshore Wind California, told NetZero Insider.

Development of offshore wind infrastructure will occur primarily in federal waters under the jurisdiction of the Department of the Interior’s Bureau of Ocean Energy Management (BOEM). The agency held its first auction for wind power commercial leases in December 2022, which resulted in lease awards to five developers for parcels off California’s North and Central coasts. The winning bids for the lease areas total more than $757 million and include a commitment of more than $50 million to support communities and ocean users through community benefit agreements. (See First West Coast Offshore Wind Auction Fetches $757M.)

Challenges

But amid the progress, challenges remain. Waters off the coast of California are deeper than those in the Atlantic, requiring the installation of floating wind turbines rather than the more common fixed structures, which are suitable for waters about 200 or fewer feet deep. Floating platforms require more infrastructure, including suspended electrical cables linking the turbines, mooring cables and anchors attaching the turbines to the sea floor, with an electrical cable to transport the energy to a substation.

California’s coast is also less populated than the East and will require development and upgrades to ports and waterfront facilities to support offshore wind power, the report says, including construction of floating platforms, manufacturing and storage of components, and long-term operations and maintenance.

“Existing California port infrastructure is unable to support an offshore wind industry in the state,” the plan says. “As it will take a decade to make the needed port improvements that can support the full offshore wind supply chain, the state may need to import components from other parts of the world to meet the state’s 2030 offshore wind planning goals.”

New transmission also will be needed.

“The electric system on the North Coast is relatively isolated from the larger California grid and serves primarily local communities, so additional transmission infrastructure will be needed in this region. Existing transmission on the South-Central Coast is robust; however, there is still a need for long-term planning,” the plan says.

Stacey Shepard, senior information officer at CEC, told NetZero Insider in an email that permitting among local, state and federal agencies is perhaps the largest challenge offshore wind deployment faces.

“Coordination will be critical, but California has successfully coordinated multiple local, state and federal agencies to deploy clean and renewable energy facilities on state lands,” Shepard said.

Benefits

The plan cites several studies that estimate high potential economic and workforce benefits from offshore wind. For example, a Catalyst Environmental Solutions study estimated that a $124 million investment at the Port of Humboldt, a $20 million training center and workforce development, would create 500 annual short-term jobs by 2030 and 14,000 annual long-term jobs by 2045. The study projects that offshore development would generate upward of $5 billion in state-level gross domestic product by 2045, in addition to $1.2 billion in labor income and $385 million in fiscal revenue.

Another study by the Natural Resources Defense Council and Environmental Entrepreneurs estimated that 10 GW of offshore wind development in the Morro Bay and Humboldt areas could create more than 169,000 jobs and more than $45 billion in short-term economic benefits to the state.

Impacts

To better understand the potential impacts associated with offshore wind, the CEC conducted outreach to neighboring communities and tribal nations.

“While permitting agencies and developers have extensive experience with development and operation of various types of onshore and nearshore facilities, including deep water oil and gas platforms, there is a great deal of uncertainty about the impacts from large-scale floating offshore wind facilities anchored more than 20 miles off California’s coast,” the report states.

The plan lays out a detailed analysis of potential impacts associated with the Morro Bay and Humboldt lease areas, which could include habitat displacement of marine animals and birds and entanglement of species in underwater gear. To address some of these challenges, the CEC suggests burying underwater cables, avoiding important habitat and conducting regular monitoring.

AB 525 also directed the CEC to create a strategic plan identifying impacts to Indigenous groups and offering potential solutions. Tribes consulted were concerned with several potential issues associated with offshore wind development, including the perpetuation of resource extraction in their traditional territories that lack benefits to their communities, potential violence associated with the influx of non-local workers, the impact on sacred and historical sites, and more. Suggested strategies included exploring public safety measures to reduce violent crime and sexual and gender-based violence against California tribes and other vulnerable populations, and collaborating on avoidance, mitigation and co-management opportunities.

A framework for identifying suitable sea space was also outlined in the plan, which involves spatial mapping in federal waters from about three miles offshore to the 200-mile federal boundary. So far, the CEC has identified six locations for further screening — five off the North coast and one off the South-Central coast.

The draft strategic plan will be presented at a future public workshop.

“The CEC and collaborating state agencies are proud of the progress to date but appreciates there is much more work to be done,” Shepard said.

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DOE Adopts Modest Upgrade in Stove Efficiency Standards

The U.S. Department of Energy has finalized new efficiency standards for residential cooking appliances, ushering in modest increases that will take effect in January 2028. 

In its announcement Jan. 29, DOE said the changes will save consumers $1.6 billion on their utility bills over 30 years. 

But DOE also said the improvements it’s ordering are modest and will pertain to only a small percentage of cooktops and stoves manufactured. It said 97% of gas models and 77% of smooth-top electric stove models now on the market already meet the new standards. 

The cooking equipment standards are part of a larger push by the Biden administration for energy efficiency standards it estimates will yield nearly $1 trillion in consumer savings over 30 years. 

Partisan and corporate priorities would make any such package of changes contentious, but the proposed new rules on cooking equipment published by DOE in February 2023 became a cause celebre, with conservative firebrands pouncing on a supposed gas stove ban. 

The blowback was such that DOE in May 2023 published a knockdown piece that read in part: “Claims that the federal government is banning gas stoves are absurd.” 

The lingering effects of that kerfuffle can be seen in the wording of the announcement, in which DOE emphasizes that the new standards were mandated by Congress and drawn up in negotiations with stakeholders including utilities, states and advocates for consumers, appliance makers and the environment. 

DOE also points out the new rules will not bar features desired by consumers such as continuous cast iron grates, high-input-rate burners and other specialty burners. 

The efficiency standards for gas cooktops were watered down significantly during negotiations. DOE first proposed a limit of 1.2 million BTUs per year, but the final rule sets a limit of 1.77 million BTUs. 

Spread over 30 years across the 143 million existing U.S. housing units, the $1.6 billion in projected savings works out to about 37 cents a year. 

The Association of Home Appliance Manufacturers was one of the stakeholders that helped negotiate the new rule. It said Jan. 29: “This standard is a win for consumers and energy savings. Manufacturers will have the flexibility they need to continue offering the features and performance that consumers value in gas and electric cooking products.”  

Another of the stakeholders, the Appliance Standards Awareness Project, said the value of the negotiated recommendations is not so much for cooking appliances but in the entire package of appliance standards that was negotiated, including washers, dryers, dishwashers, refrigerators, freezers and beverage coolers. Executive Director Andrew deLaski said the effect of the announcement will be seen primarily in electric cooking equipment. 

“The main thing this does is ensure new smooth-top electric stoves don’t waste energy when they’re not even operating,” he said in a news release. “It’s a modest money saver for consumers, with changes that would be challenging to even notice. There was disagreement over this stoves rule last year, but then the stakeholders came together and resolved it.” 

He added: “It’s the whole suite of dozens of updated product standards the department is working on that will deliver the big impact, reducing people’s costs and protecting the climate.” 

DOE in late December adopted new residential refrigeration standards that will take effect in 2029 and 2030, with $36.4 billion in consumer savings over 30 years. Proposed commercial refrigeration standards would save businesses $56 billion over 30 years. 

U.S. Secretary of Energy Jennifer Granholm said her agency is continuing the initiative: “DOE is dedicated to working together with our industry partners and stakeholders throughout 2024 to continue strengthening appliance standards, addressing a backlog of congressionally mandated energy efficiency actions that is delaying a projected $1 trillion in consumer savings from reaching the American people.”  

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FERC Approves NYISO Waiver on Interconnection Study Requirements

FERC on Jan. 25 granted NYISO a waiver allowing a temporary suspension of tariff rules for its interconnection study processes to assist developers and facilitate a smoother transition to the procedures prescribed by Order 2023 (ER24-342).

NYISO has been working to implement the commission’s order, which seeks to unclog the nation’s interconnection queues. It submitted a partial compliance filing in November and was granted an extension to April 3 to submit its full proposal. (See NYISO Stakeholders Question Proposed Interconnection Timelines, Deposit Rules.) In the meantime, developers under the ISO’s current tariff rules face mandatory feasibility and system impact studies for their queued projects at their own expense.

To address this, NYISO proposed in its waiver request to establish a set of limited interim rules for its large facility interconnection procedures (LFIP) that would allow developers to choose between completing ongoing studies, opting for limited studies, withdrawing without penalty or not starting studies at all. The ISO argued that these proposed rules would “minimize the expense, time and resources” needed to advance studies in the interconnection queue.

NYISO’s current LFIP require developers to undergo three successive studies: an optional feasibility study that evaluates a project’s configuration and local system impacts; a system impact study that evaluates a project’s impact on transfer capability and system reliability; and a class year facilities study that evaluates the cumulative impact of a group of projects.

Now developers can either remain in the interconnection queue or withdraw their requests, thereby avoiding unnecessary costs until the new procedures take effect. However, they must make their decision within 30 calendar days following FERC’s order.

The commission said the waiver was “limited in scope,” remedies a “concrete problem” and would not “have undesirable consequences.”

NYISO has nearly 530 projects in its interconnection queue, and nearly all of them are renewable projects, according to an S&P Global analysis.

The waiver is effective beginning retroactively from Nov. 30 until FERC rules on the ISO’s partial compliance filing. The commission noted that it made “no findings as to the merits of NYISO’s partial compliance filing at this time.”

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PJM: Grid Performed Well During January Winter Storm

PJM last week said the grid maintained reliability through nearly a week of harsh winter conditions during the winter storm that blanketed much of the nation during mid-January. 

Dave Souder, PJM executive director of system operations, told the Jan. 24 meeting of the Markets and Reliability Committee that the grid was at its most strained Jan. 17, which saw a peak load of 134,777 MW and some emergency procedures implemented to mitigate transmission constraints. Cold weather alerts were in place from Jan. 14-17 and Jan. 19-22. 

Comparisons to December 2022’s Winter Storm Elliott dominated the discussion, with PJM making the case that several market and operational improvements bolstered performance. Souder said the RTO drew on its experience with generation performance during cold weather to take more action before the storm arrived. Dispatchers manually committed thousands of additional megawatts through the day-ahead market to give long-lead units time to come online and combustion turbines that have had trouble procuring gas in the past additional notice to firm up their fuel. 

Conservative operations were in place between Jan. 13 and 17 to provide dispatchers with greater flexibility to keep long-lead resources online when they’d otherwise be released on economics. 

“We took a risk-based unit commitment approach,” Souder said. 

PJM’s Brian Chmielewski said transmission congestion also peaked on Jan. 17, with 19 constraints reaching the $2,000/MWh transmission constraint penalty factor (TCPF). Heavy load interchange and congestion drove system marginal prices to the $500/MWh range Jan. 17 and 18. 

Vitol Vice President of Regulatory Affairs Jason Barker questioned if price spikes on the mornings of Jan. 16, 17 and 18 were driven by PJM load or exports to neighboring regions, saying that the timing appears to align with the MISO morning peak. PJM representatives were unable to confirm the observation, but agreed to examine event data.

Souder said additional information will be presented at next month’s Market Implementation and Operating committee meetings, scheduled for Feb. 7 and 8, respectively. 

The rate of generation outages was around a third of the peak during Elliott at 16,119 MW offline Jan. 16 versus 46,124 MW on forced outage Dec. 24, 2022. Souder said the gas fleet’s performance in particular was much stronger this month; though pipeline capacity restrictions were in place throughout the storm, there were few compressor station or gas well failures, and pipeline operators coordinated with PJM to improve forecasting. 

Generators that did experience disruptions impacting their output also made use of PJM’s newly implemented temporary exception process to report their diminished output. One of the challenges PJM highlighted following Elliott was a significant number of generators not reporting issues to the RTO until dispatchers attempted to bring them online. 

Independent Market Monitor Joe Bowring told RTO Insider that PJM took a “very conservative” approach to the storm and relied on a forecast that turned out to be much more accurate than that for Elliott. While he applauded the performance of PJM operators in keeping the grid online through their actions, he said that a stronger market design would commit generators based on economics. 

“The operators made the system work, and we’re happy they did, but when we think of the bigger picture, markets were not relied on,” he said. 

He argued that the need to manually commit resources during the storm highlighted the need for ongoing stakeholder discussions over the reserve market design to focus on how to include market parameters that reflect a need for short-term reserves. He contrasted the need for reserves that can operate through a storm lasting a few days to the decision to increase the synchronized reserve requirement by 30% last May. (See “Stakeholders Reject PJM Synch Reserve Manual Change; RTO Overrides,” PJM MRC/MC Briefs: May 31, 2023.) 

“You don’t need more reserves year-round; you needed them for a couple days last week,” he said. 

Several stakeholders questioned the cost of $28 million in uplift payments to generators committed under conservative operations, arguing that costs should be built into the market, while others said the current market structure provides dispatchers with flexibility to commit units as they may be needed in real time. 

Gregory Poulos, executive director of the Consumer Advocates of the PJM States (CAPS), said that both uplift payments and exports during strained conditions are worrying, but in this instance PJM’s actions appear to be warranted because of the concern that generators wouldn’t be able to perform during a holiday weekend winter storm — the same scenario PJM found itself in during Elliott. In this case, the holiday was Martin Luther King Jr. Day, instead of Christmas in 2022. 

The storm brought a new record-high peak load of 34,524 MW in the Tennessee Valley Authority region Jan. 17, and other PJM neighbors also saw high loads, leading the RTO to export 12,131 MW, the equivalent of nearly 10% of its own load. 

Gregory Carmean, executive director of the Organization of PJM States Inc. (OPSI), questioned whether the large amount of exports signal that other regions are leaning on the RTO for reliability at the same time that it has been recommending reducing projected reliability benefit of imports reflected in the capacity benefit of ties (CBOT) value. The package of market changes PJM proposed in the Critical Issue Fast Path process last year would have set the CBOT to zero, but the Board of Managers did not include that component in its proposal now pending before FERC. (See PJM Board Releases Outline of Capacity Market Changes.) 

Noting that the drop in temperatures was most severe in the ComEd zone, AEP Energy Director of RTO Operations Brock Ondayko said more detailed analysis on generation outages by zone could provide more information about any incremental improvements made in generator performance in subzero temperatures. 

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New York PSC Seeks Rehearing of RTO Adder for Offshore Tx Project

The New York Public Service Commission on Jan. 25 requested a rehearing of FERC’s December order granting a 50-basis-point RTO participation adder for the Propel NY Energy transmission project (ER24-232).

Propel — a $2.7 billion, 345-kV joint venture between New York Transco and the New York Power Authority — was selected from NYISO’s public policy transmission needs (PPTN) assessment to deliver at least 3,000 MW from offshore wind farms near the Long Island coast.

NY Transco petitioned FERC for transmission incentives, including a cost-containment mechanism, a base return on equity of 10.7% with a 150-basis-point risk adder, 100% coverage for abandoned plant and construction work in progress, and a 50-basis-point RTO participation adder. The commission approved these requests, but it reduced the risk incentive to 75 basis points and suspended the proposed base ROE pending hearing and settlement judge procedures. (See FERC Approves Incentives for NY OSW Transmission.)

However, the PSC said in its protest that the RTO adder is “neither necessary nor warranted” and “harms New York consumers” who will be “required to overpay to encourage a voluntary conduct on the part of the developer where the conduct sought to be incentivized is already required.”

FERC granted the adder with the condition that the developer continue its “membership in NYISO and transfer … operational control of the project to NYISO once it has been placed in service.”

But the PSC argued that the adder, typically used to incentivize voluntary participation, is redundant for Propel NY, as NY Transco’s involvement with NYISO is a regulatory requirement, not a discretionary choice. The adder “gives the developer an unjustified windfall while unnecessarily increasing costs to New Yorkers,” it said.

To support its position, the PSC cited FERC’s ruling last month that Pacific Gas and Electric was not eligible for an RTO adder in CAISO (ER24-96). (See Citing California Law, FERC Rejects PG&E Request for RTO Adder.) It said the two cases “are analogous.”

The PSC, along with New York City and Multiple Intervenors, had opposed NY Transco’s requested ROE and incentives. They complained that the 10.7% ROE was inflated and argued that NY Transco failed to demonstrate any special project risks.

The first settlement conference over the ROE is scheduled for Jan. 31.

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Virginia State Corporation Commission Finally Gets All Seats Filled

The Virginia State Corporation Commission (SCC) has a full complement of commissioners after the Virginia General Assembly approved two new members last week.

The legislature picked Kelsey Bagot, a former staffer of FERC Commissioner Mark Christie who was working at NextEra Energy, and Sam Towell, who is associate general counsel for Smithfield Foods and previously worked for the state attorney general.

“Kelsey is an excellent choice by the Virginia General Assembly for the State Corporation Commission,” Christie said in an interview Jan. 26. “As a former commissioner on the State Corporation Commission, I know that Kelsey brings exactly the qualities and the dedication to serving the public that the Virginia Commission needs and that the people of Virginia deserve.”

The two new members join Jehmal Hudson, who has been the only member of the state regulator since former Chair Judith Jagdmann stepped down in 2022.

The issues with staffing the SCC go back to when Jimmy Dimitri stepped down in 2018 and the legislature failed to find a long-term replacement for him. Dimitri has, however, been able to come back and help move needed business with Hudson in recent months because the body requires two votes for a quorum. The general assembly, which has seen its chambers flip between Republicans and Democrats multiple times in recent years, likewise had been unable to find a long-term replacement for Christie, who served on the SCC for nearly 17 years before joining FERC in 2020.

“I’m very, very happy that finally, after three years, all three seats are filled with permanent appointments, permanent elections, and they’re all three quality people,” Christie said. “The State Corporation Commission of Virginia is the most important state agency in Virginia that most people have never heard of.”

The SCC oversees energy, as well as large swaths of the state economy, including all insurance (it helps set up the state marketplace for health insurance under Obamacare), banking, securities, retail franchises and railroads. It also is the state’s central filing office for corporations, limited partnerships and LLCs.

“I think it’s the outstanding regulatory agency in America at the state level, based on the history and based on the broad jurisdiction,” Christie said.