Page 1500 – RTO Insider

November 8, 2015

OPINION: Why RTO Transparency Matters

By Rich Heidorn Jr.

It was about a year ago that RTO Insider began expanding its coverage beyond PJM to the other ISOs and RTOs in the Eastern Interconnection. We now have reporters based in PJM, SPP, MISO and New England (covering New York and ISO-NE) as well as Washington. And we’re planning to continue our expansion by initiating regular coverage of ERCOT and CAISO.

With the National Association of Regulatory Utility Commissioners holding its annual meeting this week, we thought it would be a good time to offer some perspective on our experience covering the grid operators.

The idea for RTO Insider’s focus on stakeholder meetings came several years ago, when I attended a PJM Markets and Reliability Committee meeting in Wilmington, Del., while conducting a compliance audit of the RTO for FERC’s Office of Enforcement. With dozens of stakeholders arrayed in two concentric U-shaped sets of tables equipped with microphones, the meeting room resembled the United Nations.

The stakes aren’t as large of course — only 21% of U.S. GDP is produced in the 13 states PJM serves.

RTOs’ Hybrid Role

Like other RTOs and ISOs, PJM occupies a unique, hybrid role — not a government, but not a wholly private organization either. (See sidebar, RTOs: ‘A Form Between Government and Business.’)

RTOs make decisions worth billions of dollars, decisions that have a direct impact on the electric bills of millions of ratepayers and an indirect effect on a region’s economy.

But few who are affected by these decisions can afford to send a representative to the hundreds of meetings PJM and other RTOs hold. The mission of RTO Insider is to provide a fair, accurate account of the stakeholder debates to help those outside the room monitor issues that matter to them.

I’m certain more than a few PJM stakeholders were apprehensive when we started attending stakeholder meetings in early 2013. But — since settling a little disagreement with PJM over our publication’s original name — we have had good relations with both PJM and its stakeholders.

The relationship has been aided by the trust that resulted from PJM’s media participation rules, which require us to share stakeholders’ quotes with them prior to publication to ensure accuracy. At all but the two PJM senior committees, stakeholders also have the right to refuse permission to quote them by name or company affiliation (Section 4.5 of Manual 34).

The rules gave me my own apprehensions. But in practice, very few stakeholders invoke the quote veto. Most appreciate having their views communicated. It has also helped us limit factual errors and misunderstandings from lack of context.

In fact, we have voluntarily adopted the “quote check” as an RTO Insider Code of Conduct in MISO, SPP and NYISO, and we will do the same when we expand to CAISO and ERCOT.

New England an Outlier

Why haven’t we done so in ISO-NE? It’s not because we don’t like New England. My daughter is in law school in Boston, so I’m always looking for reasons to go there.

It’s because ISO-NE and the ISO-NE and NEPOOL on Transparency.)

ISO-NE is a FERC-approved creation of NEPOOL, which began central dispatch of generation in the region in 1971. ISO-NE, created in 1997, refers to NEPOOL as “an advisory body” to the RTO.

“NEPOOL is a private organization and its meetings (including the Markets Committee, Transmission Committee and Reliability Committee) are private,” said ISO-NE spokeswoman Marcia Blomberg.

NEPOOL Secretary David T. Doot, an attorney with Day and Pitney, told RTO Insider that while there are no NEPOOL bylaws or other documents that prohibit the press, “it has been the recognized practice in the pool for the almost 30 years I have been representing NEPOOL.”

How can this be? FERC decided in Order 2000 to set only “minimum characteristics and functions” for RTOs but to allow RTOs to vary in their rules and governance structures.

We respect ISO-NE and believe it runs a first-rate operation. No RTO has a better communications department or website. NEPOOL posts unusually detailed minutes of its meetings, which are publicly available.

But these are no substitute for true transparency — the kind that can only come by allowing public and press access to stakeholder discussions. ISO-NE is as essential to its region as every other RTO, and its legitimacy depends on public trust.

We believe that ISO-NE’s fears of press coverage are unfounded, and our experience in PJM is proof. PJM’s rules were the result of a compromise between those who stressed the importance of transparency and those who feared the presence of the press would have a “chilling effect” on stakeholder discussions. Anyone who has read a single issue of RTO Insider can tell that our presence has scarcely affected the willingness of stakeholders to vigorously argue their case. This transparency also serves to undermine the claims of some critics that PJM is a shadowy “cabal” into which consumers have no input.

Is there some self-interest in our crusade for transparency? No doubt. We are in the transparency business and make no apologies about it.

The stakeholders in the regions we cover have repeatedly expressed their appreciation for RTO Insider’s commitment to accuracy and fairness. In fact, our business model requires it. Our subscribers include state regulators, consumer advocates, environmental groups and industrial consumers as well as transmission owners and independent power producers. None would subscribe if they didn’t believe us to be both balanced in our coverage and accurate on the details. (That is not to say we always get it right, as evidenced by the two corrections in this week’s newsletter.)

ISO-NE and NEPOOL aren’t the only organizations who could improve their transparency.

At a FERC technical conference last month on MISO’s capacity market, Tyson Slocum, director of the energy program at consumer group Public Citizen, complained that attending stakeholder meetings by phone was an inadequate way to participate because speakers fail to identify themselves.

“There is no transcript made available of these meetings at any time. As a result, there is very little public record about the details of what is driving decisions within this process,” he said. “It is essential that as a part of any capacity market reform that you look at stakeholder process reform because you are entrusting a private organization to represent all shareholders that are affected by policy.”

We’d also like to see NYISO change its rule prohibiting reporters from covering meetings except in person. (While we prefer to cover meetings in person, it is not always possible.) We’d also like to see PJM’s Board of Managers meet in public, as MISO’s and SPP’s do to no ill effect. And we’d like to see all restrictions on audio recordings eliminated. (Having a recording only helps us ensure accuracy.)

That said, ISO-NE/NEPOOL is the outlier among the RTOs and ISOs in the U.S. We take no pleasure in singling them out and hope we won’t have to report a similar disparity a year from now.

So to those within ISO-NE and NEPOOL who are opposed to opening your meetings, we say, let us in. The water’s fine.

November 6, 2015

SPP Board of Directors/Members Committee Briefs

LITTLE ROCK, Ark. — The SPP Board of Directors and Members Committee approved the 2017 Integrated Transmission Planning 10-Year Assessment’s scope, which had been revised to account for pending North American Electric Reliability Corp. transmission planning standards. The scope, which was recommended by the Markets and Operations Policy Committee, was approved with three no votes during their quarterly meeting Oct. 27.

The board and members discussed whether fluctuating gas prices, one of the assessment’s sensitivities (along with demand levels and final reliability and stability assessments), would result in a drain on staff’s time and increased study costs.

“How can you assess the demand on gas prices when you’re looking that far into the future?” asked Stuart Solomon, COO of Public Service Company of Oklahoma.

Alan Myers, chairman of the Economic Studies Working Group, said the study’s scope uses a $6/MMBtu price for gas 10 years in the future and tries to account for the impacts of increased liquefied natural gas exports and decreased fracking.

The assessment currently assumes a high availability of natural gas due to fracking. It also will consider three futures: a regional Clean Power Plan, a state-level CPP solution and an assumption the CPP is not implemented. The 2020 and 2025 models will include the CPP’s interim goals that begin in 2022 and 2025-2027, respectively.

Enhanced Combined Cycle Project Moves Forward

Natural gas prices were also at issue in the board and committee’s approval of revised Tariff language clarifying the design of the enhanced combined cycle (ECC) project, an effort to provide more sophisticated modeling that captures such plants’ flexibility. The revisions limit the number of combined cycle configurations at registration to three, tweaks the market-clearing engine’s algorithm to account for overlapping commitment periods between the day-ahead and real-time markets, and makes simplifications to ensure the project’s timely and on-budget completion.

“With gas prices where they are today, how is the ECC project going to achieve efficiencies?” asked American Electric Power’s Richard Ross. “Theoretically, [the savings] will be much smaller than what we started with, which was gas in the $4-5 range.”

Other stakeholders said the Tariff change was needed and should be approved. “Holding up the ECC cleanup revision is not the right way to move forward,” said Dogwood Energy’s Rob Janssen.

Janssen reminded members they moved forward with the ECC project not only because of the current cost-benefit analysis, “but also with the expectation the SPP system moves toward more natural gas-fired capacity in the future.”

Ross said SPP would achieve more by moving the deadline for day-ahead offers to 9 a.m. and compressing the commitment time to four hours. This summer, both SPP’s board and the MOPC voted to move the deadline for day-ahead offers up 90 minutes to 9:30 a.m. CT. (See “Board Approves Gas-Electric Timeline Change,” in SPP BoD/Members Committee Briefs.)

Ross said AEP was a no-vote against the ECC-cleanup language because it understood that the ECC project and further gas-electric harmonization couldn’t proceed in tandem, with the latter being the higher priority.

“It may have been a breakdown in communications,” Ross said, “but we understood we couldn’t advance the gas market-clearing logic any further and also implement the ECC.”

Bruce Rew, SPP’s vice president of operations, said the RTO believes it can complete the gas-electric harmonization work by next fall and complete the ECC logic by March 2017. The two projects are expected to cost a combined $7.7 million.

“Our own constraint is whether we can go down to four hours,” Rew said. He said SPP’s market-clearing engine is currently able to work with a 4.5-hour compressed timeline. He agreed to report back in January’s meeting as to “what we can do with this current technology.”

The ECC project was delayed last year to allow for a more thorough cost-benefit study. SPP has estimated it will take approximately $1.5 million and 14 months to implement the changes, which would require new software.

AEP has said it believes the ECC logic “is unlikely to resolve the challenges of combined cycle operation,” saying SPP’s market solution-engine is “already among, if not the, most complicated and computationally intensive such algorithms in the country.”

Lone Interregional Project Approved

The board and Members Committee approved the MOPC’s recommendation to approve one of three interregional projects evaluated as part of a regional review with MISO, the South Shreveport-Wallace Lake rebuild. The 11-mile 138-kV project addresses area congestion in northwestern Louisiana and has an estimated cost of $18.5 million — of which SPP would fund 20% ($3.7 million) — and a benefit-to-cost ratio of 11.86, far exceeding the 1.0 threshold.

MOPC Vice Chairman Paul Malone, of the Nebraska Public Power District, reminded the board that MISO has yet to act on approving the project and its Planning Advisory Committee did not support the project.

Eckelberger said he understood his MISO counterpart, Judy Walsh, is still open to the project. He said he will send Walsh a letter to “see if we can get this rolling.”

Eckelberger also said, “We think we’ll have to change some numbers to get MISO to work with us.”

The other two projects in the regional review are the Alto-Swartz series reactor and the Elm Creek-NSUB 345-kV transmission line. Both could be reevaluated in a future regional or interregional study.

Annual Meeting of Members

Calling the previous 12 months “another interesting year for the corporation and our members,” SPP CEO Nick Brown ticked off the Integrated Marketplace’s successful performance, recent transmission investments and the addition of 10 new members through the Integrated System’s incorporation as achievements during his annual president’s report.

Brown credited the Integrated Marketplace with creating $300 million in savings off of a $100 million investment, saying “nothing speaks more to our value to members” than seeing the markets credited for savings in members’ rate cases, annual reports, press releases and news stories.

“If ever there’s a success metric, it’s that,” Brown said.

The annual meeting began with members voting to re-elect two board members, a Regional Entity trustee and five members of the Members Committee, while also unanimously accepting a Corporate Governance Committee recommendation to increase their compensation.

Board members saw their annual retainers doubled to $30,000, with Board Chairman Jim Eckelberger’s retainer increased by $15,000 to $35,000. Members approved slightly smaller increases for meeting participation and RE trustee compensation.

Members re-elected Eckelberger and Harry Skilton to three-year board terms and Dave Christiano to another three-year term as an RE trustee. They also approved a recommendation to expand the RE trustee membership to four “in the interest of succession.”

Members re-elected Kelly Walters (Empire District Electric Co.), Mike Wise (Golden Spread Electric Cooperative), Kevin Smith (Tenaska) and Tom Kent (Nebraska Public Power District) to three-year terms on the Members Committee. Also re-elected was Bob Harris (Western Area Power Administration-Upper Great Plains), who was elected to fill a vacancy earlier this year.

Brett Leopold (ITC Great Plains), Scott Heidtbrink (Kansas City Power & Light) and Jason Atwood (Northeast Texas Electric Cooperative) were all elected to their first three-year terms.

Board Approves New Order 1000 Evaluation Panel

The board followed a unanimous members’ vote to approve the Oversight Committee’s recommendation for the 2016 industry expert panel (IEP), which will evaluate proposals for SPP’s competitive solicitations under FERC Order 1000.

SPP recently asked FERC to allow it to waive Tariff provisions governing the IEP’s selection (ER16-126). It has proposed using one of its 2016 panelists to replace a 2015 candidate who may not be able to serve.

The panel was to begin its evaluation this week of bids for the 21-mile, Walkemeyer-North Liberal 115-kV project in Kansas. (See SPP Issues RFP for 115-kV Transmission Project.) It will recommend a winning proposal and an alternate proposal to the SPP board.

IEP renewals from 2015 include financial consultant William Steele, rate expert Denis Bethel, transmission analyst Michael Jacobs, NERC-compliance consultant Raj Rana, planning engineer Ronald Brown, regulatory expert Steve Strickland, former Kansas Corporation Commissioner Tom Wright and former NERC vice president Dave Nevius.

The new IEP applicants are economist Monica Kachru, former Heartland Consumers Power District CEO Michael McDowell, regulatory veteran Murry Witcher, former SPP lead engineer Bob Lux, power-systems consultant Ali Al-Fayez and engineering consultant Kirk Patterson.

Skilton: 39-Cent Administrative Fee ‘Still Realistic’

Finance Committee Chair Harry Skilton said an administrative fee of 39 cents/MWh “is still realistic,” based on SPP’s draft budget for 2016.

The administrative fee, which is collected through charges to transmission customers, funds SPP’s ongoing operating costs. The budget will be voted on during the board’s December meeting.

SPP in recent years has used a 10:1 ratio to describe the benefits members receive for every dollar they put in. However, Mike Ross, the RTO’s senior vice president of government affairs and public relations, is working on a “comprehensive dialogue and story” of transmission’s value, according to Brown.

“We want to know the true value of the transmission we invest in, the value we offer with and without that transmission,” Brown said.

HR Committee Sets Merit-Compensation Increase

Josh Martin, chair of SPP’s Human Resources Committee, said the group has set SPP staff’s merit-increase budget pool at 2.5% of projected 2015 base salaries.

He said the committee has also tightened the performance compensation plan’s metrics and revised its measurements for “simplicity and alignment” with SPP’s strategic initiatives. The plan will now measure cost control, NERC violations, operating metrics and the annual customer-satisfaction survey.

Martin said SPP’s 401(k) program has been able to save $40,000 annually with a revised fee structure for its advisers. He also noted a 96% employee participation rate in the 401(k).

— Tom Kleckner

November 6, 2015

SPP Capacity Margin Task Force Shares ‘How Low’ Reserve Margin Can Go

By Tom Kleckner

LITTLE ROCK, Ark. — The SPP task force updating the RTO’s planning reserve margin requirements shared its draft report on loss-of-load expectations (LOLE) with two other working groups Oct. 28, giving them a first look at a project that has caused members concern.

More than a year in the making, the study analyzed how reducing the reserve margin would affect the RTO’s ability to maintain the number of days per year for which available generating capacity is insufficient to industry standard one-day-in-10 years (0.1 day/year) LOLE.

Or, as Capacity Margin Task Force Chairman Tom Hestermann said, the study answered the question: “How low can you go?”

SPP’s Oklahoma members have expressed concerns that the RTO already has one of the lowest planning reserve margins, at 13.6%. The task force has said that margin could be lowered to about 10%.

“A small decrease in the reserve margin may be appropriate, but a substantial decrease in what we have would be revolutionary, not evolutionary,” said Oklahoma Gas & Electric’s Philip Crussup, alluding to one of the tenets in SPP’s value proposition during the Oct. 27 Board of Directors and Members Committee meeting. “This should be approached very cautiously.”

“No one on the task force wants a capacity margin we’ll have to raise,” said Hestermann, of Sunflower Electric Power. “We hope we can come up with a requirement that will last every five years, instead of looking at it every 17 years.”

It has been that long since SPP last reviewed its planning reserve margin. But times change, as SPP’s Vice President of Engineering Lanny Nickell noted in introducing the LOLE study.

“The task force became necessary partly because of the $5.6 billion in transmission investment we’ve made since 2004,” he said. “We’ve recognized the criteria could withstand some improvement. Do we need to bring more people into the obligation to carry capacity? Can we reduce the capacity margin requirement, given the transmission increase and diversity of load?”

Among its inputs, the study used summer-peak models from the 2016 and 2017 near-term transmission planning assessments and five years of hourly load data for each of the RTO’s 16 balancing authorities. The results indicated the SPP region can maintain an LOLE of 0.1 day/year with reserve margins as low as 8.7% (see chart).

“We wanted you to see how we used the assumptions and get to a common understanding of what we did,” Nickell told the Generation and Operating Reliability working groups.

SPP staff said the LOLE study could be improved by including uncertainties such as wind variability, forced outage rates for interregional transactions and demand response.

The task force also approved for circulation to other groups its planning reserve assurance policy, an effort to address concerns that current mechanisms to ensure sufficient reserve margins are inadequate. The policy proposes penalties be timely and “economically incent” load-responsible entities (LREs) to correct planning reserve deficiencies.

The task force has already completed a white paper defining LREs to account for the fact SPP’s load-serving members do not cover all the load in the RTO’s planning coordinator footprint.

Its draft deliverability study is looking at an option to allow an LRE to meet its reserve requirements without having to obtain firm transmission service.

The task force has suggested a workshop before the January meeting of the Markets and Operations Policy Committee to share its work in more detail. It also has urged that its work be taken up by a permanent working group, as is the practice in MISO and ERCOT.

November 6, 2015

SPP Board, Members Discuss MISO Settlement

By Tom Kleckner

LITTLE ROCK, Ark. — The SPP Board of Directors and its Members Committee applauded the recent settlement with MISO before getting down to the sticky business of deciding how — and to whom — to distribute the settlement’s funds during its quarterly meeting Oct. 27.

Under terms of the settlement agreement filed last month over MISO’s use of SPP’s transmission grid, MISO will pay SPP and its members $9.6 million to settle all claims for compensation since 2014. NRG Energy, which had a firm-service agreement with MISO, will split an additional $3.7 million between SPP and other parties to the settlement. (See SPP, MISO Reach Deal to End Transmission Dispute.)

As the settlement’s funds are not being collected under SPP’s Tariff, the RTO will have to file revised language with FERC designating how those funds will be distributed, which could happen as soon as March 2016. SPP has said it favors revenue allocating the funds to transmission owners with benefits flowing through to SPP’s load.

David Kelley, SPP’s director of interregional relations, said a majority of TOs involved in the settlement negotiations favor a 100% flow-based approach. He said other TOs favor a 100% load-ratio share or a 50-50 split between the flow-based approach and annual transmission revenue requirements.

Kelley said any new Tariff language will likely require revenue be credited to the benefit of all customers taking SPP transmission service “in the same manner in which point-to-point revenue is credited.”

The board voted to adopt the 100% flow-based approach, but not before Chairman Jim Eckelberger proposed creating a task force that would “come to a quick conclusion” on the appropriate Tariff language.

“That way, I think we are engaged in the stakeholder process,” Eckelberger said. “I want to ensure everyone gets a say and everyone gets a vote. I would like to settle it here and not [at FERC].”

Eckelberger’s proposal met with immediate pushback, both from those who intervened at FERC and stand to collect the settlement funds, and those who didn’t.

“Any TO could have intervened,” Westar Energy’s Kelly Harrison said. “Some who didn’t want to spend money on litigation … now that there’s money on the table, they want to have a say?”

“We thought SPP was carrying the ball,” said Golden Spread Electric Cooperative’s Mike Wise. “We didn’t realize we would be excluded from discovery once it came to getting the ball across the goal line.”

Dennis Reed, director of FERC compliance for Westar Energy and chairman of the Regional Tariff Working Group, said work on the Tariff language “has to be on a very fast track.”

“We would really need the Tariff language by mid-December, so the [distribution] policy would have to be set by mid-November,” Reed said. “Anyone who wants to participate should know this will be on a very fast track.”

“My concern is we will have spent a lot of time and a lot of resources to get back to the same place,” said Stuart Solomon, president and COO of American Electric Power’s Public Service Company of Oklahoma. “Someone wants a study, someone wants analysis, and it goes on and on … we consume a lot of resources. If this is the step we take, we would really need tight parameters on the work.”

Members debated whether to write new business practices to handle this issue in the future.

“This only applies to the settlement with MISO,” Kelley said.

A vote to create the task force failed, leaving the heavy lifting to the Tariff working group. It will take up the Tariff language during its regular monthly meetings in November and December before bringing it to the Markets and Operations Policy Committee and Board of Directors in January for approval.

November 6, 2015

Former Congressman Ramps up SPP’s Legislative Outreach

By Tom Kleckner

LITTLE ROCK, Ark. — Arkansas’ political loss has been SPP’s gain.

When six-term Congressman Mike Ross left Washington for full-time residence in Arkansas in 2013, he quickly found a home at SPP setting up a federal-level governmental affairs organization — only to become the only viable Democratic candidate for governor, an ill-fated run that was swamped by the Republican wave last year.

Ross rejoined SPP last December as a senior vice president of government affairs and public relations, with quick results. He helped set up SPP’s first governmental affairs conference in D.C. in late September, with the RTO hosting 54 member-company representatives from nine states. They were joined by two FERC commissioners and the Environmental Protection Agency’s legal counsel, who listened to six congressman and senators discuss the Clean Power Plan’s political ramifications.

“It’s critical we work with members on educating policymakers,” Ross told RTO Insider. “I was very pleased with the participation. It was an opportunity for us to hear from our members and educate policymakers on the role of SPP and its importance to grid reliability in 14 states.”

SPP Chairman Jim Eckelberger, who was in attendance, called the event “a spectacular success.”

“Between Paul [Suskie, SPP’s general counsel and executive vice president of regulatory policy,] and Mike, we pulled in everyone we needed to hear from, with respect to where we need to go with the Clean Power Plan,” he told the Regional State Committee on Oct. 26.

“Based on the feedback we’ve received, that was our first annual conference,” said SPP CEO Nick Brown, stressing the word “annual.”

“Mike knows senators and congressmen. They responded to his request [to participate],” Brown said. “This is new for our organization. We’re out working with the folks in each of your states we never worked with before. These are new relationships we need to form and have formed.”

Brown told the RSC that Ross will be “collaborating” with and creating networking opportunities for member legislative representatives. What SPP won’t be doing is lobbying or staking out political positions.

“We’re communicating regularly with government affairs folks at our member companies, from the investor-owned utilities to the co-ops to public agencies, from Louisiana to Canada,” Ross said, “and we’ll continue to do that.”

November 6, 2015

SPP Regional State Committee Briefs

LITTLE ROCK, Ark. — Lanny Nickell, SPP’s vice president of engineering, told the Regional State Committee on Oct. 26 that the Clean Power Plan Review Task Force has begun meeting and participating in stakeholder events with state regulatory and air-quality groups, environmental groups and legislative representatives.

Nickell said the task force, which is reviewing the final version of the Environmental Protection Agency’s Clean Power Plan, continuously stresses its talking points. They include calls for a regional-compliance approach over a state-by-state approach — “bigger the trading market, the better,” Nickell said — state plans developed in parallel with litigation; and telling audiences that SPP is “best positioned” to conduct reliability reviews of state plans.

“From a reliability perspective, we believe states that develop [implementation plans] give us the leverage to look at … reliability,” Nickell said, responding to concern about the level of SPP’s interaction with the states. “If our assessment yields reliability concerns we would share that by early 2016.”

The task force faces a Jan. 21 deadline to file comments with EPA.

RSC OKs Wind Study

The RSC unanimously approved the scope of a study considering changes to a rule barring base plan transmission funding for wind generation projects that push wind’s share of capacity above 20% of summer peak load.

The study resulted from Western Farmers Electric Cooperative’s April request for base plan transmission funding for a wind generation project that would have boosted wind to 25% of its peak load.

Although the Markets and Operations Policy Committee rejected the co-op’s request, several members called for review of the rules on base plan funding — set years ago when SPP was comprised of smaller balancing authorities and there was concern over being able to balance large swings in wind generation. (See Wind Waiver Rejected; SPP Members will Revisit Assumptions.)

The study scope was proposed by the Cost Allocation Working Group, which will return with a recommendation on whether to change, eliminate or keep the current process. The group hopes to complete its work by the end of next year.

New Allocation Process for Long-Term Congestion Rights

The RSC also approved a Tariff revision request establishing a new incremental long-term congestion rights (ILTCR) allocation process.

The revision request addresses a 2014 FERC order finding fault with SPP’s interpretation of LTCRs. The commission rejected multiple rehearing requests in July. (See FERC Rejects Rehearing on SPP Congestion Rights.)

The new process will result in awards to market participants with ILTCRs when a transmission upgrade goes into service, instead of waiting until the annual LTCR allocation. Rights awarded in the initial allocation cannot be renewed; participants with candidate ILTCRs will be eligible to nominate in the same round of the next annual LTCR allocation as load-serving entity LTCRs.

New Chair, Members for RSC

The RSC meeting was Dana Murphy’s last as the committee’s chairperson. Murphy, an Oklahoma Corporation Commissioner in her fourth year on the committee, handed over her responsibilities to Patrick Lyons, chairman of the New Mexico Public Regulation Commission.

Murphy, always quick to thank those around her and hand out compliments, expressed gratitude to the members and SPP. “It’s stretched and grown me,” she said.

The committee also welcomed three new members as a result of the Integrated System’s incorporation into SPP: Brian Kalk (North Dakota Public Service Commission), Kristie Fiegen (South Dakota Public Utilities Commission) and Libby Jacobs (Iowa Utilities Board). With the additions, the RSC now numbers 10 members.

— Tom Kleckner

November 5, 2015

NYISO: Two NRG Plants can Close as Scheduled

By William Opalka

NYISO gave NRG Energy a green light to shut down two coal plants in western New York, saying reliability will be maintained through transmission. NYISO and National Grid were asked in the summer to perform a reliability study after NRG said it intended to close the 380-MW Huntley Generating Station and the 435-MW Dunkirk Station. (See NRG Plant Closures Could Impact Reliability in NY.)

“Based upon the expectation of the timely completion of the National Grid upgrades and that no other changes occur to the current and planned status of the New York electric system, reliability will be maintained through at least the year 2020 if Dunkirk is mothballed Jan. 1, 2016, and Huntley is retired March 1, 2016,” NYISO wrote in an Oct. 30 letter to the New York Public Service Commission (15-E-0505).

NRG said the plants were unable to compete with lower-priced natural gas generators. A legal challenge to a state subsidy negotiated for Dunkirk in its proposed repowering to natural gas created enough uncertainty to put that project on hold, NRG added.

NYISO said National Grid updated its local transmission plan to install capacitor banks at the Huntley 230-kV station by June 1, 2016. National Grid’s plan also includes possible system configuration changes and relay adjustments.

In its own letter to the PSC, National Grid said that it will complete in December three transmission system upgrades it proposed last year in the event that the Dunkirk repowering was delayed. “These projects contribute to the overall plan to operate the system reliably in the short and long term,” it wrote.

November 5, 2015

MISO Market Subcommittee Briefs

CARMEL, Ind. — MISO told stakeholders last week it is confident the RTO’s shortage pricing rules are compliant with FERC’s Sept. 17 Notice of Proposed Rulemaking (RM15-24).

The rule would trigger shortage pricing “for any dispatch interval when a shortage of energy or operating reserves occurs.”

MISO employs an operating reserve demand curve in its five-minute dispatch. Dhiman Chatterjee, senior manager of market design and delivery, told the Market Subcommittee he expects FERC’s final rule will align closely with what MISO already has in place.

“If they come back with some different opinions, it would affect us,” Chatterjee said, adding that MISO would make adjustments during the four-month compliance filing period before the final rule. Chatterjee said MISO “would potentially need more time” if FERC imposed something unexpected in their rule.

MISO will have to make changes, however, to comply with the NOPR’s requirement that organized markets settle real-time energy transactions financially at the same five-minute time interval that they use in issuing dispatch instructions. (See NOPR Requires RTOs Switch to 5-Minute Settlements.)

MISO told the committee the shift will require hardware, software and business process changes that could take until the fourth quarter of 2017 to complete.

FERC is accepting comments on the NOPR until Nov. 30. MISO is planning to submit its remarks around Nov. 18. Comments to help shape MISO’s response are due by Nov. 11.

$80 Million in SPP Invoices Voided in Settlement

Managing Assistant General Counsel Erin Murphy said SPP will cancel about $80 million in invoices sent to MISO as a result of the RTOs’ Oct. 13 settlement of their dispute over energy flows between MISO’s North and South regions.

“All of those invoices will be pulled back and considered to be null once the settlement is in place,” Murphy explained.

In an order Oct. 20, Chief Administrative Law Judge Curtis L. Wagner Jr. approved the compensation and transfer limit provisions of the settlement, to begin on Feb. 1 (ER14-1174, et al.).

“Fundamentally, the notion of sharing capacity has stayed in the agreement,” Murphy told stakeholders.

Compensation for system usage will be based on capacity factor: available system capacity divided by the maximum available system capacity (the difference between the contract path and the operational limit).

Stakeholders asked for more clarity on what equations MISO uses to determine the capacity factor. Murphy suggested a special meeting to walk through computations used in the settlement’s manuals.

Initial comments on the settlement were due Nov. 2, with MISO’s reply comments due Nov. 12.

FERC: Commission Can Operate with 3 Members

Chris Miller, of FERC’s Office of Energy Market Regulation, told the committee that the commission could drop to three members if former Commissioner Philip Moeller is not replaced and lone Republican Commissioner Tony Clark is not reappointed when his five-year term expires at the end of June.

“We can operate down to three [commissioners] without too much difficulty, so that’s not a big issue there,” he said.

Miller also discussed the potential for a federal government shutdown. “We’re funded into December as it is right now,” he said.

On Nov. 2, President Obama signed into law a budget agreement and debt limit increase, reducing the chances of a shutdown. But Obama noted that Congress still has to enact appropriations bills before the continuing resolution funding fiscal 2016 government operations expires Dec. 11.

— Amanda Durish Cook

November 5, 2015

Company Briefs

Xcel Energy has launched North Dakota’s first Federal Aviation Administration-sanctioned utility flight of an unmanned aircraft. The drone, which measures about 4.5 feet in length, resembles a small helicopter and is being used to inspect a 7-mile section of a transmission line as part of an FAA pilot project.

The aircraft Xcel is using is a Pulse Aerospace Vapor 35, a 35-pound drone with about a 5-mile, one-hour range while transmitting images and data to a ground station. The 230-kV line runs from Xcel’s Prairie substation in Grand Forks to the Canadian border, where it connects with Manitoba Hydro Electric Energy.

The drone technology can also be used in security flights to assess infrastructure damage and construction work.

More: Forum News Service

Coal-Fired Power Plants Begin Installing Emissions Controls

Two Farmington-area power plants in northeastern New Mexico have begun installing pollution controls to comply with federal regulations intended to reduce atmospheric haze. The multimillion-dollar retrofitting projects at San Juan Generating Station and Four Corners Power Plant are to be completed by 2018.

The upgrades are intended to comply with the Environmental Protection Agency’s 1999 regional haze rule, which calls for the “best available retrofit technology” to be added to industrial facilities that emit air pollutants that cause or contribute to regional haze. EPA finalized additional portions of the rule this summer.

The pollution controls will also help the state comply with EPA’s Clean Power Plan, which aims to reduce carbon pollution from power plants to address climate change.

More: The Daily Times

PPL Planning New Pa.-NY Transmission Project

PPL Electric Utilities is proposing a transmission line linking the grids of northern Pennsylvania and southeastern New York to strengthen reliability in the region.

Called Project Compass, the line is expected to cost $500 million to $600 million. The first leg would be a 95-mile 345-kV line running from Lackawanna County, Pa., to Rockland County, N.Y.

The link is expected to save New York customers $200 million annually. PPL, which operates in Pennsylvania, is recommending that New York state customers pay the line’s cost.

More: Times Herald-Record

Kemper Plant Announces Cost Overruns – Again

Southern Co. has increased the estimated cost of its troubled Kemper County coal gasification power plant in Mississippi by another $159 million, the latest price boost for a project whose cost has risen from $2.8 billion initially to $6.4 billion.

Mississippi Power, a Southern subsidiary, said it will absorb about $110 million of the most recent overruns but is likely to ask the state Public Service Commission to pass on to customers the remaining $49 million. The PSC has already allowed Mississippi Power an emergency 18% rate increase after the utility said it was running out of money.

A utility spokesman said much of the most recent cost overruns are associated with the need to fix problems and go into startup mode. The plant may not go into operations until the end of next June.

More: Associated Press

Panda Power Announces Another Pa. Power Plant

Panda Power Funds said it has arranged financing for its latest Pennsylvania natural-gas fired power plant, a 1,124-MW station on the site of the retired Sunbury coal-fired station. Panda said the new Hummel Station will use gas from the nearby Marcellus Shale fields.

Panda is employing a three-on-one combustion turbine combined-cycle plant that uses Siemens turbines and generators. Bechtel will be the construction manager. The plant, which is due to be completed in 30 months, is expected to cost about $710 million.

Hummel Station is Panda’s third new natural-gas plant in Pennsylvania and its seventh in the nation.

More: LCG Consulting; Electric Light & Power

Vermont Yankee Sirens Sounding Together for Last Time

The 37 emergency sirens tied in to the Vermont Yankee nuclear generating station emergency notification network are going to be tested all at once for the last time this weekend, a station spokesman said.

The plant is being decommissioned, and it has a request before the Nuclear Regulatory Commission to terminate its emergency planning activities in April. The sirens will still be tested individually until then.

The sirens are located in Vermont, Massachusetts and New Hampshire towns located within 10 miles of the plant.

More: Associated Press

Duke Conducting Groundwater Studies Enviros Call Flawed

Duke Energy is assessing groundwater to learn whether ash ponds at its power plants are contaminating private wells. Residents living near two Duke power plants have been advised to avoid drinking well water. Tests conducted by the company have found increased levels of vanadium and hexavalent chromium, which are suspected carcinogens.

There are no federal safety levels for those substances, however, and the state Department of Environmental Quality says the contaminants can occur in areas unrelated to coal ash impoundments, so they may not be connected to the ash dumps. “The fact that some well owners many miles from coal ash impoundments and municipal water customers are consuming water with levels at the same level, or higher, leads investigators to believe that vanadium and hexavalent chromium also occur naturally,” the state health agency wrote well owners Oct. 15.

In a letter to state authorities, the Southern Environmental Law Center said that Duke’s studies are flawed. “The assessments we’ve reviewed contain bad science and do not determine the full extent of Duke Energy’s coal ash pollution of our groundwater and drinking water sources,” it said.

More: The Charlotte Observer

PSE&G Building Solar Plant on Old Landfill

Public Service Electric and Gas is nearing completion on a 13-MW solar array it is building on a closed 50-acre Superfund landfill in Burlington County, N.J.

PSE&G will own and operate the solar farm, which is scheduled to go into service near the end of this year. The facility will be the largest photovoltaic array that PSE&G has built so far under its Solar 4 All program, in which the utility is developing 125 MW of grid-connected solar power.

More: Recycling Today

Cove Point Protesters Disrupt Monday Night Football

Four people were arrested at Bank of America Stadium in Charlotte, N.C., during a Monday Night Football game last week, after activists protesting Dominion Resources’ Cove Point LNG facility rappelled from an overhang in front of the press box.

The protesters, belonging to the organization We Are Cove Point, held a sign that said “BoA: Dump Dominion.” They said they were protesting Bank of America’s financing of the liquefied natural gas export facility in Lusby, Md.

The incident occurred during the third quarter of the game between the Carolina Panthers and Indianapolis Colts. Police and stadium security cleared the section of the stadium below the press box, but firefighters had to forcibly remove the protesters when they refused police orders to come down.

More: The Charlotte Observer; We Are Cove Point

Dynegy to Shutter Wood River Plant

Dynegy announced plans Nov. 4 to close its Wood River Power Station in mid-2016. The 465-MW facility in Alton, Ill., contains two coal-fueled units, one that began operating in 1954 and the other in 1964.

Dynegy said it’s being forced to retire the 60-plus-year-old Wood River because the utility cannot turn a profit under the “poorly designed wholesale capacity market in Central and Southern Illinois that does not allow competitive generators to recover costs.”

Dynegy expects to file a formal retirement notice with MISO by Dec. 1. The RTO will determine whether the plant is needed for grid reliability. Dynegy CEO Robert C. Flexon said that if capacity auction conditions in Illinois don’t change, other generating plants in the MISO-controlled portions of the state could face similar financial obstacles.

More: The Telegraph

Entergy Names Hinnenkamp COO; Will Oversee Capital Investments

Entergy announced Oct. 30 it has appointed Paul Hinnenkamp as its senior vice president and COO, effective Nov. 1. Hinnenkamp replaces the outgoing Mark Savoff and will report directly to the New Orleans-based corporation’s chairman and CEO, Leo Denault.

Hinnenkamp is responsible for executive oversight of fossil generation, transmission, system planning and capital projects-management. Denault said his assignment will be important “at a time when we are deploying significant capital resources to replace aging generation and modernize our grid for enhanced reliability.”

Earlier this year, Entergy reported the need to add approximately $3.7 billion in new generation resources consisting of six new power plants by 2020 and 635 miles of new and upgraded transmission by 2022.

More: Entergy

Exelon Says Feds Knew About Radioactive Dumps

Exelon is accusing the federal government of having knowledge of and approving a radiological waste dump in the 70s that is now causing concern because of an underground fire at an adjacent landfill.

In 1973, 43,000 tons of what was billed as “clean fill dirt” was dumped at West Lake Landfill on the western edge of St. Louis County; however, almost a quarter of the dirt was in fact radioactive waste from a nearby storage site owned by Colorado-based Cotter Corp.

Today, Exelon Chicago retains Cotter’s liability for the West Lake contamination, while the Department of Energy holds the liability for the Atomic Energy Commission, which records show ultimately approved the dump despite false claims by Cotter about the location.

In 1974, AEC approved the termination of Cotter’s license for the radioactive material, a move critics say should have never happened. By 1975, AEC was dissolved, with responsibilities eventually passed to the Nuclear Regulatory Commission. The former commission had long been accused of being too cozy with the nuclear industry.

Public concern about the incident has recently increased because of an underground fire burning at the adjacent Bridgeton Landfill, prompting concern that the fire will spread to West Lake and release radiation. The Environmental Protection Agency has said that the fire is not moving toward West Lake, and a plan for cleanup will be introduced in late 2016. In the meantime, Exelon has inferred that the federal government might have allowed more toxic waste into the landfill since Cotter’s dispatch over 40 years ago. A spokesperson for Exelon said more on-site testing at the landfill is needed.

More: St. Louis Post-Dispatch

November 5, 2015

Federal Briefs

A federal appeals court indicated it will not decide on challenges to the Environmental Protection Agency’s Clean Power Plan until the end of December, too late to make a statement directed at the global climate change talks scheduled for early December in Paris.

Opponents to the carbon emissions rule wanted the D.C. Circuit Court of Appeals to stay the regulations until after the United Nations summit. But the court’s most recent filing schedule allows opponents and EPA to file documents until Dec. 23. So far, 26 states and businesses and interest groups have joined in the action to stop the rule.

More: The Hill

Global Climate Change Goals Good Start, but not Enough

A United Nations analysis of promises made by 146 countries to cut greenhouse gas emissions indicates that the proposed cuts will have a positive impact but won’t reverse climate change.

The data analysis will be examined at the U.N.’s climate change conference in Paris beginning Nov. 30. The analysis concluded that while the cuts would reduce global warming trends by almost 3 degrees Celsius over 100 years, the reduction is not enough to meet a 2-degree limit on temperature increases, a scientific consensus “limit of safety.”

More: The Guardian

NV Energy, CAISO Wait for FERC Approval to Enter EIM

NV Energy of Nevada and CAISO have delayed the utility’s entry into the ISO’s Energy Imbalance Market pending final authorization from FERC.

NV Energy would be the second utility to enter the EIM. PacifiCorp joined in 2014. Puget Sound Energy of Washington and Arizona Public Service also plan to join the market next October.

More: CAISO

APPA’s Sue Kelly Named One of DC’s ‘Most Powerful Women’

The Washingtonian has recognized Sue Kelly, the president and CEO of the American Public Power Association, as one of D.C.’s 100 “Most Powerful Women” in its November 2015 print issue.

Kelly took the helm of the trade organization in the spring of 2014, and the magazine said she has improved the association’s relationship with the media, lawmakers and other energy trade groups.

“This is a proud moment not just for Sue and APPA but for all of public power,” said Doug Hunter, APPA board chair and CEO of the Utah Associated Municipal Power Systems. “We appreciate how effectively Sue has raised our profile in the nation’s capital.”

More: Public Power Daily

Renewables Count for 60% of New Capacity in 2015

FERC says that renewable energy accounted for about 60% of the new generation capacity added in the U.S. in the first three quarters of 2015.

FERC’s Energy Infrastructure Update shows wind, hydro, solar, biomass and geothermal accounted for 4,380 MW of the total 7,276 MW of installed capacity added during the first nine months of 2015. That breaks down to 2,966 MW of wind, 1,137 MW of solar, 205 MW of biomass, 45 MW of geothermal and 27 MW of hydro.

By comparison, over the same period, about 2,884 MW of natural gas generation came online, along with 12 MW of coal and oil-fired generation.

More: SeeNews Renewables

Pipeline Opponents Ask FERC for Single Review of Projects

About 30 opposition groups in Virginia and West Virginia are asking FERC to combine the commission’s reviews of four natural gas pipeline projects. They want a single environmental impact statement that studies the cumulative impact of the projects.

“Our region is facing an unprecedented level of natural gas infrastructure development,” said the groups, which include the Sierra Club, the Augusta County Alliance and the Friends of the George Washington Forest Against Fracking.

The projects they’ve asked FERC to conjoin are the Atlantic Coast Pipeline, Mountain Valley Pipeline, Appalachian Connector Pipeline and the WB Express Project. The pipelines are designed to deliver natural gas found in the Marcellus and Utica shale regions to coastal population centers.

More: Virginia Business

NRC Developing New Cybersecurity Rules

The Nuclear Regulatory Commission has issued a new list of cybersecurity reporting requirements for nuclear power plants.

The rules will require greater reporting of cyberattacks to improve understanding of the digital threats facing nuclear reactors. The information will aid in NRC’s “analysis of the reliability and effectiveness” of cybersecurity programs for nuclear power reactors, according to a Federal Register notice.

The move comes in the wake of real or rumored hacks of computer systems at nuclear plants around the globe. A recent report out of the U.K. charged that the nuclear industry is ignoring the risks of such attacks.

More: The Hill

NRC Rejects Call to Look into Vermont Yankee Funds

The Nuclear Regulatory Commission says Entergy’s Vermont Yankee’s decommissioning fund is healthy and doesn’t need to be audited, rejecting a request from Vermont state officials for a closer examination.

The state asked NRC to limit Entergy’s use of the funds set aside for the plant’s retirement for anything other than radiological decommissioning.

NRC Spokesman Neil Sheehan said the Vermont Yankee decommissioning account has 60 years’ worth of funds in it and the company may complete the decommissioning in less time than that. “In terms of that time frame, the company should have sufficient funding to not only carry out radiological decommissioning but also to perform other activities and use the money for other uses,” Sheehan said.

More: Vermont Public Radio

NRC: Earthquake Risk Study Further Along than Thought

A detailed examination of risks to U.S. nuclear generating facilities won’t take as long as first anticipated, according to the Nuclear Regulatory Commission.

All of the country’s operating nuclear plants were ordered to reassess seismic risks after the 2011 Fukushima disaster in Japan. NRC at first said 33 sites needed further review, but it reduced that number to 20 after closer examination. The agency said all of the reviews will be completed by the end of 2019, a year earlier than initially projected.

More: World Nuclear News