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November 16, 2024

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PJM MRC/MC Preview: Dec. 20, 2023

Below is a summary of the agenda items scheduled to be brought to a vote at the PJM Markets and Reliability Committee and Members Committee meetings. Each item is listed by agenda number, description and projected time of discussion, followed by a summary of the issue and links to prior coverage in RTO Insider.

RTO Insider will be covering the discussions and votes. See the next newsletter for a full report.

Markets and Reliability Committee

Consent Agenda (9:05-9:10)

B. Endorse conforming revisions to Manual 12, Balancing Operations; Manual 13, Emergency Operations; and Manual 14D, Generator Operational Requirements to implement a renewable dispatch package. (See “Other Committee Business,” PJM MIC Briefs: Nov. 1, 2023.)

Issue Tracking: Renewable Dispatch

C. Endorse proposed revisions to Manual 14B, PJM Region Transmission Planning Process as a part of its periodic review. The changes include specifying that the 300-MW load loss rule is meant to apply to possible outages that would affect a large number of consumers, rather than a single large industrial customer. (See “First Read of Periodic Review of Manuals 19 and 14B,” PJM PC/TEAC Briefs: Oct. 3, 2023.)

D. Endorse conforming revisions to Manual 21A, Determination of Accredited UCAP Using Effective Load Carrying Capability Analysis addressing Hybrids Phase II Market Participation of Hybrid Resources and other Mixed Technology Facilities instituting the second phase of PJM’s rules for hybrid resources.

Issue Tracking: Solar-Battery Hybrid Resources

E. Approve sunsetting the Energy Price Formation Senior Task Force (EPFSTF).

Issue Tracking: Operating Reserve Demand Curve (ORDC) & Transmission Constraint Penalty Factors

Endorsements (9:10-9:55)

  1. Performance Impact of the Multi-schedule Model on the Market Clearing Engine (9:10-9:30)

PJM’s Danielle Croop will present the proposal endorsed by the Market Implementation Committee on Aug. 9 to revise how some resource offers are entered into the market clearing engine (MCE) to allow multi-schedule modeling to be implemented without overloading the engine with an exponential increase in the number of schedules it must consider. Croop also will present an alternative approach which received lesser MIC support, but still a majority. (See “Endorsement of Multi-schedule Modeling Solution Deferred,” PJM MRC/MC Briefs: Nov. 15, 2023.)

The committee will be asked to endorse the proposed solution and corresponding tariff and Operating Agreement revisions.

Issue Tracking: Performance Impact of the Multi-Schedule Model on the Market Clearing Engine

  1. Regulation Market Design Senior Task Force (RMDSTF) (9:30-9:55)

Croop will present a proposal to shift the regulation market to have a single price signal with two products representing a resource’s ability to adjust its output up or down. (See “PJM Presents Regulation Market Rework,” PJM MRC/MC Briefs: Nov. 15, 2023.)

The committee will be asked to endorse the proposed solution and corresponding tariff and OA revisions.

Issue Tracking: Regulation Market Design

Members Committee

Endorsements (10:10-10:20)

PJM’s Michele Greening will present the proposed sector representatives for the 2024 Finance Committee, 2024 sector whips and 2024 MC vice chair.

The committee will be asked to elect the proposed representatives.

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Treasury Releases Guidance on Sustainable Aviation Fuel Tax Credit

The Department of the Treasury and the Internal Revenue Service on Dec. 15 released guidance on the sustainable aviation fuel (SAF) tax credit from the Inflation Reduction Act, meant to encourage clean fuel for airplanes.

Treasury worked closely on the guidance with other cabinet agencies, including EPA and the departments of Transportation, Agriculture and Energy, Treasury Secretary Janet Yellen said in a statement.

“The Biden administration is driving American innovation to create good-paying jobs and help the U.S. clear hurdles in our clean energy transition,” Yellen said. “Incentives in the Inflation Reduction [Act] are helping to scale production of low-carbon fuels and cut emissions from the aviation sector, one of the most difficult-to-transition sectors of our economy.”

The credit incentivizes production of SAF that achieves lifecycle greenhouse gas emissions cuts of at least 50% compared to standard jet fuel refined from oil. Producers of SAF are eligible for a tax credit ranging from $1.25 to $1.75/gallon.

Fuel that cuts GHG emissions by 50% will be eligible for a $1.25/gallon credit and an additional cent per gallon for every 1% more, up to 50 cents/gallon, Treasury said.

Multiple kinds of fuels are eligible for the credit, including biomass-based diesel, advanced biofuels, cellulosic biofuels and cellulosic diesel, all of which have been approved by EPA under its Renewable Fuel Standard.

Fuels that achieve a 50% or greater reduction in lifecycle emissions under the most recent Carbon Offsetting and Reduction Scheme for International Aviation will continue to qualify for tax credits.

EPA, DOT, USDA and DOE also committed to releasing a new version of DOE’s Greenhouse gases, Regulated Emissions and Energy Use in Transportation (GREET) model by March 1, 2024. Pending additional guidance from Treasury, the new model will offer other ways for SAF producers to determine the lifecycle emissions for their fuels, the department said.

The updated model will use new data and science, including new modeling of key feedstocks and processes used in aviation fuel. It will also integrate other categories of indirect emissions, like crop production and livestock activity, and carbon-abatement strategies such as carbon capture, renewable natural gas, renewable electricity and climate-smart agricultural practices.

“President Biden’s Investing in America agenda is creating pathways and incentives for innovators to create a cleaner, more sustainable future,” said Energy Secretary Jennifer Granholm. “Sustainable aviation fuel will provide low-carbon fuel made here in America to help decarbonize the hardest-to-reach areas in the transportation sector, and DOE is committed to supporting this effort, which will lead to cleaner skies for all.”

The Clean Air Task Force said the guidance on the SAF credit further capitalizes on the Inflation Reduction Act’s enormous potential to mitigate climate change by requiring fuel producers to show their products actually deliver clear environmental benefits.

“The climate impact of the SAF credit depends in large part on Treasury’s ability to identify and reward those biofuels that actually reduce net emissions to the atmosphere,” CATF Director of Transportation Decarbonization Jonathan Lewis said in a statement. “Today’s guidance shows that the government is taking that job seriously.”

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California Approves $30M to Build a 100-hour Battery Storage System

The California Energy Commission has awarded $30 million to Form Energy to build a 5-MW, 100-hour long-duration energy storage system in Mendocino County — the state’s largest LDES project yet. And in another first for the state, the project will deploy iron-air battery technology, which is described as “reversible rusting.”

CEC Chair David Hochschild said that although California is the largest and fastest-growing energy storage market in the world, most storage built so far has been four-hour, lithium-ion battery systems.

“A multiday battery system is transformational for California’s energy mix,” Hochschild said in a statement. “This project will enhance our ability to harness excess renewables during nonpeak hours for use during peak demand, especially as we work toward a goal of 100% clean electricity.”

The commission voted to approve the grant to Form Energy during its Dec. 13 business meeting.

Form Energy will develop and operate the demonstration project, collecting data that utilities may use in future deployments. Pacific Gas & Electric will provide land and a substation interconnection. The project is expected to be online by the end of 2025.

The project will be funded through the CEC’s Long Duration Energy Storage program, a $330 million fund aimed at spurring the development of nonlithium-ion energy storage technologies.

California is expected to need 4 GW of LDES to meet the goal of 100% clean electricity by 2045. But reliance on lithium-ion technology could impede the state’s ability to meet its clean energy goals, the CEC said during a workshop in June.

During the Dec. 13 meeting, CEC mechanical engineer Yahui Yang said that as California gains renewable energy resources, the amount of curtailment has been increasing, to as much as 2.4 TWh of solar and wind last year.

“Energy storage, particularly long-duration energy storage, can mitigate this issue and further reduce the cost of renewable energy,” he said.

Yang described the battery chemistry in Form Energy’s system as “very safe,” saying there’s no pathway for thermal runaway. And the cost of iron-air systems could be as low as $20 per kWh, compared to $200 per kWh for a lithium-ion battery.

Form Energy’s LDES project will use reversible rusting, in which iron that is exposed to oxygen rusts, releasing electrons that can be sent to the grid, according to Form Energy’s website. When there is excess power, electrons can be sent back into the battery to reverse the rusting. Oxygen is released in the process.

Form Energy also has pilot and demonstration projects underway in Minnesota, Colorado, Virginia, New York and Georgia, with projected in-service dates of 2024 to 2026. (See Form Energy Wants to Bring Long-duration Storage to New England.) The Somerville, Mass.-based company has an engineering facility in Berkeley, Calif.

Jason Houck, senior manager for policy strategy at Form Energy, said the California project would support the local grid in a transmission-constrained area with wildfire risks.

The project “will operate every day of the year to balance the hourly, multiday and seasonal variability of renewable energy resources,” Houck told the commission.

“By making the best use of our renewable energy supply and our transmission and distribution systems, we’ll lower the overall costs of the electric system and the land use impacts of achieving our clean energy goals,” he said.

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Texas Appeals Court Clears Generators of Uri Lawsuits

Texas generators may escape further litigation for their inability to meet demand during the 2021 winter storm after a state appeals court ruled Dec. 14 that wrongful death, personal injury and property damage cases against the generators have “no basis in law or fact” (01-23-00097-CV, 01-23-00102-CV, 01-23-00103-CV, 01-23-00392-CV and 01-23-00393-CV).

The 1st Court of Appeals in Houston ruled that wholesale power generators in ERCOT’s deregulated market are “statutorily precluded by the Legislature from having any direct relationship with retail customers” and “can have no legal relationship with retail customers as a matter of law.”

“Texas does not currently recognize a legal duty owed by wholesale power generators to retail customers to provide continuous electricity to the electric grid, and ultimately to the retail customers, under the allegations pleaded here by the retail customers,” the court said.

According to Texas Lawbook, the decision will lead to the dismissal of Luminant, NRG, Exelon, Sempra Energy Resources and other generators from the hundreds of lawsuits filed in the wake of Winter Storm Uri.

The storm brought sub-freezing temperatures and precipitation to much of the state that shut down thermal and nonthermal power plants alike. The state says almost 250 people died during the resulting dayslong outages, although it’s thought that number is much higher.

Hundreds of retail customers sued hundreds of entities involved in the ERCOT market for damages sustained due to the outages. They alleged negligence and gross negligence for failing to winterize and maintain their equipment, failing to ensure adequate fuel supplies and failing to properly train workers to ensure against the generator outages that occurred.

The lawsuits were consolidated into multidistrict litigation before Harris County District Judge Sylvia Matthews, who dismissed all the allegations except the negligence claims. The judge then selected five bellwether cases as representative of the cases filed.

The generators filed a petition with the appeals court, arguing that Matthews had abused her discretion in not dismissing the negligence charges. The court agreed, saying the charges should have been dismissed because the retail customers’ arguments alleged actions “have no basis in law or fact.”

The opinion applies to the five bellwether cases. The plaintiffs’ legal counsel has said they plan to appeal.

The Texas Supreme Court ruled in June that ERCOT, which operates 90% of the state’s grid, enjoys sovereign immunity and cannot be sued over the blackout. (See ERCOT Sovereign Immunity Affirmed by Texas Supreme Court.)

The state high court will hear arguments next year from Luminant (23-0231) and RWE Renewables (23-0555) over the Public Utility Commission’s emergency pricing order following the winter storm. The PUC directed prices be maintained at the $9,000/MWh cap to incent more generation to come online and end load shed.

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Standards Committee Authorizes Shortened Ballots

NERC’s Standards Committee agreed Dec. 13 to send a twice-rejected cold weather reliability standard to industry for another ballot round after the organization’s Board of Trustees made clear this week that it was prepared to take action on its own if the standard failed another vote. 

The EOP-012-2 (Extreme cold weather preparedness and operations) standard has been under development since February, after FERC approved its predecessor standard EOP-012-1 but ordered a revised version to be submitted within a year. Two ballot rounds have failed to produce enough industry support to submit the standard to the board; the most recent round ended with a 58% segment-weighted vote for approval, short of the necessary two-thirds majority. 

At the Standards Committee’s monthly meeting this week, held at NERC headquarters in Atlanta, members voted unanimously to grant a waiver to the ERO’s Standard Processes Manual shortening any additional formal comment and ballot periods for the standard “to as little as 10 days” from the usual 45, with ballots to be conducted during the last five days of the comment period. 

This action was urged by the board at its meeting on Dec. 12, with Chair Ken DeFontes warning that if the committee did not pass the waiver the board would invoke its authority under section 321 of NERC’s Rules of Procedure to approve the standard without a successful ballot. (See related story, NERC Board May Force Action on Cold Weather Standard.) While the board has never used this authority before, DeFontes said it could be necessary in order to avoid missing FERC’s February deadline. 

While no members objected to the shortened comment period, Marty Hostler of the Northern California Power Agency noted that reports by FERC and NERC on previous cold weather events have recommended a three-pronged approach to improving winter reliability. This approach consists of improved reliability standards, outreach to generator owners and operators, and market rule changes where needed; however, Hostler said most of the effort so far has been in the first two areas, with apparently little action on market rules. 

“I understand we’re up against a deadline here, but to my knowledge there has been nothing done about market rule changes,” Hostler said. “I know NERC doesn’t do that, but that’s one of the prime recommendations for helping reliability, and I think there needs to be something on that as well, because that will improve … reliability [somewhat] and not just rely strictly on standards all the time.” 

A NERC representative confirmed that the shortened ballot period for EOP-012-2 will begin in January, after the winter holidays. 

Accelerated Timelines Approved

EOP-012-2 was just one of the proposed standards for which the committee approved shortened comment and ballot periods on Wednesday, reflecting the group’s desire to shorten development timelines and reduce what Chair Amy Casuscelli called “an all-time high number of standards development projects in flight.” 

Three of the projects in question are operating under the timeline imposed in FERC’s Order 901, issued in October. The order directed NERC to submit to the commission over the next three years three tranches of standards to improve the reliability of inverter-based resources. (See FERC Orders Reliability Rules for Inverter-Based Resources.) 

The first tranche — covering disturbance monitoring data sharing and post-event IBR performance validation and correction — is due in November 2024. Jamie Calderon, NERC manager of standards development, told the committee that the ERO had identified three projects affected by the deadline: 

For the first two projects, NERC staff proposed to authorize shortening the initial formal comment and ballot periods “from 45 days to as few as 25 calendar days.” Project 2021-04 was not included in this request because it has already had its initial formal comment period. NERC’s additional proposals, to authorize shortening additional formal comment periods to “as little as 15 days” and reduce the final ballot period from 10 days to five calendar days, applied to all three projects. 

Calderon acknowledged that the requests were being made far in advance of any of these projects having a draft standard to send out for ballot. She explained that because of the “very tight timeline” of FERC’s order, the ERO wanted to request the process waivers ahead of time to ensure the standard drafting teams will not need to request them later if needed. 

Committee members approved the proposals for all three projects, albeit with some minor wording changes: clarifying that the shortening of additional comment periods applied to calendar days, and authorizing reducing the final ballot period to “as few as five calendar days.” This change was introduced because members felt that the suggested wording would make the reduction to five days mandatory rather than optional. 

Members also authorized the process waiver for Project 2023-07 (Transmission system planning performance requirements for extreme weather) with the same changes as the previous three projects. In addition, they voted to authorize the initial posting of reliability standard CIP-007-X, the result of FERC’s order to develop standards requiring internal network security monitoring at high- and medium-impact cyber systems, for a 35-day formal comment and ballot period. 

Casuscelli Hands over the Reins

This week’s meeting marked Casuscelli’s retirement both as the chair of the committee and a member. Current Vice Chair Todd Bennett, of Associated Electric Cooperative Inc., was elected in September to succeed her, with Troy Brumfield of American Transmission Co. chosen to serve as vice chair. 

Casuscelli has served as chair for two consecutive two-year terms. During the meeting she recalled some of the challenges the committee has faced during her tenure, including the COVID-19 pandemic and the record workload that the ERO’s standards development teams are facing. She thanked members, along with NERC staff and trustees, for their support over the last four years, and said she “can’t wait to see what’s next under [the new] leadership.” 

“I have just a few final words for Todd before we adjourn,” Casuscelli added before delivering her last lines as chair. “Tag: You’re it.” 

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California PUC Votes to Extend Diablo Canyon Nuclear Plant 5 Years

California utility regulators on Dec. 14 approved extending operations at the Diablo Canyon nuclear power plant through 2030, a move intended to bolster reliability as the state continues its clean energy transition.

The California Public Utilities Commission voted 3-0 to authorize an extension for Diablo Canyon, which is owned and operated by Pacific Gas and Electric. The 2,200-MW power plant provides about 9% of California’s in-state generation.

Diablo Canyon had been slated to close in stages in 2024 and 2025. But state officials, including Gov. Gavin Newsom (D), called for keeping the state’s last nuclear power plant open to support reliability. Energy shortfalls led to rolling blackouts in California in August 2020 and close calls in subsequent summers.

Senate Bill 846, which Newsom signed in September 2022, directed the CPUC to authorize an extension for Diablo Canyon by Dec. 31, 2023. The bill described the extension as a “stopgap” measure of up to five years aimed at improving energy system reliability while more renewable and zero-carbon resources come online.

The extension approved by the commission runs through October 2029 for the power plant’s Unit 1 and October 2030 for Unit 2.

CPUC President Alice Reynolds noted that SB 846 included detailed directives for the commission to follow.

“We’re doing as much as we can to move quickly to reduce and eliminate the use of fossil gas to generate electricity while ensuring reliability and controlling costs for ratepayers,” Reynolds said before the vote. “But we’re also considering this decision before us today at the direction of the legislature.”

PG&E still needs approval from the Nuclear Regulatory Commission to extend operations. The company filed a license renewal application with the NRC on Nov. 7.

CPUC plans to continue evaluating the costs of the extension as more information comes in, and whether those have become “too high to justify incurring,” as SB 846 directs. Additional costs could include the expense of meeting conditions for NRC license renewal or implementing recommendations of the Diablo Canyon Independent Safety Commission.

In making its decision, the CPUC considered a report from the California Energy Commission (CEC) on whether the Diablo Canyon extension was needed to support reliability.

The analysis, completed in February, found that ordered procurement is sufficient to meet current resource adequacy planning standards through 2030.

But shortfalls are possible if the state experiences heat waves similar to those in 2020 or 2022, the report concluded. That risk is even greater if wildfires reduce transmission capacity at the same time.

In addition, new clean energy resources might be delayed due to supply chain, interconnection and permitting problems. Another issue is the ability of load-serving entities “to secure imports in an increasingly competitive Western market,” the report said.

“Extending [Diablo Canyon] has a decided advantage in the sense that it is a firm, low-carbon resource,” the CEC report said. “This extension allows the state to rely less on natural gas and more on clean resources for the grid.”

Before the vote, the CPUC heard from members of the public who opposed a Diablo Canyon extension due to concerns about the risks of earthquakes, terrorism or sabotage.

One speaker, who lives near the central coast nuclear plant, said the state has plenty of renewable resources and battery storage to meet its energy needs.

“Why put us at risk when we no longer need the nuclear plant?” she asked.

But others supported a Diablo Canyon extension, saying the state will rely more on natural gas resources if the nuclear plant closes.

One speaker said shutting down Diablo would be inconsistent with a pledge by the U.S. and more than 20 other countries during COP28 this month to work toward tripling global nuclear energy capacity by 2050.

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DOE Report, Funding Seek to Break down Barriers to Grid Innovation

The U.S. Department of Energy looks to be preparing for a full court press on grid-enhancing technologies in 2024, with a new report and funding opportunities aimed at removing barriers to the deployment of technologies like dynamic line ratings and advanced conductors that can quickly increase capacity on existing transmission and distribution lines.  

“We’re entering into an extraordinary time where many parts of the country are seeing rapid load growth, generation additions and resiliency threats all at once,” said Vanessa Chan, chief commercialization officer and director of DOE’s Office of Technology Transitions (OTT), during a Dec. 12 webinar. “So many solutions are already sitting right in front of us. We need to get the commercially available, innovative technologies out the door on the existing system today.” 

The key challenges are not the maturity of specific technologies, but “deployment barriers inherent in the market structure,” she said. “We need to ramp momentum. It will be a massive, massive miss if we don’t work together to break these barriers down today.” 

Chan’s call to action kicked off a preview of the department’s upcoming Pathways to Grid Innovation Commercial Liftoff Report, due early in 2024, while also sending some clear messages about the kind of projects DOE will be looking for in applications for the second round of its Grid Resilience and Innovation Partnerships (GRIP) program.  

“We’re really prioritizing in this round of funding projects that significantly increase transmission capacity, whether they’re using advanced conductors or [high-voltage, direct current lines] or grid-enhancing technologies,” said Maria Robinson, director of DOE’s Grid Deployment Office (GDO), which administers the GRIP program. The goal, she said, is to leverage federal funds “to catalyze a long-term transformation of grid systems and technologies.” 

DOE awarded $3.46 billion to 58 projects across 44 states in the first round of GRIP funding, and has announced $3.9 billion for the second round, with initial concept papers due Jan. 12. (See DOE Announces $3.46B for Grid Resilience, Improvement Projects.) 

While the Commercial Liftoff report will cover about 20 technologies that are ready or almost ready to scale, the webinar was strategically focused on the same technologies that the GRIP program will be prioritizing — dynamic line ratings, advanced conductors, HVDC lines and advanced distribution management systems (ADMS). 

All four provide the most bang for the buck, said Louise White, a policy advisor in DOE’s Loan Programs Office. 

“When we evaluate the impact of these solutions on the grid, we see that each contributes in multiple ways to enhancing grid capacity to make the most of existing rights-of-way today and toward achieving modern grid objectives by improving systems portability, environmental sustainability, reliability, safety and security,” she said.  

DOE funding — from the Infrastructure Investment and Jobs Act and the Inflation Reduction Act — can buy down the high cost of the early projects needed to stimulate supply chain and further adoption, and bring down prices, she said.  

Some utilities have started deploying GETs, said Avi Gopstein, a GDO senior advisor, pointing to projects such as National Grid’s use of dynamic line ratings in New York to cut curtailment of wind projects and expand capacity on transmission lines.   

But he said, “There are more than 3,000 utilities in the United States, and a few excellent projects won’t get us where we need to be.”  

Utilities face “the competing priorities of maintaining an aging system while planning for future system upgrades, as well as the need for efficient capital allocation to minimize ratepayer impacts,” Gopstein said. The need now is for “new processes to better evaluate emerging technology benefits when technology is first deployed and for a future when it is utilized at scale. … 

“It’s clear that legacy approaches to capital allocation, which often depend on a maintenance framework built on the foundational assumption that existing infrastructure is sufficient to serve load, are no longer adequate,” he said. 

Lucia Tian, a senior advisor for OTT, agreed. “Given the pressures our electric grid is facing, stakeholders across the board are emphasizing the need to shift to a proactive, future-oriented approach for managing and investing in the grid to ensure system reliability in a rapidly changing energy system,” she said.  

“Both industry and regulators recognize that current regulatory and business models make it challenging to invest in advanced innovative grid solutions that go beyond the maintenance of existing infrastructure and development of traditional assets,” Tian said. “And the status quo here isn’t an option.” 

Innovation in Many Flavors

The main driver for GETs is burgeoning demand on the grid. According to new report from Grid Strategies, grid planners now see demand almost doubling over the next five years, requiring an additional 38 GW of capacity. (See Grid Planners Predict Sharp Increase in Load Growth.) 

Expanding capacity on existing lines is critical, but accelerating deployment will require a shift in business and regulatory models to develop standards and methods for valuing the benefits GETs can provide across a system, White said. Looking at dynamic line ratings (DLR), for example, White said, the technology “drives multiple capacity, reliability, decarbonization and affordability outcomes. 

“But to implement DLR requires installing sensors to measure real time environmental and land conditions, which also significantly [increases] system visibility,” she said. Advanced DLR also may require automating and digitizing substations, which “will enhance line voltage and current control, amplifying DLR benefits.” 

New communication and data management systems also may be needed, she said, but “being strategic about investment in these infrastructures can prepare a utility to unlock additional benefits down the road and improves cost-sharing between technologies.” 

Still, the way forward will be different for different utilities, she said. Not everyone needs best-in-class systems.  

“Innovation comes in many flavors, and considerable benefits can be realized with more basic technology investments,” White said. “So, a strategic investment plan must identify the appropriate level of innovation and supporting technical requirements to best support a diverse array of future applications to meet utilities’ current and future grid needs.” 

Angelena Bohman, a GDO technical analyst, also raised the organizational challenges adoption of new technologies can trigger. While an ADMS “increases visibility and situational awareness on the system and automates processes that exist manually today,” setting up the system “requires managing the migration of old workflows and databases into the system … [and] benefits may not be realized for many years.” 

The result is a misalignment between traditional planning and valuation based on short-term profit, and the need for more forward-looking, long-term perspectives. 

Deployment of advanced grid technologies suffers from “a lack of sufficient investment incentives to warrant the significant organizational effort required to deploy many of these innovative solutions,” White said. “This again highlights the need to shift from traditional cost-of-service models that often disincentivize these types of innovative investments and toward business models that reward utilities for these types of investments that are needed for a modern grid.” 

White ended the webinar with a list of critical takeaways: 

    • Valuing innovative grid technologies “requires looking at the system holistically to recognize complementary and stacking benefits and to strategically plan for the long term to ensure capital is deployed efficiently today.” 
    • Regulatory and business models must be updated to “address the meaningful misalignment between traditional incentive structures and the needs of a modern grid.” New structures must “value performance instead of capital expenditure [and] enable new risk- and cost-sharing models and encourage innovation.”  
    • Grid management also must change, from “legacy, reactive” approaches to “proactive, future-oriented strategies that serve the long-term interests of ratepayers.” 
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McAdams Honored During Last Texas PUC Meeting

Texas Public Utility Commissioner Will McAdams made good on his intention to resign from the commission by the end of the year, sitting through his last open meeting Dec. 14 as a member of the regulatory body.

McAdams, who told RTO Insider last month of his plans to resign before next year, wiped away tears as he thanked staff, his fellow commissioners and his family for what he called “one of the highest and true honors of my life.” (See McAdams Says He Will Resign from Texas PUC.)

“As I told the reporters, there comes a point for everybody when they evaluate their work-life balance and identify a need to take a step back; they need to heed that feeling,” he said. “That point has come for me. As I said then, this is a time for new blood to come in and continue to work on the momentum that we have created and started here.”

McAdams is the longest-tenured commissioner, having been appointed to the PUC in March 2021 shortly after the disastrous winter storm that nearly collapsed the ERCOT grid. His term was to expire Sept. 1, 2025.

The previous commission having resigned or been asked to step down, McAdams and the other commissioners who eventually joined him have spent that time implementing new rules after two legislative sessions, evaluating and redesigning the ERCOT market, and restoring staff confidence.

“As we have long said, this is not an easy assignment. The current commission was composed under extreme circumstances,” he said. “It seems to me that 2021 was a defined demarcation line and time. Especially for those working at this agency, there is now a pre-2021 history for the PUC and a post-2021 history that has yet to be made, and it’s never going back.”

“I feel privileged to have been here during that transition. The function that this agency serves is essential, and nothing’s going to change that,” McAdams added. “Our role as regulators is to instill and maintain confidence in the rule of law, the spirit of fair play and competitive neutrality in an environment with large and powerful corporate forces, all to ensure the best possible outcomes for Texas consumers.”

“Today is a bittersweet day,” interim PUC Chair Kathleen Jackson said as she opened the meeting. “On behalf of all Texans, I want to thank you for your tireless efforts since being appointed as the first new commissioner after Winter Storm Uri. You stepped up to the challenge with a desire to make a difference. … You’ve been an invaluable resource to me, the PUC and … the state of Texas.”

Cake presented to McAdams by PUC staff during reception in his honor | Texas Public Utility Commission

Commission staff recalled the day McAdams first appeared in the office. He was an industry outsider but had a strong working knowledge of the market through his policy work as a legislative staffer.

“My first thought when we were told Will McAdams was headed this way was, ‘Thank goodness! Someone who speaks electricity,’” said Connie Corona, deputy to Executive Director Thomas Gleeson. “We were well acquainted with you and your expertise and dedication to good public policy from working with you over the years. Thomas and I were sitting in a very lonely hallway on that day.”

“You strolled in and basically said, ‘We’ve got this,’ and never looked back,” she added.

“On March 15, 2021, Connie and I found ourselves with no one at the dais,” Gleeson said. “Being first is always difficult, and I’ve told you privately how much I appreciate that you were willing to go first and what that meant and how that helped with the 2021 [legislative] session. You really turned it around for us. Thank you for going first.”

“We all came in here and had a very challenging mission from Day 1: implementing all the legislation that got passed after Winter Storm Uri; engaging on several rounds of market reform discussions,” Commissioner Lori Cobos said. “The amount of work that we’ve accomplished over the last two years has been [immeasurable]. For that, I thank you for all of your leadership, your service, your support and your friendship.”

McAdams took a leadership role on ERCOT’s task force evaluating how aggregated distributed energy resources (ADERs) could participate in the wholesale market and their ability to serve as virtual power plants. He also threw himself headfirst into his SPP responsibilities, chairing a leadership team addressing the RTO’s resource adequacy issues.

“We had a great opportunity to work together on the ADER task force. That was your leadership and my nudging you in one direction, but you let your team lead that, and Texas is going to be much better for it,” Commissioner Jimmy Glotfelty said. “Having been in this business for 30 years, to watch the first few months and you grow your understanding of the market. Gosh, it was just great to see you stand up and be your own person and lead and lead and lead, and I know that’s to your core.”

The commission is now left with three members, two short of full capacity following Peter Lake’s resignation as chair in June. Gov. Greg Abbott’s press office did not respond to a question on when future PUC appointments might be made.

McAdams will chair the SPP Resource and Energy Adequacy Leadership Team’s final meeting of the year Dec. 18 before turning the position over to his likely successor, Kristie Fiegen, who chairs the South Dakota Public Utilities Commission.

Cobos will replace McAdams as Texas’ delegate on SPP’s Regional State Committee, with Glotfelty replacing Cobos on the Organization of MISO States.

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NYCA Surpasses 5,000 MW of Installed BTM Solar

RENSSELAER, N.Y. — New York now has more than 5,000 MW of behind-the-meter (BTM) solar capacity, bringing the state closer to its goal of installing 10,000 MW of distributed solar energy by 2030, NYISO announced at the Dec. 14 Operating Committee meeting.

Aaron Markham, NYISO vice president of operations, reported to the OC that an additional 59 MW of BTM solar integrated into the grid since the previous month, raising the total to 5,018 MW. (The New York State Energy Research and Development Authority reports a slightly higher 5,037 MW of distributed solar from 211,083 projects through Sept. 30.)

Markham added that in November, NYISO implemented improvements to the BTM solar forecasting system, which allows for forecasting on a 15-minute instead of an hourly basis. “The expectation is this will improve the performance and accuracy of these forecasts,” he said.

Markham also noted that November’s peak load reached 21,305 MW on Nov. 29. (See “October Operations,” NYISO Braces for the Coming Winter.) The month’s minimum load was recorded Nov. 5 at 12,471 MW.

Central East Limits

The OC voted to approve a draft report presented by NYISO re-evaluating the impact of a loss of a New England capacity source on Central East voltage limits.

The report concludes that the recent energization of the Nos. 351 and 352 Edic-Princetown 345-kV lines on the Segment A project allows Central East to support a loss of 1,500 MW, an increase from 1,320 MW.

The Central East interface is a key part of New York’s transmission that regulates the flow of electricity from New England to the central parts the state, in particular Mohawk Valley (NYISO Zone E) and the Capital region (NYISO Zone F).

Raj Dontireddy, a manager of operations engineering at NYISO, said that because NYISO operators cannot monitor or control ISO-NE’s sources and dispatch, it is crucial for the ISO to manage imported energy without compromising Central East.

Matt Cinadr, a power systems operations specialist with The E Cubed Co., asked whether the interface could handle more than the 1,500-MW limit.

Dontireddy responded that while 1,500 MW is the maximum allowed based on current limits, NYISO operators can permit a higher ISO-NE source if the total capacity of the Central East interface is not fully used. Markham added that analyses suggest this could increase to around 2,000 MW if the interface has room.

Order 2023

Thinh Nguyen, NYISO senior manager of interconnection projects, informed the OC that the ISO plans to file its proposed interconnection cluster study process to comply with FERC Order 2023 on April 3, 2024.

Nguyen provided a detailed review of the cluster study, addressing stakeholder questions and concerns, and shared a comprehensive overview chart that details the interconnection timeline and requirements developers must meet to proceed through the queue process.

Stakeholders continued to press NYISO on various aspects of the cluster study process, but the nature of their questions suggested an increasing understanding and acceptance of the proposal compared to previous times the cluster study was discussed. (See NYISO Stakeholders Question Proposed Interconnection Timelines, Deposit Rules.)

NYISO will continue developing its proposal into the early part of next year and anticipates reviewing specific tariff language soon.

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NY PSC Limits Gas Utility’s Network Expansion

The New York Public Service Commission barred a major gas utility from proactively expanding its gas mains starting early next year, trying to move the company closer to the state’s climate-protection goals.

The Dec. 14 decision labels as insufficient the long-term plan proposed by National Fuel Gas and makes multiple modifications beyond the ban on network enhancement (Case 22-G-0610).

NFG’s final plan, submitted in July 2023, was itself the third iteration, incorporating feedback offered by the state, its consultant and stakeholders on earlier versions submitted in December 2022 and May 2023.

But a consensus could not be reached on the final version of the plan.

Voicing some confusion about what they were actually doing — approving the plan, approving it with changes, rejecting it — members of the PSC voted 5-1 to attach more than a dozen directives to the plan and ordered NFG to move forward with it, to provide annual updates and to submit its next long-term plan in December 2026.

Later Dec. 14, NFG said it could not provide an immediate response to the 120-page order. It said via email:

“Having just received the order from the Public Service Commission, officials at National Fuel need time allowing for a careful review of the Long-Term Plan findings to determine next steps. National Fuel has provided very real solutions for decarbonization that will have an immediate and long-term impact.”

The state’s landmark Climate Leadership and Community Protection Act of 2019 mandated substantial reductions in greenhouse gas emissions. The CLCPA sets no specific target for gas utilities, but reduction of natural gas use and decarbonization of buildings both will be central to any wholesale reduction.

The failure after more than a year to reach consensus on NFG’s long-term gas plan speaks to the challenge of balancing conflicting priorities and evolving regulations while following through on the mandates.

The gas industry, regulators and advocates from all corners are working to carve out a new business model, plan the clean energy transition, save the planet, address socioeconomic problems and avoid crushing the state’s utility customers with a tab that will run into at least the tens of billions of dollars.

As they do this, the Legislature and governor periodically will roll out new mandates that may change whatever equations have been hammered out.

Sea Change

In March 2020, the PSC ordered what it called a “fundamental shift” in the way gas utilities do business in New York (Case 20-G-0131), moving them toward a more transparent and comprehensive process that emphasizes alternatives to new infrastructure investment.

NFG’s long-term plan was the first proposal in response; other major New York gas utilities are preparing long-term plans as well.

PSC Chair Rory Christian commended NFG for its efforts and acknowledged the challenges of going first — particularly as a gas-only utility.

“I think looking at it in a broad scale, this plan has done a good amount of what we had hoped it would do, and the planning process as a whole looks to me to be working as intended,” he said at the meeting.

“But despite all that hard work, ultimately what NFG provided fell short. In its current form, the plan is not aligned with our mandates. … There are just too many deficiencies.”

NFG serves roughly 500,000 customers in one of the colder, poorer parts of New York state, plus 250,000 more across the border in Pennsylvania.

It built its plan on an all-of-the-above approach that includes increased efficiency and hybrid gas-electric heating systems that keep its existing infrastructure in service while reducing greenhouse gas emissions. Thermal energy networks, renewable natural gas and hydrogen also would play a role.

The monthly bill impact would be substantial. NFG said “nonparticipating customers” — those not participating in billing or efficiency programs — would see their monthly costs jump from less than $100 to anywhere from $217 to $335, depending on the scenario used.

Stakeholders found many aspects of the plan unacceptable.

The PSC sought to address some of these questions in its order Dec. 14. Among the modifications it imposed, the PSC told NFG to:

    • Explain how it arrived at its system design of 74 heating degree days, which would equal an average 24-hour temperature of minus-9 degrees, something that has not happened since 1982.
    • File by May 31 a proposal for one or more demand response programs for implementation in the winter of 2024-25.
    • Cease by March 31 any further network expansion or enhancement — it can continue to hook up new customers who request service, as directed by current regulations, but it cannot proactively extend or enhance existing gas mains.
    • File within 90 days a proposal explaining how it will revise its Partnership for Urban Revitalization in Western New York to encourage electrification and remove incentives for additional natural gas use.
    • File by July 31 a report listing infrastructure upgrades and extensions planned in 2025 with a budget greater than $1 million.
    • Meet with stakeholders and develop and issue requests for proposals for at least two capital projects employing nonpipe alternatives in calendar year 2024.
    • Schedule a technical conference and develop a benefit-cost analysis.
    • Provide details on its energy efficiency programs and quantify their benefits to disadvantaged communities.
    • Formulate a pilot project to test hybrid heating options that include both cold climate and standard heat pumps by June 30.

The all-of-the-above approach is not a favorite strategy of clean energy advocates, particularly when it includes RNG or hydrogen.

The Environmental Defense Fund praised the decision up to a point, and said PSC needs to go further.

“The Public Service Commission rightly found that the company’s 20-year plan fell short of New York’s climate goals and directed the utility to halt natural gas expansion programs and improve information transparency,” senior attorney Erin Murphy said via email. “But the regulators left important questions unresolved, such as the need for limits on deployment of biomethane and hydrogen. The PSC must do more to give utilities clear direction to plan for decarbonization.”