Several generation owners and PJM are progressing toward an agreement regarding the non-performance charges the RTO assessed in its allegation the generators failed to meet their capacity obligations during the December 2022 winter storm, according to the settlement judge mediating the deliberations (EL23-53, et al.).
Judge Matthew J. Vlissides Jr. wrote in a Sept. 1 status report that a “majority of the participants indicated that they reached a settlement in principle” as of the previous day’s conference and he recommended terminating the process without holding further meetings. (See FERC Sends Elliott Complaints Against PJM to Settlement Judge.)
“These participants represent that they are finalizing the settlement materials and anticipate filing the settlement package by late September 2023,” he said.
East Kentucky Power Cooperative spokesperson Nick Comer said EKPC is pleased the parties have reached a settlement in principle but wouldn’t comment further until the terms have been filed with the commission. PJM declined to comment.
The companies involved in the settlement procedures include Essential Power (EL23-53), Aurora Generation (EL23-54), the Coalition of PJM Capacity Resources (EL23-55), Talen Energy (EL23-56), Lee County Generating Station (EL23-57), SunEnergy1 (EL23-58), Lincoln Generating Facility (EL23-59), Parkway Generation Keys (EL23-60), Old Dominion Electric Cooperative (EL23-61), Energy Harbor (EL23-63), Calpine (EL23-66), Invenergy (EL23-67) and EKPC (EL23-74).
PJM stated the penalties from Winter Storm Elliott total about $1.8 billion, though during stakeholder meetings it has said it’s likely some percentage of generators will default on the penalties. To reduce the impact to those companies, PJM filed to extend the payment period for non-performance charges to nine months, which FERC approved in April. (See “FERC Approves Alternative Billing Schedule,” PJM: Elliott Nonperformance Penalties Total More Than $1.8B.)
The commission established the settlement judge procedure June 5 to see if the parties involved in a dozen complaints could reach an agreement within 60 days and extended the process an additional month on Aug. 14 after Vlissides wrote a progress report finding the parties were “significantly progressing” toward settlement.
PJM asked the commission to establish a settlement judge in April, arguing that while it maintains the penalties are valid, a faster resolution could support the long-term health of the capacity market and result in more consistent settlement outcomes.
“The capacity market also is designed in large measure to signal the need for new capacity resource investment, and the expectations of the financial and investment community accordingly are an important backdrop to the operation of this market,” PJM said in its earlier filings. “Timely, consensual resolution of these disputes thus could, potentially, help support the long-term health of the resource adequacy construct in the PJM region.”
The complaints argued PJM improperly declared emergencies in regions where it was not warranted and continued to export to other balancing authorities in contravention of its tariff and the RTO had not provided generators with the required notifications they were expected to be available to allow them to procure fuel.
AUSTIN, Texas — The Infocast Texas Clean Energy Summit attracted several hundred developers, asset owners, financiers, investors and ERCOT stakeholders to discuss the booming opportunities and looming challenges in today’s renewables environment.
Speakers and panels discussed large flexible loads, crypto mining, energy storage, Texas’ continued reliance on renewable energy and the challenges facing ERCOT from the state’s tremendous growth and insatiable demand for energy. Many of those solutions will be affected by the new laws and rules passed by the recent Texas Legislature.
Part of a panel addressing the new legislation, Mark Stover, director of state affairs for Apex Clean Energy, pointed to a projected slide that included images of a couple of news clippings.
“I think there were about 50 bills that impacted our industry, but there were 19 bills that did not get across the finish line. Some were killed on the floor, some never got on a hearing, others kind of just got lost in the shuffle. But there were 19 bills that would have directly harmed the clean energy industry. Fortunately, those went away.”
One of the bills that failed (Senate Bill 624) would have required wind and solar facilities to acquire special permits from the PUC, a requirement thermal generators wouldn’t face.
“That was an industry killer that would have been absolutely devastating for the clean energy industry,” Stover said. “Fortunately, we were able to get the recession and ensure that that bill did not pass, no trouble.”
Still up in the air is the shape of the future ERCOT market. The grid operator and the state’s regulators still are pushing forward with the performance credit mechanism (PCM), a market tool that would retroactively reward dispatchable generation that meets performance criteria during the tightest grid periods with incentive payments.
Staff plans to draft a strawman proposal incorporating the Public Utility Commission’s feedback and hold a series of workshops with stakeholders and PUC staff. ERCOT and the market monitor will perform a cost-benefit analysis before the legislature next meets in 2025. The ISO expects it will take another two years to implement the PCM.
“So where do we go from here? There’s a lot of details to be worked out,” said Nate Miller, a director with Energy and Environmental Economics (E3). (The firm studied several market designs for the PUC but did not recommend the PCM.)
He said a reliability standard first must be determined, as it will set the PCM’s performance credits awarded to generators. Then comes the question of dispatch requirements, hybrid resources only being part of the equation.
“There’s a lot of details in the PCM that could significantly weigh the impact of PCM on the market,” said Resmi Surendran, vice president of regulatory policy for Shell Energy North America. “The PCM, based on some studies, could have been a one-third reduction in the energy price, which is the revenue stream for renewables. Hopefully, it can be implemented as an additional revenue stream … without reducing the revenue stream for everyone else.”
While the renewable sector may have escaped more severe legislation this year, it may have been enough to scare off some potential investors.
“Investors saw what happened in that last Texas session and are sort of unsure about what’s going to happen in the next session for understandable reasons,” said Frank Swigonski, director of market design for Pine Gate Renewables. “I’ve heard people say that there’s always been anti-renewable sentiment in Texas and this was just another day at the office. The difference last session was it was a little bit more pronounced and it got a little bit more national attention. I think that’s something that we’re going to be dealing with as we’re trying to get investment projects long term.”
Swigonski said the PCM remains the biggest question mark with how costs will be allocated and its effect on the energy market.
“That uncertainty itself is a challenge because other developers can probably feel the same way and we can execute around new interconnections, cost allowances and new firming requirements, as long as we know what those requirements are,” he said. “But as long as there’s a big question mark in your financial spreadsheet, it’s really hard to close on them right.”
That said, Swigonski still says the Texas energy market is a great place to invest.
“The interconnection process in Texas is the fastest, the easiest and cheapest anywhere in the country. None of that changed,” he said.” Texas is a big state. It’s got a dynamic, dynamic economy, there’s load growth, low taxes, and there’s a lot of sunshine and wind.”
“We’re pretty invested in Texas, and we think that the policy risk is very manageable,” said Allan Schurr, chief commercial officer of storage developer Enchanted Rock. “I can tell you that having lived a former life in California that it is a wild card. Texas is a lot more predictable. It’s undergoing a lot of changes with the market redesign. I don’t know about the fundamentals but somehow, through the noise and the fog, there’s still opportunity for us.”
Living with Large Flexible Loads
When Bitcoin miners — having been shoved out of China because of their insatiable demand for power — began flocking to Texas in 2021, Gov. Greg Abbott (R) welcomed them in a tweet proclaiming the state “will be the crypto leader.”
Two years later, Bitcoin mining consumes about 2.2 GW of power. That consumption could triple should the additional 4 GW of mining operations approved by ERCOT’s interconnection process become energized. And while the mining loads gobble power, their ability to shut down quickly during tight operations is what makes them appealing to grid operators.
ERCOT has adapted quickly to Bitcoin, data centers and other large, flexible loads (LFLs). It has created a working group dedicated to the loads and hired an LFL interconnection manager, Agee Springer. It also has proposed new LFL classifications as either curtailable load resources or registered curtailable loads; the former would participate in economic dispatch; the latter would operate outside SCED.
“The optimal solution for reliability would be for as many of these loads as possible to participate in the economic dispatch,” Springer said. “What this really does is it allows their behavior to be factored into the economic dispatch and accounted for when generation is instructed on how much power to produce. We see this as kind of a benefit to both loads and to ERCOT. It takes the guesswork out of being price responsive. You feed your desired behavior and your strike prices into the economic dispatch and then your behavior is coordinated with the rest of the grid.”
He said the proposed concepts, which could be ready next year, would provide more data from load resources and improve the accuracy of ERCOT’s forecasts. That would create a bigger pool of ancillary services, Springer said, “so that’s a benefit for everyone.”
The Clean Energy Buyers Association’s Bryn Baker, senior director of market and policy Innovation, stressed the need to be able to run a 21st-century grid that keeps the lights on in 21st-century weather.
“That requires thinking more expansively about what is dispatchable versus non-dispatchable. Certainly, renewables are not always reliable and the dispatchable energy is not always reliable,” she said.
“A big success story, besides demand response, is wind, solar and storage holding up the grid when its groaning at the edges,” Baker added. “It is going to require thinking about things differently. We’re going to need new technologies and new approaches … but most important is that we’re building [an ERCOT] market where that innovation happened, where testing those new technologies and approaches is possible.”
IRA Could Be Boon to Texas
Several panelists marked the one-year anniversary of the Inflation Reduction Act, which provides billions of dollars in incentives, grants and loans to support new investments in clean energy and other areas.
“When you look at it at first blush, you see a lot of positive things that are more long term,” said Matt Pawlowski, vice president of development for NextEra Energy Transmission. “We’ve gone from the years of three to five years [of tax credit deadlines], etc., where you’re kind of rushing into everything because you think it’s going to expire. Now, we have a much longer runway … the IRA has been a longer-term view of things that we’ve wanted for years, instead of three-, four- and five-year chunks.”
George Hardie, vice president of business development for Pattern Energy Group, agreed the IRA will spur new development in Texas.
“It’s a mixed bag of theories and it’s certainly ample ammunition for issues in some of the congested areas in the Texas Panhandle, where there’s more power than can get to some of the load centers,” he said, noting the demand placed on the grid by oil and gas production in the Permian Basin. “We’re seeing astounding load growth … all that oil and gas is being electrified, so there’s going to be a significant amount of renewables and weather, as well solar, needed for that density.”
A federal appeals court on Tuesday rejected a challenge to FERC’s 2020 revisions to how it enforces the Public Utility Regulatory Policies Act, though it concluded the commission committed a “serious violation” by not conducting a formal environmental assessment (EA) before issuing the order (20-72788).
Multiple renewable energy industry and environmental advocacy groups petitioned for review of Order 872, which they argued made it more difficult for independent, non-utility-owned energy generators to be designated qualifying facilities under PURPA (RM19-15, AD16-16). (See FERC Rejects Challenges on PURPA Changes.)
The 9th U.S. Circuit Court of Appeals, however, found that FERC holds broad rulemaking discretion and its interpretations of the law were not unreasonable. The court also rejected the petitioners’ challenges to four specific provisions of the order.
The court did agree with the petitioners’ contention that FERC violated the National Environmental Policy Act by not preparing an EA before issuing the order. It remanded the order to FERC to conduct an EA, but it declined to vacate it.
“Although FERC’s failure to prepare an EA is a serious violation, Order 872 does not suffer from fundamental flaws, making it unlikely that FERC could adopt the same rule on remand, and the disruptive consequences of vacatur would be significant,” the court said.
PURPA directed FERC in 1978 to promulgate rules to encourage development of two types of QFs: alternative energy sources such as renewables owned by the same person within 1 mile of each other that totaled no more than 80 MW generation capacity, or fossil-fired cogeneration facilities.
The law mandated that electric utilities buy the power generated by QFs under rate guidelines established by FERC and set by states. In response, FERC issued Orders 69 and 70 in 1980.
Congress changed the statutory language via the Energy Policy Act of 2005, and FERC responded with Order 688, which among other things established a rebuttable assumption that facilities with not more than 20 MW capacity do not have adequate, nondiscriminatory access to markets.
With Order 872, issued under then-Chair Neil Chatterjee (R), the commission explained that extensive technology advances and dramatic energy industry changes in the preceding 40 years made significant revisions necessary.
Among other things, FERC:
expanded the 80-MW calculation radius to up to 10 miles and set a list of factors to establish whether facilities were “separate”;
allowed states to eliminate the fixed-rate option;
gave states additional flexibility to calculate utilities’ avoided costs; and
reduced the 20-MW nondiscriminatory threshold to 5 MW.
Ruling
The 9th Circuit rejected the petitioners’ contention that Order 872 discourages development of QFs, and therefore violates PURPA, which directed FERC to encourage such development.
The judges shot down various other arguments as well. They ruled that:
FERC did not overstep the authority granted to it by PURPA, and Order 872 meets the test of the Chevron
FERC was not arbitrary or capricious in making the rules; it was reasonable and used discretion delegated to it by Congress.
Order 872’s rate-related provisions do not violate PURPA’s nondiscrimination requirement.
The court did fault FERC for its reasoning for not preparing an environmental impact statement or an EA.
“FERC misunderstands NEPA’s requirements,” it wrote, adding that the commission’s own regulations for implementing NEPA support its conclusions.
“It was eminently foreseeable that a regulatory change of this magnitude could produce significant environmental effects,” it wrote. “It was a near certainty, for example, that at least some QFs could lose their status under the 2020 site rule, or that at least some states would eliminate the fixed-rate option for the calculation of avoided costs.”
But the court concluded that vacatur would cause severe trouble, as several states have already initiated proceedings in response to the order and some utilities already have received relief from mandatory purchase obligations with facilities rated at 5 to 20 MW.
“Victory. Again,” Chatterjee posted on X in response to the news. “The Chatterjee FERC record in the courts is quite strong.”
California will need to double its public EV charging infrastructure between 2030 and 2035 to serve the expected number of electric vehicles in the state, according to a new report by the California Energy Commission (CEC).
That draft Electric Vehicle Charging Infrastructure Assessment, which highlights the massive needs stemming from the state’s aggressive transportation decarbonization goals, coincided with the release of a CALSTART working paper on phasing the national EV charging infrastructure build-out.
The CEC assessment estimated that by 2035, more than 15 million light-duty electric vehicles in California would require more than two million chargers at public and “shared private” locations, more than doubling the seven million vehicles and one million chargers projected for 2030. This estimate did not include chargers installed in single-family homes but included shared private locations such as multifamily dwellings and workplaces.
The estimate of 15 million electric light-duty vehicles represents a tenfold increase from today. In the first quarter of 2023, California surpassed 1.5 million light duty electric vehicles, with nearly 85% full EVs, 15% plug-in hybrids (PHEVs) and less than 1% hydrogen fuel cell vehicles. In that quarter, full EVs and PHEVs accounted for more than 20% of new passenger vehicle sales. Light-duty vehicles were defined as vehicles with a gross vehicle weight rating below 10,000 pounds, primarily privately owned cars and trucks.
The assessment was the second biennial report required under Assembly Bill 2127. The draft report extended the 2021 analysis by five years to 2035, the target date for Gov. Gavin Newsom’s ambitious transportation electrification goals. His Executive Order N-79-20 set goals for 100% zero-emission new passenger car and truck sales and 100% zero-emission vehicle operations for drayage trucks by 2035.
For the grid, peak weekday charging for light-duty vehicles is likely to reach 4,000 MW in the middle of the day by 2030, with more than a third of that from DC fast chargers. Residential charging, in contrast, would peak overnight, with the estimated demand showing a significant rise at 9 p.m. when time of use rates drop.
The assessment’s estimates for the mix of Level 1, Level 2 and DC fast chargers for light-duty vehicles appeared to be conservative, with only 83,000 DC fast chargers in the 2.11 million total, or less than 4%. That is a much lower percentage than today when California has 9,808 DC fast chargers to its 82,000 public Level 2 chargers.
In addition to building out EV charging infrastructure for passenger vehicles, the assessment forecast demand for fast chargers for commercial vehicles. The 377,000 medium- and heavy-duty EVs in 2035 would need an additional 256,000 20 to 150-kW DC fast chargers in depots, as well as 8,500 higher powered 350 to 1,500-kW public DC fast chargers. For medium- and heavy-duty vehicles, the load on the grid is more spread, with a peak demand in 2030 of 800 MW overnight, largely from vehicles at depots.
CALSTART, a nonprofit consortium focused on clean transportation, released a working paper on charging infrastructure for zero-emission medium- and heavy-duty vehicles throughout the United States. In Phasing in U.S. Charging Infrastructure: An Assessment of Zero-Emission Commercial Vehicle Energy Needs and Deployment Scenarios, CALSTART recommended phasing the building-out of commercial vehicle charging infrastructure, starting with “favorable launch areas.” The phased approach could support commercial EV uptake at the rates specified in the Global Memorandum of Understanding on Zero-Emission Medium- and Heavy-Duty Vehicles (Global MOU), which the United States signed in 2022.
“This phased approach can manage distribution grid upgrade timelines and maximize utilization even with the Global MOU’s attainable market penetration rates, which exceed those proposed by U.S. regulators,” the report said. “Favorable regions include where 1) industry concentrates, 2) public and private funds have high leverage, 3) policy is supportive, 4) energy will cost less or 5) distributed grid modernization will occur.”
The Virginia State Corporation Commission last week ruled that Dominion Energy overstepped its authority in requiring distributed solar for large customers to go through new processes that led to spikes in the cost of installation.
The Virginia Distributed Solar Alliance filed a complaint against the new procedures in June, alleging they overstepped the regulated utility’s authority, as the SCC has been looking into the issues around interconnection of distributed sources in other cases. The SCC last approved interconnection rules back in 2020 and it is now looking at additional changes.
The commission on Aug. 30 agreed to suspend the parameters and interconnection agreements until it wraps up its open proceedings looking into the issues, but it declined to “address the myriad of additional relief” sought by the solar group.
The group’s other requests can be taken up in other proceedings, the SCC said. It also noted that it was not taking lightly Dominion’s claims about safety and reliability, but that it lacked authority to implement the new processes without a prior order.
“Dominion should continue to take the actions necessary to maintain the immediate safety and reliability of its system; this may include, but need not be limited to, seeking specific authority from this commission in one or more formal proceedings,” the commission said.
The utility adopted new parameters for projects between 250 kW and 1 MW and projects that range from 1 to 3 MW in December 2022, but the solar group’s complaint focused on their impact on projects below 1 MW, which are midsized, nonresidential projects. The complaint alleged that the new rules have led to costs, delays and barriers to adding such distributed generation around Virginia.
The rules that were suspended by the SCC led to “unprecedented” costs and delays by potentially requiring distributed solar to pay for substation upgrades and dark fiber cable and relay panel equipment. Dark fiber costs between $150,000 and $200,000/mile; relay panels can cost $250,000 for equipment and potentially more than double that for engineering, mobilization and construction management.
The complaint listed a number of anecdotes, including one at the James River Juvenile Detention Center for Henrico County, where Dominion estimated $2.25 million in preliminary costs for a 686-kW system. Prince William County Schools faced similar costs on a 987-kW array it was planning. Both projects, and others owned by private firms, proved too expensive with the extra costs that Dominion assessed under the now-suspended rules.
Dominion had argued in a filing last month that it needs to update the rules as distributed generation has grown rapidly in Virginia since a law passed expanding its net energy metering program.
“As a result of these changes, more net metering generation, with higher capacity ratings, are now rapidly developing and penetrating the company’s electric power system,” the firm said. “The company has been tasked with integrating more net metering distributed energy resources, with higher capacity ratings, that are now permitted to produce up to 150% of the customer’s expected annual energy consumption.”
The parameters suspended by the SCC were meant to ensure Dominion’s ability to specify the equipment and technical specifications needed to establish safe and reliable interconnection, the company said.
MISO’s Independent Market Monitor took his concerns to stakeholders last week over what he deems unrealistic fleet assumptions in MISO’s long-range transmission planning.
MISO Independent Market Monitor David Patton delivered a presentation at an Aug. 31 long-range transmission plan (LRTP) teleconference to let stakeholders know he’s concerned MISO’s long-range transmission planning could upend market functions. He said the issue is serious enough for him to delve into MISO’s transmission planning matters when usually he’s confined to market matters.
“The performance of the market is greatly impacted by out-of-market investments … coordinated by MISO,” Patton said. He said overblown transmission investments can “fundamentally” affect locational marginal prices and ancillary services.
Patton said the capacity expansion prediction MISO is using to develop its second LRTP portfolio contains an overestimated amount of intermittent, renewable generation and an exaggerated amount of dispatchable generation retirements.
“Planning to that future, I think is highly problematic,” Patton said.
MISO would come up with a “very different set of future transmission needs” if it includes a more realistic fleet projection that includes battery storage, hybrid storage, and renewable resources and new natural gas generation, he said.
Patton’s criticisms are contained in this year’s State of the Market report. He also appeared in front of MISO board members to critique MISO’s transmission planning future. Board members have questioned Patton’s departure from markets into transmission planning. (See “LRTP Doubts,” MISO IMM Zeroes in on Tx Congestion in State of the Market Report.)
Minnesota Public Utilities Commission staff member Hwikwon Ham said he had serious concerns with Patton’s critique of transmission planning. He asked what’s keeping the IMM from weighing in on states’ integrated resource planning, because that also affects MISO markets.
Ham said MISO’s second LTRP portfolio’s assumptions are based directly on states’ emissions reductions plans.
“You are directly defying that outcome,” he said.
American Transmission Co.’s Bob McKee agreed MISO’s futures use “actual” state plans and planned retirements.
Patton said he wasn’t trying to question state directives. But he said his analysis shows a 2040 fleet mix that contains 108 GW less solar and wind resources than MISO is planning for. He said MISO states still could achieve their official emissions reduction targets even with the absent, hypothetical intermittent resources. Patton said he didn’t account for “announcements made by governors that may or may not make their way into legislation.”
MISO expects it will add 369 GW of new, mostly renewable resources by 2042, bringing its total installed capacity to 466 GW. However, only 202 GW of that capacity is accredited; staff assumes a declining effective load-carrying capability for the renewable additions. (See MISO: Long-range Tx Needed for 369 GW in Interconnections.)
Patton also said he found MISO’s forecast that it will have 29 GW of flexible resources — including green hydrogen, long-duration battery storage, small modular nuclear reactors and reciprocating internal combustion engines — highly unrealistic. He questioned whether those technologies will be commercially available by the 2040s.
Patton also said half of MISO’s 13 states don’t have definitive decarbonization mandates. He said MISO shouldn’t assume members don’t build dispatchable gas resources between now and 2030.
But some stakeholders said they viewed Patton’s view as more environmentally harmful and more expensive to ratepayers, because of an expansion of gas infrastructure. Some also said it was disrespectful for Patton to show up to a planning meeting so late in the game to advocate for a rethink of MISO’s transmission planning future.
Patton said he will make a point to participate in MISO’s LRTP benefit analysis going forward.
Sustainable FERC Project attorney Lauren Azar said she worried Patton’s transmission analysis based on a concern for the market is shortsighted because the market only sends short-term signal and doesn’t indicate “the type of grid we’re going to need in 2042, or even 2035.”
“MISO is [a] leader in the nation in building 20 years out,” Azar said.
But Patton warned about the dangers of overbuilding transmission based on a flawed view of future capacity.
“If we adopt a future that’s not realistic, I don’t think we can be confident in that,” he responded.
Southern Renewable Energy Association’s Andy Kowalczyk asked Patton to consider MISO may be running the risk of underbuilding the transmission system, which also would raise costs for ratepayers. He said he didn’t think battery storage would “absorb” the need for new transmission because it still needs to charge from and dispatch to the system.
Sustainable FERC Project’s Natalie McIntire said she was skeptical of Patton’s analysis that MISO states could achieve a dramatic, more-than-90% carbon reduction by 2042 while removing 108 GW of renewable energy from the equation.
But North Dakota Public Service Commissioner Julie Fedorchak said she thought it was worthwhile for Patton to question MISO’s fleet assumptions when the second LRTP portfolio could cost as much as $30 billion.
“We absolutely need more analysis instead of less,” she said.
Mississippi Public Service Commission consultant Bill Booth called for MISO to take a fresh look at its battery storage addition assumptions.
“This is an expensive endeavor. We cannot afford to build wasteful transmission. …These are costs that are going to be borne by ratepayers, and we need to make sure they’re necessary and needed and the best thing for the footprint,” said Kavita Maini, an energy consultant representing MISO end-use customers.
MISO Responds
MISO Vice President of System Planning Aubrey Johnson said MISO in the past has been accused of not “being big or bold enough in transmission planning,” especially in its 2011 multivalue transmission portfolio. He said MISO is embarking on “least regrets” long-range transmission planning.
Johnson reminded stakeholders that the LRTP portfolios are being developed to resolve major regional system issues, not ensure the interconnection of an additional 369 GW, or ensure a certain generation mix. He said MISO’s planning future is meant to reflect members’ resource planning.
“It’s not the goal to maximize transmission building, but to maximize the value of the transmission we recommend,” Johnson said. He added he’s confident MISO will advance the most valuable second LRTP possible.
FERC has ruled it’s appropriate for MISO to continue to preclude renewable resources from providing ancillary services in its markets, countering a solar trade group’s complaint.
FERC said the Solar Energy Industries Association (SEIA) didn’t present evidence that MISO’s policy of barring renewable output from ancillary services was producing unfair rates (EL23-28).
In an Aug. 31 order, the commission said much like its recent order authorizing MISO’s ban on wind and solar generation from supplying ramping capability, it remains the case that renewables rarely are the most economic choice to supply operating reserves because their locations exacerbate already binding transmission constraints. (See related story, FERC: MISO Can Ban Intermittent Resources from Providing Ramp.)
SEIA lodged the complaint early this year in part because of MISO’s effort to bar renewables from furnishing ramping. (See Solar Trade Group Challenges MISO Ban on Renewable Ancillary Services.) The group argued that MISO’s dispatchable intermittent resources are operationally capable of providing regulation service, spinning reserves and supplemental reserves and that MISO’s market rules today discriminate against some resources because they’re tailored to the large, centralized power plants of the past. It also said instating renewables’ eligibility for such services would foster competition.
But FERC said SEIA didn’t demonstrate that renewables “can reliably deliver the ancillary services they are cleared to provide to the MISO market in a manner comparable” with other resources.
The commission acknowledged MISO’s current market clearing software isn’t sophisticated enough to consider locations of resources and nearby congestion rendering them non-deliverable. It said if MISO were to clear operating reserves from renewable sources, congestion would prevent them from making it to market in most cases. Thus, allowing procurement would create a reliability issue and payments to unhelpful resources, FERC decided.
The commission also agreed with MISO that it’s far more lucrative for renewable resources to provide energy over ancillary services.
Lastly, FERC said SEIA’s arguments differed from the commission’s previous regulations requiring open access transmission service and establishing separate performance and capacity payments for frequency regulation service, and its ruling against the undue discrimination of electric storage resources.
“Those orders did not require that every resource type must be allowed to provide such services,” FERC said.
FERC said though it’s “undisputed” MISO’s tariff treats renewable and nonrenewable resources differently with respect to ancillary services, SEIA didn’t prove that renewable and nonrenewable resources are “similarly situated” because when renewables are cleared to provide ancillary services, they’re trapped behind a transmission constraint.
As with their order blocking MISO renewables from providing ramp capability, Chairman Willie Phillips and Commissioner Allison Clements issued a joint statement to emphasize that the order was limited. The two said MISO’s market dynamics are set to change — and the snub likely will be temporary — as renewable energy becomes more prevalent.
“We strongly urge MISO to continue to improve and enhance the software on which its markets rely. Both MISO and the commission recognize the limitations of MISO’s current software, and the record suggests that these shortcomings are contributing to problems that go beyond [renewable] integration alone,” Phillips and Clements wrote. “We anticipate the continued development of these resources and encourage MISO to be ready for them as they come online.” They said MISO should devise ways to account for locational congestion in its software when selecting resources.
CAISO is planning ahead for a solar eclipse that will abruptly slash solar power across much of California the morning of Oct. 14.
CAISO successfully managed the drop in solar output during a total eclipse on Aug. 21, 2017. But since then, grid-scale solar within the CAISO footprint has increased from 10,000 MW to 16,500 MW. (See Grid Operators Manage Solar Eclipse.)
And behind-the-meter solar has grown from 5,700 MW to 14,350 MW.
“The October 2023 eclipse will be more impactful than the 2017 eclipse because of the growth in solar capacity since 2017,” CAISO said in a technical bulletin issued last week.
In response, CAISO has scheduled a series of meetings — including a workshop on Sept. 5.
Outreach to Western Energy Imbalance Market entities is planned, as CAISO said coordination across the WEIM is critical to ensure optimal market dispatch during the eclipse.
CAISO is planning additional reserve procurement, a step it also took to prepare for the 2017 eclipse. The ISO will consider restricting maintenance operations around the time of the eclipse, to reduce the risk of an “inadvertent issue” occurring during maintenance work.
Another option would be to implement a Flex Alert or activate demand response programs during the eclipse. CAISO said it probably won’t need to do that, “due to the eclipse occurring on a weekend when loads are typically lower.”
Blocking the Sun
During the so-called Great American Eclipse in August 2017, grid-connected solar generation in CAISO territory dropped by more than 3,500 MW in about an hour. CAISO replaced the lost solar power with electricity from imports, hydropower and natural gas power plants. Consumers conserved electricity during the eclipse to relieve stress on the grid.
The 2017 eclipse was on a Monday, from about 9 a.m. to noon in California.
In contrast to that eclipse, the event on Saturday, Oct. 14, will be an annular eclipse, in which the moon will block much of the sun but leave an outer ring.
Large parts of Oregon, Nevada, Utah and New Mexico, and small parts of California and Arizona, will see the maximum impact of next month’s eclipse, with about 90% of the sun obscured. Much of California will see lesser amounts of sun obscuration, in the 70% to 80% range.
The Oct. 14 eclipse will last from about 8:05 a.m. to 11 a.m. in CAISO territory. At the peak, around 9:30 a.m., grid-scale solar generation will drop to 12% to 23% of capacity, CAISO said. Solar production won’t be completely cut off, but will fall to a low of about 3,023 MW at 9:26 a.m.
Output will also be reduced for behind-the-meter rooftop solar, leading to increased load. The maximum impact to load will be a 4,843-MW increase at 9:15 a.m., compared with normal clear-sky conditions, according to CAISO’s forecast.
Because the eclipse will occur on a Saturday, loads will be lighter than they would be on a weekday.
Ramp-up Concerns
One of CAISO’s concerns is the steep ramp up in solar power after the eclipse peaks. The eclipse will end just as solar sites are reaching their midday production maximum, the ISO noted.
“The period after the eclipse maximum to the end of the eclipse … is the period of operational interest the CAISO will study to ensure adequate supplies of generation [reserves] are available to mitigate any adverse effects of the anticipated steep up-ramp in solar production,” CAISO said in its technical bulletin.
CAISO said it will coordinate with hydro and battery resources to help with potentially large ramps.
The bulletin models eclipse impacts on a clear-sky day, which CAISO said represents a “high impact” scenario. Impacts will be less if Oct. 14 is a cloudy day.
CAISO plans to send out messages through its market notification system before and during the event.
“This message is to serve as a reminder that the solar eclipse will take place on Oct. 14, 2023, from 8:05 to 11:05 PDT,” one sample message reads. “This is a unique event for the ISO BA, during which approximately 9,700 MW of solar generation will rapidly go away and then return within the span of less than three hours. Your cooperation and support throughout the event will help to ensure grid reliability.”
In light of stressed-out supply chains and a bogged-down study process, MISO has agreed to re-evaluate its rules around commercial operation dates in its interconnection queue.
Stakeholders and staff plan to discuss extending the grace periods around commercial operation dates at upcoming meetings of the Interconnection Process Working Group (IPWG).
MISO policy requires its interconnection customers’ generator interconnection agreements (GIAs) contain a commercial operation date that’s within three years of the date originally requested in their queue applications. MISO additionally allows an up to three-year extension of the commercial operation date in the initial GIA. When customers can’t meet either, MISO can terminate the GIA and generator developers lose their place in line unless they can secure a waiver of their commercial operation dates from FERC.
Last week, EDP Renewables’ David Mindham said supply chain troubles and delays in MISO’s studies of generation projects mean that projects regularly take longer than the allotted six years from originally planned commercial operations and often require FERC waivers, which create uncertainty.
Mindham raised the issue at the Aug. 30 meeting of the Planning Advisory Committee, which ultimately assigned the issue to the IPWG for consideration.
Mindham said MISO should consider extending its COD deadlines in its Tariff so they’re feasible. He said transmission owners often don’t have network upgrades ready until well into the second extension. Mindham said current wait times for equipment like breakers can last three and a half years and “eat away at the three-year grace period.”
“There are dozens of these projects that will require FERC waivers. This problem doesn’t seem to be going away. If anything, it seems to be getting worse on the transmission owners’ end, and it’s going to take several years for that to get caught up,” he said. “… The commercial operation date should have some meaning. It should be a date that developers can reasonably meet.”
Multiple MISO interconnection customers have sought commercial operation date waivers with FERC since the pandemic began and strained supply chains. Mindham said an extension could cut down on the need for developers to seek future waivers.
LAS VEGAS — The stars may not yet have aligned in favor of CAISO in the contest to bring an organized electricity market to the West, but key players in the industry appeared to be doing just that last week at an ISO event to celebrate the progress of its Extended Day-Ahead Market (EDAM).
Wednesday’s EDAM Forum at Resorts World on the Las Vegas Strip attracted 240 in-person attendees and about 300 participants online, a CAISO official said. The packed agenda included a CEO roundtable, a panel of Western utility commissioners, an in-depth presentation on potential EDAM benefits and a discussion about evolving markets in the West.
The ISO convened the forum just a week after CAISO submitted to FERC its EDAM tariff and associated day-ahead market changes designed to increase rewards for flexible resources and reduce load imbalances between the day-ahead and real-time markets. (See CAISO Files EDAM Proposal with FERC.)
And, accidentally or not, the event also coincided with two important developments.
The first was a notice issued by the coalition of utility regulators who this summer proposed the creation of a Western RTO that would be independent of CAISO’s governance while still building on the ISO’s Western Energy Imbalance Market (WEIM) and the EDAM. The document outlined an aggressive timeline for developing the governing framework and seating a board of directors for the new entity, signaling that the backers are moving urgently to build a market structure that ensures the participation of California and increases the likelihood of a single, seamless Western market. (See Backers of Independent Western RTO Seek to Move Quickly.)
The second was the Balancing Authority of Northern California’s (BANC) announcement that it will advise its publicly owned utility members to join the EDAM over SPP’s competing Markets+ day-ahead offering. Accompanying that was a parallel announcement that the board of BANC’s largest member, Sacramento Municipal Utility District, approved the utility’s request to join the EDAM. (See BANC Moving to Join CAISO’s EDAM.)
Scott Miller, executive director of the Western Power Trading Forum, expressed surprise at what he saw at the event.
“This really changes the calculus of my thinking around” Western markets development, Miller told RTO Insider immediately after the forum concluded.
“It was the general positivity — even from CEOs whose folks are involved in Markets+ — that struck me as interesting,” Miller said later in an email. “The fact that a ‘shared governance of EDAM with CAISO’ might be acceptable was a bit of a shift, although the shared governance might prove a problem in an RTO setting where transmission operations are turned over to the RTO.”
‘Tremendous Benefit’
During the CEO roundtable, Pacific Power CEO Stefan Bird explained why the utility’s parent, PacifiCorp, the first entity to join the WEIM in 2014, also decided to become the first participant in the EDAM.
“We want to use as much renewable power that’s free — has no fuel cost — as much as possible and avoid those emissions,” he said.
“I was part of that group running around the West, I don’t know, 10-plus years ago, and dreaming about … how cool it would be if we could just coordinate better and be more efficient in how we leverage the abundance that we have across the West, and so proud of how far we’ve come and excited about the next steps,” Bird said.
Idaho Power CEO Lisa Grow offered “profound thanks” to CAISO for developing the EDAM.
“I have been in this industry for 36 years, and I have participated in every single effort we’ve had to create an RTO, or some sort of organized market, and we just never quite got there,” she said. “I think that the demonstration that we can take incremental steps is the only thing that we’ve seen work.”
Grow said the industry’s transition to clean energy will require the region to “optimize the system we have.” She also questioned whether there’s a need for a full RTO — at least in the near term.
Idaho Power doesn’t “have legislative or PUC-mandated things that we have to do towards an RTO, so we can kind of watch how this goes,” she said.
NV Energy CEO Doug Cannon gave a “shoutout” to CAISO for its responsiveness in developing a WEIM rule change that allows a participant that fails the market’s resource sufficiency test during a trading interval to acquire energy within the market rather than just being shut out.
“That’s a tremendous benefit,” Cannon said. “What we were concerned about is, you’ve got somebody who’s already kind of down. Why are we pushing them further down by not letting them get access to this broader market? Instead, as a West, let’s come together and give that person an option to pick [energy] up. Now, they have to carry their weight, they’ve got to pay the price, but let’s help them through that challenging time. And the California ISO came to the table and helped deliver product that really helped there.”
Jacob Tetlow, executive vice president of operations at Arizona Public Service, said “this summer has been incredibly challenging for us.” The summer featured a 30-day stretch of temperatures exceeding 110 degrees Fahrenheit in Phoenix, leading the utility to smash its previous peak load record of 7,600 MW by nearly 600 MW.
“To me, the Energy Imbalance Market is a very helpful tool. It creates liquidity in the market. It puts resources in that might not have otherwise been available. That’s an efficiency gain,” Tetlow said.
But Tetlow also cautioned that the WEIM can’t be relied on as a resource adequacy tool, given that the market’s operations cut some of APS’ hour-ahead schedules and low-priority transmission in July.
“So, it absolutely helps, but it can’t be the tool to make sure you’re resource sufficient for your customers,” he said.
“No market is actually a substitute for a solid foundation of resource adequacy,” said CAISO CEO Elliot Mainzer. “RA — that’s the bottom foundation layer. And that’s why it’s so important for all of us to be taking those steps to get to solid resource adequacy to meet those planning standards. The market really is an optimization tool.”
Mainzer pointed to instances in July and August when it was “kind of hot everywhere” in the West, and the bilateral day-ahead market did not provide enough liquidity to cover all the short positions heading into real time in the WEIM.
While some low-priority exports had to be curtailed, he said, “we were then able to work together to foster maximum liquidity into the hourly markets, and then we were able to sit there and watch the Energy Imbalance Market cycling power across the West, particularly most of it heading certainly not California’s direction, [but] at that point in certain places that were really on the edge.”
Solving for The ‘Future Everything’
Of the CEOs participating in the roundtable, the Bonneville Power Administration’s John Hairston was the most reserved in his assessment of CAISO, the WEIM and the EDAM.
While Hairston acknowledged BPA has seen benefits since joining the WEIM in 2022, he also alluded to a running complaint among Northwest hydroelectric producers that the market undervalues the attributes of their resources. He said the agency’s portfolio of 31 hydroelectric dams is a “foundational piece to the clean energy transformation” in the West because of its flexibility and lack of greenhouse gas emissions.
“Hydro is highly responsive, so as you add renewables to the resource mix, you’re going to have to have that instantaneous response,” he said. “And so how we manage the system and reserve it is going to be critically important. And how we also allocate it to markets — participate in markets — will also allow us to figure out how to optimize this incredible resource for attacking climate change and dealing with meeting these renewable portfolio requirements in the most efficient manner.”
When BPA this summer embarked on a public process to determine whether to join the EDAM or Markets+, it signaled that its near-term decision on a day-ahead market could hinge on a longer-term evaluation of joining an entity that — unlike CAISO — promises a governance structure that meets the federal agency’s statutory requirement for independence. (See Regulators Propose New Independent Western RTO.)
“When we joined EIM, we were really clear,” Hairston said. “We came out of our public process and said the governance structure was sufficient but wasn’t preferred. The joint authority model [with the CAISO and WEIM boards sharing decisional authority] has worked, but at the end of the day is not independent, and that’s what we’re looking for in this next step.”
Hairston said he “applauded” Western regulators for putting out an independent RTO proposal “that has some legs,” but said the process will be “complex.”
“We need answers now around governance,” he said.
“I get that we have unanswered questions,” Grow said. “I think we have to be careful not trying to solve for the future everything, because it will collapse under its own weight.”
“The governance issue is a tricky one,” said Jim Shetler, general manager of BANC, which sits squarely inside CAISO as a separate BA. “I like to say we’ve lived in the belly of the beast for the last 25 years and we’ve learned to figure out how to manage that.”
“I also like to say I think the ISO today is a very different animal than the ISO 20 years ago. Clearly a much more collaborative organization,” Shetler said.
Mainzer attempted to drive that point home in his remarks wrapping up the forum.
“We’re just super-motivated to make sure that people feel that they can walk away from a CAISO stakeholder process and say, ‘Look, that is really fabulous, and we feel heard, and we feel acknowledged,’” he said.
He also gave a nod to the regulators’ RTO proposal, acknowledging that for many Western stakeholders, the “pathway to independent governance is a critical success variable.”
“And I’m just appreciative of the work of our regulatory community, to start taking this issue on with seriousness and obviously recognize the importance of getting the right people at the table, open and transparent,” he said.
