Below is a summary of the agenda items scheduled to be brought to a vote at the PJM Markets and Reliability Committee on Wednesday. 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.
Consent Agenda (9:05-9:15)
B. The committee will be asked to endorse proposed revisions to Manuals 1, 13 and 36 associated with future energy management system (EMS) updates and to meet NERC certification requirements.
Endorsements (9:15-10:50)
3. Manual 11 Revisions (9:15-9:40)
PJM’s Joey Tutino will present proposed revisions to Manual 11: Energy & Ancillary Services Market Operations as part of a periodic review. The committee will be asked to endorse the revisions.
4. Renewable Dispatch (9:40-10:05)
PJM’s Darrell Frogg will review a proposal on renewable dispatch, which aims to increase visibility on what the relevant resources can be dispatched down to. (See “PJM, Monitor Present Renewable Dispatch Proposal,” PJM MRC/MC Briefs: March. 22, 2023.)
A. Tom Hoatson of LS Power will present a problem statement, issue charge and solution that would modify when generators are subject to Capacity Performance penalties and how much they could owe.
B. Lynn Horning of American Municipal Power will present an alternate solution that would use the locational deliverability area clearing price under the Base Residual Auction to calculate penalties in lieu of the net cost of new entry.
C. Independent Market Monitor Joseph Bowring will present an alternate issue charge and solution that would link penalties to BRA clearing prices.
Aspects of PacifiCorp’s (NYSE:BRK.A) transmission formula rate protocols limit transparency and the ability of interested parties to obtain information, FERC said Thursday in its latest ruling on last year’s show-cause orders for five Western utilities to correct deficiencies (EL22-38).
Formula rate protocols provide customers and regulators with the ability to review and challenge formula rates for transmission service. In PacifiCorp’s case, FERC found its protocols failed to adequately define the term “interested party,” which partly determines who can participate in the formula rate information exchange.
“Without such a definition, PacifiCorp’s formula rate protocols may not provide sufficient clarity and may provide PacifiCorp with the discretion to determine who is an interested party, and therefore appear to be unjust and unreasonable,” FERC said in April 2022. It ordered PacifiCorp to justify its protocols or explain how it can alleviate the commission’s concerns. (See FERC Opens Probes on Western Tx Rate Protocols.)
The commission also found a lack of transparency in the utility’s protocols because they do not “do not require PacifiCorp to make a posting of the docket number assigned to its informational filing on its website.”
PacifiCorp challenged both assertions. It argued that its protocols “contain a clear definition of ‘interested party’ because the preamble to the protocols states that ‘interested party’ means ‘a transmission customer of PacifiCorp, a state commission in a state where PacifiCorp serves retail customers, any entity having standing in a [FERC] proceeding investigating the formula rate … and [FERC] staff.’”
FERC said that was insufficient. “The definition is limited to only those entities listed and also fails to include entities such as consumer advocacy agencies and state attorneys general,” it said.
PacifiCorp also challenged FERC’s finding that the utility’s protocols “do not require [it] to make a posting on its website.” It argued that it posts its annual update on its Open Access Same-time Information System (OASIS) website, pursuant to its protocols, which require the utility to put its annual update “in an accessible location” on its OASIS site.
FERC said that too was not enough. The utility’s protocols must contain a specific provision for “posting on its website.”
“Lacking such a provision is inconsistent with [an order in which] the commission directed MISO to provide notification of its informational filing through the email ‘exploder’ list to be maintained by MISO, and by posting the docket number assigned to each transmission owner’s informational filing on the MISO website and OASIS within five days of such filing,” FERC said.
“PacifiCorp’s protocols do not contain a provision that requires PacifiCorp to post the docket number assigned to its informational filing on both PacifiCorp’s website and OASIS within five days of such filing,” the commission continued. “We find that posting the docket number assigned to PacifiCorp’s informational filing on PacifiCorp’s website, in addition to its OASIS site, is necessary to provide transparent access to the informational filing to interested parties that may not be familiar with PacifiCorp’s OASIS site.”
FERC ordered PacifiCorp to file a compliance filing within 30 days with proposed tariff revisions to rectify the shortcomings.
The four other utilities named in last year’s compliance filings were Idaho Power, Public Service Company of Colorado, Public Service Company of New Mexico and Puget Sound Energy. FERC accepted tariff revisions from Idaho Power, PSCo and PSE, subject to further compliance filings, and concluded its proceedings against PNM. (See PSCo, Idaho Power Comply with Show-cause Order.)
The five cases are the latest in a series of numerous proceedings that FERC has initiated to investigate formula rate protocols since 2012, when it ordered MISO transmission owners to “file revisions to their formula rate protocols regarding the following areas of concern: the scope of participation (i.e., who can participate in the information exchange); the transparency of the information exchange (i.e., what information is exchanged); and the ability of customers to challenge transmission owners’ implementation of the formula rate as a result of the information exchange (i.e., how the parties may resolve their potential disputes).”
The commission has repeatedly stressed the importance of ensuring the formula rate protocols meet those standards.
“The commission permits transmission service rates to be established through formulas,” FERC explained in its April 2022 show-cause order to PacifiCorp. “Under a formula rate, the formula itself is the rate, not the particular components of the formula.”
TOs adjust the formula inputs yearly, requiring “safeguards … to ensure that the input data is correct; that calculations are performed consistent with the formula; that the costs to be recovered in the formula rate are reasonable and were prudently incurred; and that the resulting rates are just and reasonable,” FERC said in the show-cause order.
Formula rate protocols “provide transmission customers with specific procedures for reviewing and challenging rates,” the commission said. “In order to fulfill this purpose, formula rate protocols must afford adequate transparency to affected customers, state regulators or other interested parties, as well as provide mechanisms for resolving potential disputes. Formula rate protocols therefore play an important role in ensuring just and reasonable rates.”
FERC on Thursday denied Tenaska’s rehearing request over the alleged curtailment of its Clear Creek Wind Farm, maintaining that the company did not provide sufficient evidence (EL22-59).
Tenaska alleged that SPP, MISO, Associated Electric Cooperative Inc. (AECI) and the Tennessee Valley Authority adopted operating guides that resulted in unduly discriminatory curtailment of the Missouri wind farm it owns and operates. FERC disagreed, denying the complaint in December. (See FERC Denies Tenaska’s Complaints over Wind Curtailments.)
The developer argued that FERC lacked substantial evidence to conclude that the operating guides limit the wind farm pending network upgrades assigned to Tenaska. It said the commission’s conclusion was a “post hoc rationalization” and asserted that the order was an unexplained departure from precedent, relying on SPP and AECI documents as supporting the operating guides.
FERC said that it was not persuaded by Tenaska’s argument, saying it was up to the complainant to present evidence supporting its assertions that the curtailments were unjust and unreasonable, unduly discriminatory or preferential, or inconsistent with the operators’ tariffs. It pointed out that SPP and AECI said the curtailments were consistent with congestion requiring network upgrades assigned to Tenaska and the reason behind the project’s limited operation status.
Tenaska’s argument that the original order was inconsistent with precedent was “misplaced,” the commission said. It said Tenaska’s reliance on Iberdrola v. Bonneville overlooked the fact that the curtailed wind generators in that proceeding “were not responsible for incomplete network upgrades.”
The commission found the project’s curtailments after the required upgrades were identified in an SPP restudy were consistent with the RTO’s generator interconnection procedure (GIP) and not unduly discriminatory.
“Adopting Tenaska’s position would be inconsistent with the structure set forth in the text of SPP’s GIP … and the purposes underlying that provision,” FERC wrote.
The commission said if Tenaska believed that FERC erred because there were curtailments prior to a subsequent restudy that was not justified, it was incumbent on the developer to identify the relevant curtailments and demonstrate that alleged error. “It did not do so,” the commission said.
Facilities Agreements Approved, Rejected
The commission on Tuesday accepted SPP’s unexecuted facilities service agreement (FSA) that the grid operator filed for a 102.6-MW wind farm in West Texas (ER23-342).
SPP, the transmission provider, filed the generator interconnection agreement last year on behalf of transmission owner Southwestern Public Service (NASDAQ:XEL) and interconnection customer Panhandle Solar.
Panhandle protested the GIA’s 20-year term, saying it had proposed a three-year term that SPP rejected. It said that when an interconnection customer is willing to pay the money back faster, a longer term imposes added and unwanted financing costs that are not just and reasonable and merely serve to enrich the interconnecting TO’s shareholders. Panhandle said the 20-year FSA would double the overall amount it paid for the network upgrades under the GIA.
The commission found that the 20-year term was consistent with MISO’s pro forma FSA that FERC had previously approved as just and reasonable. It said that 20 years allow SPS to recover its return of and on capital invested in network upgrades based on the term over which the utility will likely provide interconnection service to Panhandle. It also gives Panhandle a shorter period to pay depreciation expenses than the recovery period based on useful service life, FERC said.
“We find it reasonable to expect interconnection service under the Panhandle GIA to match or exceed 20 years,” the commission said.
FERC noted that Panhandle acknowledged that the “initial terms of GIAs often do extend 20 years … based on how long the generating facility in question is expected to operate.” They pointed out that Panhandle had not expressed any intention to take interconnection service only over the GIA’s initial 10-year term.
FERC also on Tuesday rejected an FSA filed by SPP last year, this one for TO ITC Great Plains and interconnection customer Pixley Solar Energy (ER23-155).
The commission found the agreement to be unjust, unreasonable and unduly discriminatory or preferential. It disagreed with ITC’s assertion that the Mobile-Sierra doctrine, which mandates respect for private contracts by shielding them from regulatory interference except when necessary in the public interest, applied to the FSA as executed.
FERC said the ordinary just-and-reasonable standard applies when the parties “explicitly reserve their rights to seek modifications to their contracts,” indicating that they “specifically negotiated and contemplated that their contracts could be modified” based upon the ordinary J&R standard.
“Those findings apply here,” the commission said, pointing to the FSA’s language that states “nothing in this service agreement shall limit the rights of the parties or of FERC under Sections 205 and 206 of the [Federal Power Act] and FERC’s rules and regulations thereunder.”
The commission also said ITC’s recovery of additional expenses that included an allocated portion of its operations and maintenance expenses was not justified and that certain references and calculations in the formula rate lacked transparency and were inaccurate.
FERC rejected the FSA without prejudice, offering guidance to SPP and ITC in refiling the agreement.
Commissioner James Danly dissented, saying the other three commissioners failed to recognize and address the fact that under FERC’s “fairly recent precedent, system protection facilities may be network upgrades” in the SPP footprint.
ISO-NE is studying line upgrades and new 345-kV and HVDC lines to address expected reliability violations in its 2050 Transmission Study.
Associate engineer Reid Collins briefed the Planning Advisory Committee April 20 on potential solutions for transmission overloads in Vermont and on north-south lines leading to Boston.
The RTO presented an initial round of proposed solutions in Boston and southwest Connecticut in December 2022.
Planners are primarily seeking solutions for scenarios that include a 2050 winter peak load of 51 GW. Some parts of those fixes also are expected to address needs in 2035 and 2040. The RTO is also considering additional solutions for a “high winter” 2050 peak of 57 GW.
Vermont Solutions
Planners are looking at three potential solutions for overloads resulting from large power transfers towards the Burlington area in northwestern Vermont.
Although many of the overloads can be resolved by rebuilding overhead lines, several underground or underwater sections would be very costly or difficult to rebuild, such as the PV-20 115-kV line running under Lake Champlain to Plattsburgh, New York, which cannot be fixed with the equipment that currently controls its flows.
The potential solutions are:
Upgrade the PV-20 line from New York from 115 kV to 230 kV and build a new 115-kV line parallel to line K43. The underground and underwater segments of PV-20 are already built for 230 kV; only overhead segments would need to be upgraded. Collins said this would likely be the cheapest solution — involving the fewest miles — and could improve NYISO-ISO-NE transfer capability, reducing resource curtailments in northern New York. But it would be complicated by requiring construction in New York.
Build a new 345-kV line from Coolidge to Essex, which would limit construction to New England and avoid many overhead rebuilds and the most difficult underground rebuilds. However, it would involve significantly more new construction than other solutions, at a higher cost, even though much of the new transmission could follow existing rights-of-way.
Build a new 345-kV line from New Haven to Essex and a new 230-kV line from Granite to Essex. It would avoid many overhead rebuilds and most underground rebuilds and be limited to New England while requiring less new transmission construction than the Coolidge-Essex solution. But it would require the addition of two new transformers, rather than one, at Essex. It also would limit the use of the Granite 115-kV PARs to control flow on the existing 230-kV lines in Vermont and New Hampshire.
North-South Solutions
Many of the major lines running from Maine and New Hampshire into Massachusetts face overloads from excess generation in the north and large loads in southern New England.
In the primary solution set, and in the 2035 and 2040 solution subset, all the overloads can be fixed with rebuilds. In the 57 GW scenario, many of the overloads would be too severe to be addressed by rebuilding.
The potential solutions include:
Re-route lines 375 and 3038 to avoid Surowiec and go straight from Maine Yankee to Buxton with a new 345-kV line for Surowiec-Timber Swamp-Ward Hill. A second 345-kV line for Timber Swamp-Ward Hill might be needed to fix the high winter scenario. In addition to reducing the need for rebuilds on existing lines, the new 345-kV line across major interfaces should improve voltage and stability performance. However, right-of-way (ROW) for some segments of the project would be cramped, and it would result in increased reliance on a single 345-kV ROW for moving power north to south.
Add an HVDC line between the Surowiec 345-kV line and the Mystic 345-kV line. The solution also requires re-routing of lines 375 and 3038 to form a new Maine Yankee-Buxton 345-kV AC line. It would resolve many of the north-south transfer and Boston import issues while avoiding increased reliance on a single 345-kV ROW. This solution, combined with several 345-kV line rebuilds would solve north-south overloads as well as most Boston overloads in the primary solution set as well as the 2035 and 2040 solution subset. But additional solutions — possibly multiple point-to-point or offshore network HVDC lines — will be needed to meet the high winter peak for 2050.
HVDC lines between Orrington or Surowiec, Maine, and Ludlow or Manchester, Vermont also are being tested to address north-south and east-west constraints in the high winter scenario. Although it would fix “significant numbers” of north-south overloads, it would not solve the Boston import issues, and the lengthy line could be expensive and difficult to site.
Boston Import Solutions
Boston is expected to experience import constraints during high flows into the area under both summer and winter peaks. Each season and each year studied found underground violations in at least some scenarios.
Planners project more overloads for the 2040 winter peak than for 2050 because the growth in wind injections into Boston will outpace the increased load.
Among the options being considered are:
Building an HVDC line from Ward Hill to Mystic, which would significantly reduce the number of overloaded underground elements in Boston without needing to upgrade them directly. It would avoid possible short-circuit impacts of new 345-kV AC lines. But it could be “quite expensive,” the ISO said, and finding space for HVDC converter stations near Ward Hill and Mystic could be difficult.
Adding a 345-kV AC line from Ward Hill-Wakefield Junction-Mystic could be cheaper than the HVDC option but it would be less effective at solving underground overloads in Boston.
To fix overloads on lines serving Boston from the south, planners are considering adding series reactors on the two existing Stoughton-K Street cables or adding a third Stoughton-K Street line, which would be more effective but also more expensive.
HVDC Line Configurations
The 2050 Transmission Study also is considering multiple options for HVDC lines, some with a point-to-point configuration (e.g., Surowiec-Mystic). “Others are implied through wind injections modeled as large generators at transmission-level buses,” the RTO said. Although the study is considering the lines individually, “it is also possible that these lines could be connected together to form an offshore grid,” the RTO added.
ISO-NE has hired Electrical Consultants Inc. to develop detailed cost estimates for some of the complex solutions. The RTO told ECI to avoid creating double-circuit towers, especially on the 345-kV network. The RTO also requested undergrounding lines as needed to avoid using eminent domain or displacing residents. It hopes to ease siting by placing new overhead lines along existing highway and railroad corridors.
“Detailed cost estimates will help to inform the region on both the costs and physical impacts of the projects examined,” the RTO said.
Next Steps
The RTO asked for feedback on the 2050 study presentation by May 5, with submissions to pacmatters@iso-ne.com.
Solution development work will continue through the end of this year in parallel with ECI’s cost estimates. The RTO’s next presentation will be in late summer or early fall, and a draft 2050 Transmission Study report is scheduled for release in November.
Asset Condition Projects
Also at the PAC meeting, National Grid (NYSE:NGG), Eversource Energy (NYSE:ES) and Vermont Electric Power Co. (VELCO) outlined plans to spend a combined $169 million on transmission line refurbishments:
National Grid plans to spend an estimated $138 million to replace 178 wood structures with new steel structures on its 115-kV transmission line between the Harriman #8 substation in Readsboro, Vt. and the Adams #21 substation in Adams, Mass., including this damaged wood utility pole. | National Grid
National Grid estimates it will spend $138.3 million on its 12-mile E-131 115-kV line between the Harriman #8 substation in Readsboro, Vermont, and the Adams #21 substation in Adams, Massachusetts, in an area with steep terrain. Constructed in 1925 and updated in 1971, it includes 209 structures, including a tap to the Bear Swamp substation. The company will install new steel structures to replace three lattice towers and almost 200 wood structures that showed signs of top splitting and woodpecker damage. The project, which will also include access road improvements, has an estimated in-service date in the third quarter of 2027.
Eversource will replace wood structures with light-duty steel poles on a 5.4-mile section of 115-kV lines 1132 and 1505 on a shared right-of-way between Canterbury Switchyard and Killingly Station and the Brooklyn Tap in Connecticut. “If you replace [some structures] with wood, the woodpeckers will just find the next piece of wood out there,” said Eversource’s Chris Soderman. The estimated cost is $13.4 million, and the proposed in-service date is the first quarter of 2024.
VELCO will replace 105 of 245 wood H-frame structures, most with steel H-frames, on its K43 115-kV line from Williston to New Haven. The 21-mile line was built in 1954 and originally operated at 69 kV. The cost is estimated at $16.9 million, and the company is targeting a 2026 completion.
The New York Public Service Commission on Thursday approved construction of a scaled-back version of Consolidated Edison’s (NYSE:ED) proposed Clean Energy Hub in Brooklyn.
Con Ed originally proposed the hub in April 2022 (20-E-0197) as a $1 billion landing point for 6 GW of electricity generated by the wind farms New York wants to build off its coast.
In December 2022, the utility supplemented that proposal with a smaller alternative that it framed as a step needed by mid-2028 to maintain reliability in the area amid rapid electrification of buildings and transportation. The cost was significantly lower, at $810 million: $773 million for the hub itself, and $37 million to prepare the facility to serve as a make-ready point of interconnection for 1.5 GW of offshore wind power.
The PSC unanimously approved the supplement Thursday as necessary to maintain electric reliability.
The commission also rejected the original hub plan — which was still alive — because there was no evidence offered to show that routing 6 GW of power to the hub is feasible. There was demonstrated interest from developers in doing so but no indication it is physically possible.
The proposal was attractive because of the scarcity of real estate to build such a facility in New York City. Con Ed proposed to build it on a site occupied by an office building and three retired gas turbine generation units, adjacent to its Farragut substation.
But objections were raised during the public comment period. Many questioned the feasibility of running multiple HVDC cables beneath the East River to reach the hub. Others said the hub was not the product of a competitive solicitation process, such as NYISO’s Public Policy Transmission Planning process, and therefore might not result in the lowest price tag, or the price tag least likely to change.
But the PSC unanimously approved the scaled-down version of the hub proposal, agreeing that it is the only potential solution to the projected needs in the area as the city and state press forward with their clean energy transition.
The PSC denied New York City’s request to delay a decision to await further analysis, saying the proposal is time-sensitive. It also rejected the city’s contention that the hub would not be cost-effective and would not promote resilience.
The hub is only the first of several 345-kV substations that will be needed in the city, the PSC countered. Installed generation capacity statewide is expected to double from 43 GW in 2019 to 90 GW in 2040, with much of the load growth in New York City. The commission determined that the cost of building the hub will be borne by Con Ed ratepayers, as it is designed for purposes of reliability of service to them.
If the hub’s benefits expand beyond Con Ed territory into the larger realm of the state’s climate protection goals, such as through offshore wind, the utility can petition for an alternative cost-recovery mechanism to spread the costs beyond its rate base, the commission said, but it said it is skeptical at this point that it would agree to such a change.
Commissioner John Howard focused on the costs involved, and noted that Con Ed has estimated it will need to spend $60 billion to prepare its service area for the energy transition.
He applauded the inclusion of the word “skepticism” in the order and suggested also that the city should not be allowed to reap a property tax windfall from all the infrastructure that will be needed in the next few decades.
A Department of Public Service staff member estimated the smaller $810 million hub would have a $48 million annual property tax bill.
PSC Chair Rory Christian said Thursday that New York state’s energy landscape is in a period of fundamental change and that infrastructure investments must keep pace with proactive planning.
“Priority has shifted to ensuring increased levels of renewable, clean sources are integrated into the grid while polluting sources are being phased out,” he said. “To make sure the system continues to serve customers with the level of reliability that our modern economy demands, we know that additions and modifications to the utilities’ transmission and delivery infrastructure will be needed, as well as equitable methods for recovering the costs of such additions.”
HOUSTON — The Gulf Coast Power Association’s annual spring conference April 18-19 revolved around how Texas and its coastal region can become a hotspot for energy innovation.
Anne Choate, executive vice president for energy, environment and infrastructure with consulting firm ICF, said the Gulf Coast can “further cement its goal as the innovative energy epicenter” of the world.
She said the region can impel clean energy infrastructure and long-term change for climate stabilization “in the same way we’ve been successful at repairing the ozone layer.” Choate said the industrial-heavy Gulf Coast has “powerful” potential in geothermal energy, carbon capture and green hydrogen technologies.
“It’s going to be a lot of work. We’re going to look like we’re gliding across the water, but we’re going to be paddling furiously underneath,” she said, saying it has the potential to make Silicon Valley look “quaint.”
“I think the Gulf region will be one of the most active regions, not just in the U.S., but globally, in carbon capture and sequestration,” predicted Frederik Majkut, senior vice president of carbon solutions at SLB New Energy.
Brett Kerr, Calpine’s vice president of external affairs, said a healthy carbon capture industry will require a nexus of a young workforce, academics and financial capital.
“I truly believe that carbon capture can do for the Gulf Coast what tech did for the Bay Area,” he said.
Kerr said the Inflation Reduction Act’s passage means that carbon capture now makes financial sense.
“It’s always been good policy, but for the first time it really makes good business sense to pursue these projects,” he said.
Kerr said when power generation has a carbon capture facility backfit, it becomes no different from a wind or solar resource, save for an “on/off switch.” He said firm delivery will make retrofitted gas plants attractive to buyers.
Mark O’Donnell, Occidental’s assistant vice president of power, said decarbonizing the region’s natural gas plants will undoubtedly take carbon capture and a conversion to green hydrogen. He warned that at ambient temperatures, it takes three times the amount of hydrogen to produce the same amount of energy generated by natural gas.
“It’s not like you can’t overcome hurdles, but carbon capture, you’ve seen it and it’s proven,” O’Donnell said.
Form Energy Senior Business Development Manager Molly Bales said long-duration storage can de-risk utilities’ increasingly renewable generation portfolios.
Bales said her company is pioneering a rechargeable iron-air battery capable of storing power for a little more than four days at costs on par with legacy power plants. She said the batteries cost about one-tenth of lithium-ion battery facilities. The iron-air batteries “breathe” in oxygen from the air and convert iron metal to rust when discharging; the process is reversed when charging, with an electrical current converting the rust back to iron while the battery expels oxygen.
Bales said Form Energy realized that the grid needs multiday storage to firm up renewables and navigate mounting multiday weather events.
“This is an opportunity to build a whole new ecosystem,” Bales said. Form is planning to build its first battery factory in Weirton, West Virginia, a former steel town.
Bales said Form could be eyeing Texas for such a factory as soon as 2025. “We’re really excited about what’s happening in the next few years,” she said.
Inflation, Interest Curbing New Assets?
Julien Dumoulin-Smith, head of U.S. power utilities and clean energy research at Bank of America Securities, said “rampant” inflation and increasing interest rates are complicating the outlook for new asset construction.
“It’s not over,” he said of stubborn inflation. “You heard it here first.”
Dumoulin-Smith, a frequent questioner during utility earnings conference calls, said investments in carbon capture and sequestration “should be taken seriously” while green hydrogen is “similarly quite real.”
“This stuff ain’t cheap, but $85 per ton does wonders on the cost,” he said, referring to the newly enacted tax credit for carbon capture and storage.
However, Dumoulin-Smith said capacity prices and resource adequacy’s costs “have gone from zero to 100” seemingly overnight.
“I think we’re heading materially higher,” he predicted.
Dumoulin-Smith said that he expects Texas, Oklahoma and Arkansas to be most affected by generation retirements as the Environmental Protection Agency ratchets up regulations.
“We see a litany of new EPA rules ahead that could impact the generation stack again,” he said. EPA’s proposed crackdown on coal ash through effluent-limitation guidelines stands to move the needle on retirements, Dumoulin-Smith said.
He said 2023 will be a “catch up” year for solar panel supply as it recovers from last year’s trade issues. He said interconnection queue wait times also remain a problem.
“Bottom line is, you need to be very skeptical about when these projects can get done,” Dumoulin-Smith said, stressing that companies must consider how much time and money it will take to get grid treatment versus situating resources on the distribution system.
Advances in Tx Capacity
LineVision CEO Hudson Gilmer said there is a “mismatch” between today’s grid needs and planned transmission that’s five-to 10 years away. He said even Texas, which typically gets lines built faster than the rest of country, lags on new transmission capacity.
Gilmer said LineVision uses non-contact sensors and analytics to employ dynamic line ratings that allow 30-40% more power to flow through lines. He said utilities don’t always have to use “disaster plan” line ratings.
Gilmer said bottlenecks in interconnection queues have led utilities to his company.
“While no one wants to be the first to deploy a new technology, when they see their peers adopting it … there’s a tipping point,” Gilmer said. He added that dynamic line ratings have had a perception problem, with fears they would “cannibalize” the need for new transmission lines. Gilmer said contrary to that belief, the grid needs new firm capacity, even with the assistance of dynamic line ratings.
“It’s not an either-or situation. It’s an ‘and’ situation,” he said.
Stephen Conant, vice president at startup VEIR, said his company focuses on overhead superconductors that can increase line capacity without expanding rights-of-way or increasing transmission tower heights. He said superconductors are at an “exponential” adoption stage, though he admitted the costs aren’t yet competitive with normal conductors.
“There’s a huge need to build transmission capacity, but it’s difficult to site, as some as you have experienced,” he told attendees.
Conant urged the audience to remember that at one point, it was difficult to imagine the development of 18-MW offshore wind turbines when compared to the 1.5-MW turbines that were once the standard.
“In the time it takes you to build your next transmission line, you’re going to be giving me a very serious look,” he said.
Speakers with Differing Market Views
Texas Public Utility Commissioner Kathleen Jackson said she believes the state’s energy future will come down to a blend of “a lot of little things,” not a singular technological solution. She urged attendees to focus on the “data, science and economics” when standing up new technologies.
Jackson urged Texas utilities to focus on energy efficiency and investing in new assets. She said the state’s growing population demands forward planning and making the most out of existing generation.
“We have 1,200 people coming to Texas each day,” she said. “Nobody is bringing power with them.”
Carrie Bivens, ERCOT’s Independent Market Monitor, said growing load uncertainty and renewables dominance in Texas means that ERCOT is currently making avoidable out-of-market commitments. She said she expects the energy-only market to effectively send price signals that stir respondents and said she doesn’t foresee a “fundamental” market breakdown on the horizon.
Former FERC chair Joseph Kelliher expressed disappointment during a keynote address over how RTO executives lead wholesale markets today.
“When I was at FERC, we expected RTO leadership to be more FERC-like. And I know that sounds obnoxious,” he said, explaining that grid operators should make unpopular decisions at times.
“I think some RTOs have become more dedicated to stakeholder consensus than they do toward market integrity,” he said. “I think some RTOs have lost their way, and that’s their current approach.”
Kelliher said capacity markets, especially those in the Northeast, are disappointing and producing suppressed prices that won’t support new generation entry. He said grid operators might consider scrapping the markets altogether and focus instead on long-term contracts.
GCPA Debuts ‘Power Pitch’
The GCPA conference featured a new concept in Power Pitch, where early-stage energy technology companies competed for a $5,000 award styled after the “Shark Tank” television show. Bodhi, a software app that offers real-time, personalized updates on homeowners’ residential solar projects, took the award home to Austin.
The judging panel consisted of three professional energy investors, with the audience weighing in via an interactive survey. Criteria included the presentation’s quality, potential impact on the industry, and the business model’s potential success. Judges asked about the comparative costs of new technologies, risks of being copied, ease of manufacturing and target customers.
Other contestants included:
Calwave Power Technologies, which plans to churn out submerged xWave boxes to harness the power of ocean waves and complement power output at existing offshore wind sites;
Criterion Energy Partners’ distributed geothermal system designed to be co-located on heavy industrial sites in Texas and Louisiana;
Revterra’s grid-synchronous, inverter-free kinetic flywheel battery that serves as a buffer between the grid and EV charging; and
Dash Clean Energy’s zero-emission hydrogen fuel cell storage facility, which is trying to ensure peaker plants can replace retiring older generation.
Houston-based energy startup incubator Greentown Labs vetted the contestants.
ISO-NE’s revised load forecast sees slower growth in the next few years because of economic turbulence, followed by accelerating growth from electrification.
The RTO’s draft 2023 Capacity, Energy, Loads, and Transmission (CELT) report, presented at the April 20 Planning Advisory Committee meeting, projects the RTO’s net winter 50/50 peak will hit 25,133 MW by 2031, a 10% increase over last year’s CELT projection for that year. The net forecast subtracts the impact of energy efficiency and behind-the-meter PV.
The RTO predicts a 2031 gross 50/50 winter peak — including BTM resources and passive demand resources that participate in the ISO-NE markets — of 27,646 MW, almost 7% above its 2022 forecast. For 2023, however, ISO-NE projects a gross winter peak of 22,053, almost 1% below the 2022 projection.
The summer forecasts for 2023 and 2024 also have been reduced from last year with the summer gross 50/50 forecast reduced by 1% in both 2023 and 2024.
New England’s projected economic growth (real gross state product) | ISO-NE draft 2023 Capacity, Energy, Loads, and Transmission report
The new report incorporates Moody’s February 2023 macroeconomic outlook, which projects the region’s economic output will be about 3% less than its previous forecast through 2032 because of the war in Ukraine, increased fossil fuel prices and the Federal Reserve’s interest rate increases to tame inflation. The final CELT report will be released May 1.
Lead data scientist Victoria Rojo told the PAC that the RTO expects winter loads to grow faster than summer loads over the next decade.
“In the outer years, you see a lot more growth [in winter] than you do in summer because now in our electrification forecast, we have both the heating and transportation components, which increased significantly over last year’s forecast,” she said.
By 2032, the 50/50 net load forecast shows the winter peak less than 800 MW below the summer peak. The 50/50 measure is a probabilistic forecast intended to be indicative of normal weather conditions in each season. “So if, for example, you had a summer with cooler than normal summer weather conditions, and in that same year, you have a winter with more extreme than normal winter weather, it’s possible that you can see a winter peaking system much sooner than our 50/50 forecast would dictate — possibly even by the end of the forecast horizon,” Rojo said.
RTO system planners have made no major changes to the specification of the summer/winter demand forecast models since CELT 2020, Rojo said. However, methodologies for both the heating and transportation electrification forecasts have been updated since CELT 2022.
“On the heating side, we’ve completely overhauled our methodology. And on the transportation side, we’ve made some more targeted updates to pieces of the methodology,” Rojo said.
For heating, the RTO changed how it performs demand modeling, as well as how it forecasts the adoption of electrification. It includes a greater variety of building types and technologies through use of the National Renewable Energy Laboratory’s residential and commercial real estate stock data sets.
Planners are now including the impacts on commercial real estate “whereas in the past forecasts, we focused exclusively on the residential sector,” Rojo said.
Residential properties are forecast to adopt electrification at different rates depending on their current heat source, with oil-heated homes transitioning faster than propane and natural gas properties lagging both.
The RTO’s forecast shows faster adoption of full heating electrification in the commercial sector while the residential buildings are expected to see more partial heating electrification.
“It’s easier to install a ductless mini-split heat pump … especially when you have buildings that have [hot water] systems that have no ductwork [for heating or air conditioning],” Rojo said. “It’s easier to just do the partial application, which can be a room or zone in the house.
“The expectation is that when a business … chooses to electrify a building, they’re doing it as more of a business decision versus just kind of taking advantage of certain incentives [available to residential homeowners]. It’s more of a business choice, and it’s more likely to be a whole business transition,” she added.
FERC on Thursday approved revised rate schedules for two American Electric Power (NASDAQ:AEP) affiliates in Ohio to remove their RTO participation adders (ER23-855).
The order stems from a complaint filed last year by the Ohio Consumers’ Counsel (OCC) arguing that because state law mandates that transmission owners in the state participate in an RTO, the utilities should not be eligible for the adder. The commission agreed in December, requiring AEP to make a compliance filing recalculating its returns on equity for the affiliates without the RTO adder. (See FERC Orders Two Ohio Utilities Ineligible for RTO Adder.)
Under the new language, AEP affiliates Ohio Power and AEP Ohio Transmission would lower their ROE from 10.35% to 9.85% under the filing and revise the PJM tariff to specify that the adder does not apply to those companies.
The commission also approved a proposal in AEP’s filing to add language to the tariff stating that the companies have the right to receive refunds should federal courts invalidate the Ohio law, noting that there are pending lawsuits challenging the legislation on the grounds that it may pre-empt the Federal Power Act.
The OCC protested the filing, arguing that the notice provision asserting the right to collect refunds should not be approved, arguing it is out of scope, premature, and a violation of the filed-rate doctrine and rule against retroactive ratemaking.
AEP countered that the provision does not violate the filed-rate doctrine because it provides notice of a potential future rate change, which has been upheld by past court rulings. The commission agreed.
“If the commission’s determination in the December order is overturned, the inclusion of the notice provision provides sufficient notice under the filed-rate doctrine to permit Ohio Power and AEP Ohio Transmission to surcharge customers,” FERC wrote.
NextEra Energy (NYSE: NEE) is continuing its efforts to salvage the only competitive regional transmission project MISO has recommended in its South region, filing a request last week at FERC to stay the commission’s recent order that formally terminated the project.
NextEra Energy Transmission Midwest (NEET) requested on Monday both a rehearing and a stay of FERC’s March order that allowed MISO to abandon the $115 million, 500-kV Hartburg-Sabine Junction project in East Texas (ER23-865). MISO approved the project in 2017 but determined last year that the project’s benefits faded after recent generation additions in the region. (See FERC Rejects Last-ditch Effort to Save Tx Project.)
NEET said the stay is necessary while it “fully exercises its right to judicial review” of not only the March order but also its pending appeal of Texas right of first refusal legislation that prompted MISO’s re-evaluation of the project.
The 5th U.S. Circuit Court of Appeals last year ruled that the state’s 2019 law giving incumbent transmission companies the first rights to build new power lines is unconstitutional. Texas has petitioned the U.S. Supreme Court to review that decision. (See Texas Petitions SCOTUS to Review ROFR Ruling.)
NEET said it is likely to succeed in the case and maintains that FERC’s cancellation of the project was premature.
“Absent a stay of the commission’s order, the project will be removed from MISO’s regional transmission planning models and cannot easily be reinstated, regardless of whether NEET Midwest prevails on rehearing or on appeal,” NEET argued. “Granting a stay will avoid imposing these substantial and irreversible consequences on NEET Midwest and will not unduly harm third parties.”
The transmission developer said MISO will likely remove the project from planning models for its interconnection queue and 2024 Transmission Expansion Plan (MTEP) cycle, which will begin later this year.
“Once removed from MISO’s MTEP and generator interconnection planning models, it will be difficult, if not impossible, to reinstate the project, particularly given the disruptions and delays to MISO’s annual transmission planning and interconnection studies that reinstatement will likely cause,” NEET said.
The NextEra subsidiary added that interconnection customers are unlikely to be harmed if the project is kept in planning models because no generation projects currently rely on it for grid access. NEET said scrubbing the project from MISO “prior to final resolution of the legal issues surrounding it” may require customers to pay abandonment costs.
The developer said it’s at a point where it has spent significant money to participate in MISO’s competitive bidding process and to develop the project, but that it may be unable to recover even a portion of its costs.
NEET argued that FERC simply took MISO at its word that keeping the project on its books would distort transmission planning. It said the grid operator’s tariff language triggering a project’s re-examination is more prescriptive and includes “reliability- or service-related issues that may ‘be jeopardized as a result of the delay.’” The developer pointed out that MISO continues to incorporate the unfinished Cardinal-Hickory Creek line in the Midwest that was first recommended in 2011 in its models.
It also said FERC should have more seriously weighed not taking immediate action on the project while the Texas ROFR litigation is pending.
Opponents of a natural gas compressor station made a long-shot bid to close the facility in oral arguments Thursday at the D.C. Circuit Court of Appeals that focused on FERC’s handling of environmental justice concerns.
The compressor is part of Algonquin Gas Transmission’s $627 million Atlantic Bridge Pipeline Project, which expanded capacity into the area.
The commission approved the pipeline expansion, including the compressor, on a peninsula in the city of Weymouth, Mass., in early 2017. In September 2020, the compressor station had two unplanned releases of natural gas, leading a number of groups to ask FERC to reconsider the project.
The commission then took the rare step of asking for briefings on the environmental justice impacts of the compressor after the certificate had been granted and upheld on appeal to the D.C. Circuit.
In an order dealing with those briefings issued in January 2022, FERC let the project keep its certificate. However, then-Chair Richard Glick said he thought the earlier order was likely a mistake, though it could not legally be overturned as the time for rehearing had passed and the D.C. Circuit had upheld that initial decision.
“Although it is cold comfort for the residents near the compressor station, I hope that this proceeding will serve as a turning point for the commission as we work to better consider, address and act on issues of environmental justice,” Glick said during the 2022 briefings.
The attorney for Fore River Residents Against the Compressor Station, Michael Hayden of Morrison Mahoney LLP, told the three-judge panel Thursday that FERC’s decision on the briefings was a “Pyrrhic victory.”
Since then, Glick was denied a nomination hearing before the Senate, which means FERC is more prone to deadlock on such cases with two members from each party, he added.
“I recognize it is a mountainous uphill climb for my clients [to] expect any change to occur before FERC,” Hayden said. “So we don’t expect it to happen voluntarily. It is only going to happen through the influence of the courts.”
The judges asked questions focusing on the same procedural issues that FERC said tied its hands in reviewing the environmental justice concerns. Chief Judge Sri Srinivasan noted that Hayden and his clients were not challenging the 2020 order that authorized an extension of the project’s certificate, but only the order on briefs that also dealt with the rehearing on the extension request.
FERC granted an extension request to the Atlantic Bridge project just 34 minutes after receiving it in the days following Christmas 2018, through an order issued by a staffer. Hayden complained that stopped his clients and others from even having a chance to challenge the firm’s request for an extension.
FERC attorney Jared Fish noted that the staff was in a position to act because it had been monitoring the project’s efforts to get state permits, which were also heavily litigated and delayed. The entire commission later confirmed that order, giving opponents a chance to weigh in on the merits of the extension. But they did not seek rehearing of that order, instead challenging the 2022 order on the briefings.
That 2022 order was an “unusual animal” that constituted a rare third round before the commission, Judge Patricia Millet said.
“I feel like it’s … a little unfair to put on them not to know how to challenge it,” she said.
FERC effectively asked the towns and residents to make their case; the commission seemed to agree with them; but then nothing was changed, Millet said.
“I credit FERC for having done the work and professed its need to change going forward,” Millet said. “But … real people are getting lost in the technicalities of all of this.”
Fish said the problem was that the petitioners asked FERC to reopen its decision granting a certificate, which is not something that it was legally able to do as the 60-day rehearing period had long ended and the court had already upheld the decision.
“You ask for new evidence, new briefing arguments about events that post-date the facility coming online, but it’s not a reopening?” said Millet. “How is it not a reopening?”
Fish answered that FERC was looking for information to determine whether Algonquin was still in compliance with its certificate based on the unintentional releases of natural gas and other new information such as COVID’s impact on environmental justice communities. The commission ultimately found no credible allegation that Algonquin was out of compliance with its certificate order or other permits, he added.
