Page 289 – RTO Insider

May 9, 2023June 14, 2023

NEPOOL PC Briefs: May 4, 2023

Historically Warm Last Winter

ISO-NE COO Vamsi Chadalavada on Thursday told the NEPOOL Participants Committee that New England’s overall energy demand was down during the past winter, coming in at approximately 29,300 GWh, compared to the 31,600 GWh average since 2010.

This is the lowest winter energy total reported by ISO-NE going back through 2010, punctuating a clear downward trend over this time period.

Chadalavada highlighted how the expansion of behind-the-meter solar energy, which has significantly outperformed ISO-NE projections in recent years, has helped to ease winter demand.

The low demand was also in part from abnormally high temperatures, which averaged 4.8 degrees Fahrenheit above “normal” — defined as the average temperature over the past 30 years — from December through February. This includes a 35-consecutive-day stretch of above-normal temperatures, nearly extending through the entire month of January.

These warm conditions could increasingly become the new normal in the region, as research has indicated that New England is warming faster than average global temperatures, with the greatest impacts being felt in the winter.

2023/24 Projection

Looking forward to this coming winter, Chadalavada presented a variety of scenarios modeling the impacts of different severities on the grid. These generally found the region well positioned, with sufficient energy and capacity to meet demand in mild and moderate winter scenarios.

In the case of a harsher winter, with lower-than-normal overall temperatures and several extended cold stretches, the RTO projected that some capacity deficiency actions may need to be taken for a few days, but that emergency measures will likely not be necessary.

He also noted that the Inventoried Energy Program, which compensates generators for storing up to three days of fuel, will remain in place in the winters of 2023 and 2024.

Winter Without the Everett LNG terminal

Chadalavada also presented the RTO’s modeling of the winter of 2024/25 with and without the LNG import terminal in Everett, Mass., owned by Constellation Energy. The reliability-must-run agreement for the Mystic generating plant, the terminal’s “anchor tenant,” will expire in June 2024. (See Narrow Set of Options for Retaining Everett LNG Terminal.)

The RTO, along with the gas distribution companies, have argued that the terminal is necessary for the reliability of the region’s gas and electric systems, while environmental groups have challenged this conclusion, saying that these needs could be covered by storage investments and demand response programs.

ISO-NE’s modeling, which looked at how the grid would perform under moderate and severe winter scenarios, found “limited exposure to energy shortfalls” without the terminal, compared to essentially no exposure to energy shortages with the terminal. The projected severity of the shortfall depends on the size of the fuel oil inventory and how much additional clean energy — offshore wind in particular — is added prior to the loss of the terminal.

Winter energy and peak load (ISO-NE) Content.jpg

Winter energy and peak load in New England from 2010 to 2022 | ISO-NE

The RTO concluded that an increased fuel oil inventory could fully cover the energy shortfall in the case of a moderate winter, and mostly mitigate the shortfall in the case of more extreme winter conditions.

Despite these findings, Chadalavada cautioned against jumping to the conclusion that the terminal will no longer be necessary following the expiration of the existing contract, owing to potential impacts the loss would have on the gas system, as well as on the electric system in the winters following 2024/25.

“The ISO doesn’t have the expertise to assess the operational capability of the regional pipeline system without Everett and will rely on the expertise of pipelines and the [local distribution companies] to identify any operational concerns,” Chadalavada said.

The RTO has been collaborating with the Electric Power Research Institute to study the potential long-term effects that the loss of the Everett terminal would have on reliability in the region. The first phase of this study, projecting out to 2027, is set to be released this Friday.

Order 2222 Compliance

The committee endorsed tariff revisions to comply with FERC Order 2222 in response to a commission directive, with a filing expected Tuesday.

The PC voted along the same sector lines as the Markets Committee did when it endorsed the revisions last month, with almost exactly the same amount of support: about 78.6%. (See “Compliance Filing on DER Aggregation,” ISO-NE Stakeholders OK DER Aggregation Plans, Generator Relief.)

FERC in March rejected certain elements of ISO-NE’s original proposal to comply with Order 2222, which directed RTOs and ISOs to allow distributed energy resource aggregations to fully participate in their markets. The commission ordered further revisions by several different deadlines, depending on the element.

The new revisions are those due 60 days from FERC’s March 1 order. (ISO-NE was granted a week extension to file them.) They would clarify that the relevant electric retail regulatory authority authorizes customers of small utilities to participate in a DER aggregation and that the RTO will resolve disputes that are within its authority and subject to its tariff.

The filing will also include an explanation of why ISO-NE’s proposal to require measurement of behind-the-meter DERs at the retail delivery point, rather than allowing submetering, minimizes barriers to entry for resources. The RTO has requested a rehearing of FERC’s rejection of its proposal to designate the DER aggregator as the entity responsible for providing any required metering information.

LS Power CSO Proposal

Finally, the committee rejected endorsing proposed tariff revisions by LS Power to allow its gas-fired Ocean State Power plant to unwind a 64-MW capacity increase while maintaining its existing 270-MW capacity supply obligation.

The plant had cleared Forward Capacity Auction 15 at 334 MW, but the company has become concerned that it will not be able to complete the uprate by the June 1, 2026, deadline. Under the RTO’s tariff, that would mean the plant would also lose its CSO for the existing capacity.

LS Power’s proposed revisions were intended to allow market participants to “unwind” promised capacity increases, allowing the plant to continue participating in the capacity market. Despite the RTO and its Internal Market Monitor opposing the proposal, the MC last month overwhelmingly endorsed it, with 83.3% in support. (See “LS Power’s Dilemma” in linked article above.)

But the company failed to achieve even a majority of the PC’s support, with only 45.7% voting in favor; it needed 60% for endorsement. All of the Generation sector was in favor, and minor support came from the Supplier, Alternative Resources and End User sectors. The Publicly Owned Entity sector was unanimous in opposition. Every sector had numerous abstentions.

LS Power may file a complaint with FERC under Federal Power Act Section 206. Before the vote, NEPOOL clarified to committee members that if they endorsed the revisions, it would indicate its support for LS Power’s revisions in the docket but not weigh in on the just and reasonableness of the current tariff.

May 9, 2023

PNM, Avangrid Optimistic About Merger Prospects

While PNM Resources (NYSE: PNM) awaits a state Supreme Court decision that could give the company another shot at a merger with Avangrid (NYSE:AGR), PNM officials said they’ll keep running the company like it’s a standalone business.

The comments came Friday during a conference call with analysts to discuss PNM’s first-quarter results. Much of the discussion focused on Avangrid’s proposed acquisition of PNM, a deal that was announced in October 2020 and valued at $8.3 billion.

The merger received approval from five federal agencies and the Public Utility Commission of Texas, leaving approval from the New Mexico Public Regulation Commission (PRC) as the final hurdle to closing the merger. But in December 2021, the PRC voted 5-0 to reject the merger. (See NM Regulators Reject Avangrid-PNM Merger.)

PNM and Avangrid appealed the decision to the New Mexico Supreme Court. But the companies revised their strategy this year, when the PRC changed from a five-member elected commission to a three-member panel with commissioners appointed by Gov. Michelle Lujan Grisham. (See New NM Commissioner Steps Down over Qualifications.)

In March, the reconfigured PRC joined with PNM and Avangrid to file a motion asking the Supreme Court to dismiss the appeal and remand the case back to the PRC for rehearing.

On Friday, analysts pressed PNM officials for a timeline of the proceedings.

PNM Resources CEO Pat Vincent-Collawn emphasized that the court has no deadline for making a decision. Calling the state’s high court “the Supremes,” Vincent-Collawn referenced a song by the Motown musical group of the same name.

“You can’t hurry love … or mergers,” Vincent-Collawn told analysts.

Vincent-Collawn said that if the Supreme Court agrees to dismiss the appeal, the companies would file a motion for reconsideration of the merger with the PRC. The commission would establish a procedural schedule and decide whether to assign the case to a hearing examiner or manage it at the commission level.

PNM and Avangrid agreed last month to extend their merger agreement until July 20. That follows a decision last year to extend the merger agreement through April 20, 2023.

“This additional time should provide clarity on the path forward and an expected timeframe for further regulatory proceedings,” Vincent-Collawn said.

And for now, it’s business as usual at PNM, according to Don Tarry, the company’s president and chief operating officer.

“We’re focused on continuing to manage the business like it’s a stand-alone business,” Tarry said. “And we’ll continue to operate it that way and continue to fund it that way, too.”

Under the proposed acquisition, Avangrid would pay $50.30 in cash for each share of PNM Resources common stock. PNM Resources includes PNM, New Mexico’s largest electric utility, and TNMP, an electric transmission and distribution utility in Texas.

In discussing the proposed acquisition in a February conference call with analysts, Avangrid CEO Pedro Azagra said he expected the PRC’s new composition to make a difference. (See Avangrid Pushes Forward on NECEC, Offshore Wind, PNM Merger.) Azagra described the new commissioners as “highly experienced individuals” with “deep knowledge” of the energy transition and its challenges.

And in a news release last month announcing an extension of the merger agreement, Azagra said Avangrid remains committed to the merger.

“Together, we will accelerate Texas and New Mexico’s clean energy futures and increase the focus on reliability and resiliency for customers,” Azagra said.

May 9, 2023

Wisconsin Tx Project Clears State Litigation

A transmission project that MISO approved 12 years ago cleared another legal hurdle Monday when a Wisconsin county judge found that regulators adequately scrutinized the project nearly four years ago.

Dane County Circuit Court Judge Jacob Frost upheld the Wisconsin Public Service Commission’s 2019 decision to issue a certificate of public convenience and necessity for the Cardinal Hickory Creek project, a 102-mile, 345-kV transmission line (2019CV003418).

The ruling does not affect last year’s U.S. district court decision, finding that federal agencies violated federal law when they cleared the line to route through the Upper Mississippi River National Fish and Wildlife Refuge. The decision halted construction on one segment of the line and is currently on appeal in the Seventh Circuit U.S. Court of Appeals. (See Federal Judge: Tx Line Can’t Cross Wildlife Refuge.)

Cardinal-Hickory Creek is one of the 17 Multi-Value Projects MISO approved as a $5-billion portfolio in 2011. The line is projected to facilitate the connection of nearly 20 GW of renewable energy, but it has been mired in litigation for more than a decade.

Frost said the Driftless Area Land Conservancy and two Wisconsin counties’ challenge to the PSC’s approval “largely boil down to disagreements with the PSC’s conclusions and decisions regarding the disputes of fact.” He said state regulators didn’t err in their decision to grant the certificate; adequately weighed competing evidence and explained their decision; properly determined that an environmental impact statement satisfied the state’s Environmental Policy Act; and did not shift the burden of proof to opponents of the line.

Regulators, not the courts, determine energy policy, Frost said.

“Though they couch the arguments as the PSC decision lacked substantial evidence, when examined more closely, petitioners are actually saying the PSC should not have believed the evidence applicants submitted and should have given greater weight to the evidence petitioners or PSC staff provide,” he wrote. “However, the court cannot second-guess the PSC as to weight and credibility of evidence. Because the PSC’s decision relied on substantial evidence, I must affirm.”

Frost said though he understood the “massive impacts” the project holds for Wisconsin, the PSC “properly conducted itself.”

The Cardinal-Hickory Creek owners, American Transmission, ITC Midwest and Dairyland Power Cooperative, said they were “extremely pleased” with the ruling.

“The judge’s decision reinforces that Cardinal-Hickory Creek is a critical, backbone project for the regional power grid within the Upper Midwest,” the companies said in a joint statement.

Mixed Responses

Jennifer Filipiak, executive director of the Driftless Area Land Conservancy, said the group was disappointed with the decision to uphold the PSC’s approval of the line. She said state regulators “failed to fully and fairly consider less-damaging alternatives to the Cardinal-Hickory Creek transmission line.”

“We remain committed to protecting the unique landscape of the Driftless Area and working to enhance its health and diversity. We are considering next steps and actions,” Filipiak said in a statement.

Wisconsin Wildlife Federation Executive Director Mark LaBarbera said his organization was similarly dissatisfied with the ruling. He said the PSC failed to “look more seriously” at potential alternatives and said that the line’s costs are already more expensive than original estimates.

“The company reported it has spent more than $530 million on this unfinished project, already exceeding its original $492 million total estimate,” LaBarbera said. “The dramatic cost increase makes clear why it’s essential to thoroughly study and consider alternatives before starting to build large projects that will damage Wisconsin’s natural environment. We are considering next steps and actions.”

Environmental Law & Policy Center senior attorney Brad Klein, who represented both conservation groups, said he is considering filing an appeal. He noted that the state decision does not impact the 2022 federal decision.

Clean Grid Alliance, Fresh Energy, and the Minnesota Center for Environmental Advocacy applauded the decision in a joint press release. They said that with the ruling, they’re “one step closer” to completing construction the project’s final leg so it can move forward and enable 115 renewable generation projects.

“We have been needing — and waiting — for this line for 12 years. And in that time, our society’s demand for clean electricity has grown even greater,” Clean Grid Alliance Executive Director Beth Soholt said. “Several states have enacted clean energy goals since 2011. That means we need this line — and much more — to meet their carbon reduction goals and improve the reliability of the grid to boot. There is great demand on our electric grid these days, so seeing Cardinal-Hickory Creek get across the finish line is a huge win.”

Amelia Vohs, regulatory attorney for the Minnesota Center for Environmental Advocacy, said the line is “well-designed and well-vetted to minimize its environmental impact, and its construction will result in reduced greenhouse gas emissions and more clean, renewable energy in the Midwest.”

“Everyone says they want a clean energy economy, but to get there we need transmission. You can’t have one without the other, and there is no time to waste,” Soholt said.

She noted that MISO’s first tranche of four long-term transmission portfolios, a $10 billion package approved last year, shows the need for transmission is only intensifying.

May 9, 2023

Vistra Bolstering its Zero-carbon Generation

Vistra (NYSE:VST) officials told the financial community Tuesday that they are excited about the company’s recent acquisition of Energy Harbor, which will more than double its zero-carbon generation currently online and that they expect to close by year-end.

“We’ve talked about closing this in the fourth quarter, and I think that is achievable. So far, so good,” CEO Jim Burke told financial analysts during the company’s first-quarter earnings call.

The Irving, Texas-based company announced in March it was purchasing Energy Harbor, a spinoff from FirstEnergy (NYSE:FE), for $3 billion and assuming $430 million in debt. The company plans to combine Energy Harbor’s nuclear plants and its retail business in the MISO and PJM footprints with its nuclear, retail, renewables and battery storage assets into a new subsidiary called Vistra Vision. (See Vistra Pays more than $3 Billion for Energy Harbor.)

Burke said the regulatory approval process is progressing well and that the key filings have been made. The deal must be approved by the U.S. Department of Justice, FERC and the Nuclear Regulatory Commission.

“We believe the NRC is working towards an early October approval,” he said. “To be on the six-month track for a license transfer, we think, is actually on the more efficient side of the scale.”

Should the transaction close, it will give Vistra about 7.8 GW of zero-carbon generation and make it the second largest operator of nuclear plants in the U.S., with six reactors producing more than 6.3 GW of power. The Energy Harbor platform would also increase the company’s retail customer count to about 5 million.

“I like our retail, and we like our integrated model,” Burke said.

Vistra will add another 350 MW of zero-carbon energy when it completes the third phase of its Moss Landing energy storage facility in California later this summer.

The company reported quarterly ongoing operations adjusted EBITDA of $771 million, compared to $1.19 billion for the same period last year. It uses adjusted EBITDA as a performance measure because, it says, outside analysis of its business is improved by visibility into both net income prepared in accordance with GAAP and adjusted EBITDA.

Vistra’s share price closed Tuesday at $24.60, a gain of $1.22 for the day.

May 9, 2023

FERC Questions MISO Plan to Drop Renewables’ Ramp Eligibility

FERC last week told MISO to provide more details around its plan to exclude wind and solar generation from supplying ramping service.

The commission issued a May 5 deficiency letter asking the grid operator to explain by midyear its proposal to disqualify its dispatchable intermittent class of resources from providing ramping capability (ER23-1195).

MISO staff have said that its wind resources are ineffective at ramping because their output is often trapped behind transmission congestion. They said when that occurs, they are forced to curtail intermittent resources from supplying energy but clear them for ramp capability, even though they’re undeliverable. (See MISO Plans to Bar Intermittent Resources from Ramp Capability.)

FERC asked the RTO to describe any operational challenges it has encountered with ramping supply issues and explain why it intends to only block intermittent resources from providing ramp capability. The commission pointed out that energy storage and other resources “are similarly undeliverable” when MISO clears up their ramp capability behind the same transmission constraints.

The agency also said the grid operator should describe how its plan is not discriminatory, an indication it believes the proposal could discriminate among resource types.

FERC said MISO should calculate the percentage of non-deliverable ramping megawatts from its intermittent resource class and the proportion of intermittent and traditional generation that clears for ramping from behind transmission constraints. It asked whether the RTO would consider non-intermittent and intermittent generation “similarly situated” when they’re located behind an identical constraint.

FERC also responded to MISO’s narrative that solar resources experience about 90% less congestion because they tend to be closer to load and are less likely to be curtailed. The commission asked why the grid operator wants to uniformly prevent intermittent resources from ramp eligibility when solar resources face fewer transmission obstructions than wind resources. It asked for an explanation about why the blanket exclusion should be considered reasonable.

J.T. Smith, executive director of market operations, has told stakeholders that MISO understands the criticism of its filing. He said staff doesn’t plan to make a permanent change, but they want to put the issue on “hold for the near term.”

“Under the current market conditions, the complication versus the benefit doesn’t make sense,” he told stakeholders in March.

Smith said MISO strives to make market participation available to all resources capable of providing services.

May 9, 2023

Duke Energy Sees Earnings Fall on Warm Winter Weather

Warm weather in its service territories led to lower earnings for Duke Energy (NYSE:DUK) in the first quarter at $1.20/share, but CEO Lynn Good told investors Tuesday that the firm should make up for it this summer.

“These results reflect a 22-cent headwind from weather, with January and February ranking among the warmest winter months on record across our service territories,” Good said. “In fact, DEP [Duke Energy Progress] had its warmest January and February in the last 32 years.”

Duke is working to make up lost ground on ratings and reaffirmed its annual projections, given that its strongest quarter is coming up this summer.

The firm is working on a sale of its commercial renewable business, with separate sales for its utility-scale subsidiary and another for one that focuses on distributed generation.

“We are in the late stage of the process for both transactions, and we’ll look to update you in the near future,” Good said on a conference call Tuesday. “We continue to anticipate proceeds in the second half of the year.”

The firm took an impairment charge on the sale of its commercial business of $175 million in the first quarter, which follows a $1.3 billion impairment in the fourth quarter that was also related to the sale of its commercial renewables business. Asked about the second impairment, Good said that the firm is nearing the end of the process.

“I would say to you, though, that the estimated value that we see in this process remains within our planning assumptions,” she added. “So, there’s nothing here that I would point to as a surprise for us, as we’ve moved through the process.”

The firm is in discussion with “select bidders” and is nearing the end of the process, with Good saying her team is anxious to announce a deal and give the market more information once that is appropriate.

Duke is getting started on a major spending spree on transmission and distribution, investing $36 billion through mid-decade on its system.

“The grid is a critical part of our energy transition, and with more than 320,000 line-miles, we operate the largest transmission and distribution system in the nation,” Good said. “The foundation of our grid plan is focused on improving reliability and resiliency, preparing the grid for renewables and enabling electrification.”

The investments are aimed at addressing threats from storms and attacks on the grid, as well as improving Duke’s ability to restore power, she added. The company is allocating capital for self-optimizing grid technologies, targeted undergrounding, physical and cybersecurity upgrades, and upgrading lines and substations.

“Our investments are already making a difference as evidenced by our response to Hurricane Ian last fall, where we restored power in less than half the time of our Hurricane Irma restoration efforts in 2017,” Good said.

Duke has received approval for recovery mechanisms in place for that transmission investment in all its states, she added.

May 9, 2023June 14, 2023

NYISO Shares Details of Potential Long Island Tx Projects

Stakeholders at the NYISO Transmission Planning Advisory Subcommittee and Electric System Planning Working Group (TPAS/ESPWG) meeting Friday learned how the ISO assessed the seven transmission projects chosen from the Public Policy Transmission Need (PPTN) solicitation for Long Island.

The solicitation was issued in August 2020 after assessments showed that Long Island’s existing transmission system was not capable of exporting offshore wind power to the rest of New York at levels exceeding its native load. NYISO identified seven viable transmission projects out of 19 submissions that the ISO found could expand Long Island’s export capabilities by unclogging constraints across the island. (See “Long Island PPTN Report,” NYISO Previews Plan to Expedite Interconnection Queue.)

NYISO presented cost cap assessment results, projected performance and production costs, and potential economic benefits for the projects.

The ISO used three criteria to assess developers’ proposed project cost cap, which is the amount of money they can recover from customers for the construction and operation of their transmission project: developers’ profit motive, consumer risk exposure and uncertainty, and the expected project cost versus the developer’s cost cap.

Respectively, these criteria evaluate how well developers incentivize their projects to contain costs via their proposed cost cap; how effectively the cost cap protects consumers from cost overruns; and how divergent the developer’s cost cap is from one estimated by SECO, an independent market research consultancy.

Long Island OSW project cost estimates (NYISO) Content.jpg

Summary of Long Island OSW project cost estimates and economic benefits | NYISO

For the first and second criteria, the results indicated that projects with hard caps — meaning little to no recovery of expenses incurred above the cap — were assessed better than those with soft caps, meaning incurred costs above the cap are shared between investors and customers. This means hard-capped projects tend to have lower risk profiles.

Conversely, results for the third criterion show projects with hard caps tended to have significantly different proposed costs than those estimated by SECO, while soft-cap projects were closer.

According to NYISO, the qualitative results should not be read as weighted scores indicating whether one transmission project scores higher or lower than another, as each criterion is not a “smoking gun,” but instead should be considered collectively to “give a global perspective that holistically” identifies how each project can best fit New York’s needs.

In its review of project impacts, NYISO also found potentially immense economic, environmental and grid reliability benefits over the next two decades. The projects could reduce future consumer costs, generate production savings across New York and enable up to $3 billion in avoided upstate solar capacity capital costs.

The ISO compared the potential production cost savings and avoided costs from building out either upstate solar or Long Island dispatchable emission-free resources (DEFRs) to the buildout costs projected by the developer and SECO.

As noted by stakeholders during the meeting, DEFRs do not exist at scale, but they represent a significant element of New York’s strategy for achieving its energy goals.

The results show that a project’s magnitude of savings and its benefits are closely correlated to the amount by which it increases Long Island’s import capability and reduces energy curtailment.

The ISO is targeting the TPAS/ESPWG meeting this Thursday to present and review the draft report. It will spend the rest of the month seeking stakeholder advisory votes on the report.

Queue Window Comments

Also at Friday’s TPAS/ESPWG meeting, NYISO shared stakeholder feedback and comments on its interconnection queue proposal, which emphasized stakeholders’ continued apprehension.

NYISO and stakeholders have been debating the proposed overhaul of the interconnection process, and the recent feedback highlighted both developers’ concerns about the lack of transparency on implementation and transmission owners’ calls for greater scrutiny on the requirements for projects seeking interconnection. (See NYISO Stakeholders Debate Proposed Interconnection Queue Overhaul.)

This debate was best captured during a discussion about the overlapping nature of projects in a queue window between Anne Reynolds, executive director of the Alliance for Clean Energy, and Doreen Saia, an attorney with Greenberg Traurig.

Class year interconnection study (NYISO) Content.jpg

Historical statistics on NYISO’s class year interconnection study | NYISO

Reynolds asked why some TOs appeared opposed to overlapping clusters of projects, saying, “This is somewhat fundamental to [NYISO’s] redesign proposal.”

Saia responded that they were not outright opposed to overlapping projects but thought it was important “to stay open with how we address concerns identified.”

“This whole effort feels like that old joke about, how do you eat an elephant? A bite at a time. And we have this enormous elephant in front of us, and we are trying to figure out how to digest it while also trying to turn it into a different kind of elephant,” she said.

Anthony Abate, lead energy market adviser with the New York Power Authority, concurred. “We’re eager to get into the details,” but “we are looking at the next number of months and saying, ‘Holy moly, there’s still a lot of details that need to be figured out.’”

NYISO will return to the TPAS later this quarter after refining its proposal based on solicited feedback and begin vetting tariff revisions.

May 9, 2023December 7, 2023

Illinois Regulators Hear from RTOs on Summer Readiness

The Illinois Commerce Commission questioned MISO and PJM officials on their respective RTOs’ preparations for summer Thursday, with commissioners concerned about the rapid retirement of traditional power plants and the lag in interconnecting new renewables.

Bob Kuzman(Illinois Commerce Commission) Content.jpg

Robert Kuzman, MISO | Illinois Commerce Commission

Robert Kuzman, director of customer affairs for MISO’s Central Region, said the RTO’s meteorologists are not expecting this summer to be as hot overall as last year, but they are expecting June temperatures to be higher than normal, as happened last year.

Using data from previous summers, MISO is modeling wind speeds and the amount of wind generation available hour by hour during previous summer months because of the resource type’s growth in the region, said Kuzman. “Wind forecasting prepares us for changes in wind [power] output from hour to hour and day to day.”

The analysis showed that MISO has tended to have between 800 and 1,200 MW of error in day-ahead forecasting, he said. Solar generation, which is also growing in the region, poses another problem, as weather can also affect its electrical output.

Kuzman also noted that the RTO was forced to delay its first capacity auction under its new seasonal construct after FERC ordered it to rework a capacity value ratio. “So, us being really prepared for summer, until we get those results, that data is not quite there,” he said. (See MISO Unveils New Seasonal Auction Timeline, Ratio.)

ICC Chair Carrie Zalewski asked whether there have been any developments in the retirement of old power plants or availability of demand response.

Kuzman said aggregations of DR are beginning to occur in Zone 4, which includes Ameren Illinois’ service territory, and that the retirement “of some thermal resources” has been delayed.

Mike Bryson, senior vice president of operations for PJM, also noted that shutdowns of fossil plants are occurring at a faster rate than the buildout of wind and solar.

“The megawatts are in the queue. The projects are there. We got to get them out of the queue and get them built,” he said in a reference to the long lead time between applications and approvals of renewable power projects.

In response to a question from Commissioner Conrad Reddick about PJM shortening that lead time, Bryson said the “lag will improve yet continue.” He added that PJM is trying to slow down the closing of thermal plants while working “to get solar and wind projects out and built faster.”

DR has worked when needed, Bryson added. “We going to look for opportunities to get more demand response as well.”

Dave Kolata, executive director of the Illinois Citizens Utility Board, also voiced concern that there are a lot of renewable projects stuck in planning queues.

“There are and there have been delays, and we absolutely need to work on that and make sure that all these projects that are ready to go actually get built,” he told the commission. “As fossil fuel resources … retire, we want to make sure that we have the resources there to replace them. I think there’s no doubt in our minds that that can be done. But clearly, we need to put the focus on that.”

He said the RTOs, particularly PJM, have not recognized that Illinois is committed to moving away from all fossil-fueled power plants to renewables.

“I think that the existing capacity construct is designed to build new combined cycle gas turbines,” he said. “And that’s not consistent with CEJA, and where the state is going,” he said in a reference to the state’s Climate and Equitable Jobs Act passed in 2021, committing the state to 100% clean power by 2045. (See Illinois Senate Passes Landmark Energy Transition Act.)

May 9, 2023

Former Lordstown Motors CEO Sells Shares Before Dismal Q1 Earns

Electric vehicle manufacturer Lordstown Motors (NASDAQGS:RIDE) last week reported a first-quarter loss of nearly $172 million and warned investors of “substantial doubt regarding our ability to continue as a going concern.”

An ongoing dispute with its partner and major funder, Taiwanese-based Foxconn Technology Group, regarding additional investment in the company erupted just days before the release of the quarterly results, sending the company’s share price from 52 cents at the end of April to a low of 26 cents last week. The share price closed Monday at 37 cents.

Throughout the quarter, former CEO Stephen Burns continued to sell his stock in the company, according to a document Lordstown filed with the Securities and Exchange Commission at the close of business Friday.

The filing reported Burns had sold off nearly 10 million shares during the quarter as the share price fell below $1 and now owns nearly 17 million shares, down from the 46 million shares he owned in 2020, when Lordstown merged with special-purpose acquisition company DiamondPeak Holdings to raise substantial new funding.

Burns resigned as CEO in June 2021 after an investigation revealed that he and other company executives lied about the number of preorders Lordstown had for its electric pickup truck.

In another SEC filing last week, Foxconn agreed that it cannot legally walk away from its current funding agreement with Lordstown as the automaker warned Foxconn was preparing to do. (See Lordstown Motors Warns of Bankruptcy in Contract Funding Feud.)

The dispute with Foxconn erupted after Nasdaq removed Lordstown from its main trading chart when the automaker’s share price fell below $1. The company has floated a plan to do a “reverse stock split” in hopes investors will approve it at the company’s annual meeting.

May 9, 2023

PJM Hears from White House Official on Security

CAMBRIDGE, Md. — A top White House security official urged participants in PJM’s General Session to engage in closer collaboration with RTOs, infrastructure owners and law enforcement at all levels as cyber and physical security threats morph.

“We need to think about how in this changing environment we can enhance our resilience — not just on the grid, but other critical infrastructure sectors,” said Caitlin Durkovich, deputy homeland security adviser for resilience and response.

The growing prevalence of renewable resources on the grid and new transmission technologies will increase the use of networked devices on the grid, which Durkovich said will bring new capabilities but also potentially create vulnerabilities for attackers to exploit.

Part of expanding grid security at all levels will involve a “Madison Avenue campaign” to educate the public, critical communities in particular, about the infrastructure they rely on. By increasing people’s ability to be more self-sufficient, she said first responders can focus on the most important aspects of their response to an emergency, be it a security issue or related to the impacts of climate change.

“It is a remarkable engineering feat, especially as you think about the number of … dependencies and interdependencies,” Durkovich said of the electric grid. “I think we’re at a point where we have to do a better job of helping Americans understand … the increasing threats that we’re dealing with.”

The Biden administration is currently working on updating the 2013 Presidential Policy Directive 21, which defines the responsibilities of government agencies and private companies in maintaining the security of critical sectors, as well as creating bridges for collaboration. The 2021 cyberattack on Colonial Pipeline was an instructive moment for the Department of Homeland Security, which Durkovich said has been working to create new communications infrastructure to allow for tighter collaboration between infrastructure owners and law enforcement. (See Glick Touts Gas Pipeline Reliability Organization Before Congress.)

In addition to strengthening security guidelines, she recommended that companies reach out to state and local law enforcement to identify ways of collaborating. Many of those agencies have received federal security funding and are also in the process of expanding their own practices or creating new programs, which could benefit from knowledge about the infrastructure within their jurisdictions. Recent attacks on substations have also highlighted the need for enhancing physical security, and Durkovich recommended companies reach out to report any suspicious activity.

RTO Panelists Discuss Experiences

A panel of top officials from CAISO, MISO, ISO-NE, NYISO and SPP discussed their experiences navigating the clean energy transition and how they’ve addressed challenges that would be familiar to PJM stakeholders, including how to accredit burgeoning renewable energy, resource adequacy concerns, and the siting and cost allocation for the transmission needed to interconnect intermittent resources.

Melissa Seymour, MISO vice president of external affairs, said the RTO has seen a dramatic evolution from a fairly homogenous grid powered by dispatchable coal resources to a more balanced and diverse fleet. Looking at the projects that are expected to be built in the coming years, however, she said it’s likely to become dominated by resources with limited ability to be dispatched. The margin between the accredited capacity on MISO’s grid versus installed capacity is expanding, along with the number of unforeseen outages, which she said pose a growing reliability risk.

SPP Vice President of Engineering David Kelley said that as wind resources began to proliferate in the RTO, it didn’t require the generators be dispatchable, requiring significant retrofits years later. PJM stakeholders recently endorsed a proposal addressing renewable dispatch, providing more transparency and expanding existing wind rules to solar resources. (See “Renewable Dispatch,” PJM MRC Briefs: April 26, 2023.)

In New England, coal and oil generation have fallen from accounting for 40% of ISO-NE’s generation to single digits, though oil still accounted for nearly a third of the energy supplied during the December 2022 winter storm. Director of External Affairs Eric Johnson said natural gas now supplies about 45% of the RTO’s energy, but there is a disconnect between the short-term commitments wholesale powers markets utilize for generators and the long-term investments needed to support the fuel infrastructure for those resources.

Constructing adequate transmission to meet localized load is proving to be particularly difficult for NYISO. Vice President of Market Structures Rana Mukerji said there is limited transmission going into New York City and opposition upstate to building more to connect to more plentiful renewables.

MISO has sought to address transmission needs by implementing long-term planning using its Multi-Value Project system. It is planning four tranches of transmission, with the first round approved in July 2022 with 18 projects. (See MISO Finalizes Long-range Tx Cost Sharing Plan.)

Johnson said ISO-NE has also experienced many of those challenges, presenting roadblocks to clean energy projects proposed by individual states. The RTO is exploring what can be done to reconductor or otherwise improve lines in existing rights of way and has found that many constraints can be resolved while avoiding siting new projects.

Casey Roberts of the Sierra Club questioned how the RTOs plan to manage the transition to clean energy and retirement of fossil fuels. Mukerji said it will require long-term storage capability beyond four intervals, which is not currently available technologically or economically in many cases.

Kelley said the December storm showed the need for forecasting to go beyond drawing off historical data to find ways of evaluating needs during rarely seen conditions, such as a sharp temperature drop on a holiday. The RTO created an Uncertainty Response Team in 2018, incorporating experienced staff from several departments tasked with identifying new risks and solutions.