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October 10, 2024

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NextEra Continues to Shine Brightly

NextEra Energy (NYSE:NEE) leadership said Friday that “powerful tailwinds” continue to support strong demand for renewables, repeating a message from last month’s investor conference.

“High power prices and high gas prices … are helping to make renewables the most economic form of generation,” CFO Kirk Crews said during the company’s quarterly conference call with financial analysts.

Crews said NextEra’s renewable developer, NextEra Energy Resources, added slightly more than 2 GW to a backlog that now totals more than 19.6 GW. That included about 1.2 GW of solar projects, the second largest quarter of solar origination in our history.

The Juno Beach, Fla.-based company said it was pleased with the government’s recent decision to waive additional duties for two years on solar panels imported from Malaysia, Thailand, Cambodia and Vietnam. The U.S. Department of Commerce has opened an investigation into claims that panels imported from those countries contain Chinese components subject to tariffs imposed by the Trump administration and continued under President Biden. (See Biden Waives Tariffs on Key Solar Imports for 2 Years.)

Crews said NextEra expects its suppliers will be making ingots and wafers outside of China at the end of those two years. The Commerce Department staff have “publicly stated that panels with wafers made outside of China are not subject to its investigation,” he said.

NextEra reported earnings of $1.38 billion ($0.70/share), compared to last year’s second quarter of $256 million ($0.13/share). Earnings adjusted for one-time gains and costs came in at $1.59 billion ($0.81/share), exceeding Zacks Investment Research’s consensus of 75 cents/share.

During the quarter, NextEra commissioned the 1.2-GW natural gas-fired Dania Beach Clean Energy Center and placed into service the 176-mile North Florida Resiliency Connection transmission line. The line physically connects NextEra’s Florida Power & Light and Gulf Power grids and is projected to yield $1.5 billion in system benefits through consolidated operations.

“Smart capital investments such as these help lower costs and improve reliability for customers, NextEra CEO John Ketchum said.

The company’s share price gained $1.55 on Friday and closed at $80.25.

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Maine Environmental Board Denies Appeals of NECEC Transmission Line Permit

The Maine Board of Environmental Protection last week removed one potential obstacle to the 145-mile New England Clean Energy Connect (NECEC) transmission line, upholding Central Maine Power’s construction permit.

After two days of oral arguments, the board voted Thursday to deny appeals by the Natural Resources Council of Maine (NRCM), NextEra Energy and a group of local entities and individuals to vacate a 2020 Department of Environmental Protection (DEP) order approving CMP’s project application.

The board confirmed DEP’s order approving a permit to construct the project and modified parts of the order related to decommissioning and habitat impact compensation. In addition, the board denied appellants’ request for a new public hearing on CMP’s application.

CMP cannot resume construction, however, unless it prevails in its court challenge of a November 2021 referendum blocking the project.

Compensation, Decommissioning

Prior to hearing oral arguments on the appeals, the board issued a proposed order finding that the department’s order for CMP to conserve 40,000 acres to compensate for the effects of the project on wildlife habitat was sufficient. After hearing petitioners’ arguments, however, the board increased the total compensation to 50,000 acres.

NRMC claimed that the standard compensation ratio used by DEP to calculate the total acreage to be conserved does not reflect the importance of the affected lands. Maine law relies on an 8:1 ratio to replace any lost function from activities that alter wetlands, and DEP applied that standard in the order using an estimated 5,000 acres of baseline affected lands.

“The 8:1 ratio is a typical ratio, but the problem is this is not a typical area — it is a very special part of the state,” said attorney James Kilbreth, representative for NRCM, in testimony Wednesday. “The impacts here are more consequential than in other parts of the state, and the compensation should reflect that higher degree of value.”

In its 2020 appeal of the department’s order approving the project permit, NRCM said that the project is sited in a part of Maine that “supports exception biodiversity,” making the area a “unique and important wildlife habitat.”

The board agreed that the compensation ratio should be higher, and increased it to 10:1, resulting in the new 50,000-acre conservation area.

To address concerns about decommissioning guidelines for the project, the board’s proposed order upheld parts of DEP’s original decommissioning plan, while also addressing what might happen if project construction is completed and not energized or not completed.

Permit Suspended

CMP began construction on the project in January 2021 and halted construction in November when DEP Commissioner Melanie Loyzim issued a suspension order for CMP’s permit to construct. (See NECEC Halts Tx Line Construction, Regulators Suspend Env. Permit.) At that time, CMP had already completed clearing activities on four of the five line segments and begun other infrastructure work.

The board’s proposed order called for CMP to submit a decommissioning plan to DEP for review prior to resuming construction and to begin decommissioning within 18 months of nonrenewal or termination of current power contracts. After hearing oral arguments, the board added a condition to its final order for decommissioning to begin in August 2024 if construction has not resumed by that time.

That 24-month period will allow for an appeal of the board’s decision to play out, if one is filed, board staff said Thursday.

Suspension of CMP’s permit to construct will remain in place unless the Maine Supreme Court decides in favor of CMP in NECEC Transmission LLC, et al. v. Bureau of Parks and Lands, which challenges the legal authority of a referendum on transmission development passed by Maine voters in November. The court heard oral arguments in that case in May.

The referendum authorizes a statutory change requiring legislators to approve high-voltage transmission lines greater than 50 miles that are not necessary for reliability purposes. CMP is asking the court to block retroactive application of that law.

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Westerners Get Tips on Being ‘Little Bitty Cog’ in an RTO World

SAN DIEGO — Officials in Western states looking to join an RTO should know a key thing about organized markets, according to those familiar with them: They will require a lot of time and resources from your regulators and consumer advocates.

“There are times when I think I’m a little bitty cog in a big RTO world, and that the RTO is my full-time job and the other state regulatory stuff is what I end up with when I’m not busy with RTO stuff,” Arkansas Public Service Commission Chair Ted Thomas said Tuesday at the National Association of Regulatory Utility Commissioners (NARUC) Summer Policy Summit.

Thomas was speaking on a panel to provide Western regulators and advocates with insights on how to position themselves to participate in any organized electricity markets that take root in the region.

As a regulator experienced with both SPP and MISO, Thomas said he’s confident in his agency’s ability to help shape market policy.

“What I worry about is someone who’s newer, that doesn’t have the background, and then they show up and they can get [run] over by a big snowball — not even realizing what hit them, and there’s nobody there to help them help themselves,” he said.

Greg Poulos, executive director of the Consumer Advocates of the PJM States, advised Westerners of the benefits of state consumer advocates and utility commissions being aligned on their positions on RTO affairs.

“For me that’s very helpful because I do talk to state commissions, their advisers or staff a lot, and it’s a great working relationship. I’m able to provide some of their opinions in the stakeholder process along with ours, and they have a lot more influence than we do,” Poulos said.

Poulos said RTO/ISO market monitors can be a valuable source of information because electricity customers and their advocates usually have less information than other stakeholders because they don’t directly participate in or regulate the markets.

Although PJM’s territory includes 65 million residential customers, those ratepayers represent just 1.4% of the votes “at the lower levels” of the RTO’s consensus-based stakeholder process, and have little visibility into the transmission planning process, Poulos said.

“There’s public power, there’s industrial customers, but for us as customers — those who pay the bills — we have very little influence,” he said.

Amanda Bradshaw, energy markets adviser with FERC’s Office of Public Participation (OPP), said there are many groups “that are recognizing that RTOs have an increasing impact on everyday people [and] on broader energy policy questions that people care about.

“But they might not necessarily understand or have full information about FERC processes, or about the market underpinnings of those policy goals that they care about,” she said.

Established in 2021, the OPP “is trying to understand how we can reach out to the public and bridge a lot of information gaps,” Bradshaw said. The office also seeks to increase understanding of RTO processes and help public interest groups figure out how get involved in those processes from the beginning.

“How do you actually participate in those processes if you don’t understand how those things work? How do you allocate staff resources to attend those meetings, especially when it’s necessary sometimes to attend in person?” she asked.

“Typical citizens don’t have expertise; they have passion,” Thomas said. “They might have environmental passion. … They might just want the lights to come on [and say], ‘Leave me alone.’ But for that person to have input … you need expertise. But having expertise doesn’t do any good if you don’t have access to the information, and to me, that’s a big part of that problem.”

‘Complex Subject Matter

Panel moderator Kent Chandler, chair of the Kentucky Public Service Commission, asked panelists whether they have enough resources to have a “meaningful impact” on RTO processes. Each answered with a resounding “no.” He followed up with a question about what barriers must be removed to encourage participation by those outside the industry.

“I think you start with inclusiveness: barriers to entry around cost, membership fees, differing eligibility requirements for membership in the RTOs,” said John Moore, director of the Natural Resources Defense Council’s Sustainable FERC Project.

Moore said his organization recently joined SPP for the $6,000 membership fee after FERC eliminated the RTO’s $50,000 deposit fee and $100,000 exit fee for all members. In PJM, he noted, the Sustainable FERC Project cannot become a full member and — along with the states — is barred from attending Liaison Committee meetings with  the Board of Managers. Moore also pointed to the restrictions the press faces in covering NEPOOL, something that “FERC said is okay, more or less.” NEPOOL meetings are closed to the public; although RTO Insider’s ISO-NE correspondent attends meetings as an end-use customer, NEPOOL rules bar quoting from members’ discussions. (See FERC Rejects RTO Insider Bid to Open NEPOOL.)

“Another set of huge issues is around data access and overall understandability of the issues,” he said. “There’s a lot of chicken-and-egg issues going on here. The reason a lot of non-traditional groups and entities don’t show up at the RTOs is that it’s just very complex subject matter.”

Moore said working groups at WECC and other organizations in the West make the region’s electricity data more accessible. “My experience has been lots of times — and somebody in the West can correct me — it’s actually easier to get a lot of the data we need to input in our models than it’s been in the East; and a lot of different standards are applied in different RTOs.”

FERC’s Bradshaw said groups lacking expertise in energy regulation tell the OPP, “‘We’re just having a really difficult time crafting these proceedings that we need to be involved in, and that would be relevant to us,’” Bradshaw said. “I think it’s even difficult when you do have those resources, when you’re able to hire an attorney or contract a law firm to track those things for you.”

“The real resource issue for the states is state staff and state time.” Thomas said.

Balancing Act

Thomas believes the U.S. grid has become more robust since the catastrophic blackout that brought down the Northeast grid in 2003, in part because of new investments and the “balance” that comes with having states certify utility transmission plans after being included in the negotiation process.

“I think one of the most important things that comes out of this is that balance — the balance of states and your roles as commissioners and your ability to maintain that balance,” Poulos said.

But Poulos sees a lack of balance in PJM’s current transmission process. While he lauded the RTO for fostering wholesale competition in power generation, he criticized it for a corresponding lack of competition and transparency in transmission planning.

“We don’t really know what PJM’s role as a planner is in a lot of cases because since 2012, or [FERC] Order 1000, there’s been a lot of push towards competition, but what happened is a transmission owners said we’re gonna push everything away from those types of projects,” he said.

As a result, Poulos said, the majority of the RTO’s transmission projects are “supplemental” ones that waive competition.

Poulos thinks there’s an open question about the roles of PJM, the transmission owners and the states in the “vast majority” of the RTO’s transmission planning.

“One of the deepest frustrations we have is that lack of ability to be involved in that process,” he said.

Moore said there’s now an “implicit connection” between transmission planning and resource adequacy.

“And I think this is something that states and FERC are grappling with, obviously through the [transmission Notice of Proposed Rulemaking] and through the dialogue that has happened with FERC and the state commissions, and the increasing realization with our transforming grid mix that there are going to be more out-of-state resources that have to be relied on to help meet reliability and state resource adequacy needs,” Moore said. (See States Back Interregional Transfer Requirement.)

Poulos wrapped up his comments by advising Western state officials on what they should consider as they contemplate joining an RTO.

“I would say the one thing is, if anything goes wrong in the system in your state, as a commissioner you are the ones who are going to be accountable, so you need to have that ability to have a say in what goes on,” he said.

State officials also need to immediately establish transparency in the RTO and guarantee their representation, preferably with a reserved seat on the board of directors, he said.

Moore said states need to ensure that RTOs make efforts to include different groups in their processes.

“And even if they’re not full-time stakeholders, these groups and communities need to understand what the RTO is doing is actually affecting them, so they can in some way start to influence that process. So don’t forget about equity in this process,” he said.

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Consumer Groups File FERC Complaint Against MISO

An alliance of consumer groups on Friday jointly filed a complaint with FERC against MISO’s practice of respecting state rights-of-first-refusal (ROFR) laws in its regional transmission planning.

The consumer alliance asked the commission to block MISO and other RTOs from applying “anticompetitive” ROFR laws to their regional transmission planning and cost-allocation processes.

The group made the filing as the RTO’s Board of Directors prepares to consider Monday the $10.4-billion, 18-project long-range transmission plan (LRTP) for its Midwestern states. The portfolio is the first of four that MISO is planning to modernize its system.

The group said ROFR laws conflict with FERC’s rules on transmission competition and the commission’s obligation to establish just and reasonable rates.

The alliance includes the Industrial Energy Consumers of America, the Coalition of MISO Transmission Customers, the Wisconsin Industrial Energy Group, Resale Power Group of Iowa, Association of Businesses Advocating Tariff Equity and the Michigan Chemistry Council.

The groups said MISO should not hamstring itself by maintaining tariff provisions that prohibit it from holding a competitive solicitation for regionally cost-allocated projects. It said ROFR laws in that application are unjust and unreasonable.

FERC should prohibit the grid operator from recognizing the laws in the LRTP and order the RTO to hold competitive solicitations for projects located in those states, the consumer alliance said.

MISO estimates $1 billion of the portfolio will ultimately be open to competition. The grid operator said nearly $4 billion worth of the projects are considered upgrades to existing facilities, while another $5.5 billion of projects are in states that have enacted ROFR legislation.

Michigan, Minnesota, Iowa and the Dakotas all have ROFR laws; Wisconsin lawmakers have considered one but haven’t passed it. Additionally, MISO is likely to scrap its only market efficiency project assigned to MISO South after Texas’s ROFR legislation delayed the project’s start by years. (See MISO on Verge of Cancelling Hartburg-Sabine Tx Project.)

The RTO is planning to prepare requests for proposals where ROFR laws don’t prohibit competitive bidding. In those states without the legislation, incumbent transmission developers will need to provide to their regulators a notice of intent to construct.

The consumer alliance insisted that its complaint wasn’t seeking to slow down any reliability projects, but that MISO “delay issuing any notices to construct to projects currently protected by state ROFR laws” in the LRTP’s first cycle.

“Circumstances have substantially changed since 2013-2014 when the commission accepted the MISO tariff provisions … that mandate that MISO apply any state law that includes a ROFR to circumvent transmission competition in MISO,” the alliance said.

The alliance argued it’s now clear that ROFRs are being enacted to circumvent FERC’s competition mandate and “that the burdens of state ROFR requirements do not fall solely on customers within ROFR states, forcing pro-competition states to pay for the parochial policies of incumbent preference states.” They said ROFR laws are premised on the fear that incumbents will be outbid by competitive developers, are “economically inefficient by design” and “needlessly raise costs to consumers.”

“The costs at issue are far from modest, and so the time is ripe for the commission to act,” the alliance argued.

Industrial Energy Consumers of America President Paul Cicio said should $5.5 billion of transmission projects be automatically assigned to incumbent utilities, consumers in MISO Midwest will pay more for regional transmission than if they were bid out.

“We are requesting that the commission act quickly to find MISO’s provisions to be unjust and unreasonable and to require the replacement rate to be based on project costs resulting from competitive solicitation,” Cicio said in a statement.

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Illinois Leaders Blast MISO Inaction on Capacity Crisis

Sponsors of Illinois’ Climate and Equitable Jobs Act (CEJA) condemned “foot dragging” by MISO in getting new renewable energy online to fix its capacity crisis during a press teleconference Thursday.

State lawmakers and a representative for consumer advocate Citizens Utility Board (CUB) said with a climate crisis escalating quicker than scientists predicted and energy prices climbing sharply, MISO should re-evaluate and revamp its interconnection rules to accelerate new renewable capacity interconnections.

They said the grid operator is sitting on 34 renewable projects for the state that are capable of powering 4.5 million homes “while the grid operator blames others, spreads fear.”

The news conference comes as some critics are calling to reopen CEJA’s provisions given the capacity shortages. The legislation requires Illinois to be reliant on 100% renewable energy by 2050.

Ann Williams (IL CleanJobs) Content.jpgIllinois Rep. Ann Williams | Illinois Clean Jobs

Illinois Rep. Ann Williams (D) opened the press conference by referencing Vistra CEO Curtis Morgan’s 2019’s pronouncement that coal was on its way out.

“It was an admission to us and to the state of Illinois that coal could not compete with clean solar and wind energy. Now, gas is following coal into the land of polluting, expensive fuels of the past,” she said.

Williams said Illinois “saw the future” and enacted CEJA.

“But we write the laws. We don’t operate the grid. That’s MISO’s job,” she said.  

Williams said rather than bringing clean energy on the grid as quickly as possible, “MISO is addressing concerns about capacity by trying to shift blame.”

“Fossil fuel interests and entrenched energy lobbies are jumping on the blame game and calling for a return to the days when coal and gas generated Illinois’ electricity, even as fossil fuel prices skyrocket, emissions continue to pollute our communities and our planet is burning,” she said. “Going back to coal and gas is like pouring gas on a fire, in terms of hiking energy prices up and polluting our communities.”

Fossil fuel prices are only becoming more expensive, made worse by Russia’s war in Ukraine, Williams said. She challenged MISO’s “lackluster approach” to bringing new renewable energy online.

“You can’t do what you’ve always done and expect it to solve a problem you’ve never encountered before, but that’s what’s happening. … MISO needs to operate with a sense of real urgency here [and] think outside the box to meet the moment that we are in,” Williams said of the RTO’s system of processing and studying interconnection requests.  

MISO’s 2022-23 Planning Resource Auction (PRA) failed to secure enough capacity in its Midwestern zones, which cleared at a $236.66/MW-day cost of entry for new generation. MISO Midwest now faces the possibility of rolling outages in the 2022-23 planning year, which began June 1. (See MISO’s 2022/23 Capacity Auction Lays Bare Shortfalls in Midwest.)

Though the grid operator’s membership approached the auction with more capacity year-over-year, MISO said the resource additions were mostly intermittent and generally less available than retiring thermal generators. It said it will require dispatchable, natural gas generation well into the future.

MISO’s current generator interconnection queue contains 806 projects totaling 126.3 GW of capacity. The queue overwhelmingly is comprised of solar, wind and storage projects or a combination of renewable energy and storage. The RTO historically only interconnects about 20% of projects that enter the queue.

MISO executives have been making the rounds in front of state regulators and lawmakers to drive home the urgency to fix future capacity shortfalls. (See MISO Promises Stakeholder Discussions on Capacity Auction Reform.)

“Rather than do its job, which is to operate the grid and transition our energy needs, MISO is pointing fingers. … MISO, with more than 1,000 employees, can and should move faster to transition Illinois to renewable energy,” Illinois Sen. Cristina Castro (D) said.

Castro said while PJM has made the energy transition a priority, MISO “still stubbornly holds on to a backwards-looking fossil fuel system that is dirty and expensive.” She questioned the grid operator’s delay in reviewing and approving generation projects, saying it led to expensive and “phony” shortage pricing.

“If Ameren customers ever find themselves in the dark, MISO’s inaction is to blame. They are asleep at the wheel, asleep at the switch and dragging their feet,” Castro said.

“It’s time for MISO to let CEJA do its job,” said Jim Chilsen, director of communications for CUB.

Chilsen said he was “challenging MISO to show leadership” and speed up the approval process for capacity additions.

“MISO needs to make the transition away from expensive fossil fuels a bigger priority. This is largely a problem of planning. For years, MISO has known that the transition from dirty energy was coming,” Chilsen said. “MISO has been slow to respond to these developments over the years.”

Chilsen said CUB has seen a 20% increase in ratepayers contacting them over energy affordability concerns.

MISO spokesperson Brandon Morris said the RTO was aware of the virtual press conference and that it planned to review the event in its entirety.

“We look forward to thoughtfully responding to any concerns or questions raised,” Morris said in an emailed statement to RTO Insider.

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MISO, PJM Consider Four Small Interregional Projects

MISO and PJM are considering four interregional transmission project candidates as targeted market efficiency projects (TMEPs).

The grid operators said during a Thursday Interregional Planning Stakeholder Advisory Committee (IPSAC) teleconference that the four congestion-relieving projects were whittled from a list of 23 solution ideas.

They are assessing:

      • a potential project to upgrade ComEd terminal equipment for the Quad Cities to Rock Creek 345-kV flowgate near the Iowa-Illinois border;
      • a conductor and switch replacement on the Mohomet-Champ 138-kV flowgate in central Illinois;
      • bolstering the Powerton-Towerline 138-kV flowgate in central Illinois; and
      • a potential fix for the congested Chicago-Praxair 138-kV flowgate near the Chicago area.

The grid operators plan to complete an evaluation of the upgrades in September. Until then, they continue to review historical congestion and perform no-harm tests, PJM Senior Transmission Engineer Jeff Goldberg said.

MISO and PJM said they were considering conducting a TMEP study in February. (See MISO, PJM Weigh ’22 Interregional Plan.)

The RTOs said they experienced about $519 million in congestion costs on market-to-market flowgates over 2020 and 2021; $328 million of that total has been determined as persistent and is not slated to be fixed with future upgrades.

MISO and PJM have approved three small TMEP portfolios since 2017 and one larger interregional market efficiency project in northwest Indiana in 2020.

TMEP projects must cost less than $20 million, completely cover installed capital cost within four years of service, and be in service by the third summer peak from their approval. The projects are assessed using a shorter time horizon than interregional market efficiency projects.

Earlier this year, some stakeholders asked the RTOs to also consider a more intensive interregional market efficiency project study to analyze expected future congestion instead of waiting until they amass years of expensive historical congestion. Staff officials have said the timeline this year supports the lighter TMEP study because MISO is embroiled in its long-range transmission planning work.

MISO and PJM will hold another IPSAC meeting Aug. 26.

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MISO Stays Course on Sharpening Generation Retirement Studies

MISO is all but certain to enact changes to its study process for retiring generators, stakeholders learned last week.

The RTO also continues to maintain that the changes will not introduce resource adequacy considerations into its retirement-study process.

Staff said during a Planning Subcommittee meeting July 19 that they will relax confidentiality rules around retirement data, adhere more strictly to local reliability requirements, and require more notice from resource owners in making their retirement decisions.

MISO will now impose a one-year notice requirement on retiring generation before it begins retirement studies under Attachment Y of its tariff; conduct retirement studies in on a quarterly basis; share with stakeholders the megawatt value of retirement requests systemwide; and discourage reliance on load shed as a valid mitigation option when voltage and thermal violations are uncovered in its steady state analyses. (See MISO Bolstering Generation Retirement Studies Amid Capacity Shortage.)

MISO has insisted that ensuring local reliability requirements is a last step, not a measure to secure resource adequacy.

The RTO has been firm that the changes will respect state jurisdictions and not extend generators’ operational lives because of resource-adequacy concerns. Its retirement studies currently focus solely on the transmission system’s reliability.

“The Attachment Y process is about local reliability issues associated with a resource retiring,” MISO’s Andy Witmeier said. “Anything related to larger resource-adequacy concerns should be discussed in the Resource Adequacy Subcommittee.”

Witmeier said MISO doesn’t have the authority to keep generation online over resource-adequacy concerns.

Customized Energy Solutions’ David Sapper, representing MISO load-serving entities, said it wasn’t clear how the grid operator would manage simultaneous studies should it encounter a large cluster of retirement requests. Staff said they will still study retirements individually, not in groups.

But Sapper insisted that MISO would still have to make assumptions about other active retirement requests that stand to impact study outcomes. He pointed to downstate Illinois, where several large generators could retire at the same time.

WEC Energy Group’s Chris Plante called for a transition period before the current 26-week notice is doubled. He said some generation owners have planned around the 26-week notice for years.

“I’d rather deal with this in the stakeholder process than at FERC,” Plante said of MISO’s future filing of the proposal.

Plante said generation owners face an “incredibly complicated” decision over whether to retire. An unexpected system support resource (SSR) designation, applied by MISO if it determines there are reliability concerns with plans to retire a generating unit, can throw a wrench into plans he said. Plante referenced the yearslong clash and complex refunding process that followed SSR status for the Presque Isle coal plant in Michigan’s Upper Peninsula. (See $23 Million Owed to Ratepayers in Presque Isle SSR Case.)

“The last thing my company wants to do is go through another hotly-contested FERC proceeding over who pays for an SSR,” Plante said.

Stakeholders last week also voiced frustration that MISO no longer posts unsolicited comments from stakeholders as part of meeting materials. During the week’s transmission-planning meetings, some stakeholders said the RTO had previously compiled stakeholder comments and shared them publicly on its meeting webpages, even when it had not opened a stakeholder comment period.

Coalition of Midwest Transmission Customers attorney Jim Dauphinais and Clean Grid Alliance’s Natalie McIntire called it a change in policy and a step back for transparency.

“I think this is especially important now because MISO makes fewer formal feedback requests,” McIntire said.

“I do think it’s incredibly important that comments, whether informal or formal, are attached to presentation materials. I just don’t see the value of not posting stakeholder comments,” said Andy Kowalczyk of activist group 350 New Orleans.

MISO staff said they would further address the issue during an upcoming Steering Committee meeting.

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BOEM DEIS Sparks Sharp Divide on NJ OSW Project

The draft environmental impact statement (DEIS) by the U.S. Bureau of Ocean Energy Management on New Jersey’s first offshore wind project, Ocean Wind 1, drew more than 50 speakers at two hearings this month, offering no consensus on the report’s merits but underscoring the deep division between project supporters and opponents.

The bulk of the speakers at the online forums held on July 14 and 21 cited few specifics from BOEM’s 1,408-page report, instead offering often vigorous perspectives on whether the 1,100-MW, 98-turbine wind farm planned for a site 15 miles off Atlantic City should go ahead.

The DEIS, which BOEM released on June 17, found that Ocean Wind 1 would likely not have a major impact on most of the 19 environmental and related categories scrutinized. But the report also found that the construction and installation, operations and maintenance, and eventual decommissioning of the project could have a major impact on marine navigation and vessel traffic. (See BOEM Draft EIS Finds Potential Major Impacts from 1st NJ OSW Project.) About 140 people attended the forum Wednesday.

Clean Ocean Action, a nonprofit environmental organization that protects marine life, urged the federal agency to extend its public input period by 60 days to allow a more thorough analysis of the report. It also urged BOEM to approve only a pilot offshore wind project to allow the impact to be evaluated before committing to the portfolio of projects under development.

“Clean Ocean Action is not opposed to offshore wind, but the ocean deserves protection,” Cindy Zipf, executive director of Clean Ocean Action, told the bureau July 14. “We are very concerned, and we have many questions.”

Among them, she said, are: What will be the impact on the ocean from its “massive industrialization” by wind projects? How would it “undermine the ocean’s ability to buffer climate change”? Will the area lose local seafood resources? And what are the “long-term consequences” of the projects?

“Do we really understand and know what we’re doing?” asked Zipf, one of four Clean Ocean Action speakers at the hearing. “The answer, we believe, is ‘no.’”

Property owners from Jersey Shore towns that face the planned wind farm site also spoke vigorously against the plan, fearing it would ruin the view and the atmosphere of the shore communities.

Joan-Marie Ebert, who said she owns a second home with her husband in Ocean City on the Jersey Shore, said they only recently learned about the wind project, which was approved in 2019, by accident. She said most Ocean City homeowners are also not well aware of the project because their properties are second homes, and they live out of state.

“Nobody knows about Ocean Wind. It is alarming to me that a project of this scale and scope and size with impact to our coastal communities is being pushed through so aggressively,” said Ebert, who spoke at both hearings. “My husband and I are not opposed to wind energy. However, 900-foot turbines, 98 of them with Ocean Wind 1, placed 15 miles off the coast, and three substations, will produce a dominant impact on the beach view.”

Supporters

Project opponents, however, were heavily outnumbered by environmental and business groups and other project supporters, who cited the need to move quickly to combat the growing threat of climate change, and the economic benefits and job creation that would come from the projects.

“I understand the fear of the unknown or uncertain,” James Lavor Thompson, campaigns director for the New Jersey League of Conservation Voters, said at Wednesday’s hearing. “But the consequences of opposition to this project will have an effect on our marine life, water quality and air quality. … We have already seen these impacts in a very real way along the Jersey coast: rising sea levels, stronger storms, impact to marine life and coastal erosion. And the crisis is only getting worse.”

Supporters of the project said that offshore wind projects had been operating in Europe for years without problems. And they said the first U.S. offshore wind project, the 30-MW Block Island Wind Farm in Rhode Island that became operational in 2016, had shown that offshore wind works without causing problems.

“We already have a pilot project in Block Island,” said Drew Tompkins, director of advocacy and policy at the New Jersey Work Environment Council.

Several union representatives — among them representatives of the Eastern Atlantic States Regional Council of Carpenters, Easter Millwright Regional Council and the Laborers’ International Union of North America — shared their commitment to the project. So did Hilary Chebra, manager of government affairs for the Chamber of Commerce Southern New Jersey.

“The draft environmental impact statement noted that there will be notable and measurable benefits as a result of offshore wind development,” said Chebra. “The jobs and economic benefits of Ocean Wind 1 are vital to the South Jersey region, to help diversify our economy that has been historically dependent on hospitality and gaming industries.”

Focusing more on the impact of Ocean Wind 1 on human beings, three medical professional urged BOEM to advance the project.

“Climate change poses threats to human health, safety and security,” Aviva Gans, a pediatric physical therapist, told the agency. “And children are uniquely vulnerable to these threats.”

Inga Robbins, a cardiologist and a member of Clinicians for Climate Action New Jersey, said she backed the wind projects in part because they would help combat the damage, particularly heart ailments, that are caused by pollution from fossil fuel-fired plants.

“I can’t bear to see the patients I care for every day, already struggling with a disparate burden of cardiovascular disease, find themselves in a hotter city with more flooding events,” she said.

Next Steps

BOEM will hold a final hearing this Tuesday, and the 45-day public comment period ends on Aug. 8, after which the agency will release its final environmental impact statement.

Ocean Wind 1, which is planned for a site about 15 miles from the Jersey Shore around Atlantic City, is one of three offshore wind projects so far approved in two solicitations by the New Jersey’s Board of Public Utilities (BPU). The agency expects to hold three solicitations to bring the total capacity of the state’s offshore wind sector to 7,500 MW by 2035. (See NJ Awards Two Offshore Wind Projects.)

BOEM said the hearings are designed to solicit public input and new information that would shed new light on the report, such as issues over its accuracy; the adequacy of the methodology and the assumptions; questions seeking to clarify issues in the report; and alternative information sources not used.

The DEIS outlines the impact of several scenarios, including the project not going ahead, advancing as planned and advancing with modifications. These include scenarios that would remove between nine and 19 turbines that are closest to coastal communities, and a proposal to relocate eight turbines so that there is a space between Ocean Wind 1 and the Atlantic Shores project, which is planned for a nearby area.

In most cases, the DEIS concluded that the alternative scenarios would provide only minor to moderate benefits.

Requests and Questions

Kristen O’Rourke, quality of life director for the borough of Point Pleasant Beach, urged BOEM to extend the public comment period on the DEIS, in large part because the municipality’s small staff doesn’t have the time to fully digest the lengthy report at the height of the busy summer season.

An extension is needed “to give people like us — small people, small towns — a fighting chance to review the potential impacts to our environment,” she said.

BOEM officials said they will evaluate all suggestions, including the request to extend the public comment period. And the agency responded to some questions submitted at the hearing, some of which touched on concerns that have surfaced repeatedly at forums on the offshore wind projects.

Among them was why the Ocean Wind 1 proposal places turbines only 15 miles from the shore, when proposed projects in New York are twice that distance to minimize the visual impact.

Will Waskes, project coordinator for BOEM’s New Jersey office, said the state determined the location of wind projects to be built off the state’s coast around 2010. The decision was “intended to protect ecologically sensitive areas and minimize use conflicts,” among them those with vessel traffic and the activities of the Department of Defense, and also crafting a map of “areas that would be of sufficient size to hold a commercial-scale development.” Those decisions also were based on the technologies available at the time, he said, apparently referring to smaller turbines that were the norm then.

BOEM also addressed a concern often raised at hearings about the potential health risks from electromagnetic fields (EMF) emanating from high-voltage transmission lines that will run undersea and onshore through communities. Srinivas Vishnubhotla, a civil engineer for BOEM, said the agency studied the issue in 2019, and EMF levels associated with offshore wind projects were “found to be well below the recommended limits for human exposure.”

“The recommended limits for human exposure are 12 to 100 times higher than the EMF levels from cables measured at the seafloor,” he said. “Onshore export cables would be buried and housed within a single duct bank buried along the onshore export cable route.”

Vishnubhotla also addressed a speaker’s question on the ability of turbines to withstand a hurricane, and how the agency could “guarantee the workmanship and integrity on such a huge project.” He noted that a small land-based wind farm near the sea in Atlantic City “survived Hurricane Sandy and was back to full operations shortly after the storm passed.” Construction integrity is ensured by having a neutral third party certified verification agent (CVA) oversee the “design, the fabrication and the installation of any approved projects” and to verify compliance with BOEM requirements.

Ric Bertsch, a resident of Ocean City, said his reading of the report suggested that some mammals could suffer hearing loss from construction of the projects.

“Marine mammals, in particular in North Atlantic right whale, are at increased risk of greater mortality,” he said.

Greg Fulling, a marine biologist for BOEM, said the impact to marine mammals, sea turtles and fish depends on the distance from the noise source. “BOEM has worked directly with the National Marine Fisheries Service in evaluating and reducing these potential impacts,” he said.

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‘Collaboration and Innovation’ Key for New DC PSC Chair

First appointed to the D.C. Public Service Commission in 2021, Emile C. Thompson was confirmed by the D.C. Council as the panel’s chairman on June 7 for a term ending June 30, 2026. Earlier some council members had questioned whether Thompson met its requirement that the next person appointed to the PSC have “experience in electric grid modernization and renewable energy integration or technology.”

Thompson addressed that concern and talked about his vision for reaching the district’s goal of cutting greenhouse gas emissions in half by 2032 in an interview July 13 with NetZero Insider reporter Martin Berman-Gorvine. This interview has been condensed and edited for clarity.

Q. What are your priorities for the PSC?          

Externally, making sure we meet our mandate of providing safe, reliable, affordable service to our ratepayers, while also meeting the District’s clean energy commitments. I don’t look at these as independent of each other. And we’ve started to move in that direction. One good example is our Pepco rate case, in which we approved a modest increase for residential ratepayers but also put into effect many performance-tracking mechanisms that include climate and energy goals that we hope will become fully operational in the future and will help the District in achieving our clean energy commitments. We’re also going to continue to prioritize grid modernization and the proliferation of solar around the District. Internally, it’s about improving employee retention and satisfaction.

Q. What are the biggest obstacles to reaching DC’s climate goals? (a) Cutting greenhouse gas emissions in half, District-wide, by 2032, and going carbon-neutral by 2050; and (b) 100% of electricity from renewable sources by 2032. 

Looking at those two goals, we really think of collaboration and innovation. Collaboration, because these are not goals that solely rest on the commission action. For example, in D.C., roughly 23% of our greenhouse gas emission comes from vehicles, so we have to work with District agencies on how we’re going to look at the conversion of vehicles: gasoline and diesel-powered to EVs. Also, we have to look at our building codes and see how we can improve those. So that’s DCRA [the District’s Department of Consumer and Regulatory Affairs].

And then, of course, innovation, because we don’t yet have all the tools in our toolkit to reach our goals. As new technologies develop and become more cost effective, it will make our 2032 goal and our 2050 goal both more attainable and not have a huge cost burden on our residents.

Q. What is your response to concerns that you lack “experience in electric grid modernization and renewable energy integration or technology,” as required by the DC Council? What are you bringing to your new job from your previous roles as an assistant United States attorney and board member of DC Water?

Out of law school, I clerked for a judge, and that really gave me the background into how one thinks in this type of position, because we are a quasi-judicial body — we issue orders that are based on our opinions. I would also add that my undergraduate degree was in computer science, and I had a math and biology minor. So, this allows me to get down into the weeds, and I actually enjoy the numbers and some of the technical aspects.

I worked in city government for a number of years. That really taught me about collaboration and bringing parties to the table to reach a common goal and consensus. I then went to the U.S. Attorney’s office, and from there, I’m taking two main skills. One, the ability to delve into a subject deeply and substantively and become a subject matter expert; it also taught me to have a critical eye to what’s being presented to me. My time at DC Water was critical because DC Water really is on the forefront, especially with respect to renewable energy integration. On their campus, they have solar arrays; they have a geothermal heating and cooling system that powers the entire building. The big word there was innovation, especially when it came to renewable, resiliency in terms of how you respond to and plan for weather events like 100-year storms and 500-year storms that are becoming much more prevalent.

At the commission, I’m gaining grid modernization experience through on-the-job training and prior experience.

Q. What is your response to Nicole Rentz, Chesapeake Solar & Storage Association, who said solar developers are “facing arbitrary cost delays, barriers and inefficiencies imposed” by Pepco? She also cited a recent complaint filed with the PSC against Pepco for allegedly mishandling billing on community solar projects.

This is an allegation that I and Commissioner Beverly took very seriously. We studied the complaint, the response from Pepco, and the comments from the other parties involved, and we opened an investigation immediately. We are in the process right now of compiling an RFP for an audit into Pepco’s practices. [See DC PSC order issued June 30 in Case 1171.]

In Pepco’s response, they didn’t necessarily deny the allegations. What a lot of their response centered around was that the rules didn’t necessarily call for what the complaint alleged [they hadn’t done]. We are asking the parties to submit additional comments to see if there’s certain things the commission needs to do to make the process more transparent, to make the process easier, etc. The CREF [community renewable energy facilities] program provides a lot of the benefits of solar to our low-income residents, and we want to make sure everybody has the opportunity to take part in and benefit from this program and receive the credits that they signed up for.

Q. What is the role of natural gas in DC’s future? Do you support the Washington Gas 30-year project to replace gas pipes for a total cost of as much as $3 to $4.5 billion? Do you worry these could become stranded assets, given the city’s 2050 goal of carbon neutrality?

That’s the million-dollar question. That’s why the Commission opened Case 1167, our climate business plan case where we required Washington Gas and Pepco to file 30-year plans to explore what that road map looks like for carbon neutrality in 2050. As part of that, we’re going to be exploring many of the long-term assumptions that Washington Gas asserts and is trying to implement. People talk a lot about Washington Gas’s 30-year plan to replace the pipes. We have taken a very, very, very incremental approach to PROJECTpipes [the utility’s 40-year pipeline replacement program, which began in 2014 and completed its first phase in September 2019.] We require Washington Gas to file plans to replace pipes, and after every round of pipe replacement, we’re conducting audits and doing our due diligence to make sure we aren’t just replacing every pipe — we’re replacing only those that cause gas leaks and greenhouse gas emissions and explosions.

As we develop more of the Climate Business Plan, and we see the direction the District as a whole is moving to achieve these goals, that will continue to inform the direction we move with Washington Gas. In PROJECTpipes 2, we approved $150 million, which is a huge amount, but far less than $3 billion.

Q. How do you plan to address the interconnection issue for solar and wind power?

We’ve done a lot there. We look at interconnection in two ways: We look at it locally, and we look at it on the PJM level. PJM is doing this big interconnection reform in which they’re trying to reduce the backlog. [See

PJM Challenged on Interconnection Rule Transition.] A lot of that is caused by big projects going on the grid. And that has huge implications for us, because we don’t have any traditional generation within our boundaries. We rely on the PJM grid at large for a lot of our power.

[At the local DC level], we have established a cost-sharing program to reduce the burden of distribution upgrades when we do CREF projects. We have an issue with hosting capacity on a lot of our feeders, and so sometimes when you put on these larger CREF projects, it causes the hosting capacity to be exceeded, which requires the distribution upgrades. And so instead of having the developer of that CREF pay that money in full, we’ve developed a cost-sharing mechanism. It’s a 50K cap per project; PEPCO pays a part of it, and the developer pays a part of it.

Next, we’ve established a public interconnection queue so people can go into it and look for where their project is. So there’s more transparency there. We also, this past January, established a similar cost-sharing mechanism for net metering projects because we were running into the same hosting capacity issue with some homeowners who wanted to get solar in their house. There were large distribution upgrading costs. And so we put a rulemaking out, and we received comments. The commission is currently evaluating them and trying to determine the best way to go.

We are having more solar coming online than we ever had. Last year, 2021, was the first year that hit our solar carve-out, as required by the RPS statute, and so we’re very proud of that. This year we’re on track to outpace the number of applications we had next year. Yes, there are opportunities for improvement, but we’re adding solar in the District at a high number, and we’re very proud of that,

Q. From the PSC’s annual report on the Renewable Portfolio Standard, it looks as if what’s happening is that the utilities are meeting annual goals by buying renewable energy credits, not putting new clean generation on their systems. So how do you want to address this situation wherein D.C. ratepayers are not getting more clean energy but are paying for the RECs?

Wholesale electricity suppliers are the ones who are bound by the RPS, not the actual utilities. Pepco procures electricity through PJM auctions. But those wholesale providers are the ones who are responsible for ensuring that energy from renewable resources is in their bid.

The question really is, how do we encourage more renewable energy on the grid? I think we’re starting to see that in D.C. In our fuel mix versus the PJM fuel mix, we have 12% renewable energy, versus the PJM region, which is 6%. So we are better than the region. We are trying to be innovative in our approach. We have Pepco in the process of securing a long-term PPA. As the cost of solar is reduced, you’ll see more people buying solar energy. And as we make the procurement of renewable sources easy, you’ll see a lot of electricity suppliers do that. Right now, they do have the ability to just buy RECs. Some of it is just a financial proposition. Some of these things are controlled by market forces and things that we don’t have the power to require explicitly at this time.

Q. Why was there no substantive meeting in early July about encouraging Pepco and Washington Gas to apply for IIJA funds, report monthly to the PSC, and track their expenses? Are there plans for the commission to open its process and make it really public, transparent and engaging?

When we have our open meetings, the purpose of the open meeting, the majority of times unless stated otherwise, is to purely vote on matters before the commission. But we engage in a very, very robust stakeholder process. In the proceeding you mentioned, we told people two things. One, we want the utilities to file their plans with us, so that everybody can see them, so that there’s not this complaint later that Pepco and Washington Gas have filed their plan with the federal government that the commission didn’t know about, nor did the public. Once the plans are filed, we ask the public to comment. In the commission’s opinion, that’s the ideal transparency, because we’re making Pepco and Washington Gas come to the table and submit their programs. A lot of times in our other meetings, when we make orders, our orders will have the justifications for our reasoning, as well as the e-docket system that allows the public to go through and search anything they want with respect to any case. We very frequently grant intervenor status, so that parties that have an interest in the case can submit pleadings. We sometimes have open meetings hearing-style in which we allow public comment. The commission has, in my opinion, a very robust transparency process, to the point where some people complain it slows us down.

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PJM MRC/MC Preview: July 27, 2022

Below is a summary of the issues scheduled to be brought to a vote at the PJM Markets and Reliability and Members committees 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.

Markets and Reliability Committee

Consent Agenda (9:05-9:10)

B. Load Management Resources Testing

The MRC will be asked to endorse changes to Manual 01: Control Center and Data Exchange Requirements, Manual 18: PJM Capacity Market and Manual 28: Operating Agreement Accounting to conform with new testing requirements for demand response and price-responsive demand. The changes, which were approved by FERC in June 2020, will become effective with delivery year 2023/24 (ER20-1590).

C. Timing of Generation Deactivations

Members will be asked to endorse revisions to Manual 14D: Generator Operational Requirements to support the process timing changes for generation deactivations. (See “‘Quick Fix’ Changes OK’d for Manual 14D,” PJM Operating Committee Briefs: July 14, 2022.)

D. Start-up Cost Offer Development

PJM will seek stakeholder endorsement of revisions to Manual 28: Operating Agreement Accounting to support the start-up cost offer development proposal the MRC approved in May. It clarifies what intervals are included in segments for determination of balancing operating reserve credits. (See “Start-up Cost Offer Development Proposal Endorsed,” PJM MRC Briefs: May 25, 2022.)

Endorsements (9:30-10:25)

2. Application of Designated Entity Agreement (9:30-10)

Members will choose between two issue charges on PJM’s administration of the designated entity agreement: one proposed by the Delaware Division of the Public Advocate and the New Jersey Division of the Rate Counsel, and a second by East Kentucky Power Cooperative on behalf of transmission owners. The latter would make out of scope any consideration of changes to the rights and responsibilities of PJM and the TOs under the Consolidated Transmission Owners’ Agreement. (See PJM TOs, Consumer Advocates at Odds over DEA Inquiry.)

3. Market Seller Offer Cap (10-10:25)

Members will be asked to approve revisions to the market seller offer cap endorsed by the Resource Adequacy Senior Task Force. (See “Stakeholders Wary of ‘Narrow’ Change to Market Seller Offer Cap,” PJM Markets and Reliability Committee Briefs: June 29, 2022.)

Members Committee

Consent Agenda (1:25-1:30)

B. Start-up Cost Offer Development

See MRC Consent Agenda item D.

Endorsements (1:30-2:05)

1. Manual 34 – CBIR Matrix Solutions Options (1:30-1:40)

John Horstmann of Dayton Power & Light and Adrien Ford of Old Dominion Electric Cooperative will seek endorsement of revisions to Manual 34: PJM Stakeholder Process to allow PJM and stakeholders to add options to a Consensus Based Issue Resolution (CBIR) matrix before posting the matrix for discussion. (See “Members Debate Change to CBIR Matrix Procedure,” PJM Stakeholders Pump the Brakes on ‘Clean Energy Expertise’ for Board.)

3. Market Seller Offer Cap (1:40-2:05)

See MRC Endorsements item 3.