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.
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.
Illinois 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.
“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.
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.
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.
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.
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.
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.
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.
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.)
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.)
The Northeast U.S. could meet its winter peak power needs with LNG or even hydrogen-fired gas turbine generation rather than relying on oil or firing up idle coal plants, argues a Houston-based entrepreneur who views hydrogen as gradually augmenting and, in some areas, supplanting fossil natural gas.
Hydrogen “fits into New England and East Coast fundamentals,” argued Scott Shields, a founding partner of the New Energy Development and a participant last week in a webinar produced by the Northeast Energy and Commerce Association.
Shields said his company began in New England, providing LNG to “peak-shaving” turbine power plants, which typically operate only a few days a year to meet peak demand. Because the gas pipeline system in the region is inadequate, he said, such turbines are often oil-fired. But given the infrequent use, the turbines can run on LNG stored on-site, he said.
But “we found that LNG wasn’t good enough. It had to be sustainable LNG; it had to have a green focus; and hydrogen fit right into that,” he said.
The company today is expanding to partner with client companies on projects that begin with electrolysis to produce green hydrogen for liquefaction or immediate injection into pipelines for power plant consumption.
Small amounts of green hydrogen injected into gas transmission lines today would cut millions of tons of CO2 emissions equivalent to the carbon pollution created by millions of cars annually, argues Scott Shields, a founding partner of Houston-based New Energy Development Company and participant in a Northeast Energy Commerce Assn. webinar this week. | New Energy Development Co.
Shields argued that the future of hydrogen in the U.S. is blending with natural gas. “There’s not a [gas] turbine on the planet that can’t burn a blend of 15% hydrogen right now,” he said, adding that at that level, “we are making a huge dent in the carbon footprint of North America.”
But building gas pipeline infrastructure is difficult. Shields said the number of gas pipeline projects that have had to be scuttled because of public opposition and legal challenges has “created an opening for other fuels that otherwise wouldn’t be competitive”; in other words, green hydrogen.
“We are finding that green hydrogen is a unique substitution that goes hand in hand with LNG. Does New England need green hydrogen or LNG?” He said it does because during times of peak demand, the region must turn to oil and coal plants, totaling nearly 13 MW of capacity.
From a national perspective, he said gas-fired generation has grown, surpassing coal in 2008, but that hydrogen will gradually supplant gas, especially as green hydrogen production ramps up.
“The biggest surprise is the hydrogen use right now,” he said. “There is 13 Bcf of hydrogen produced every day. The U.S. has about 300,000 miles of natural gas pipelines — not counting the [local] distribution systems — but only 1,600 miles of dedicated hydrogen pipelines. …
“Is there going to be a flip of a switch and hydrogen is going to supplant natural gas? Absolutely not. That’s not how anything happens,” he said.
The Biden administration’s efforts to jumpstart the development of hydrogen hubs, he added, will help the growth, but that in general, hydrogen would grow with the right tax policies; “letting capital allocate to the most realistic and most cost-efficient areas would make the most sense.”
“It makes sense for hydrogen to supplant some of the most expensive natural gas markets where you cannot build pipelines,” he said, adding that by his company’s count, there are now 520 large hydrogen projects being planned across the nation.
Brian Jones, a partner at Boston-based Environmental Resources Management, said the administration’s hydrogen hub projects, funded by $8 billion allocated in the Infrastructure Investment and Jobs Act, is driving interest in hydrogen as the program calls for developments producing 50 to 100 metric tons of clean hydrogen per day.
He said the arguments over what constitutes “clean” hydrogen will likely come down to the carbon intensity of the method used to produce the hydrogen.
“There’s really a lot of focus from other stakeholders on what the emissions footprint looks like from that production process for hydrogen and then its uses,” he said. “Fuel cell-based technologies at the end-use can enable zero emissions in a bunch of different sectors, whether it be transportation, stationary remote power or portable power applications.”
Jones too said blending hydrogen into natural gas will likely occur, as well as the development of 100% hydrogen-capable gas turbines, enabling power producers to integrate intermittent renewable technologies with combustion generation.
“Clearly, there needs to be linkages between the renewable energy resources so we have a responsive fleet that can balance the intermittency of renewables as we get into a higher penetration in the future.
“When that day comes, we cannot rely solely on unabated natural gas, and so companies are looking at pilots and blending processes and even working towards 100% power generation from hydrogen and … then blending [hydrogen] into pipelines to repurpose existing assets,” he said.
At this point, however, the U.S. hydrogen strategy appears to be well behind European goals, particularly those of the U.K., the Netherlands and Germany, said Claire Thornhill, associate director at Frontier Economics, based in London.
“Europe has set really ambitious targets for the carbon hydrogen at the EU level, and the aim is to have 40 GW of renewable hydrogen in place by 2030. In the U.K., the aim is to have 10 GW of low-carbon hydrogen in place by 2030, and 5 GW of that should be electrolytic,” she said.
“At the end of 2021, there was a total of just 180 MW of installed capacity across Europe and the U.K. of green hydrogen.”
Following a relatively calm weekend, SPP has again declared a resource advisory for Monday across its 14-state balancing authority area because of expected high loads and concerns over generation availability.
The advisory, which does not require public conservation, is effective from noon to 10 p.m. CT. Under the advisory, the BA can commit units earlier than under standard day-ahead market procedures and commit resources in reliability status.
The RTO’s most recent conservative operations and resource advisories expired as scheduled Thursday night.
The National Weather Service says an approaching cold front will cool down parts of the Midwest by late Sunday into Monday, but “searing heat” will remain in the Southern Plains into early this week.
A persistent high level ridge from the Southern Plains to the Southeast has resulted in record-breaking triple-digit temperatures as high as 115 degrees Fahrenheit in Oklahoma and Texas. Highs well above 100 F are expected in the early part of the week and for the foreseeable future. (See related story, ERCOT Sets Record for Demand … Again.)
SPP set a new mark for peak demand last week at 53.2 GW on July 19. It was the fourth time this year the RTO has recorded a new high. The record before this year was 51.04 GW, set last July.
SAN DIEGO — State regulators generally expressed support for minimum requirements on interregional transfer capacity Wednesday, saying they believed it could produce cross-border transmission projects where FERC Order 1000 failed.
But defining the minimum and ensuring it doesn’t result in inefficient, single-purpose transmission lines remain concerns, the regulators said during the fourth meeting of the Joint Federal-State Task Force on Electric Transmission. The session, which concluded the National Association of Regulatory Utility Commissioners (NARUC) Summer Policy Summit, focused on interregional transmission planning and project development and FERC’s April Notice of Proposed Rulemaking (RM21-17), which would require planners to use longer time horizons and consider multiple scenarios. (See Christie Talks up Flexibility of Transmission NOPR.)
Lessons from Uri
FERC Chairman Richard Glick said the need for more interregional capacity was demonstrated during Winter Storm Uri, when “a couple hundred people [in ERCOT] died, literally, just because they didn’t have access to power.” In contrast, SPP and MISO, which also lost many generating units, were able to minimize blackouts because they were able to import power from PJM and other regions, Glick said.
FERC Commissioner Mark Christie noted that PJM was able to export 6 GW of energy this week despite approaching its projected summer peak of 149 GW. “Interregional transfers do have reliability benefits, no question about it,” he said.
Several state members of the task force said minimum transfer requirements could simplify cost allocation, one of the most vexing barriers to new transmission.
“I don’t know of any regulators in the West who aren’t willing to pay for reliability and resilience,” said Utah Public Service Commission Chair Thad LeVar.
“If we are in agreement that the reason for building projects is resilience and prevention of service interruptions, I see a real possibility that there could be a more across-the-board cost allocation,” said Andrew French, chair of the Kansas Corporation Commission. “It gets much more difficult and much more granular if you start to justify lines based on economic benefits or public policy benefits.”
“It simplifies the cost allocation to set the minimum [requirement]. It also simplifies the benefit calculation by basically assuming benefits,” said Ted Thomas, chair of the Arkansas Public Service Commission. “If you can study rigorously and get the level set right, I’d rather spend that money than trying to come up with a formula that measures the impact of what might happen [in the future] and use that to come up with a cost allocation methodology. I think the minimum transfer benefit solves a lot of those other problems.”
He added: “We’re in a foot race between implementing the solution and the next time we get hit. And laying down a marker is important. If somebody gets hit and we didn’t act, it’s on us.”
Thomas said FERC should set such levels first in the organized markets. “If the non-RTOS don’t like it, you know, or want to study it or want to see what happens, that’s their choice. [I would] point out when you do that, you’re picking up a pair of dice and hoping” for the best.
Kansas regulators made a straw proposal to set the minimum at 10% of each region’s peak load. “That was essentially based on the experience during Winter Storm Uri — the level of demand that had to be interrupted, and the level of imports that we relied on,” French said. “I don’t know that we’re here saying that’s the right number. I’ve seen numbers as high as 40%.”
North Carolina: No Thanks
A numerical requirement would not be welcome in North Carolina, said North Carolina Utilities Commissioner Kimberly Duffley. Although a small part of the state is within PJM’s territory, most of it is not part of an RTO.
“Areas of the country like the Southeast — where through the IRP [integrated resource plan] process the generation is located close to load — may not need this type of interregional transmission, or they just may need less of this transfer capability,” she said.
Duffley also said the Southeastern Association of Regulatory Utility Commissioners (SEARUC) states would oppose “top-down” planning, preferring a “bottom-up” process that preserves regional flexibility.
“When I say regional differences, I mean market structures, natural resources, job development, just the geography of the different regions, to name a few,” she said, noting that Duke Energy does not measure market efficiency benefits based on LMPs, unlike PJM and other RTOs. “A one-size-fits-all approach is not an appropriate way to incent new transmission.”
She also urged caution on FERC establishing a minimum set of benefits to be considered in evaluating new transmission. “There are some states that are opposed to that, but I’m not taking any position on it here today,” she said.
Responding to Duffley, FERC Commissioner Allison Clements said that for interregional planning to be successful, two entities must come to an agreement despite having different resources, methodologies and benefit determinations. “The Order 1000 interregional coordination process kind of just assumed those differences would go away; they don’t go away,” she said.
Role for NERC
Duffley endorsed Michigan Public Service Commission Chair Dan Scripps’ proposal that any minimum transfer requirement be a “definition” rather than a number, “so that non-RTO states are not burdened with a too high of any type of minimum.” Christie, who has warned against FERC being overly prescriptive in its rulemaking, also expressed support for a definition.
Vermont Public Utility Commissioner Riley Allen said he was “intrigued” by a minimum transfer capability but feared that it could lead to “stopgap solutions that are kind of singularly focused on one category … undercutting the benefit cost or the economic case for a larger solution.”
If the focus is on reliability and resilience, he said, perhaps NERC should “identify what that level should be and whether it should vary between regions.”
LeVar said it was unclear how a minimum transfer capacity would affect the WestConnect and NorthernGrid planning regions, which have little or no cost allocation authority. “If that’s an issue that’s going to be pursued, the NERC reliability standards process is a great process for an issue like that,” he said. “WECC can be a valuable tool … because they don’t have an agenda other than reliability.”
Glick also hinted at a role for NERC, saying a FERC rulemaking could be based not just on Federal Power Act sections 205 and 206 — the source of much of FERC’s authority — but also under its reliability authority under Section 215, which the commission used to delegate to NERC the power to impose mandatory reliability standards.
FERC Commissioner Willie Phillips said he hoped the national laboratories’ efforts to quantify the resilience benefits of new construction would provide a foundation for a FERC rulemaking. Under current rules, he said interregional projects have often foundered because neighboring regions could not agree on benefit calculations. When “those projects fall out … we do wash, rinse, repeat — things don’t get built.” Phillips said.
FERC Commissioner James Danly, the lone dissent on the April NOPR, questioned whether FERC could make the “showing” necessary for the commission to issue any requirements.
“I have yet to hear anything that makes me think we’re going to be able to make that showing for us to actually impose something,” he said. “I don’t believe that every wrong can be remedied under the statutes that we administrate.”
Thomas and French disagreed, citing Uri. “I frankly think we have a pretty strong evidentiary basis right now that something needs to be done,” French said.
Pushback on ROFR Reversal
Another subject of discussion was the NOPR’s proposal to reverse Order 1000 and allow incumbent transmission owners a federal right of first refusal (ROFR) if they give an unaffiliated company a “meaningful level of participation and investment” in the project. (See Ratepayers Protest FERC Retreat on Transmission Competition.)
“I can’t say we have consensus in the West about this … but I can speak for myself and the PUC,” said California Public Utilities Commissioner Clifford Rechtschaffen. “We strongly oppose the idea of a conditional ROFR. We think it’s a step backwards.
“We’ve had experience with competitive bidding in California: It’s worked,” he said. “It’s reduced prices. It’s been successful. We have a lot of regionally cost-allocated projects. There’s no real evidence that in states with ROFRs, that they have more regional projects, or that costs are lower.”
Rechtschaffen said FERC should consider other steps to address “legitimate concerns” about unanticipated effects of Order 1000’s ROFR provision. “At a minimum, our recommendation is that FERC leave it up to each state to determine whether or not transmission should be developed competitively,” he said.
Kansas’ French said he had “very complicated” thoughts on the issue. “But we have seen tremendous cost savings in our region, as well, over the last few years on several projects. And it seems the wrong time to turn away from that,” he said.
Rechtschaffen said he welcomed the NOPR’s proposals for more transparency in local transmission planning and said they should include “repair and replacement” or supplementary projects, which receive little or no scrutiny under regional planning processes.
Rechtschaffen said these “utility self-approved” projects represent half of all investor-owned utility spending in RTOs and ISOs.
“In 2022, our largest utility, PG&E, forecast $1.2 billion on capital spending; 88% of that will be spent on utility self-approved projects,” he said. “We heard a similar story yesterday on a panel from Greg Poulos,” executive director of the Consumer Advocates of the PJM States.
Appreciative of FERC Outreach
Several of the state commissioners praised FERC for establishing the task force and including in the NOPR a requirement that planners seek states’ agreement on cost allocation.
“We’re very pleased in terms of the direction and tone of the NOPR,” said Pennsylvania Public Utility Commission Chair Gladys Brown Dutrieuille. “We’re very appreciative because you did put a lot of effort into understanding and hearing the concerns that were expressed by not only us but other people.”
Brown Dutrieuille said she supported FERC’s proposal to consider an expanded set of benefits in transmission planning and cost allocation but said they should not be “mandatory nor exclusive.
“I do have some concern that list of potential benefit metrics includes metrics that may double count the same benefit,” she said.
“It’s really hard to be frustrated with FERC when they’re actually listening to you,” said Maryland Public Service Commission Chair Jason Stanek, a former FERC staffer. “When I first read the NOPR, I felt like the dog that caught the car. So be careful what you wish for, because FERC is saying if you want a seat at the table, pull up a chair, and you have 90 days to sort it out amongst yourselves.”
Stanek also called on East Coast states to coordinate on building transmission to serve their offshore wind projects, saying New Jersey so far is “going it alone” under PJM’s state agreement approach. (See PJM Sees Wide Range of Costs in NJ OSW Tx Proposals.)
“That is not the way for us to be developing transmission along the coast,” he said. “We have to have clear open communication coordination between the RTOs.”
LeVar said “it’s obvious FERC went to great lengths to try to preserve flexibility and state input.”
“What I don’t know … is what impact this different planning scenario would have on momentum towards RTO development in the West. … I think it’s a real issue.”
French voiced a similar worry, saying FERC should ensure that any new requirements not interrupt ongoing intraregional work. “I have some concerns that could inadvertently press a pause button on some of the important work that’s taking place,” he said.
The task force’s next meeting is scheduled for November at the NARUC annual meeting in New Orleans.
