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September 3, 2024

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NJ Transit Advances with EV Bus, Sustainability Plans

NJ Transit, New Jersey’s mass transit agency, is pursuing its first ever planning process to draft a sustainable agency future as it pushes ahead with plans to launch its first electric bus program, at a South Jersey garage, and spend $4.3 million to prepare a second garage for electrification.

The agency on March 23 held what it expects to be the first in a series of hearings to solicit public input on the 18-month process to shape and create a sustainability plan that will address issues such as clean vehicle technology, equitable transportation and energy consumption.

The state’s 2019 Energy Masterplan, initiated by Gov. Phil Murphy, set the foundation for the sustainability plan, calling for the state to decarbonize the transportation sector, including a directive for NJ Transit to implement an electric bus program and introduce a battery electric train prototype by 2025. The state’s Global Warming Response Act (GWRA) report, which outlined legislative and policy initiatives to confront global warming, called for 10% of NJ Transit’s new buses to be zero-emission vehicles by Dec. 31, 2024, and all new bus purchases to be for zero-emission vehicles by 2032.

NJ Transit CEO Kevin Corbett said the sustainability plan will build on the agency’s existing efforts by “expanding and optimizing solar energy assets, and implementing energy-efficiency and conservation measures.”

The initiative comes as the agency on March 22 announced that it has completed the installation of eight electric vehicle chargers at the Newton Avenue Bus Garage in Camden, where the agency expects to launch its first electric bus project. The garage is undergoing a $3 million renovation, and the first of eight electric buses are expected to arrive in June, with the full complement expected by the end of the year. The agency approved a $9.5 million purchase of eight buses in October as part of an effort to convert its fleet of 3,000 buses to zero emission by 2040. (See NJ Committee Advances $45M Electric Bus Bill.)

In a separate initiative, the agency on March 14 awarded a $4.3 million contract for the infrastructure design for the deployment of battery electric buses at another facility, Hilton Garage in North Jersey. The expenditure includes a survey of the agency’s 16 garages statewide to assess infrastructure upgrades needed at each garage for future transitions to zero-emission buses.

“Through our garage modernization program, and our zero-emission bus system design and investment planning study, we will transform our infrastructure, our routes [and] our operation to modernize our infrastructure and network to support zero-emission buses,” Erin Hill, an energy and sustainability analyst for NJ Transit, told the hearing.

Car Emissions vs. Mass Transit

Agency officials argue that mass transit is “inherently” sustainable because each person that takes mass transit instead of a private vehicle is reducing their carbon footprint. While a private car emits 0.96 pounds of carbon per passenger mile, commuter rail emits 0.33 pounds and a bus emits 0.64 pounds, according to a presentation at the agency’s sustainability meeting.

For that reason, the GWRA report calls for an increase in NJ Transit’s bus and train ridership from 2020 to 2050, seeking a 54% hike in the most optimistic scenario. The report also encourages the creation of transit villages, with residential areas that are easily reachable from rail stations and so reduces the need for car use.

Environmentalists have criticized the agency for moving too slowly, however. A 2021 report by New Jersey Policy Perspective, a nonprofit think tank, urged the state to move faster in transitioning its diesel buses to zero-emission, saying it would reap extensive health benefits and remove “significant environmental and public health costs.” The report expressed skepticism that the agency is on track to meet the 100% EV bus purchase goals by 2032, in part because the state has no dedicated funding source for the $5.7 billion that NJ Transit expects the transition to cost. (See Environmentalists Call for Faster Transition to Electric Buses in NJ.)

NJ Transit officials said they are looking for input from all stakeholders on the sustainability plan, especially for determining key issues that it should address, including two surveys: one of agency leaders, and the second of community stakeholders. The six “sustainability themes” the plan will encompass include community engagement, air quality, and improving fuel and energy-use efficiency while the agency transitions to clean energy technology, Marcella Thompson — vice president at HDR, a consultant working on the project for NJ Transit — told the hearing.

Sustainability and Reliance  

When the hearing opened to the public, however, the agency’s focus on sustainability and cutting emissions quickly ran into an ongoing concern from some environmentalists about its plan to build a 140-MW natural gas-fired generating plant in Kearny as part of its “resiliency” preparations. The plan is part of a proposal to create a microgrid that would provide power to the agency and enable it to keep three key rail lines going in the northern part of the state if commercial power is knocked out by a storm or other incident, as it was after Superstorm Sandy in 2012.

Several speakers at the hearing decried the proposal and questioned how the agency could claim to be moving toward clean energy and a sustainable future while it is moving ahead with a gas-fueled power plant that will be adjacent to environmental justice communities that already see excessive air pollution.

Ken Dolsky — co-leader of the Don’t Gas the Meadowlands Coalition, a group created to oppose the plant, and a steering committee member of Empower NJ, a statewide environmental group — said he heard a lot of “good stuff” in the presentation about the sustainability plan. But it was marred by the agency’s continued pursuit of the generating plant, he said.

“The bottom line is, if you’re going to go ahead and you are going to build a gas plant, the hypocrisy of this sustainability program is evident, is obvious,” he said. “I mean, this is nonsense. You’re talking about tweaking things around the edges while the elephant in the room is this new gas plant that you’re going to use to make our greenhouse gas problem worse, to make our air quality problem worse.”

In response to that and other concerns about the generating plant, John Geitner, senior director for energy, environment and sustainability for NJ Transit, did not directly address the issue. But he told the hearing that the agency does not “view resiliency and sustainability as opposing topics or in separate spheres.”

“The challenge is to make sure that we’re thinking about resiliency in terms of what it means for sustainability,” he said. “If you don’t have a resilient system, it’s not going to be sustainable.”

“The more resilient system that we have, the more sustainable it is going to be for future generations,” he said, adding that many transit agencies are facing the same issue. “We’re all sort of struggling with what it means to create a system that that will withstand challenges, whether those challenges are weather related, whether the challenges are service reliability related.”

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Overheard at GCPA MISO South-SPP Conference

NEW ORLEANS — Relationships were on the agenda last week during the Gulf Coast Power Association’s MISO South-SPP regional conference, from those among the 200 attendees who hadn’t seen each other in two years to the strong bonds now evident between the two RTOs.

SPP CEO Barbara Sugg said her most rewarding accomplishment since taking the helm in March 2020 — about the same time the COVID-19 pandemic “moved everybody’s cheese,” as she said — has been building the RTO’s relationship with MISO.

“I think one of the biggest changes that we made is that we focused on our relationship with MISO, and I can’t tell you how much how rewarding that relationship has been thus far,” Sugg said during her keynote address that opened the two-day conference. “We were trying to solve the same problems. There’s just doesn’t seem to be a reason to me why we can’t solve them together.”

Sugg said SPP must be ready for the future grid, and collaboration with neighbors is one of her organization’s goals.

“I’ve got a long list of unexpected things that have happened in the past two years,” she said, jokingly. “Don’t worry, I won’t read them to you.”

Sugg referenced the RTOs’ Joint Targeted Interconnection Queue (JTIQ) transmission study as a uniting force between them. (See MISO, SPP Finalize JTIQ Results with MISO Tx Duplicates.)

“Quite simply, we can build it separately, or we can build it together,” she said.

A day later, MISO CEO John Bear said the improved relations were as “simple as Barbara Sugg and I decided to make it a priority.” He said many down the ranks also deserved credit.

“I can’t heap enough praise on MISO and SPP for doing this,” Clean Grid Alliance’s Beth Soholt said of the JTIQ study, which she called “groundbreaking.”

“We’re just very grateful to John and Barbara.”

Bear: High Reliability, Not High Costs

MISO Chief Customer Officer Todd Hillman conducted an environmentally friendly fireside chat with Bear using a tablet’s video of a burning hearth to add warmth.

Todd Hillman John Bear 2022-03-30 (RTO Insider LLC) Alt FI.jpg“Fireside” chat between MISO’s Todd Hillman (left) and CEO John Bear | © RTO Insider LLC

 

“We don’t want to emit any carbon from a fire in the building,” Hillman said.

He asked Bear about his reaction to a recent PJM study that concluded the grid operator might need a reserve margin above 70% to accommodate a 50% share of renewables in the resource mix and satisfy a one-day-in-10-year loss-of-load expectation.

“We all want really high reliability, but we don’t want really high costs,” Bear responded. He said transmission operators must strike a balance between intermittent assets and controllable assets while building new structures, but added that MISO will strive for a more efficient reserve margin.

“Otherwise, someone else will be here talking to you next year,” Bear said.

Although gas generation remains harder to build because of grueling pipeline permitting, Bear said, MISO will continue to rely on gas-fired generation to a degree. “You can’t paint 65% of your house without scaffolding and ladders,” he said, referring to fossil generation importance during the transition.

Bear called escalating weather events an “enduring issue.” He said MISO’s seams are a “magic lever” that MISO can sometimes pull to import generation during severe weather.

Hillman asked what topic Bear would raise if he was in an elevator with President Joe Biden. Without hesitation, he said MISO must build long-range transmission projects over the decade. MISO’s $10.4 billion long-range transmission package has a nearly 3:1 benefit-to-cost ratio, the RTO says. (See MISO Updates Stakeholders on $10B Long-range Tx Package.)

Bear said if staff is to operate with a fleet awash in intermittent resources, they must be able to move the energy around when output is high or when the intermittent resources aren’t producing at high levels. He said MISO will have to look closely at how renewable resources twice the size of today’s might alter flows.

The RTO will soon reassess the need for a new set of interregional transmission projects with PJM because of the increase in renewable resources, Bear said.

Consultant Asks for Unified MISO 

Jennifer Vosburg 2022-03-30 (RTO Insider LLC) FI.jpgJennifer Vosburg | © RTO Insider LLC

“The future is coming, and we’re going to have a rough ride getting there,” independent energy consultant Jennifer Vosburg said, calling for a more unified MISO between the Midwest and South. She lamented that about eight years into the South’s MISO membership, it’s isolated from the rest of the footprint when it comes to planning.   

“How many futures are we talking about? Are we talking about MISO future or a MISO South future?” she asked rhetorically. “I joined MISO. I didn’t join MISO South.”

Vosburg pointed out that MISO South is not included in the first half of MISO’s long range transmission plan (LRTP) and will not share in costs. When the South is included in long-term planning, she predicted rocky cost-allocation discussions.

A cost-allocation “Civil War,” she quipped.

Vosburg also said addressing the connection between MISO Midwest and MISO South is past due. She pointed out that because a 500-kV Dell-New Madrid line is on outage through June, MISO Midwest lacks any physical links into the South. (See MISO Midwest-South Transfer Service on Outage until July.)

“That is something we must address. It’s been long enough,” Vosburg said. “We’re planning for one MISO, but we’re operating two.”

She said while MISO South won’t see any costs from the LRTP’s first half, it also won’t see any chance for federal infrastructure funding. “I think there’s a danger there,” Vosburg said, reminding planners that ratepayers are at the other end of spending.

Undergrounding a No-go in NOLA

Deanna Rodriguez 2022-03-30 (RTO Insider LLC) FI.jpgEntergy New Orleans CEO Deanna Rodriguez | © RTO Insider LLC

Entergy New Orleans CEO Deanna Rodriguez earned the conference’s biggest laugh when describing the resilience plan the utility will file at the Big Easy city council’s request.

She said Entergy will likely stop short of “gold-plating” the infrastructure by undergrounding all power lines.

“We don’t underground our dead people in New Orleans,” Rodriguez said, a reference to the city’s iconic above-ground tombs. Because New Orleans is at or below sea level, the soil has a high water table, placing bodies buried in the ground at risk of being water-logged or even displaced.

In recent years, Entergy NOLA has been buffeted by hurricanes, severe winter weather and just recently, tornadoes. Hurricane Ida last year cut power to the entire city, and it took 10 days to completely restore electricity. Rodriguez said that the transmission structures that toppled during the storm were first tested by 150-mph winds.

She said it’s “critical” the utility get creative in making the system more resilient, including exploring microgrid technology.

“You have to look at all options,” she said.

Tx Planning a ‘Least-regret’ Approach

Aubrey Johnson, a freshly minted vice president at MISO overseeing all aspects of transmission planning, said that recent leaps in the electric industry are more dramatic than any of the 100 years that came before and require planning a system that can handle more uncertainty.

Johnson said MISO’s planning is a “path of least regrets” and quoted President John F. Kennedy in saying, “the best time to fix the roof is when the sun is shining.”

“We’re speeding to the outcome at a rapid pace. … What we should realize is, when it’s broken, it’s always harder to fix.”


Aubrey Johnson Antoine Lucas 2022-03-30 (RTO Insider LLC) Alt FI.jpgMISO’s Aubrey Johnson (left) listens to SPP’s Antoine Lucas during a panel discussion on transmission planning. | © RTO Insider LLC

Antoine Lucas, SPP’s vice president of engineering, agreed that transmission planning inaction carries a hefty cost.

“We’re going to have to get more study … into the cost of indecision to get folks more comfortable with the costs of decisions,” he said.

MISO Director of Real-Time Operations J.T. Smith said he had a role in the 2011 Multi-Value Project (MVP) portfolio, the RTO’s last long-range planning effort. He said the portfolio’s only shortcoming is that it didn’t go far enough.

“We underbuilt it,” he said. Nodding to Soholt in the audience, he said, “Beth was yelling at me [at the time] that it wasn’t enough, that more wind was coming.”

Lessons from the Natgas Sector

Steven Bruns 2022-03-30 (RTO Insider LLC) FI.jpgSteve Bruns, Tenaska | © RTO Insider LLC

 

Steve Bruns, a marketing vice president with Tenaska Marketing Ventures, gave attendees and MISO and SPP staff a crash course on natural gas contracts and curtailments during a panel discussion on the fuel supply issues during the February 2021 winter storm that led to load shed in both RTOs.

SPP COO Lanny Nickell said 53% of the grid operator’s accredited gas supply didn’t show up during the storm, leading to the first load shed in the organization’s 80 years. It turned out a “surprisingly low number” of contracts were for firm fuel.

“Less than 50%,” Nickell said. “That was eye-opening.”

“I’m sympathizing with you guys because I too still have PTSD over the events that transpired during that week in February,” Bruns said. “Firm means something different in the natural gas world. Unfortunately, the electricity markets have decided to be a spot buyer, a daily buyer of commodity [regulated local distribution companies].

“The big gas utilities’ industrial customers have much more of a portfolio approach when they’re procuring gas. They’re buying first of the month; they’re buying fixed price. Yes, those are typically higher priority products that those consumers of natural gas have contracted for, and therefore the producers are going to give those contracts a higher priority level of service when they’re going through their curtailments as they’re starting to lose production.”

Gramlich Says System at ‘Breaking Point’

Rob Gramlich 2022-03-30 (RTO Insider LLC) FI.jpgRob Gramlich, Grid Strategies | © RTO Insider LLC

Grid Strategies President Rob Gramlich said RTOs, save for CAISO, fail to proactively plan their transmission systems. He said MISO’s and SPP’s interconnection queues, largely designed to usher in natural gas and combined cycle plants, are dysfunctional when it comes to integrating the new resource mix.

“This system is really at the breaking point right now,” he said. “Low-cost decarbonization requires large-scale transmission.”

Gramlich said the future system must be able to flow tens of gigawatts of renewable power bidirectionally. “If we keep nickel and diming with generator interconnections, we’re probably going to end of paying a lot more in the long run,” he said.

Past transmission planning efforts to incorporate renewable energy, such as MISO’s MVP portfolio and SPP’s priority projects, only came up short in that they weren’t big enough, rendering wind generation curtailments today, Gramlich said.

“Let’s take that lesson, roll it forward, and do this big at the right scale,” he said.

Entergy La. CEO Looks to 2050

Entergy Louisiana CEO Phillip May said though some industrial customers were initially resistant to carbon reductions goals, they now widely accept sustainability.  

“The shift is complete. Anywhere you go, that conversation is welcome, and you can roll up your sleeves and talk about it,” May said.

He said while he’s confident about Entergy’s goal to reduce carbon emissions 50% by 2030, the path to net-zero by 2050 is hazy.

“The great thing about big, audacious goals is you don’t know how you’re going to get there,” May said. “But I’m confident we’ll get to 2050 and there will be a big, quantum change.”

May said solar generation is now a “very compelling economic asset,” and that carbon capture and sequestration will likely come into play. Electrification of the Gulf Coast’s heavy industry is also on the horizon, he said.

“Increasingly, our customers’ customers are going to demand that those products be cleaner,” May said.

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Nonprofits Push Entergy on Transmission Planning

NEW ORLEANS — Several nonprofits pushed Entergy to embrace large scale transmission expansion in adjusting to a growing renewable fleet during an Entergy Regional State Committee Working Group meeting Wednesday.

Debra Lew, with Energy Systems Integration Group, said Entergy’s corporate decarbonization goal requires transmission. The company committed in 2020 that it would meet a 100% clean energy goal by 2050.

Lew said Entergy should have a “triple goal” in the transition: “clean, reliable and affordable.” She said large-scale transmission projects are key to ensuring those goals.

“The larger the geographic size of transmission expansion, coordination, the cheaper the energy,” she said. “Transmission costs are tiny compared to other resources and infrastructure costs.”

Andy Kowalczyk, with activist group 350 New Orleans, also advocated for a robust transmission system and called for a re-examination of MISO South’s planning needs.

“Utility trends in the changing resource profile for MISO South, public policy goals and prevalence of extreme weather events drive the need for a reassessment of planning for the bulk power system in the region,” he said.

Kowalczyk said between Entergy utilities’ and Cleco’s current requests for proposals, MISO South is primed for an additional 4.2 GW of renewable generation. He said he pictures even more RFPs within five years.

“This is only the beginning of this generation shift,” he said. “There will need to be adjustments in transmission planning to deliver renewables and meet this shift.”

He also said an “inability to transfer power from outside of impact zones hindered recovery for Louisiana and Texas residents after Hurricanes Laura and Ida.”

Laura in 2020 and Ida in 2021 were the strongest hurricanes to ever strike Louisiana.

Clean Grid Alliance’s Natalie McIntire asked Entergy leadership to prepare a future presentation on how the utilities plan to handle a clean transformation in terms of generation and transmission planning.

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Big Investments Still Needed to Meet California Dairy Methane Goal

California is about halfway to meeting a 2030 dairy methane reduction target, and it could cost as much as $3.9 billion to get the rest of the way there, according to a new report from the state’s Air Resources Board.

Progress on meeting the goal has been boosted by $289 million from California Climate Investments, a program that distributes proceeds from the state’s cap-and-trade program to help reduce greenhouse gas emissions. The program has funded 233 dairy and livestock GHG emissions reduction projects.

The cost to further reduce emissions to reach the 2030 goal depends on the types of projects and technology involved, according to the report, which the California Air Resources Board (CARB) released last week.

On the high end of the cost range, rolling out an additional 230 manure digester projects that use fuel cell technology would cost an estimated $3.9 billion. If the digesters used internal combustion engines instead, the cost would drop to $700 million. But that technology would increase on-site pollution, according to the report, which envisions a range of funding sources.

“New or expanded local, state or federal incentives or funding mechanisms could potentially accelerate the capture and beneficial use of California biomethane, provide additional revenue necessary to ensure that California’s dairy manure methane emissions are captured, and direct the biogas to difficult-to-decarbonize sectors,” the report said.

CARB also hosted a workshop last week on methane, dairies and renewable natural gas in California.

Range of Strategies

California’s dairy and livestock sector produces more than half of the state’s emissions of methane, a short-lived climate pollutant and potent greenhouse gas.

Cows burp out methane produced in the digestive process, and methane is released during anaerobic processing of the animals’ manure.

Senate Bill 1383, adopted in 2016, set a statewide target to reduce the dairy and livestock sector’s methane production by 40% below 2013 levels by 2030.

Dairy digesters are one way to reduce methane emissions. The digesters collect methane produced during anaerobic manure digestion. The biomethane then has a variety of potential uses: generating electricity that can be used on site or sent to the grid, fueling vehicles or being injected into the natural gas pipeline system after it has been upgraded to meet specifications.

Digesters have contributed a dairy methane reduction of about 2 million metric tons of CO2 equivalent, or about 20% of the 2030 target, according to CARB’s report.

Another way to reduce dairy methane is through alternative manure management, in which manure is exposed to air during processing to stop methane production. In one such practice, animals are allowed to spend more time in the pasture.

In addition, research is ongoing on food additives that may reduce the amount of methane that cows burp, known as enteric emissions.

And a decrease in the number of cows statewide is reducing dairy methane, a trend that’s expected to continue.

“A combination of dairy digesters, alternative manure management, enteric strategies and dairy herd size population decreases will be needed to meet the 2030 target,” CARB said in its report.

Digester Debate

Several programs can serve as incentives for dairies to install digesters. Digester-produced biomethane may be eligible for credits in CARB’s low-carbon fuel standard (LCFS) program, the federal Renewable Fuels Standard or CARB’s cap-and-trade offsets program.

The programs “act as an ongoing revenue stream for facilities to help offset the initial high capital costs of development as well as support the ongoing operational costs of the digester,” CARB said in its report.

But critics say the programs create an incentive for dairies to expand, increasing environmental and health impacts on surrounding disadvantaged communities. And some say the LCFS overstates the climate benefit of using the digester-produced biomethane as a transportation fuel. (See CARB Promises Closer Look at Biomethane Role in LCFS.)

Some have suggested that large California dairies may be making more money from the so-called “factory farm gas” than they do from milk.

The latter question was discussed during CARB’s workshop last week.

Aaron Smith, a professor of Agricultural and Resource Economics at the University of California, Davis, presented an analysis of dairy costs and revenues in the third quarter of last year.

Making several assumptions based on a herd size of 2,000, Smith found that the main component of biogas revenue was LCFS credits, followed by credits from the federal Renewable Fuel Standard program. Revenue from the gas itself was only a sliver of the total.

Smith described the total revenue as “much, much larger” than the digester cost, “which is largely what has fueled this massive growth that we’ve seen in digesters.”

The total biogas revenue in Smith’s analysis was slightly more than half the value of milk produced by the dairy.

“What these large subsidies do, is they do change the economics of dairy farms,” Smith said.

Another workshop speaker was Sam Wade, director of public policy for the Coalition for Renewable Natural Gas, who disputed Smith’s findings.

Wade said the volatility of credit prices must be kept in mind. LCFS prices, for example, have ranged from $22 to $206 per credit, he said.

“It’s not fair to just look at the prices when we’ve been at peak and sort of assume from that that these projects are making a huge amount of return,” Wade said.

Grants to partially cover capital costs of digesters were initially offered, Wade said, but digester projects didn’t really take off until credit programs were added. The idea is that revenue from the environmental credits will cover digester operating costs and pay back a significant share of the capital costs, he said.

“Only recently has the mix of federal and state incentives been successful at promoting digester project development in California,” Wade said. “Diminishing those incentives would slow progress and risk non-achievement of our methane-reduction goals.”

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How FERC’s Office of Public Participation is Spending its Early Days

FERC’s Office of Public Participation is up and running 44 years after Congress first directed the agency to create it.

Elin-Swanson-Katz-(RTO-Insider)FERC OPP Director Elin Katz | © RTO Insider LLC

It’s a very different world than lawmakers probably imagined back then. For one, the office has had to start up almost entirely virtually as the pandemic continues to keep workers away from the office.

But Elin Katz, a former consumer advocate who was appointed director of OPP in October, has been diving right in despite the circumstances.

“It’s been hard, but we’re going along, and like everybody else, we’re doing the best we can under the circumstances,” she said during an event hosted by the Connecticut Power and Energy Society Wednesday.

So what does OPP do, anyway?

A big part of the job is answering calls from people looking to engage with FERC’s work.

“I think of us as a soft place to land,” Katz said.

About 30% of the calls have nothing to do with FERC jurisdictional issues, but Katz said the office tries to find answers for every call.

OPP is also doing outreach and creating educational materials to help the public understand better how the agency operates.

And Katz said she has started an informal mission within the office called Comments Matter to let people know that their voices are heard.

“You can file a comment fairly easily. It tells you how to do that on our website,” she said. “But I also reassure people that when you file a comment … the commissioners read them.”

Katz is aware that some issues tend to attract more voices than others.

“There’s a lot of concern around infrastructure development,” she said. “A lot of the angst in recent years has been around … pipelines, and that was part of the impetus for the office, to make sure that people who are impacted by infrastructure projects are able to bring their voice in earlier.”

Transmission infrastructure is also a growing point of notice for the office.

The office, she said, wants to understand how to make sure that the public and affected parties are part of the process and FERC is protecting environmental justice communities from unnecessary infrastructure development.

OPP is planning to hold its first in-person staff meeting at the April open meeting.

The office is also still staffing up. FERC is hiring a supervisory energy markets adviser and supervisory infrastructure adviser for OPP.

“We’re building the plane as we fly it,” Katz said, adding that anyone can reach out to OPP if they need assistance understanding what is happening at FERC.

And she had a request for members of the public.

“Hold our feet to the fire,” she said. “Make sure we’re meeting your expectations and giving you, as members of the public, what you need.”

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GCPA Panelists Go One on One Over SEEM Proposal

NEW ORLEANS — Two panelists on either side of the Southeast Energy Exchange Market (SEEM) argument used several basketball references in debating how the nascent market will work in practice during the Gulf Coast Power Association’s MISO South-SPP conference.

SEEM will facilitate sub-hourly, bilateral transactions at a zero-transmission rate. Bordering the MISO and SPP footprints and with 16 member utilities, it’s set to go live in October.

The Southern Alliance for Clean Energy’s research director Maggie Shober said her concern is SEEM members can pick and choose whom they transact with, effectively blocking out some independent power producers and that it discriminates access to transmission service.

Maggie Shober 2022-03-30 (RTO Insider LLC) FI.jpgSACE’s Maggie Shober | © RTO Insider LLC

“We aren’t seeing this as a driver to new renewables. We see this as a potential air ball,” she said, working in a March Madness reference as a nod to the Final Four games being held down the street at the Superdome.

Corey Sellers, Southern Company’s general manager of transmission policy, said the member companies don’t have an incentive to block certain transactions. “The incentive is to have this [market] as active as possible to drive down costs,” he said.

Sellers said interested participants are seeking a “low-cost, low-bureaucracy approach” to the market. He said it will cost about $5 million to stand up the market and about $2 million to $3 million annually to maintain it.

“We think it’s a rather elegant approach to modifying the Southeastern market,” Sellers said.

Southern is a founding member of SEEM. Other members include Duke, Dominion, Associated Electric Cooperative, Inc., LG&E and KU Energy, Santee Cooper and the Tennessee Valley Authority.

FERC recently rejected more attempts by environmental, clean energy and community groups to overturn both its approval of SEEM and its orders to implement the market. Some of those groups have also filed an appeal in the D.C. Circuit Court of Appeals, asking the court to prevent SEEM’s creation. (See FERC Again Rejects Efforts to Overturn SEEM.)

SEEM’s footprint would be about the size of MISO, extending from Springfield, Mo., to Savannah, Ga., Sellers said.

Shober said she is worried about the market’s “opaqueness.” She said SEEM will lack the transparency of an RTO wholesale market.

“Once it goes live, it will be hard for us to even know what’s going on in the market,” she said, likening the situation to holding a basketball game without media coverage. “How would the public feel about that? ‘Here’s the winner of your NCAA tournament, and just trust us that it happened this way.’”

Sellers said that while SEEM won’t publish real-time pricing, it does plan to share certain hourly statistics, such as megawatt amounts traded. He said the market might publish average weighted prices from the prior trading day.

“The output is a set of bilateral transactions,” he explained, adding that there wouldn’t be uniform pricing.

Sellers said he wasn’t yet sure if SEEM is the end goal, but that it’s a way to raise a market quickly and realize benefits while keeping conversations open about the future.

But Shober said SEEM is missing several design features that could allow it to transition smoothly into an energy imbalance market or an RTO.

“SEEM is not seeming to be designed in that way to take those steps forward,” she said. She likened the market to a “high school JV squad” when it could be a high-performing college team.

Sellers said SEEM represents the best way to make market transactions and possibly save millions without disturbing the members’ current constructs.

“Now, are we a fast-break team? Probably not,” he said.

“JV might have been a bit of a low blow,” Shober responded.

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Biden Invokes Defense Production Act for Critical Minerals

The White House on Thursday announced that President Biden had invoked the Defense Production Act (DPA) to step up production of rare minerals that are critical components of the transition to electric vehicles, fuel cells and green hydrogen production.

The announcement came the same day that the Senate Energy and Natural Resources Committee heard from a domestic uranium mining company, a metals mining company based in Minnesota, a D.C.-based minerals trade group and a U.S. Geological Survey expert who explained that a list of “critical minerals” vulnerable to foreign supply disruption has grown in the last four years.

Committee Chair Joe Manchin (D-W.Va.) noted that he and other senators had asked the president to invoke the DPA, a Cold War-era law enacted in 1950 authorizing the president to order private companies to prioritize production for the government.

Ranking Member John Barrasso (R-Wyo.) complained that the administration has made it more difficult to mine domestically and called for Biden to ban imports of Russian uranium as he had proposed earlier.

“Currently it takes an average of 10 years to permit a new mine in the United States and [Biden] wants all of this [decarbonization of the economy] in place in eight years. It just doesn’t add up,” Barrasso said. “If President Biden doesn’t reverse course and stand up to the mining opponents in his own party, it’s only going to get worse. It will mean that we will continue to fund our adversaries as we are doing today with Russia.”

Biden’s invocation, along with his announcement that he would withdraw 1 million oil barrels per day from the Strategic Petroleum Reserve for U.S. refineries in view of the global oil shortage, drew Manchin’s immediate support after the hearing. Barrasso dismissed the move and again called for Biden to ban imports of Russian uranium.

During the hearing, Scott Melbye — executive vice president of the Uranium Energy Corp., based in Corpus Christi, Texas, and president of the trade group American Producers of America — testified that Russia, Kazakhstan and Uzbekistan “now supply nearly half of the uranium consumed by U.S. nuclear utilities.”

“We estimate that more than $1 billion per year in nuclear fuel purchases are flowing from the United States to Rosatom, the Russian State Atomic Energy Company, which is an extension of the Kremlin and clearly part of the Russian military complex.

“It’s simply unconscionable to allow U.S. uranium purchases to continue funding the Putin war machine,” he said, adding that his group supports a ban on Russian uranium imports.

Steve Fortier, director of the USGS’ National Minerals Information Center, said that while the U.S. remains a major mineral producer, the agency has determined that the nation’s industries are “100% import-reliant for 17 mineral commodities and at least 50% import-reliant for an additional 30 mineral commodities.”

“The United States depends on unreliable foreign sources for many of the strategic and critical materials necessary for the clean energy transition, such as lithium, nickel, cobalt, graphite and manganese for large-capacity batteries. Demand for such materials is projected to increase exponentially as the world transitions to a clean energy economy,” Fortier said.

Abigail Wulf, director of the Center for Critical Minerals Strategy at D.C.-based Securing America’s Future Energy, said the U.S. is losing to China on mining and mineral processing.

“China is the world’s largest processor of copper, nickel, cobalt, lithium and rare-earth elements, and they control 60% of anode production and 40% of global cathode production. Consider that in 2019, about 70% of the world’s cobalt supply was mined in [China]. But more than 70% of that cobalt was refined in or controlled by China. The first metric is an act of nature. The second is an act of policy,” she said.

Julie Padilla, chief regulatory officer for Twin Metals, said that despite the president’s enthusiasm about more domestic mineral production, the federal bureaucracy, namely the departments of Agriculture and the Interior, have continued to block development.

“If this country wants to produce its own nickel, it has to mine in Minnesota. If we want our own cobalt, platinum and palladium, we have to get it in Minnesota,” she said. “Northeastern Minnesota, where Twin Metals has proposed to operate, sits on top of the largest undeveloped deposit of these minerals in the world. The area contains a stunning 95% of the U.S. nickel resources, 88% of our cobalt, 75% of our platinum group metals and a third of the country’s copper.

“But the United States will not be able to do that under the current regulatory process that is unpredictable, subject to political manipulation, with changing rules in each administration and in conflict with the priorities of our nation. It’s past time for Congress to take action,” she said.

Paul Ziemkiewicz, director of the West Virginia Water Research Institute at West Virginia University — and the only witness to come to the committee with good news — said researchers have developed a process to pull rare and critical minerals out of acid mine drainage.

He said the university is now building a 1,000-gallon-per-minute plant near an old mine in the state to test the process.

“We see this as an opportunity to recover value in the treatment of acid mine drainage rather than simply spending money for an environmental useful purpose,” he said.

The university is also working with officials in Montana, he added, and the early analysis is promising.

“We have a relationship with the Montana resources at Butte, Mont. We’ve characterized the acid mine drainage coming into the Horseshoe Bend plant there. It’s an excellent resource, and the interesting thing is the makeup of the rare-earth elements coming into these hardrock mines and coal mines are almost identical.

“And when I say identical, they’re not only the same distribution of elements, but it’s heavily skewed toward the heavy rare-earth elements. The Chinese … are desperate to get their hands on heavy rare-earth elements.”

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Q&A: SERC CEO Jason Blake

SAVANNAH, Ga. — As SERC Reliability held the first in-person meeting of its Members and Board of Directors since the outbreak of the COVID-19 pandemic this week, ERO Insider’s Holden Mann sat down with CEO Jason Blake to discuss how the coronavirus has changed regional entity’s culture and the challenges that lie ahead for the ERO Enterprise. The following exchange has been edited for clarity.

ERO Insider: As this is SERC’s first in-person meeting in almost two years, it seems appropriate to start by talking about some of the lessons you’ve learned from the changes to how SERC operates over the last few years. What kind of efficiencies have you discovered during the shift to remote work, and what are the things that you’ve found really need to be done in person?

Jason Blake: Well, it’s so commingled — I think some of the things that we’ve learned and the opportunities that we’ve had are also so intertwined with [the feeling of], “Oh, my goodness, I miss doing that.”

In terms of lessons learned [and] efficiency gains, [there’s] the way we do our monitoring and our audits. We’ve learned that for certain audits, we can be quite effective doing things virtually, so that’s a bit of a game changer. We may not need to bring everyone on site to conduct a certain audit. And we really pride ourselves on being risk based, so … if it’s a lower-risk type engagement, we should try to utilize these new tools of virtual engagements.

With that said, there are certain things that are hard to do virtually. You know, being able to walk down substations, or just the human interaction with the audit engagement that I believe is critically important. Our auditors don’t want to be seen as a cop out to give you a ticket, but rather an expert coming in to evaluate your programs and identify ways you can get better. And there’s so much value that happens with just the humanization that occurs when you’re in person.

It just feels very different than if we’re on a WebEx or [Microsoft Teams] call. You see body language, and then on top of that, you have the opportunity to have additional conversations in the hallway to seek clarification.

Q: How about SERC itself, and the working culture?

A: It’s really [been] wonderful to be able to move toward recognizing and establishing work life balance [and] creating the type of work environment where people can work remotely twice a week — [which is] our policy — yet, not wanting to let go of the value that we have.

It’s really important to our culture and who we are to be able to get together. I think there’s creativity, there’s connection, there’s just massive efficiency gains by being able to dip in someone’s office and ask a benign question, [which] you might not ever ask if you had to set up a WebEx or Teams [meeting]. And I think that there’s probably a [similar] concept with stakeholders: certain things they may never ask because they’re not in front of us.

I think the way we do our workshops and things like that, opening those up to be hybrid where people attend virtually … has some benefit to it as well for those that can’t make it. Trying to allow as may people [as possible] to hear the lessons learned we’re trying to share, or that type of outreach, I think has proven well. It’s also sparked a little innovation. We have e-learning modules that are on our website; we have an outreach and assistance team that’s voluntary, [where] if an entity’s struggling with something they can call us.

Q: You have a lot of veteran staff who had to adjust to working remotely during the pandemic. But you must also now have a significant cohort that joined during the pandemic and don’t know what it’s like to work in-person at SERC. Has it been a bit of a shock for them, going back to the office?

A: I think one of the great things about people is we’re adaptable. We had a large percentage of our workforce who really struggled when we went full remote; of course, you also have some individuals that felt quite comfortable quickly. We’re all wired in our own ways.

There are definitely upsides about being able to work remotely: all kinds of family-related things become simpler. That’s why I’m so big on the hybrid [model], to help people with work-life balance while also realizing the benefits of returning to the office. It’s been two years, effectively, so we want to make sure people are comfortable with the new world we live in.

We are focused on having people recall what it was like to be together that we so valued before the pandemic. It’s been really refreshing to see the energy in the hallways: people standing in another person’s [doorway] having a conversation, laughing, or talking about work or whatever. But we had to be very thoughtful about trying to bring people in and understanding that we’re going to have different risk tolerances. So we are being thoughtful as we possibly can, while still trying to do what’s best for our mission.

Q: Cybersecurity and cyber hygiene became a major concern early in the pandemic. (See PPE, Testing Top Coronavirus Concerns for NERC.) How did this risk affect your work at SERC, both in the early stages of remote work and ongoing? 

A: I think the biggest thing is, it just makes us re-evaluate lots of basic, underlying assumptions. It makes us think about the types of devices we’re disseminating to staff: How well protected are they? How locked down are they? Same with [smart phones]: everyone has one with them, right? Do we have those as secure and as locked down as we possibly can?

So there’s definitely focused energy there, which would have needed to occur regardless because of the nature of what we do. People want to be mobile with their information, regardless of whether they’re in the office for a set amount of time or not. One thing that [we’ve] noticed is the phishing [attacks], the smishing — which is when they do it via text — and all kinds of other things. We just learned that QR codes can be corrupted … and that can be a way to get into your system.

Cyber attackers have gotten so creative, and it’s constantly moving and evolving … [and] it only takes one person to make a mistake, which is scary. One person opening something or downloading something that they could potentially spread. So it’s training, training, training, and practice. We do drills; we have an IT department that enjoys trying to catch people, and they do a really good job. But it’s vigilance, and it’s exhausting because you can’t let your guard down.

Q: One of the things we heard about in the meeting today is the escalating cyber risk caused by the conflict between Ukraine and Russia. (See “Cybersecurity and Ukraine,” SERC Board of Directors/Members Briefs: March 30, 2022.) How do you see SERC’s mission in the bulk power system, not just as a regulator but as a resource for the ecosystem or the utilities? How can you be a productive part of that system?

A: With things like cyber, you have known risks, you have emerging risks and you have unknown risks. There are things that we know are out there, but we also know that the adversaries are getting more sophisticated and motivated; the threats are getting more complex; geopolitical tensions are volatile. So there has to be a great deal that you don’t know about.

I have a medical analogy that I’ve used quite a bit. The first [step] is preventative medicine: you go to your doctor. Your doctor doesn’t want you to get sick, and so they say, eat these types of things, exercise, practice this type of hygiene and so on. This is the best of what we know now, and if you do this, it will reduce the likelihood of you getting ill. So we have an outreach team and assistance team, which does exactly that. They set up workshops about emerging issues, or about proven mitigation strategies.

The second [stage] is like your annual checkup. If your doctor knows about known risks and who you are and your potential issues that you could get sick [from], and they run a periodic annual checkup, you leave feeling a little bit more confident and in a better situation. I think the analogy there goes to our monitoring team. They use the reliability standards, the [Critical Infrastructure Protection] standards, which are robust, to make sure you have controls in place … [and] have a very strong and secure posture.

The third part of my analogy ties to the emergency room … and that is when something has occurred and you’re having challenges. Sometimes it could be nothing more than allergies, [but] sometimes, you may have a programmatic issue. And there’s where I see our role. I think this is one of the most important roles that we have.

It’s not just about fining — that’s important, because we want to send a message that this is not all right. But what I believe is most important are ensuring effective mitigation plans are in place. We don’t want to just check a box; we really want to get in there, roll our sleeves up and understand the root cause to make sure we’re setting our entities up so that we’re not only addressing the issue, but that it’s sustainable for the future.

Q: One of the other things that you talked about was the ERO’s transformation: we’re pivoting to renewable resources, and there’s a lot more public attention being paid to the question of reliability and resilience, especially after last year’s events in Texas. Can you talk about the coming challenges for the ERO and regional entities like SERC?

A: I think what we’re seeing is the maturation of the ERO model. Generally speaking, when things first started out, I think our model was much more centered around compliance. And at some point, I think around 2010 or 2011, we became more focused on understanding the why — why are we doing this? I have a hard time believing anybody wakes up and says, “I can’t wait to be compliant today!” I think the why is, “I can’t wait to wake up and make sure that the grid is reliable and secure.” It powers communities; it’s vital to the health and safety of my hometown, a big city, the economy.

And once you come to realize that, then you move to the concept [that] these are tools. Compliance is incredibly important, but it’s a tool to ensure things are reliable and secure. The standards are designed to [ensure] good utility practice. You need to do these things to make sure you’re secure and resilient. So once you can see the big picture, then you start evaluating — what other tools you have, that you [may be] already using, but maybe not in the most effective way.

I believe the regions — SERC and NERC and other regions — have done a really nice job on upping their collective game with the long-term reliability assessment, seasonal assessments and those things. But we cannot draw up those reports, or observe things such as the Odessa event or the [winter storms] in Texas and just write up a really good report and set it on the shelf.

It’s incumbent on us not only to make sure that our stakeholders know. … You have state legislators, you have policymakers [who are] making really complicated decisions. They’re struggling with ideas that have real reliability [and] security implications, and we really do need to improve our capabilities and ability to get in front of them and make sure that as an independent resource, [we’re] just explaining … the challenges … the opportunities, [and] the limitations … so that they can make their decisions. It’s not about driving decisions in any way whatsoever, but just making sure they are in the best position possible.

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Western Power Pool Names New CEO

The Western Power Pool has named industry veteran Sarah Edmonds as its new president and CEO, a role in which she will be responsible for furthering the aspirations of WPP’s Western Resource Adequacy Program (WRAP) throughout much of the Western Interconnection.

“We are truly fortunate to have retained Sarah Edmonds because she brings exactly the right mixture of experience, credibility, and integrity to build on the WPP’s strong foundation, and we are confident she can move it forward with purpose and innovation,” WPP Chairman Bill Drummond said in a March 24 statement.

Edmonds is currently director of transmission and reliability services at Portland General Electric, a job she plans to leave April 18, WPP said. Her prior roles included serving as vice president and general counsel at PacifiCorp Transmission.

Edmonds has been a key player in designing WRAP and in other organizational efforts in the Western grid, including development of the governance structure of the Western Energy Imbalance Market (WEIM).

Edmonds-Sarah-at-EIM-RIF-2018-03-09-RTO-Insider-FI.jpgSarah Edmonds has been named the new CEO of Western Power Pool. | © RTO Insider LLC

“Her move is seen as an important continuation of her extensive work on regional grid matters,” the WPP statement said.

Edmonds said in the statement she is looking forward to “teaming up with the WPP’s Board and staff to propel the organization into the next stage of excellence to meet the needs and aspirations of the Western Power Pool membership.”

Edmonds will replace outgoing President Frank Afranji, who is retiring after leading the organization for four years and establishing the WRAP. (See Retiring WPP Head Foresees Increased Collaboration on Western RA.)

Earlier this year, the Northwest Power Pool rebranded itself as the Western Power Pool, signifying its expanding reach across the Western Interconnection.

What was once a member-run organization focused mainly on grid reliability in the Pacific Northwest and Intermountain regions, Portland, Ore.-based WPP spent the past two years growing south and east.

WPP has been developing WRAP since 2020, initially to address concerns that Northwest utilities have been unknowingly drawing on the same shrinking pool of reliability resources, but interest in the effort spread to other parts of the West.

The WRAP, which is slated to launch a “nonbinding” iteration in the third quarter of this year, has attracted participants in an area spanning from British Columbia south to Arizona and east into South Dakota. Stage 1 of the WRAP will include 26 participants that together represent a summer peak load of about 67,000 MW and a winter peak of more than 65,000 MW.

In creating the WRAP, WPP has also been forced to repurpose itself as an organization. Once the WRAP enters its “binding” phase in 2023, the program and WPP will become subject to federal oversight and FERC rules.

Anticipating those requirements, WPP has moved to restructure its governance and prepare to adopt some elements of an RTO, such as the appointment of an independent board of directors. WPP has created an RA Participants Committee and will establish a Committee of States to ensure that utility regulators have a voice in discussions related to the WRAP. (See RA Program will Require Restructuring of NWPP.)

Edmonds has played a leading role in those efforts.

WPP has not signaled intentions to expand the WRAP’s offerings beyond resource adequacy but appears increasingly as a possible platform for incrementally developing a Western RTO — one that would compete with CAISO’s stalled regionalization efforts, the ISO’s well-established WEIM, and SPP’s nascent RTO West and Western Energy Imbalance Service.

WPP last year selected SPP to operate the technical aspects of the WRAP, providing the market’s forward-showing functions, modeling and system analytics, and real-time operations.

The WPP board selected Edmonds after a months-long search for an experienced industry professional with “demonstrated knowledge of the increasingly complex regional and interregional grid issues faced by the Western U.S. and Western Canada,” it said.

Edmonds “has stood out amongst her peers in helping to steer the development the Western Resource Adequacy Program development effort,” Debra Smith, CEO of Seattle City Light, said in the statement. “Her keen mind and expertise in utility regulatory and governance concepts, and her relationships across the landscape of stakeholders will be a tremendous asset to the WPP and its membership.”

“Nobody is better positioned to steer the organization through the WRAP implementation into the binding program and whatever comes next,” Smith said.