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October 31, 2024

FERC Officials See Need for Changes to RTO Transmission Rules

WASHINGTON — FERC officials told the American Council on Renewable Energy’s Policy Forum on Thursday that RTO transmission planning rules must be revised to support reliability and accommodate the flood of renewable generation.

FERC Commissioner Willie Phillips, in what he said was his first speaking engagement since joining the commission in December, cited estimates that weather-related power outages cost Americans $70 billion annually. He also noted the November FERC-NERC staff report that concluded interregional transfers from PJM to MISO, and MISO to SPP, were essential to recovery from the February 2021 winter storm. (See FERC, NERC Release Final Texas Storm Report.)

“I’ve taken a lot of meetings since becoming a commissioner. And one of the things I hear all the time is that we have generators [and] transmission developers out there that want to build reliability projects; they want to build these interregional projects. But one of the one of the complaints I’ve heard is that RTOs sometimes don’t really take into consideration the reliability value of interregional lines. The thing I keep asking myself is that, in the wake of Winter Storm Uri, how in the world would you assess the … reliability benefit as zero?

“We have a wakeup call right now,” he added. “The transmission development and transmission buildout can be a huge part in addressing reliability and resilience.”

“Amen,” responded ACORE CEO Greg Wetstone, prompting applause from the nearly 200 in attendance at the Convene conference center.

Phillips said additional transfer capability along the MISO-SPP seam “could have made a huge difference and saved lives” during the storm. MISO and SPP recently estimated that transmission projects among their seam could free up to 53 GW of new low-cost renewables and more than $900 million in adjusted production costs benefits. (See MISO, SPP Finalize JTIQ Results with MISO Tx Duplicates.)

‘Reactive’ Planning Panned

Also speaking at the conference was Eric Vandenberg, deputy director of FERC’s Office of Energy Policy and Innovation, who said there was a clear “theme” in the tens of thousands of pages of comments filed in response to FERC’s July Advanced Notice of Proposed Rulemaking (ANOPR) on transmission planning (RM21-17). The consensus: Transmission planners’ “reactive” strategy cannot absorb the influx of renewable generation.

“That process … worked really well for these discrete central station generator interconnections. But now that we’re having so many interconnections, and they’re all of a much smaller size, that process is starting to break down,” Vandenberg said, citing offshore wind projects being built along the East Coast. “That kind of reactive process isn’t necessarily the best way to accommodate that multibillion-dollar investment that you’re looking to make in offshore wind.”

Most commenters on the ANOPR agreed with the commission on the need for changes, but there was no consensus over whether the commission should eliminate participant funding or create independent transmission monitors. (See FERC Tx Inquiry: Consensus on Need for Change, Discord over Solutions.)

Vandenberg made his remarks during a panel discussion with speakers from renewable developer RWE Renewables Americas, think tank RMI and Amazon Web Services (AWS), which has about 274 utility-scale generation projects totaling 12 GW in its global portfolio, most in the U.S.

Although the panel was titled “Advancing Competitive Wholesale Electricity Markets,” the speakers spent much of their time also discussing the need for changes to transmission rules.

Kevin Gresham, senior vice president of government relations and external affairs for RWE, agreed that current transmission planning is too slow for the pace of generation development and that OSW projects need regional plans rather than requiring individual states to cover the costs — as under PJM’s “state agreement approach.” (See Fierce Competition in Plans to Upgrade NJ Grid.)

Craig Sundstrom, AWS’ senior manager of energy and environment public policy, also called for broader geographical areas in planning and said RTOs should include corporate power purchase agreements in their forecasts. “That kind of load coming on the system is very real; those commitments are real,” he said, citing the more than 300 companies that have signed on to The Climate Pledge. “Transmission [planning] should account for that.”

Sundstrom said AWS is “super excited” by the provisions of the Build Back Better bill, particularly the investment tax credit for high-voltage transmission, calling it “a critical policy to unlock private investment in transmission.”

Because of its growing power demands, Sundstrom said AWS has started to get involved in stakeholder processes in PJM and CAISO.

AWS began analyzing the PJM queue in early 2021 and determined “a high likelihood of four to five years of project delays,” Sundstrom said. “For companies like ours, that want to decarbonize as fast as possible, that’s simply not keeping up with the pace of innovation and renewable deployment.”

In CAISO, AWS is challenging the ISO’s proposal “to essentially disallow corporate projects with corporate PPAs from availing themselves of resource adequacy in the market, basically limiting those to load-serving entities or utilities,” Sundstrom said.

He said the capacity AWS is deploying “provide some level of resource adequacy, which … load-serving entities and utilities [can buy] to meet their own obligations. We think that there should be some parity in that process to ensure that all the investments that we’re making in Amazon are also helping them meet the reliability needs in the market.”

‘Make Transmission Sexy’

Katie Siegner — senior associate for carbon-free electricity at RMI, who urged the use of grid-enhancing technologies to relieve some of the pressure on PJM’s transmission queue — also said transmission developers need a public relations makeover to respond to local opposition that can prevent RTO-approved projects from being built.

“I feel like there’s a lot more public support for renewables than there is for transmission today,” she said. “So there’s a need that I see to make transmission sexy.”

She cited an RMI report documenting the economic development opportunities associated with wind and solar projects.

“There’s a need to really highlight [the benefits of] transmission [to respond to complaints that] the lines that go over my state are not benefiting me at all. If we can more clearly communicate how they are — even at a macro scale benefiting us all — that, I think, can help.”

Although there was relatively little change in the electric industry for most of its 140-year history, RWE’s Gresham said the current transition means more communication is needed between generators and RTOs.

He said RTOs have not always recognized the technological advances of wind turbines. “If there was one thing that I would say [is] still to be worked on, [it] is to have more industry-RTO/ISO discussion and engagement to really figure out, what can these machines do? Because I think part of the hesitation on ancillary services and inverter technology is [a lack of] understanding of how these machines function.”

FERC’s Vandenberg said he told his staff that they should consider what the electric system will look like in 15 years in evaluating comments from the commission’s two technical conferences last fall on the energy and ancillary services markets (AD21-10). (See Stakeholders Ask FERC to Support E&AS Market Changes.)

The consensus of the technical conferences, he said, was that no single product will solve all of the issues of the generation transition. “There’s a toolkit that you can use, and that toolkit includes things like changes to your operating demand curves for reserves; things like changes to your software; looking at, you know, more efficient ways to commit your resources.

“The other thing that was also very clear is that different regions have different levels of variability and uncertainty and other operational issues that they’re all trying to accommodate.”

Renewable Industry Banking on Trade Bill, Tax Incentives in 2022

WASHINGTON — Supply chain challenges and trade and tax legislation were recurrent themes in discussions at the American Council on Renewable Energy’s Policy Forum on Thursday.

ACORE CEO Greg Wetstone opened the daylong session at the Convene conference center on a note of optimism — citing Sen. Joe Manchin’s (D-W.Va.) willingness to resume negotiations over the energy tax incentives in the Build Back Better (BBB) bill he had rejected in December — before dourly noting that the Russian invasion of Ukraine had spurred “new enthusiasm for near-term fossil fuel development and … momentum for growing the export of liquefied natural gas.”

“Meanwhile, supply constraints, trade policy issues and legislative uncertainty are slowing renewable development,” he continued. “The world has changed in ways that are complicated and not fully understood. But a couple of things are clear: We do know that the folly of our continued reliance on the fossil fuel economy — which leaves us vulnerable to unsavory foreign actors and the gyrations of unpredictable markets — has never been more clear.”

Solar’s Headwinds

Katherine Gensler, vice president of government affairs and marketing for generation developer Arevon, noted that the U.S. has seen three consecutive quarters of price increases for installed solar. “That has not happened before in the United States,” she said.

John Smirnow, general counsel and vice president of market strategy for the Solar Energy Industries Association, said tariffs “are doing great damage” to the solar industry.

“We’ve literally lost tens of thousands of jobs, multiple gigawatts of solar deployment and billions of dollars of economic investment,” he said during a panel on strengthening renewable supply chains through trade and regulatory policy. “Are we still growing as an industry? Sure. Are we going to have our best year ever? Maybe. That’s a question mark.”

Smirnow said the solar industry is “dangerously over reliant” on imports. “Ninety-five percent of solar wafers are manufactured in one country, almost in one region. If solar is going to be the economic engine — the national security economic development engine — that we need here in the United States, we have to grow a solar supply chain here.”

Doing so, he said, will require the federal government to invest in manufacturing, starting with passage of the clean energy provisions of the BBB bill. “Today as a country, we mainly look to the states to drive economic development. Anytime you see a new announcement for new manufacturing investment, it’s always the state governor [or] state economic development officials that are there with the investment,” Smirnow said.

“We can’t compete for private sector investments by relying on states alone, because other countries aren’t relying on their provinces or states alone. And it’s not just China. India, for example, just started a new production-linked incentive. That’s a big reason why First Solar is building a plant there.”

Supply Chain Challenges

Rachel Jones, vice president of energy and resource policy for the National Association of Manufacturers (NAM), said industry needs to change its siloed “pre-pandemic, pre-Ukraine invasion playbook” focused on the “fastest, easiest” way to obtain supplies. Now, she said, manufacturers must understand not only their direct suppliers but the entire supply chain above them.

“I had a company that was looking to build a facility, and they couldn’t get the structural aluminum that they needed,” she recalled. “It became a several-day endeavor of unpacking backwards until we identified the global shortage of magnesium [as the problem]. Ultimately, the global shortage of magnesium was about 20 links up the chain and totally out of control of the person that was trying to build a facility. … It was eye opening.”

The need for critical minerals, she said, “means all of us in this room need to learn about mining” and processing.

“It’s great if you can mine something in the United States. But if there’s one country that controls all of the processes for that, you have to then be reliant on them.” China, for example, controls almost 90% of rare-earth processing and almost 60% of lithium processing, according to the International Energy Agency.

Offshore Wind: Opportunities and Risks

Grant van Wyngaarden, Ørsted’s head of offshore North America procurement, said the “brand new” supply chain the offshore wind industry is building in the U.S. presents economic development opportunities and “a lot of risks.”

Ørsted is building 12 vessels in U.S. shipyards but will need to use foreign heavy-lift installation vessels initially.

One example of opportunity: A plant in South Carolina that will be supplying some of Ørsted’s projects with high-voltage submarine cable will also produce cable for export to an offshore wind farm in the U.K.

Among the risks: international competition for supplies. “Other countries — Netherlands, Belgium, Australia and the U.K. — all announced increased [OSW] targets just this month alone, and that increases additional pressure on a constrained supply chain,” he said.

Although North American OSW developers are primarily sourcing components from Europe, which has been building offshore turbines for decades, van Wyngaarden said the economics will favor U.S. sources in the long term. Transportation costs are “such a significant portion of the total cost that if we can avoid that cost through domestic production, we’re at a sustainable competitive advantage,” he said.

Security Concerns

The panel also turned to supply chain-related security concerns.

Jonathan Wakely, a partner with law firm Covington & Burling, said the U.S. government is particularly concerned with ensuring no risks are introduced by manufacturers of supervisory control and data acquisition (SCADA) and other industrial control systems.

It also is taking a close look at foreign investment in U.S. renewable projects. “Many of these solar farms [and] wind farms can be located in areas of the country that are close to things that the government cares about [such as military] training and testing that’s being done in the air,” he said. “Transactions have been prohibited because of those concerns.”

At a recent NAM board meeting, Jones said, “The biggest … surprise to me, was to fully appreciate the scale of the cyber warfare that’s going on right now, in particular ransomware.

“If you have ransomware that attacks … your [operating technology] system, that takes two or three times as long to rebuild as an [information technology] ransomware type attack. And so far, almost none of these have been reported,” she said. “Companies obviously don’t want a lot of this [made public]. But I would say … a lot of the supply chain disruptions that we are seeing actually have their roots in cyber warfare by ransomware or other types of things.”

Trade Legislation

Congress is considering legislation that could address some of the panelists’ concerns.

Democratic leaders said earlier this month they will convene a conference committee to iron out differences between the United States Innovation and Competition Act (USICA) (S. 1260), approved by the Senate last June, and the America Creating Opportunities for Manufacturing, Pre-Eminence in Technology and Economic Strength (COMPETES) Act (H.R. 4521), which cleared the House of Representatives on Feb. 4.

Both would provide funding to support supply chain security and U.S. semiconductor manufacturing, research and development.

SEIA’s Smirnow said the semiconductor funding would be “hugely valuable,” but his group is concerned by “anti-circumvention” provisions in the COMPETES Act that would  “reduce due process rights.”

Wakely said “every business that does business overseas with foreign partners should look at the outbound investment provision” in the House bill. “This would, for the first time, regulate a broad range of transactions between U.S. businesses and foreign businesses, including investments overseas. It’s never been done before; no other country does it. The language is extraordinarily broad.”

Jones said NAM supports the USICA provisions on chips and critical minerals. “The way that we’re thinking about this is we’ve got an opportunity right now, all of us in this room, to get the best parts of the House bill [and] the best parts of the Senate bill; we get those all together in the conference.”

Texas RE Releases 2021 Annual Report

Texas Reliability Entity CEO Jim Albright said in the organization’s annual report for 2021 that staff were tested by February’s winter storm and the ongoing COVID-19 pandemic, but they “rose to the occasion and [were] able to maintain high-level operations across all program areas while functioning in a virtual work environment.”

The report, released last week, details Texas RE’s accomplishments in registration and certification, reliability standards, compliance assessment, enforcement, reliability services, and outreach.

The Reliability Services Department, which monitors the Texas Interconnection by reviewing system disturbances, analyzing grid performance and contributing to future performance, maintained situational awareness throughout the February winter storm. It also participated in developing the FERCNERC joint inquiry’s key findings with their staff and those of other regional entities.

“Winter weather readiness has been top-of-mind for all of us this past year, so continuing to engage with stakeholders on this key topic and other extreme events is critical to bulk power system reliability,” Board of Directors Chair Milton Lee said in the report.

Members Urge MISO to Assist with Federal Funding Access

MEMPHIS, Tenn. — MISO members last week urged the RTO to position itself as a liaison to help stakeholders access project funding from last year’s federal infrastructure bill.

They also said MISO’s long-range transmission projects seem ripe for an infusion of cash.

The $1.2 trillion bipartisan Infrastructure Investment and Jobs Act passed Congress in November and was swiftly signed into law by President Joe Biden. The bill provides billions in financial resources for new transmission, energy efficiency, electric vehicle development, carbon-capture technologies and nuclear fleet preservation. (See Biden Signs $1.2 Trillion Infrastructure Bill.)

During an Advisory Committee roundtable discussion Wednesday on the legislation’s effect within the RTO’s footprint, several stakeholders envisioned a mad scramble for the bill’s grants and loans. They said the process to access the funds is still unclear.

ITC Holdings’ Brian Drumm, representing transmission owners, said the grid operator might serve as a “hub or a clearing house of ideas” to bring its stakeholders together on projects that would be candidates for the bill’s funds.

Sam Gomberg 2022-03-23 (RTO Insider LLC) FI.jpgSam Gomberg, Union of Concerned Scientists | © RTO Insider LLC

The Union of Concerned Scientists’ Sam Gomberg said MISO could foster a coalition among its stakeholders and members that would help it better its chances to save members’ customers money.

Multiple stakeholders said the RTO might be able to approach the Department of Energy and deliver some clarity to stakeholders. Many said MISO has a role to play in gathering stakeholders together to develop infrastructure projects that can vie for federal dollars.

“MISO could be a conduit for demanding clarity … of what the DOE is asking for. I think they could gather better answers than what my group could,” said Public Consumer Advocates sector representative Christina Baker.

Gomberg said MISO has already done a lot of work to identify the transmission expansion it needs to sustain the grid through its long-range transmission planning. He said MISO could easily get noticed by the DOE as a recipient of federal dollars.

“I know the DOE is under the gun. They want to move this money out the door,” he said. “I think it would be a missed opportunity if MISO and utilities and members didn’t get in line for some funding for these projects.”

Michigan Public Service Commissioner Dan Scripps also said it appeared MISO could see some of the bill’s benefits flow back to the region through its long-range transmission plan.

Otter Tail Power’s Stacie Hebert, representing MISO transmission owners, said it’s not clear how approval of federally funded projects would logistically work. She asked whether transmission developers would still come before the RTO to request project approval.

The Affiliate Sector’s Michelle Bloodworth, CEO of coal trade organization America’s Power, said it’s logical that MISO’s transmission planning would be most affected by the bill. She asked staff to consider that the bill provides for grid development in rural areas, which could spur transmission projects in unexpected places.

Bloodworth said the infrastructure funding will likely speed up the nation’s transition to clean energy sources. She encouraged MISO to conduct analyses on how the bill might interrupt dispatchable resources’ revenue streams.

Multiple members agreed that ratepayers, especially residential ones, should ultimately see the most savings.

The Advisory Committee will discuss the energy industry’s staffing shortages and employee retention concerns during its quarterly Board Week meeting in June. MISO leadership has said it and members are not immune from the Great Reshuffle and CEO John Bear has voiced apprehensions about the grid operator’s ability to secure talent in a tight labor market.

MISO Pivots to Models, Market Engines in New Platform Replacement

MEMPHIS, Tenn. — Now in its fifth year, MISO’s market system replacement project is focusing on a one-stop model manager, new energy management system and day-ahead market-clearing engine.

MISO Vice President Todd Ramey said during the Board of Directors’ March 22 Technology Committee meeting that staff hopes to retire its existing model-management procedure by the end of the year. Going forward, the RTO will rely on a standardized model manager that will be improved upon through 2024, with monthly updates instead of quarterly refreshes.

The grid operator receives modeling data from more than 60 transmission owners and nearly 600 market participants. Ramey said that currently the submission methods vary and require manual validation of the data.

The RTO also plans to test its new energy management system this year and prepare for parallel operations in 2023. The EMS system was delivered last year by General Electric; it’s also slated to deliver the new day-ahead market-clearing engine by the end of 2023.

Ramey said General Electric has two dedicated teams for MISO’s market system, one working on the market clearing engine and another devoted to the EMS.

MISO’s market platform project is set to conclude in late 2024 when the real-time market fully migrates to the new, modular platform.

“This is critical to all the things we want to do to facilitate the change that’s coming,” MISO CEO John Bear said, referring to the new platform.  

Later this year, the RTO must add an energy storage participation model to its legacy market platform. Staff have said they couldn’t simultaneously roll out the energy storage offers mandated by FERC Order 841 while working on the platform replacement. FERC has said storage participation couldn’t wait, so MISO must introduce the storage participation model on both its old and new market platforms. (See MISO: No Choice but to Double Up on 841 Compliance.)

During Thursday’s board meeting, Bear said MISO’s quarterly progress report on the market platform was brief, which he said was a good sign. He said Ramey and his team were making such good progress that there was little to report. 

Director Todd Raba asked whether the RTO is stepping up cybersecurity measures following Russia’s invasion of Ukraine. The U.S. has put the private sector on notice that Russia may launch cyberattacks in retaliation for Western sanctions.

Chief Information Security Officer Keri Glitch said staff understands that Russia is ramping up “preparatory action” for a cyberattack, including scanning websites for security cracks.  

“We continue to take appropriate actions,” Glitch said, adding that MISO regularly reviews updates from government authorities. Staff further addressed the situation in a closed session following the technology committee meeting.

MISO Board of Director Briefs: March 24, 2022

MEMPHIS, Tenn. — MISO leadership took advantage of its Board Week in Memphis to meet with Memphis Light, Gas and Water staff, who are mulling a split from the Tennessee Valley Authority and a new source of wholesale power.

MISO was one of 27 respondents to MLGW’s requests for proposals for an alternative wholesale supplier. The utility is reviewing the proposals and has yet to announce whether it will depart TVA. (See Memphis Moves Closer to Breaking from TVA.) 

MLGW representatives and Memphis-based lawyers and activists attended MISO’s Thursday board meeting. 

Former MLGW CEO Herman Morris, Jr., who now practices energy law, said he appreciated getting to know the people behind MISO.

“The City of Memphis is at a crossroads,” said Pearl Eva Walker, representing the Memphis Has the Power campaign, an offshoot of the Southern Alliance for Clean Energy. “While TVA heralds its low rates, Memphians struggle to afford power.” 

Walker expressed frustration at Memphis’ high energy burdens and TVA’s lagging decarbonization goals, which render the city’s own climate goals unattainable. She also said it’s unacceptable that the federal agency now dumps tons of coal ash near a South Memphis residential area of 72,000 people. 

“We can’t trust TVA,” she said. “They have no accountability. They have no integrity.” 

Walker urged MISO to work with the utility and forge a relationship should Memphis decide to join the RTO. The city will need to develop its transmission infrastructure if it’s to access MISO’s wholesale markets. 

MISO Community Mourns Vannoy

vannoykevin-2018-10-11-rto-insider-fi.jpgMISO’s Kevin Vannoy | © RTO Insider LLC

MISO said last week that Kevin Vannoy, its director of market design, passed away unexpectedly on March 20. 

An emotional CEO John Bear remembered Vannoy as a “phenomenal” link between the RTO and stakeholders whose knowledge, warm manner and quick wit benefited many. 

Vannoy was with the grid operator for more than 15 years and was a fixture at Market Subcommittee and Resource Adequacy Subcommittee (RASC) meetings, often delivering presentations and leading stakeholder conversations. 

RASC Chair Kari Hassler, of Xcel Energy, recalled Vannoy as an invaluable source of knowledge and “a reasonable voice in stakeholder discussions.”

MISO Expects to be On-budget in 2022 

MISO’s finances are tracking to be on budget in 2022, CFO Melissa Brown told the board. 

Brown said her team predicts that by year’s end, the RTO will pay about $282 million in base expenses and $47 million in project investments. Both projections are within a 1% variance from the 2022 budget set last year.  

MISO has spent $22 million of its base budget and $2.3 million of its project investment budget so far this year. 

Brown said inflation has taken the financial team a little off-guard.

“MISO continues to monitor the evolving labor market dynamics, supply chain situation, interest rate environment as well as inflation, which may lead to more significant adjustments to the 2022 forecast in the coming months,” she said.

Last year, the grid operator was 1.4% under its $271 million base budget and 5.5% under its $50 million project investment budget. 

Brown said the underspend was primarily due to lingering COVID-19 impacts, including reduced travel spending, diminished off-site training and untouched salaries and benefits allotments because of unfilled positions.

Board Asks for Better Succession Planning 

The grid operator’s directors are becoming concerned about succession planning within their ranks, according to the board’s annual self-evaluation.

They pointed out that most of the nine directors are in their sixth or seventh year of service. The directors said they and MISO should work on ensuring the board doesn’t suffer gap years where it’s light on experience with the RTO’s systems and protocols.  

MISO directors are limited to serving three three-year terms.

FERC Again Rejects Efforts to Overturn SEEM

FERC on Thursday once again rejected attempts by environmental, clean energy and community groups to overturn both its approval of the Southeast Energy Exchange Market (SEEM) and its subsequent orders implementing the market (ER21-1111, et al.).

The petitioners — two separate collections of activist organizations calling themselves the Clean Energy Coalition and the Public Interest Organizations (PIOs) — have been active in their opposition to SEEM since before the market came into effect by force of law last October because of the inability of commissioners to form a majority either for or against approval. (See SEEM to Move Ahead, Minus FERC Approval.)

The groups challenged this and were denied by the commission. Their request for rehearing Nov. 12 (30 days after the Oct. 13 announcement that the agreement had taken effect) was rejected on the grounds that it was filed out of time; FERC reasoned that the request should have been filed by Nov. 10 (30 days after the deadline for FERC to issue an order expired on Oct. 11, Columbus Day).

After the SEEM agreement became effective, FERC in November approved revisions to four of the participating utilities’ open access transmission tariffs (OATT) implementing the non-firm energy exchange transmission service (NFEETS) used to deliver the market’s energy transactions. (See FERC Accepts Key Tariff Revisions to SEEM.) The petitioners also filed for rehearing of this request, which FERC likewise denied.

Thursday’s orders affirmed FERC’s decisions in both of these cases. Regarding the rehearing request for the original SEEM approval, the commission argued that “the statutory deadline under Section 205(d) [of the Federal Power Act] is a strict requirement.” While petitioners had pointed out that FERC has previously allowed more time for filing rehearing requests because the deadline for commission action fell on a public holiday or a weekend, the commission replied that court decisions have not allowed such extensions for decisions relating to electric rates.

FERC was likewise “unpersuaded” by the petitioners’ description of the OATT amendments as discriminatory. For one thing, the commission said, the PIOs and Clean Energy Coalition had merely repeated their claims that the SEEM agreement constitutes a loose power pool, claims that “were thoroughly addressed in the November 2021 order.”

Additionally, the petitioners had argued that SEEM members have “absolute discretion” about whether NFEETS is used. FERC said that this is not true, because NFEETS is so fundamental to the system that there is no discretion available to members on this point; NFEETS must be used for SEEM to function at all. The commission also disagreed with the claim that requiring “good financial standing” to access NFEETS, as required in the OATT amendments, is unreasonable, as the original OATT also included requirements related to creditworthiness.

Commissioners’ Statements Point to Pending Appeal

Some of the members of the two petitioner groups have also separately filed an appeal in the D.C. Circuit Court of Appeals, asking the court to set aside SEEM’s implementation and FERC’s approval of the tariff amendments. (See Environmental Groups Appeal SEEM in DC Circuit.) Thursday’s order did not directly discuss those challenges, though Commissioners James Danly and Mark Christie issued concurring statements intended to clarify statements of theirs, cited by the petitioners in their arguments, for the benefit of “any reviewing court.”

Danly’s and Christie’s clarifications pertain to their statements of Oct. 20 explaining their support for the SEEM agreement. (Chairman Richard Glick and Commissioner Allison Clements both voted against approval.) Both statements included language that the petitioners interpreted to support their contention that the SEEM agreement took effect later than Oct. 11; Christie and Danly emphasized in their concurrences that this was not their intent, and they both agreed with the commission’s timeline.

Clements also concurred with FERC’s decision to deny rehearing of the SEEM agreement, though she called it a “close case” that is “lamentable insofar as it deprives the rehearing parties a chance to be heard on the merits of their claims” and also leaves unaddressed the question of whether FERC’s deadline for action continues to run during a federal holiday or emergency. Unlike her colleagues, Clements did mention the pending case before the D.C. Circuit, which she hoped would provide “clarity in this difficult matter.”

Clements had dissented on the amendments approval, writing that she agreed with petitioners that “NFEETS is provided through a loose power pool, [and] the majority’s determination to the contrary is arbitrary and capricious.”

“I am an ardent supporter of electric markets when they are used to meaningfully harness competition and ensure better outcomes for customers, including through reduced costs and reliability benefits,” Clements wrote. She warned that the decision “puts a camel’s nose of discrimination under FERC’s tent, threatening to despoil the principles this commission has long held dear. Whatever the potential market benefits of SEEM, the means by which utilities transition towards such a market cannot be permitted to undermine the bedrock principle of ensuring open access to non-discriminatory rates and service.”

MISO Updates Stakeholders on $10B Long-range Tx Package

MISO focused on its first long-range transmission portfolio (LRTP) package twice last week, revealing an early price tag during its March Board Week and then holding a stakeholder workshop Friday to address cost-related questions.

The RTO has cut one long-range project from its final lineup, dropping one of two 345-kV lines in southern Minnesota. That reduced the portfolio’s cost to $10.4 billion, down from a previously announced $13 billion, while staff continues to refine cost estimates. (See MISO Delays $13B Long-range Portfolio’s Recommendation.)

Even as MISO pushed back the board’s consideration of the portfolio to July, it said it wants to move quickly in strengthening the grid with new lines. Its planners have said the seven 345-kV projects should relieve congestion that the Independent Market Monitor regularly warns of and tracks. (See MISO Says System Volatility Here to Stay.)

The grid operator doesn’t yet have estimated in-service dates for the projects.

Jarred Miland, senior manager of transmission planning coordination, said the LRTP is the most expensive package MISO has put forward. He also said it represents the most extensive planning work the RTO has ever performed.

A final list of 345 kV projects (MISO) Alt FI.jpgA final list of 345 kV projects from the first cycle of MISO’s long-range transmission planning | MISO

 

The projects will ease growing pains as MISO grapples with increasing renewable energy output and the loss of large, centralized power plants, Miland said. He pointed out that the interconnection queue contains almost 56 GW of solar projects alone.

“The LRTP is not a one-and-done. It’s a journey,” Miland said of the first cycle of projects.

MISO will begin work on a second cycle sometime during the third quarter, Miland said. The second portfolio will focus on MISO Midwest, as did the first. MISO South won’t enter the planning picture until the third and fourth iterations of long-range planning.

“It’s a big system. It’s a tremendous amount of work,” Miland said. “We do recognize that there is a lot more work to do. That’s why we’re moving into tranche two. It’s a big apple. We can’t eat it all at once.”

The seven groupings of 345-kV projects include:

  • a $955 million line from Jamestown to Ellendale and Big Stone to Alexandria to Cassie’s Crossing in Western Minnesota and the Dakotas;
  • a $1.2 billion line that crosses Minnesota into Wisconsin, hitting Wilmarth, North Rochester, Tremval, Eau Claire and Jump River;
  • a $673 million line from Minnesota into Wisconsin that touches Tremval, Rocky Run and Columbia;
  • an $853 million line in Western Minnesota and the Dakotas that intersects Iron Range, Benton and Cassie’s Crossing;
  • an $894 million line in Iowa that passes over Webster, Franklin, Morgan Valley and then Beverly to Substation 92 near West Liberty;
  • a $2 billion line situated mostly in Northern Missouri that includes Orient, Iowa, and extends into Meredosia, Ill.; and
  • a sprawling, $3.4 billion line that links Iowa, Illinois, Indiana and Michigan.

The portfolio also provides for $350 million in lower voltage “under-build” projects necessary to accommodate the 345-kV transmission. MISO is still working to compile a list of the under-build projects.

“The under-build sort of represents … a high-end bogey as to where we’ll end up,” Miland said.

Miland said anytime MISO introduces new, large transmission projects, power system flows and contingencies could change and necessitate new equipment.

Indiana Utility Regulatory Commission staffer Dave Johnston asked whether the massive Iowa-to-Michigan project in the Central Region will be open to competitive bidding and whether it will be split up by jurisdiction into project segments.

MISO Executive Director of System Planning Aubrey Johnson said staff has yet to finalize those details.

“We have to think about some natural break points,” Johnson said, citing recent rights-of-first-refusal legislation in Michigan, Minnesota and Iowa. Wisconsin lawmakers are also considering ROFR laws.

MISO said its steady-state analysis of the Iowa-to-Michigan line show that it “can mitigate severe thermal issues in Michigan, Indiana, Illinois, Missouri and Iowa,” including reduced loading on 78 monitored facilities.

The grid operator is currently drafting an appendix to its 2021 Transmission Expansion Plan (MTEP 21) for the long-range projects. The portfolio will be part of MTEP 21, although its project approvals will take place about six months after the $3 billion MTEP 21 was approved.

MISO plans to divide costs of the long-range plan using a subregional, 100% postage stamp to load rate that is pending before FERC.

FERC Rejects Waiver Request for QF Filing Requirements

FERC said Thursday that a new renewable energy investment firm cannot cut corners when applying for qualifying facility statuses.

Irradiant Partners, an Austin, Texas-based private equity firm focusing on clean energy infrastructure, asked the commission last November to waive a requirement that it submit recertifications for generators to be qualifying facilities (QF) under the Public Utility Regulatory Policies Act.

The commission, which requires a QF’s status be recertified when a generators’ upstream management changes, declined the ask (EL22-8).

Irradiant was spun off from Kayne Anderson Capital Advisors in October. Upon forming, it acquired a controlling ownership interest in a portfolio of 185 small renewable generation projects across the country. The equity firm argued that the facilities were all under 20 MW and not yet in operation. Irradiant also said Kayne Anderson, despite not being under FERC jurisdiction, had already filed for QF statuses.

FERC rejected the argument, saying it’s important it have current and accurate QF information on file. It said that a change in upstream control is too big to overlook.

“The commission has found that ownership information, in particular, is important; it assists the commission in monitoring potential discrimination in the provision of service and in reviewing the extent to which QFs should continue to be exempt from various provisions of the [Federal Power Act] and state laws,” it said.

The commission also rebuffed Irradiant’s argument that preparing and filing nearly 200 recertifications would be too labor-intensive and too time-consuming. It said because Kayne Anderson had already applied for QF statuses, Irradiant largely had copy-and-paste work ahead of it.

Irradiant “is overstating the time and effort” required to reapply for QF status, the commission said. It said for each facility, Irradiant must provide mostly “fill-in -the-blank or check-the-box” information on six or seven pages in addition to supplying one- to two- paragraph descriptions for the renewable generators.

FERC Approves BPA’s 2022 Power and Transmission Rates

FERC last week approved the Bonneville Power Administration’s proposed 2022 wholesale power and transmission rates — a formality by the commission that carries little weight under federal law.

Under the Northwest Power Act, FERC’s review of BPA’s proposed rates is limited to determining whether the rates:

  • are sufficient to assure repayment of federal investment in the Federal Columbia River Power System over a “reasonable” number of years after meeting BPA’s costs;
  • are based on BPA’s total system costs; and
  • equitably distribute the costs of the federal transmission system between federal and non-federal generation.

Unlike its jurisdictional authority over public utilities under the Federal Power Act, FERC does not hold authority to modify BPA’s proposed rates, which are developed by BPA’s federally appointed administrator and then submitted to the commission for approval or disapproval.

“In this regard, the commission’s role can be viewed as an appellate one: to affirm or remand the rates submitted to it for review,” FERC noted in its order Thursday (EF21-3).

Under its rate proposals, BPA estimated that the filed rates will produce average annual power revenues of $2.774 billion and annual transmission and ancillary services revenues of $1.151 billion, sufficient to recover its costs for the 2021-23 rate approval period while also providing 95% probability that it can make all required payments to the U.S. Treasury Department on time.

“The traditional measure of the adequacy of Bonneville’s revenues has been the power repayment study,” the commission wrote. “Bonneville’s generation and transmission repayment studies indicate that the revenues expected to be collected under the proposed rates will be sufficient to recover the total system costs, including the recovery of the remaining federal investment, with interest, over the repayment period.”

The commission’s order also rejected a joint protest by the Idaho Conservation League, Great Old Broads for Wilderness and Idaho Rivers United, who argued that BPA has not met its statutory obligation to “protect, mitigate, and enhance fish and wildlife” affected by the federal hydropower system or demonstrate “equitable treatment” for fish and wildlife overall.

The protesters contended that the Northwest Power Act requires that BPA’s funding decisions be subject to an “equitable treatment” mandate and that the agency must take the Northwest Power and Conservation Council’s fish and wildlife program into account “to the fullest extent practicable” when setting funding levels for fish and wildlife mitigation. BPA’s failure to re-evaluate its fish and wildlife funding in the rate case represented a violation of the Northwest Power Act and Administrative Procedure Act, the protesters said.

In dismissing the protest, the commission agreed with BPA that the protesters’ arguments fell outside FERC’s limited jurisdiction over BPA’s rates under the Northwest Power Act.

“We agree with Bonneville that the commission’s review of Bonneville’s power and transmission rates is limited by Section 7(a)(2) of the Northwest Power Act,” the commission said. “Bonneville’s compliance with its environmental review and fish and wildlife protection obligations is thus outside the scope of the commission’s review under Section 7(a)(2). Because our review is limited to the relevant provisions of the Northwest Power Act, we do not address the joint protesters’ allegation that Bonneville has violated the Administrative Procedure Act.”