ISO-NE, States Seek to Build on ‘Alignment’ Efforts

ISO-NE took several important steps to demonstrate its “alignment” with state climate policies in 2021. But the RTO’s stakeholder meetings remain closed to the public, and its board elections remain secret, falling short of calls for increasing transparency. And this spring, the states and the RTO will be debating differing market proposals for accomplishing the states’ clean energy goals.

Which design will prevail is just one of the questions facing New England in 2022, starting with whether it will have enough natural gas to keep the lights on through the winter. Among the others: whether Maine voters’ rejection of the New England Clean Energy Connect (NECEC) transmission line will stick, and whether the 650-MW gas-fired Killingly plant in Connecticut will get built.

Here’s a look back at the big issues of 2021 and what to expect in 2022.

Resource Adequacy Concerns

On Dec. 6, ISO-NE officials gave a sobering press briefing, warning that limited natural gas pipeline capacity and global supply chain issues put the New England grid at heightened risk of load sheds this winter.

The RTO said it can meet forecast peak demand of 19,710 MW during average winter weather conditions of 10 degrees Fahrenheit and 20,349 MW if temperatures reach below-average conditions of 5 F. But ISO-NE CEO Gordon van Welie said uncertainty over fuel supplies “could put the region in a more precarious position than past winters and force the ISO to take emergency actions up to and including controlled power outages.” Van Welie said the outages would be a last resort “to prevent a regionwide blackout, which would take many days or weeks to restore.” (See ISO-NE: New England Could Face Load Shed in Cold Snaps.)

Resource adequacy has been a recurring winter concern in New England because of difficulty siting new natural gas pipelines and electric transmission. The state-RTO tensions were on display at FERC’s technical conference on modernizing electricity market design in ISO-NE in May (AD21-10).

Katie Dykes, commissioner of Connecticut’s Department of Energy and Environmental Protection, complained that the RTO had failed to prevent the premature retirement of the Millstone nuclear plant, leaving her state to “shore up the reliability of the [ISO-NE] grid and the market” by approving subsidies funded by ratepayers.

Van Welie told the conference that markets are “never going to work very well” with inadequate infrastructure supporting them “or if policy objectives are not aligned.”

“We have to design the markets around those [pipeline and transmission] constraints,” he said. “That’s just where we ended up because of the choices we made over the last two decades.

“Until the region figures out how it wants to socialize some of these costs for reliability that are outside of the market, we’re going to stay stuck in that situation,” he added. “There’s no market design that will solve the problem that Commissioner Dykes wants us to solve.” (See Regulators, ISO-NE Discuss Market Changes at FERC Tech Conference.)

Progress on States’ Wish List

ISO-NE took several steps in 2022 to address the states’ demand for changes to the RTO’s wholesale market design, transmission planning and governance. The demands, first spelled out in a joint statement by five of the region’s governors in October 2020, was updated by the New England States Committee on Electricity (NESCOE) last August in its “Advancing the Vision” report.

ISO-NE’s priorities for 2022 | ISO-NE

ISO-NE’s Board of Directors responded to the states’ demands in September, saying it was “pursuing targeted governance and communications enhancements, consistent with its independence and oversight role.” It assured NESCOE that it is “aligned with the states on the clean energy transition,” citing a list of transmission planning and market rule initiatives that it was pursuing to enable the transition.

2050, ‘Future Grid’ Studies Highlight Transmission Planning Efforts

In November, ISO-NE presented the scope of its work for the 2050 Transmission Study, which will examine ways to incorporate clean energy and distributed energy resources beyond the RTO’s standard 10-year planning horizon. The study will seek to determine what transmission is needed to serve load while satisfying reliability criteria for 2035, 2040 and 2050, including high-level cost estimates to help the states evaluate different transmission options. The study was requested by NESCOE, which also was responsible for many of the study assumptions. (See ISO-NE Presents Preliminary 2050 Tx Study Scope.)

Work is expected to continue on the study throughout 2022. As also requested by NESCOE, ISO-NE on Dec. 27 filed proposed tariff changes to permit future state-led, scenario-based transmission planning as routine practice (ER22-727).

In addition, ISO-NE expects to release a report this spring on the RTO’s Future Grid Reliability Study (FGRS), which will identify potential reliability gaps in 2040 based on current state laws and policies. The FGRS, which is not a detailed transmission study, is largely based on assumptions developed by NEPOOL stakeholders, with input from NESCOE. A draft of the FGRS is expected to be presented at the Planning Advisory Committee in April and discussed at NEPOOL’s Markets Committee/Reliability Committee meeting in May.

The RTO also is conducting cluster studies to interconnect offshore wind on Cape Cod and a pilot study to proactively plan for growing levels of DERs, renewables, imports and energy storage.

Wholesale Market Design

In April, the RTO is expected to release its Pathways to the Future Grid study, which will evaluate alternative market frameworks for adapting to state energy policies. The analysis will include a forward clean-energy market (FCEM): a centralized, forward auction favored by states in which buyers (states, cities, retailers, companies and utilities) could voluntarily purchase clean energy attribute credits.

The study also will examine the RTO’s net carbon pricing proposal, which would require suppliers pay for each unit of carbon they emit to generate electricity, as a supplement to the Regional Greenhouse Gas Initiative.

A third alternative to be considered is a hybrid of the net carbon and FCEM proposals. (See ISO-NE to Study Additional Model for Capacity Market.)

Order 2222, MOPR Removal

Stakeholders and ISO-NE staff spent many meetings during 2021 discussing the RTO’s Order 2222 compliance filing and eliminating the minimum offer price rule (MOPR).

In December the NEPOOL Markets Committee approved ISO-NE’s proposed set of market rules to implement Order 2222 — which requires RTOs to allow DER aggregations to provide all wholesale services that they are technically capable of providing — and rejected several amendments opposed by the RTO.

The compliance filing passed the MC with unanimous support from the Generation, Transmission and Publicly Owned Entities sectors and most Suppliers. Alternative Resources were split, and End Users, who had supported unsuccessful amendments by Advanced Energy Economy, were unanimously opposed.

Assuming that FERC accepts the compliance filing by the fourth quarter, distributed capacity resources will be able to participate in Forward Capacity Auction (FCA) 18 in February 2024. The RTO proposed a fourth-quarter 2026 effective date for the energy and ancillary services markets.

The Participants Committee is scheduled to vote on the Order 2222 changes Thursday. The filing is due Feb. 2.

Meanwhile, the Markets Committee is scheduled to vote on the RTO’s proposal to eliminate the MOPR at its first meeting of the new year, Jan. 11-12.

NESCOE, FERC Chair Richard Glick and Commissioner Allison Clements all favored eliminating the MOPR, which they said was undermining state decarbonization efforts. Stakeholders approved the change in November, despite warnings from merchant generators and ISO-NE’s Internal Market Monitor that it will suppress capacity prices. Other stakeholders debated whether the implementation of the RTO’s plan should be delayed until it approves long-term market rule changes on capacity accreditation and reserves. The MOPR would be eliminated beginning with FCA 17 in 2023. (See Monitor, Merchants Challenge ISO-NE Plan to Eliminate MOPR.)

State-RTO Communications

ISO-NE’s September response to NESCOE said the RTO’s board is “making changes that are consistent with the ISO’s core requirement for independence and its role as an oversight board.”

It pledged the board will hold an annual open meeting beginning in 2022 — focused on the electricity markets on even-numbered years and transmission planning in odd-numbered years — in addition to meetings the board holds with the states and NEPOOL sectors throughout the year.

The board said it would hold other meetings as needed to discuss consumer implications of its proposals and that if the states have a majority position on an RTO proposal, “management will include consideration of a state majority position in filings to FERC.”

It also noted that the CEO’s monthly board reports — which summarize recent board and board-committee meetings — are public and that states can question van Welie about board activities at NEPOOL Participants Committee meetings.

But the board did not take action on NESCOE’s request to establish a standing board committee on state and consumer responsiveness. “The board is continuing discussions with the states about this request,” ISO-NE said in an email to RTO Insider. “The board and several of its committees already review state and consumer issues in various ways, and the board is continuing to consider other targeted enhancements.”

Nor were there any changes to how ISO-NE selects its board members. NESCOE had called on FERC to revise Order 719 to ensure “that states and consumers in New England are meaningfully represented” in the composition of the board and the Joint Nominating Committee process that governs board nominations. State officials have only one vote on the 14-member committee, through the New England Conference of Public Utilities Commissioners.

“The Joint Nominating Committee is governed by the Participants’ Agreement between the ISO and NEPOOL stakeholders,” the RTO said. “The board cannot make unilateral changes to the process for selecting new members. Any changes would need to be pursued through the NEPOOL stakeholder process and approved by FERC.”

In September, ISO-NE announced the election of four board members for three-year terms: incumbent Michael Curran and newcomers Caren Anders, Steve Corneli and Catherine Flax. The board also elected former FERC Commissioner Cheryl LaFleur as its chair, replacing the retiring Kathleen Abernathy.

Transparency Still Lacking, Critics Say

Critics were unimpressed with the RTO’s modest changes on transparency, noting that New England remains the only region in the U.S. whose RTO/ISO stakeholder meetings are closed to the public.

ISO-NE and NEPOOL have “essentially privatized public policymaking,” Tyson Slocum, director of Public Citizen’s energy and climate program, said at the RTO’s quarterly Consumer Liaison Group meeting in September. “There is inadequate transparency and accountability in these institutions that don’t reflect the public interest nature of what they’re doing.”

Rebecca Tepper, chief of the Energy and Telecommunications Division in the Massachusetts Attorney General’s Office, also lamented the lack of progress. “I think it would be good to see that move forward and have some real dialogue about how the governance process can be more accommodating to people.” (See Stakeholders Still Seeking Transparency from ISO-NE, NEPOOL.)

FCA 16

In the near term, capacity market watchers are waiting for a FERC ruling on ISO-NE’s request to prevent the 650-MW natural gas-fired Killingly Energy Center in Connecticut from participating in FCA 16 in February and to terminate its capacity supply obligations (CSO). Killingly, which initially secured a CSO in 2019’s FCA 13 for the 2022/23 capacity commitment period, failed to meet its development milestones, the RTO said (ER22-355).

Developer NTE Energy responded that ISO-NE made an incorrect assumption regarding a financing milestone date, claiming that its financing is “imminent.” In its Dec. 3 protest to FERC, NTE called the RTO’s action “premature” and said it had kept the project moving despite “challenges beyond its control, including the COVID-19 pandemic and an ultimately unsuccessful 29-month challenge to its state siting certificate.” ISO-NE responded on Dec. 20, saying the only question facing FERC was whether the plant can reach commercial operation by June 1, 2024. “The answer … is ‘no,’” said the RTO.

“There is also no dispute that to terminate Killingly’s capacity supply obligation — a valuable asset worth hundreds of millions of dollars — ISO-NE’s tariff requires the ISO to prove that Killingly would not enter service before the June 1, 2024 deadline,” NTE responded Dec. 28. “Despite its burden, to date, the ISO has offered only speculation about what might happen — repeating in its answer that it just ‘lost confidence’ in the project.”

FCA 16 also will see the end of the seven-year price lock for new entrants. FERC ruled in late 2020 that the rules, which had been in effect since the FCA began in 2006, resulted in “unreasonable price distortion” and that locked-in prices are “no longer required to attract new entry.” (See FERC Orders End to ISO-NE Capacity Price Locks.)

Prices in FCA 15 cleared at $2.48 to $3.98/kW-month — the high in Southeast New England nearly doubling 2020’s record-low figure.

Turbulent Year for Avangrid

2021 was a turbulent year for Avangrid (NYSE:AGR), the parent of Central Maine Power (CMP) and United Illuminating in Connecticut.

In May, the Bureau of Ocean Energy Management approved the final permit for 800-MW Vineyard Wind I, a joint venture of Avangrid Renewables and Copenhagen Infrastructure Partners. The first commercial-scale offshore wind project in the U.S., Vineyard Wind broke ground in November and is expected to begin commercial operation in 2023. In December, Massachusetts said it would purchase 1,200 MW of OSW from Vineyard Wind’s Commonwealth Wind project. (See Mass. Adds 1,600 MW to OSW Portfolio in Latest Procurement.)

Avangrid faced two setbacks late in the year, however.

In November, CMP halted construction on the NECEC transmission project in response to Maine voters’ approval of a referendum to block it. Avangrid filed a lawsuit challenging the constitutionality of the referendum. On Dec. 16, a judge rejected the company’s request for an injunction to block the impact of the referendum.

NECEC Maine Map map (New England Clean Energy Connect) FI.jpg

Central Maine Power halted construction on the New England Clean Energy Connect transmission line in November following Maine voters’ approval of a referendum to block the project. | New England Clean Energy Connect

In December, New Mexico regulators rejected Avangrid’s proposed $8.3 billion acquisition of PNM Resources (NYSE:PNM), citing Avangrid’s “demonstrated record of poor performance” in other states, including its stewardship of CMP.

The New Mexico Public Regulation Commission’s 5-0 vote also followed allegations by a former cybersecurity contractor that the company conspired with suppliers to buy “tens of millions” in overpriced and unnecessary security equipment and services to boost profits. (See NM Regulators Reject Avangrid-PNM Merger.)

Regulators in Connecticut and Maine said they would review the allegations, which came six months after Maine Gov. Janet Mills vetoed legislation to create a publicly owned utility to replace CMP and Versant Power, calling it “hastily drafted.” (See Mills Tells Maine Legislature to Slow Down on Plan to Replace IOUs.)

Annual Work Plan

ISO-NE’s Annual Work Plan lists several additional projects and timelines for 2022:

The RTO is expected to file a proposal with FERC by the end of 2022 revising resource accreditation in the capacity market, to be effective in FCA 18, with a second filing by the end of 2023, targeting FCA 19.
The RTO will focus in 2022 on proposals to co-optimize reserves in the day-ahead energy markets.
Beginning in the first quarter and extending into 2023, the RTO will work with stakeholders and the Electric Power Research Institute on ways to model high-impact reliability risks (tail risks) related to extreme weather events, an initiative prompted by the outages in Texas during the February 2021 winter storm.
The RTO expects to file changes with FERC in 2022 allowing solar resources to take electronic dispatch instructions in the real-time energy market under the Do-Not-Exceed model currently used by wind resources. The change would be effective in the second quarter of 2023.
ISO-NE plans to begin discussing tariff changes in the first quarter to allow storage-as-transmission solutions for needs assessments or public policy transmission studies.
It also hopes to complete its two-year nGEM Day-Ahead Market Clearing Engine Implementation project this year. The day-ahead clearing engine is expected to be in-service Q1 2023.
The RTO will complete three projects in 2022 concerning identity and access management; security information and event management; and a refresh of the hardware and software supporting the collection of network traffic data that feed the Network Intrusion Detection system and the Security Information and Event Management analysis system.

January 2, 2022

Inslee Approves 80-MW Goose Prairie Solar Farm

Gov. Jay Inslee last month approved the 80-MW Goose Prairie solar farm to be built in Central Washington.

“I believe this project is appropriately sited, and that the site certificate is legally adequate,” Inslee wrote in a Dec. 20 letter to the Washington Energy Facility Site Evaluation Council (EFSEC), which in November recommended the governor approve the project. (See Siting Council Endorses Central Wash. Solar Farm.) Inslee said the project is environmentally sound for the land it will occupy.

The project by OneEnergy Renewables (OER) of Seattle would be located near the town of Moxee in Yakima County. Goose Prairie’s application states that the 625-acre solar farm would interconnect with the Bonneville Power Administration’s 115-kV Midway-to-Moxee transmission line. The company is also retaining the option for a battery-storage system that would not exceed the 80-MW capacity of the project.

Inslee’s letter said the EFSEC did eventually consider the Yakama Nation’s concerns about the project’s effects on wildlife migration and the tribe’s access to the area for cultural reasons.

But “the council was not able to directly engage in early, ongoing and thorough government-to-government consultation with tribal governments,” Inslee added. Inslee wrote that EFSEC needs a more formal mechanism for consulting with the appropriate tribes on the effects on solar and wind turbine proposals.

Now, OER must study the environmental impacts to any habitats for sensitive species and provide a mitigation plan, according to paperwork filed with the EFSEC. The council and the Washington Department of Fish and Wildlife would have to approve that plan. An EFSEC public hearing on the project held March 16 showed no opposition.

Central and Eastern Washington have four solar farms going through permitting, 28 on the drawing board, two under construction, and one in operation, according to state estimates. EFSEC is currently reviewing nine proposed wind and solar projects for the state.

December 22, 2021January 9, 2024

NRC Preparing to Cite Davis-Besse Nuclear Plant on Safety Issue

The Nuclear Regulatory Commission is preparing to cite Energy Harbor, the owner of the Davis-Bessie nuclear power plant in Ohio, for failure to develop a preventative maintenance schedule for electric switches installed in 2006.

The field flash selector switches (FFSS) enable the plant’s two emergency diesel generators (EDGs) to actually begin to produce electricity once their turbines are spinning.

A team of NRC inspectors earlier this fall determined that the switches had not been inspected in the 15 years since installation and that “degradation” of electrical contact surfaces had occurred.

Each EDG is designed to power the plant’s complex safety systems, including the emergency cooling equipment, if the reactor shuts down and the facility is also cut off from grid power. Their functioning in an emergency shutdown is crucial. They failed to generate power during five routine periodic tests between 2019 and 2021, the company reported.

The EDG problems and a July incident that began with the plant’s main steam generator, causing the reactor to automatically and safely switch off, prompted NRC to send a special inspection team to the plant, located about 30 miles east of Toledo on Lake Erie.

Davis-Bessie’s own engineers had determined that two other switches were not designed for the plant’s EDG system, and they were replaced. But the plant’s management disagreed with NRC’s finding that its failure to develop an inspection of the FFSS had caused the problem.

“After the special inspection concluded and during the development of the preliminary significance determination, you provided the perspective, based on a vendor analysis, that the EDG FFSS failure during the fast-start test was most likely the result of foreign material between the switch electrical contacts, as evidenced by the presence of nickel on the contact surface,” the commission noted in a letter sent to Davis-Besse managers Dec. 16 and released to the public Monday.

“You concluded that the failure was not caused by the lack of inspection and long-term switch electrical contact degradation. The NRC has preliminarily determined this vendor analysis does not rule out contact degradation due to lack of inspection as a significant contributing cause of the failure,” the commission countered.

“There is sufficient operating experience on electrical contact failure due to contamination to reasonably consider this degradation mechanism to be credible. Therefore, we continued to conduct our significance determination with this assumption.”

If NRC does cite the company as it appears ready to do, the citation would remain on the plant’s safety record while the commission conducts additional on-site inspections. The commission is attempting to assess the risk the problem with the switches posed.

Energy Harbor did not respond to a request for comment.

December 22, 2021November 24, 2023

Study Provides Oregon Lawmakers Wide Shot on RTO Membership

An RTO could provide Oregon with economic, planning and operational benefits, but it would not serve as a “universal problem-solver” for the growing challenges facing the state’s electricity system, according to a study the Oregon Department of Energy (ODOE) delivered to the state legislature Monday.

And bringing Oregon into an RTO would present challenges of its own, the report says. Chief among them: ensuring a market and governance design that balances the state’s “diverse interests,” guarantees a “meaningful role” for those interests, and preserves state clean energy and equity goals.

But the ODOE study also casts a favorable light on Oregon’s increased participation in regional collaboration across the power sector. It highlights the various regionalization efforts already taking shaping across the Western Interconnection and emphasizes the importance of Oregon entities continuing to play a role in their progress.

It also points out that, unlike previous efforts to develop organized electricity markets in the West, “the current momentum toward increased regionalization has a unique sense of drive and urgency … driven by transformational changes in the electric sector — from the rapid deployment of increasingly cost-effective wind and solar energy, to the retirement of coal plants in Oregon and across the West, to the adoption of state clean energy mandates.”

In developing the study, ODOE said it “identified broad common interest among Oregon stakeholders” to build on that momentum “to explore increased regional collaboration and coordination in the electric sector.”

The study also advises lawmakers that the “nuanced perspectives” among various stakeholders “would need to be carefully considered in designing an RTO that could deliver benefits to Oregon retail customers.”

Incrementalism

The ODOE study was a requirement of Senate Bill 589, which state lawmakers passed last spring just as other Western legislatures primed the push for regionalization by approving bills requiring their state’s utilities to form or join RTOs by 2030. (See Many Next Steps to Follow Passage of Nevada Energy Bill and Polis Signs Bipartisan Bill to Support Interstate Tx.)

A Colorado Public Utilities Commission study released early this month, the product of a 2019 law, found that utilities in that state could save between $50 million and $230 million annually from joining an RTO. (See Colo. PUC: State Could Save up to $230M in Wholesale Market.) A different multistate-led study published earlier this year found the West as a whole could save up to $2 billion a year by 2030 through the development of a single RTO. (See Study Shows RTO Could Save West $2B Yearly by 2030.)

But ODOE was not charged with creating an economic benefits report, nor was it expected to make recommendations about whether the state should compel its utilities to join an RTO, Adam Schultz, electricity and markets policy lead at the department, said during the first meeting of the state’s RTO Advisory Committee, whose representatives helped guide development of the study. (See Oregon RTO Committee Ponders Paths to Regionalization.)

Instead, the goal was “to gather and synthesize the range of perspectives on the benefits, costs, opportunities, challenges and risks of RTO formation that exists among a diverse range of Oregon stakeholders to inform the state legislature and other interested parties,” Schultz said.

In that vein, the ODOE study provides lawmakers with a primer on RTOs, describing the role of an organized market in the buying and selling of energy, the procurement of capacity (or not), and the planning and operation of transmission networks.

The study also outlines the regionalization efforts already in motion. “Given recent industry trends, including coal plant retirements and the need for flexible capacity that can integrate increasing amounts of variable wind and solar generation, significant momentum has built in recent years to increase regional cooperation,” the report said, citing CAISO’s expanding Western Energy Imbalance Market (WEIM), SPP’s increasing market offerings in the West and the Northwest Power Pool’s (NWPP) Western Resource Adequacy Program, which will roll out next year. (See Implementation Underway for NWPP’s Western RA Market.)

Membership in an RTO would represent a qualitative step beyond those efforts because conventional organized markets require member utilities and transmission owners to surrender operational control of their transmission systems to a central operator, which would also assume the role of grid planner.

The ODOE study highlighted a debate that occurred within the RTO Advisory Committee, in which Ravi Aggarwal, a manager with the Bonneville Power Administration, urged the region to take “a more incremental and staged approach” to forming an RTO, given that the “three-legged stool” of planning, resource adequacy and markets are all currently being served by NorthernGrid, NWPP and the WEIM, respectively.

“Some committee members believe that the incremental steps to increase regionalization could lead the region to formation of an RTO. The incremental approach may be helpful and necessary to build the trust required among a diverse set of stakeholders to make formation of a sufficiently large and well governed RTO possible,” the study said.

Other members said an incremental approach could allow participants to take an “a la carte” approach to regionalization, “participating only up to their comfort level up to and including membership in an RTO.”

But still other members were wary of such an approach, the study pointed out, warning that it could fail to deliver the full benefits of an arrangement that coordinates many functions within a single body. “The region may also be approaching the limits of how many additional incremental steps (and therefore additional benefits) can be bolted-on to the status quo,” the report said.

The report also advised that while RTO formation could yield operational benefits for the transmission system, particularly through improved utilization and transparency, it would not necessarily solve challenges around cost allocation, siting or permitting.

“Multiple members of the committee noted the development timelines for major new transmission projects can often be in the 10- to 20-year range due primarily to challenges around siting and permitting. An RTO would not necessarily resolve these timeline challenges,” the study said.

The report additionally pointed to an RTO’s potential to improve utilization of existing renewable resources through reduced curtailments, as well as its ability to provide customers with greater access to low-cost out-of-state renewables. However, committee members widely agreed that state policies and declining costs would continue to drive the adoption of renewables regardless of the existence of an RTO.

Comes Down to Design

But the ODOE study advised lawmakers that the key challenge to forming an RTO would be political rather than technical or operational.

“One of the key perspectives shared by committee members was the criticality of negotiating the details of market design and governance structures to weigh trade-offs, balance multiple interests, and identify pathways to achieve optimal outcomes,” the study said. Those trade-offs would occur in and among:

states, with their varying policy priorities and regulatory requirements;
load-serving entities, which in Oregon consist of three investor-owned and 38 consumer-owned utilities;
independent power producers, power marketers and transmission owners;
advocacy organizations, such as trade groups, environmental and social justice organizations, and labor unions; and
retail customers.

An RTO would also have to contend with the presence of BPA, which owns and operates about 75% of the region’s transmission system.

“This makes BPA a critical but largely voluntary participant in regional conversations around RTO formation, although the actions of neighboring utilities in the region or of other parts of the federal government (e.g., [the U.S. Department of Energy], FERC or Congress) can affect the decisions of BPA,” the report said.

It also cautioned lawmakers that “careful design” of an RTO would be necessary to prevent an erosion of state authority while also helping Oregon to achieve its environmental policy objectives.

RTO Advisory Committee members generally agreed that an RTO would provide an “additional tool” for helping Oregon achieve its target of generating 100% emissions-free electricity by 2040, according to the report.

“Several members of the committee went even further to suggest that RTO formation may be necessary to achieve those targets,” the report said.

December 22, 2021December 10, 2023

Consumer Advocates Request Rehearing on PJM Rate-base Network Upgrades

A group of consumer advocates requested rehearing Monday of FERC’s decision in November to open a paper hearing on PJM transmission owners’ proposal to add network upgrades to their rate base (ER21-2282).

The Maryland Office of People’s Counsel, the D.C. Office of the People’s Counsel and the Delaware Division of the Public Advocate argued the TOs do not have “exclusive and unilateral rights to file under Section 205” of the Federal Power Act to change network upgrade rules in the tariff, “particularly the rules impacting major elements of the market structure such as those relating to network upgrades affected in this proceeding.”

“There are good public policy reasons for the existing division of filing rights,” the advocates said. “Significant changes to PJM market design should be carefully considered by all stakeholders in the PJM market, either through a stakeholder process or their interactions with the RTO. This process allows PJM and, through its review of PJM’s filing, the commission to receive a balanced perspective that considers generation and consumer interests as well as those of transmission owners. The PJM TOs’ unilateral filing rights, which by definition are necessarily parochial in nature, are appropriately limited to areas related to rate design and revenue adequacy.”

The TOs had asked the commission on June 30 to allow them the option to fund network upgrades and add them to their rate bases. Under PJM’s “participant funding” model approved in 2004, generators provide the capital for network upgrades, while the additional infrastructure is added to rate bases at zero cost, allowing TOs to recover only their operations and maintenance expenses from network transmission customers. (See FERC Establishes Paper Hearing on PJM Rate-base Network Upgrades.)

The advocates said the tariff modifications would impede PJM’s “exclusive rights to change terms and conditions related to billing and cost recovery” because they would change how the RTO collects payments for network upgrades. They also said FERC’s order “interferes” with PJM’s responsibility to review public policy objectives when evaluating projects and needs in the Regional Transmission Expansion Plan.

“The authority granted to the PJM TOs by the November 2021 order must be part of a market design that is consistent with or superior to the market design approved in Order No. 2003, but, as reflected in the June 30 filing, it is not,” the advocates said.

FERC previously set a deadline of Jan. 3 for initial responses to its November order, but the TOs filed a motion earlier this month to extend the deadline to Jan. 13 for initial responses and Feb. 28 for reply comments because of the holiday season and a compressed time frame. The commission accepted the deadline extension request on Dec. 9.

December 21, 2021November 13, 2023

Colorado Regulators OK Revised Emissions Standards for Oil and Gas

The Colorado Air Quality Control Commission (AQCC) on Friday became the first state to adopt emissions-reduction standards for the oil-and-gas industry based on production quantity, leaving industry stakeholders celebrating and environmentalists wary.

The new “intensity program” (Regulation No. 22) aims to reduce methane and CO₂emissions from industrial production without “vilify[ing] the oil-and-gas industry,” Commissioner Elise Jones said.

Along with the new program, the commission approved revisions to Regulation No. 7 that specify more stringent requirements for leak detection and repair (LDAR) for oil and gas companies.

Several environmental groups and industry stakeholders presented their position on the two regulations at last week’s AQCC hearing.

Environmentalists were not convinced that the GHG intensity program would adequately reduce emissions from the oil-and-gas sector. Though it approved of the LDAR provisions and encouraged their adoption, the Environmental Defense Fund suggested the commission extend Colorado’s pneumatics retrofit conversion program “requiring operators to continue replacing polluting gas-driven controllers with non-emitting technology” for another two years.

EDF also suggested the commission adopt its “well liquids unloading proposal,” which aims to reduce emissions from liquid unloading by “explicitly requiring the use of artificial lift and flares where feasible and appropriate.”

Colorado’s Joint Industry Working Group (JIWG) expressed concern over EDF’s suggestions, calling its pneumatic controller proposals “unnecessary” because the industry is on target to meet its 2025 emissions goals. The group said EDF’s alternate proposal “removes the flexibility for owners and operators to determine which control technologies/methods will reduce the most emissions in the most cost-effective and feasible manner for individual facilities,” which “diverts capital from more effective technologies.”

December 21, 2021June 14, 2023

NY Officials Approve Draft Climate Action Plan

New York officials on Monday unanimously approved a draft scoping plan that lays out the steps needed to achieve the emission limits set by the Climate Leadership and Community Protection Act (CLCPA).

Sarah Osgood, NYCAC | NYDPS

The law requires New York, through its Climate Action Council, to reduce economywide greenhouse gas emissions 40% by 2030 and no less than 85% by midcentury from 1990 levels.

The plan needs to include a detailed, credible analysis of cost impacts for all customer sectors across the state, Donna L. DeCarolis, president of the National Fuel Gas Distribution Corporation, told the council.

“It’s particularly concerning given the upfront cost to consumers that the council’s consultant has presented to us of between $20,000 to $50,000 to convert an average upstate single-family home to electric heat pump, along with the energy efficiency upgrades that would be needed,” DeCarolis said.

NYPSC Chair Rory Christian | NYDPS

As the state’s CLCPA requires, the council in March will begin holding regional public hearings on the draft plan, with three located in the upstate region and three located downstate, all in person, with at least one virtual hearing added for good measure, said CAC Director Sarah Osgood.

The public will have 120 days to submit comments on the draft plan, and the council will incorporate the feedback before issuing a final plan by Jan. 1, 2023.

“Ultimately, I think the more time we have for public comment the better the final report will be, capturing the needs of New Yorkers and ensuring that the energy transition we’re embarking on emphasizes reliability, affordability, safety and environmental considerations,” said Public Service Commission Chair Rory Christian.

Key Recommendations

The draft plan provides strategies for transportation, buildings, electricity, industry, agriculture and forestry, and waste, along with cross-sector strategies. Among the many recommendations for each sector are a combination of carbon pricing and zero-emission policies.

In the transportation sector, the draft plan said the state should enact a Clean Fuel Standard that requires fossil fuel providers to reduce carbon in their products through blending or acquiring credits.

The plan also suggests that the council seek public input on options for pricing GHG emissions potentially economywide for inclusion in the final scoping plan. Three options are outlined for public comment, including a fee that establishes a carbon price, a program to cap emissions across the economy or in certain sectors, and a clean energy supply standard.

Electricity sector key strategies by Climate Action Council theme. | NYDPS

For the building sector, the plan said that regulators should phase in zero-emission standards through 2035 that prohibit new gas services in existing buildings and prohibits the replacement of gas- and oil-based equipment for heating and cooling and hot water.

Additional major recommendations in the draft plan include:

installing heat pumps in 85% of homes by 2050;
updating the state’s energy storage roadmap deployment goals and increasing funding for energy storage deployment;
considering creation of a market for retail and wholesale storage through Clean Dispatch Credits;
establishing Renewable Energy Zones and initiating transmission planning for those zones; and
enacting a Forest Carbon Bank to finance GHG emission reduction and carbon sequestration projects by farms and forest landowners.

Focus on Benefits

The scoping plan includes a definition of “disadvantaged communities” (DACs) prepared by the Climate Justice Working Group based on environmental burden, public health risks, and population characteristics, with tribal lands included by default.

Raya Salter, NY Renews | NYDPS

The plan’s basic framework is essentially how to start, what to count and what to track towards the benefits goal, said Chriss Coll, NYSERDA director of low-income programs.

With the draft plan, New York is schooling the federal government, said Raya Salter, lead policy organizer for NY Renews.

“I hope that they are watching this, that they’re going to take all this information and be really excited about it,” Salter said. “We know we must act on climate; we know state action is more important than ever. We know that the benefits of climate action outweigh the costs for health, for the economy, for women and children and families.”

The CLCPA requires that at least 35% of the benefits, and ideally 40%, go to disadvantaged communities, a point that Gavin Donohue, president and CEO of the Independent Power Producers of New York, wanted to make clear in the plan’s language.

Nonetheless, Donohue said he was “incredibly disappointed” about the lack of discussion about zero-emission technologies in the plan, citing studies presented to the council by E3, the ISO and New York City talking about the need for dispatchable resources.

Paul Shepson, Stony Brook University | NYDPS

“We have Gov. Hochul giving state money to Plug Power to build in New York; we’ve got NYSERDA doing a demonstration project. And we fail to acknowledge the importance of dispatchability and how we’re going to keep the lights on, and I think that is a major shortcoming of this report,” Donohue said.

The plan needs a deeper focus on creating clean energy manufacturing jobs that align with the CLCPA goals, said Dennis Elsenbeck, president of lithium-ion storage developer Viridi Parente.

“This could provide an extremely sustainable economic impact on our DACs, and in that regard, I think we need a better understanding of what is intended by benefits within the CLCPA,” Elsenbeck said. (See NY Predicts 200K+ New Clean Energy Jobs by 2030.)

Peter Iwanowicz, executive director of Environmental Advocates NY, said that carbon pricing isn’t primarily an emissions-reduction strategy, but “a pathway forward to pay for the transition” to clean energy.

Anne Reynolds, ACE-NY | NYDPS

However, another council member said that focusing too much on cost is misleading when the balance favors the benefits.

To focus on costs is “biased and is a discredit to the very thorough and impressive cost/benefit analysis that was done by this team and would, in fact, rob people of New York state of the knowledge that as we enact the Climate Act there will be a substantial net benefit,” said Paul Shepson, Dean of the School of Marine and Atmospheric Sciences at Stony Brook University.

Although the plan presents most policies as options, more than 90% of the emissions reductions are coming from measures that are not optional, such as building electrification, said Anne Reynolds, director of the Alliance for Clean Energy New York (ACE-NY).

“It’s important to continue to talk about policy differences for that final percentage of emissions … but to continually remind ourselves that most of what we need to do for the next 19 years we agree on, and so we need to move forward,” Reynolds said.

December 21, 2021

National Grid Wins Approval for $15.6M Geothermal Demo

Massachusetts regulators on Thursday gave National Grid (NYSE:NGG) the go-ahead to study geothermal district energy as an alternative to replacing natural gas pipes that leak.

The Department of Public Utilities (DPU) issued an order approving the utility’s $15.6 million, five-year demonstration program, saying it could inform the state’s efforts to understand the role of gas distribution companies in achieving its 2050 climate goals.

Participating buildings will incur a monthly charge by rate class: $60 for residential, $45 for low-income residential and $90 for commercial and industrial. The program will include the installation of up to four shared-loop geothermal systems, each serving 20 to 40 residential or commercial customers, or a combination of both.

Where National Grid seeks to avoid replacing leak-prone gas lines, participating customers must discontinue gas service and switch to electric appliances. Project funding will be available to help customers that need to replace natural gas appliances, such as stoves.

National Grid has one year to file an implementation plan for DPU approval. Each system could take 12 to 24 months to construct, according to the utility’s initial program filing.

In its order, the department acknowledged the contribution of information on geothermal technology provided during the proceedings by the nonprofit Home Energy Efficiency Team (HEET). It also encouraged National Grid to consider HEET’s recommendations for the program, which included using control software for integrated data acquisition and sharing program data publicly where possible.

“We hope to assist [National Grid] to come up with the standard metrics for the project … so that we can have normalized data,” Audrey Schulman, HEET’s co-founder and co-executive director, told NetZero Insider. “We’re also hoping to provide design assistance … to give them more expertise on tap to make sure that they have the information they need.”

HEET’s other executive director, Zeyneb Magavi, is credited with developing and refining the idea of installing ground-source heat pumps in gas utility rights of way to serve multiple buildings.

“We would like to continue to advise on the whole project process to make sure it’s done well and de-risked for all … so that we can evaluate [the projects] as a method that we might very much need in the future,” Schulman said.

Federal Funds

Gov. Charlie Baker signed a bill Dec. 13 authorizing $4 billion in American Rescue Plan Act funding that includes the study of geothermal district demonstration projects in the state.

The Massachusetts Clean Energy Center (MassCEC) will receive $5 million for the study, which will include National Grid’s projects and Eversource Energy’s $10 million geothermal district demonstration project that the department approved last year.

Working in collaboration with researchers, nonprofits and universities, MassCEC will seek to:

model the system design and operation of proposed networked geothermal demonstration project sites;
monitor the thermal energy storage potential of sites;
create a public project data bank;
disseminate recommendations and best practices for rapid scaling and optimization;
provide projections of scaled-up site impacts on heating, emissions, health, customer bills and other variables;
engage and educate stakeholders in potential project host communities; and
perform feasibility studies for communities interested in serving as project hosts.

The stimulus funding also allocated $150,000 to Michael Walsh, a senior research scientist with the Institute for Sustainable Energy, to study the thermal heating transition in Massachusetts.

December 21, 2021November 13, 2023

New York Issues 10 GW Solar Roadmap for 2030

New York officials on Friday announced the release of a roadmap outlining expanded programs to achieve 10 GW of distributed solar in the state by 2030 (Case No. 21-E-0629).

The state defines distributed solar as projects under 5 MW, including rooftop installations and community solar projects. The new framework builds on New York’s solar energy progress so far, with installed distributed solar and projects under development already totaling 95% of the current state goal of 6 GW by 2025.

“Strengthening our commitment to solar energy will help build healthier, more resilient communities while catalyzing quality, good paying new jobs in this thriving sector of our clean energy economy,” Governor Kathy Hochul said in a statement.

The New York State Energy Research and Development Authority (NYSERDA) and the Department of Public Service (DPS) submitted the roadmap to the Public Service Commission for public comment.

The expanded NY-Sun initiative aims to incent the construction of at least 1,600 MW of new solar capacity to benefit disadvantaged communities and low-to-moderate income New Yorkers, and proposes that at least 450 MW be built in Con Edison’s service territory covering New York City and parts of Westchester, increasing installed solar capacity there to more than 1 GW by the end of the decade. NYSERDA also proposes that at least 560 MW be advanced through the Long Island Power Authority.

Progress Toward 6 GW Mandate (NYSERDA) Content.jpg

An overview of the progress made toward the 6 GW target, by development phase, market sector, and region. Most of the progress to date has been in the Upstate region for C/I onsite and community solar projects. | NYSERDA

The proposal would require workers associated with projects supported by NY-Sun that are greater than 1 MW be paid the applicable prevailing wage, although projects that submitted their initial utility interconnection application prior to the Dec. 17 filing of the roadmap would be exempt from that requirement.

NYSERDA and the DPS estimated that the new solar push would direct $600 million in investments toward disadvantaged communities, with the Climate Leadership and Community Protection Act (CLCPA) mandating that at least 35% of the benefits from the state’s renewable energy spending go to such communities.

The proposal estimates that the solar program expansion will spur $4.4 billion in private investment and create 6,000 additional solar jobs across the state.

A study commissioned by the New York Climate Action Council’s Just Transition Working Group last month predicted that the state’s clean energy sector will add at least 211,000 jobs this decade and nearly 350,000 by midcentury, and that 10 new jobs will be created for every job displaced through 2030 by the state’s transition away from fossil fuels. (See NY Predicts 200K+ New Clean Energy Jobs by 2030.)

Questions and Answers

To ensure funding for the incremental 4 GW target, NYSERDA proposes ratepayer collections of nearly $1.5 billion through 2032. The cost of up-front incentives would be distributed across utilities proportional to load via a Clean Energy Fund surcharge.

Funding would not require new processes or ongoing settlements between utilities or NYSERDA. NYSERDA’s cashflow analysis has been updated to reflect the projected expenditure forecast of the $1.47 billion.

“Assuming collections occur over the 11-year period of 2022-32, the average levelized ratepayer bill impact is 0.79%,” the roadmap said. “The levelized impact on residential bills would be $0.71 per month. Expenditures, collections, and ratepayer impact are forecasted to peak in 2024. The 2024 bill impact is calculated at 1.07%, with an average 2024 statewide residential bill impact of $0.92 per month.”

The Public Service Commission on Thursday approved NYSERDA’s 2022 Clean Energy Standard compliance period administrative budget in the amount of $30.2 million, up from $28.4 million this year (Case No. 15-E-0302).

PSC Commissioner Diane X. Burman, one of two Republicans on the seven-member commission, said that while it’s reasonable that the NYSERDA team must grow as the workload continues to grow, the commission needs to engage in more discussion about how the state will deal with legislation that creates significant cost drivers.

“I believe very strongly that we should look at the proper resources, staff resources across the board,” Burman said. “I’m tired of it just being NYSERDA who we’re looking at … I’m left with blanks.”

Under the same CES proceeding, nuclear energy advocacy group New York Energy and Climate Advocates on Dec. 7 submitted to the PSC a query regarding differences between NYSERDA’s analysis of the steps needed to meet CLCPA goals and analysis of the same subject by NYISO.

The letter signed by Leonard Rodberg referred specifically to a presentation of clean energy integration scenarios and analysis provided by NYSERDA and consultancy Energy and Environmental Economics (E3) at the Oct. 1 meeting of the Climate Action Council, and to the Climate Change Impact Phase II study conducted by Analysis Group on behalf of NYISO in September 2020. (See New Analysis Sets Low-carbon Focus for NY Climate Plan.)

“In our view, both analyses reveal an unrealistic buildout of intermittent, low-energy-density, low-capacity factor sources and related infrastructure that warrants the consideration of alternatives if New York hopes to meet its climate goals,” Rodberg said. “We also recommend better coordination between agencies involved in crafting energy policy and entities charged with maintaining the reliability of New York’s electric grid.”

Rodberg said in the letter that since Oct. 1 he had written three times to Carl Mas, NYSERDA’s director of energy and environmental analysis, and received no reply to his questions.

One question concerned NYSERDA’s estimate of up to 126,047 GWh annual solar generation by 2050, which Rodberg said corresponds to a capacity factor of “almost 22%. However, the capacity factor of solar PV in New York is poor, only 14% for fixed panel and only 20% for tracking panels. How does NYSERDA explain this discrepancy? … Did NYSERDA inadvertently use capacity factor data for a different state?”

In response, NYSERDA told RTO Insider that it has provided an “unprecedented” level of transparency around the Integration Analysis presented to the Climate Action Council, with the most up-to-date inputs and key drivers published on the CAC resource website. The analysis team has conducted an in-depth study of the performance and cost of solar-PV technology specific to New York, the agency said.

NYSERDA said the state’s solar PV capacity factors range from 13 to 21%, depending on the NYISO Zone (based on variation in solar irradiance by geography) and installation configuration, with large utility-scale tracking projects able to harness more power than fixed roof-mounted systems.

December 21, 2021March 13, 2024

PJM PC/RMC Briefs: Dec. 14, 2021

Planning Committee

Interconnection Process Proposals

Members praised work done by PJM in the stakeholder process in the development of new rules for the interconnection process, as four proposals were brought to last week’s Planning Committee meeting.

Jack Thomas, of PJM’s Knowledge Management Center, provided a first read of the new interconnection process proposals from the work done at the Interconnection Process Reform Task Force.

An issue charge for work to be completed was approved at the April PC meeting, with task force meetings starting later that month. (See “Interconnection Process Reform Endorsed,” PJM PC/TEAC Briefs: April 6, 2021.)

Key work activities include studies related to the interconnection process and costs related to network upgrades; improving and clarifying the use of interim agreements; the process for rules and requirements for new service requests; and ways to reduce the interconnection queue backlog.

Stakeholders also discussed how PJM will transition to a new interconnection process. Thomas said a separate slate of transition proposals is still being developed and will be presented for a first read at the January PC meeting.

PJM conducted a poll in November on the proposals, with a total of 625 companies responding, including 280 member companies. The PJM proposal received the highest level of support, with 83% of all responding stakeholders supporting the measure and 86% support from PJM members. The next most popular proposal was a joint effort from Open Road Renewables and Cypress Creek Renewables, which received 60% support from all stakeholders and 33% support from PJM members.

A proposal from RWE Renewables received 35% support from all stakeholders and 22% support from PJM members. Finally, Clearway Energy’s proposal received 29% from stakeholders and 16% from members.

More than 90 design components were included in the matrix developed at the task force.

Thomas said details common to all four proposals included moving away from the concept of “first come, first served” projects in the queue to a “first ready, first served” concept. Thomas said the change will ensure projects that are ready to be built are prioritized instead of allowing speculative projects to fill the interconnection queue.

The proposals would add language that if a facility study isn’t needed and no network upgrades are necessary for a project, then it could move to the final agreement stage early, speeding up the process. The study window for projects is also proposed to be scheduled for 710 days, or just under two years.

Three separate phases are being created to go through the interconnection process with different milestones attached to each phase. Thomas said at the end of each phase, there will be a decision point for customers to either continue with a project or abandon it and remove it from the queue.

Prior to proceeding to the final agreement, Thomas said, a customer will need to have all security deposit amounts submitted, 100% control of the building site, the attainment of all necessary state, county and local permits and the completion of all state jurisdictional interconnection requirements.

Jason Connell, director of infrastructure planning for PJM, said the RTO has spent most of the year putting together a proposal that is “workable” and “achieves a level of consensus” from the task force. Connell said PJM used an “enormous amount of feedback” from stakeholders to formulate the proposal.

“This moves the PJM interconnection process into a new stage where we can provide customers more cost certainty [and] timing certainty and make sure the projects that are ready to move ahead into construction and interconnection do so,” Connell said.

Matthew Crosby of Cypress Creek thanked PJM for their leadership in the task force. Crosby said its proposal wit Open Road largely mirrored PJM’s except for state jurisdictional issues. It would give interconnection customers “more flexibility,” Crosby said, allowing project customers to post a security deposit and grant extension rights in the event of delays outside of the control of customers.

Iker Chocarro of RWE said there were five different issues his company wanted to “improve upon” in their proposal compared to PJM’s. Those issues included:

site control language alignment;
affected-systems studies coordination;
interconnection service agreement execution timeline;
study methodology and coordination; and
public policy and state agreement approach alignment.

Chocarro said RWE recognized that the last two items were likely out of scope from the issue charge, but he encouraged PJM to address and coordinate with stakeholders on those issues in the future.

Paul Sotkiewicz of E-Cubed Policy Associates said PJM did an “absolutely fabulous job” in running the stakeholder process in the task force and that their actions should serve as a “model going forward” as other issues are debated. He said its proposal “strikes the right balance” of where it needs to go in the future in the interconnection process.

“This has been a really good experience, and I hope the rest of PJM can replicate the process that’s been done here,” Sotkiewicz said.

Brian Kauffman of Enel North America said PJM has “put a lot of work” into the stakeholder process on the interconnection process issue and “appreciated the time and energy” spent in the task force.

John Brodbeck, senior manager of transmission at EDP Renewables North America, said he witnessed a “very level-headed and consistent effort” by PJM to improve the interconnection process and would like to see new rules implemented as soon as possible.

Alex Stern, director of RTO strategy for PSEG Services, said he was “impressed” by the level of discussion that took place between stakeholders with diverse perspectives, as well as PJM, both in task force meetings and offline to develop proposals and reach consensus.

“I think we landed in a good spot, and I think you’ll see a number of the transmission owners supportive of the PJM approach,” Stern said.

Thomas said the process in the task force was difficult but ultimately fruitful.

“At the beginning we did start off polar opposites, and I think we’ve managed to get really close to the equator and get packages forward that everybody will be able to live with,” Thomas said.

The committee will be asked to vote on the proposals at next month’s PC meeting.

Generator Deliverability Proposal

Jonathan Kern of PJM’s transmission planning department provided an update on a timeline for the development of a proposal to change the generator deliverability test.

Kern said PJM has agreed to conduct two sets of studies. The first is on the baseline in the 2026 Regional Transmission Expansion Plan summer, winter and light load assumptions, and the second is on an interconnection queue case using commercial probabilities to get an idea of the long-term implications of new rules.

All the work PJM is doing to provide transmission results and complete the studies is “customized,” Kern said, with staff developing power flow models and completing an “extensive” revision to the in-house generator deliverability code. He said the in-house work has resulted in delays in the completion of the generator deliverability testing.

PJM is planning on providing a first read of the proposed generator deliverability changes at the Feb. 8 PC meeting.

“We have to make sure all the new rules are reasonable, both on an individual unit basis and collectively,” Kern said.

Apex Clean Energy’s Richard Seide asked if there will be any FERC filing involved in the process by PJM because of the potential for “significant changes” and impacts to customers.

Kern said that will come down to whether the changes will be considered planning assumption changes. He said typically in the past, PJM handled planning assumption changes through manual adjustments that didn’t require any revisions to governing documents of FERC filings.

Kern said work currently being done in PC special sessions on capacity interconnection rights for effective load-carrying capability resources will also help to determine whether a FERC filing is needed or not.

“Depending on how that process works out, we may or may not have to make a filing,” Kern said.

Sotkiewicz said the generator deliverability issue “dovetails with a lot of market and resource adequacy reliability issues.” He said he can imagine scenarios in which capacity is being purchased that is not deliverable or could be backed down at PJM’s direction because there’s not enough transmission to deliver the energy on the system.

Sotkiewicz said there should be a more holistic discussion beyond the PC, possibly involving a joint meeting with the Market Implementation Committee.

“As we’re having these discussions, it becomes more apparent that this is beyond a Planning Committee technical issue that we’re dealing with,” Sotkiewicz said.

Preliminary 2022 Load Forecast

PJM is anticipating “accelerated load growth” compared to last year’s forecast as the 2022 load forecast is finalized this month, largely driven by the development of data centers in Virginia.

Tom Falin, director of resource adequacy planning for PJM, reviewed the preliminary 2022 load forecast results; the final results are expected by the end of the year. The long-term load forecast includes peak demand and energy forecasts for all zones, load deliverability areas and PJM over a 15-year forecast period.

The preliminary 15-year annualized load growth rate in the summer months for 2022 is estimated at 0.4%, Falin said, compared to 0.2% in the 2021 load forecast. However, 2025’s rate is estimated to be 0.5% lower than in last year’s model, driven by improvements in modeling.

Preliminary 15-year annualized load growth rates in the winter months for 2022 are estimated at 0.6%, compared to 0.2% in the 2021 load forecast. Falin said behind-the-meter solar growth in PJM reduces the load impact modeling for the summer months by about 0.3% per year.

Summer peak average annual growth (2022-2037) | PJM

Falin said the 2022 methodology changes in the forecast included enhancement to the sector models like residential, commercial and industrial customers to “better capture granularity.” PJM specifically looked at industrial intensity, a measure of the electricity demand per unit output, and the industrial makeup of individual zones to have a better idea of the types of industry.

Summer and winter forecast comparisons (PJM) Content.jpg

PJM summer and winter forecast comparisons between 2021 and 2022. | PJM

“A steel plant is going to be much more energy intensive than electronics manufacturing,” Falin said.

PJM also made improvements to better capture weather response in the summer and winter. Falin said the impact of the two modeling changes was “not great,” and there were changes to the model in the last few years that had a larger impact.

Falin said the model parameters included a behind-the-meter solar and battery forecast for the first time. He said the amount forecasted was “extremely small,” at 30 MW across the RTO, but PJM is “trying to get ahead of the game” as more storage comes online.

“That is something that could expand significantly in the future,” Falin said.

In the forecast adjustment parameter for different transmission zones, PJM received information from Dominion about the addition of data centers in Northern Virginia. Falin said the planned data center projects could amount to as much as 2,800 MW of additional load by 2025.

“Past Dominion forecasts have underestimated the growth in data centers to some extent, so PJM has to be sure to capture that,” Falin said.

Risk Management Committee

Bankruptcy Protections Issue Charge Endorsed

Stakeholders unanimously endorsed an issue charge at last week’s Risk Management Committee meeting to examine changes to PJM’s bankruptcy process with members.

Jess Troiano, senior counsel for PJM, reviewed the revised problem statement and issue charge addressing potential bankruptcy protection opportunities to be made in the tariff.

Troiano said PJM currently has several steps it can take regarding bankruptcies, including retaining all payments due as cash security for all obligations; suspending and/or terminating transmission service; and limiting, suspending and/or terminating market participation.

PJM has handled 15 bankruptcy proceedings in the last three years, Troiano said, with the RTO having to secure outside representation with its bankruptcy counsel to protect its interests. PJM hasn’t suffered any “catastrophic loss” resulting from the bankruptcies, but its outside counsel and in-house staff identified areas in the tariff that the RTO can “fortify” to create stronger protections against future bankruptcies.

Some of the possible enhancements identified include:

distinguishing between liquidation and reorganization in bankruptcies;
requiring designation of PJM as a critical vendor upon bankruptcy filing;
establishing an obligation to replenish collateral for post-petition activity;
adding language with respect to priority interest in collateral; and
strengthening recoupment language.

“We are not limited to these five, and we’re not beholden to these five,” Troiano said.

Work on the issue charge will begin at the January RMC meeting and is expected to take four months.